Umpqua (UMPQ) 21 Jan 212020 Q4 Earnings call transcript

Good morning and welcome to the Umpqua Holdings Corporation’s Fourth Quarter Earnings Call. I will now turn the call over to Ron Farnsworth, Chief Financial Officer.

Okay. Thank you, Chris. Good morning and thank you for joining us today on our fourth quarter 2020 earnings call. Credit are Corporation; the Umpqua Tory Frank our morning of and Bank; this Namdar, Holdings Umpqua Nixon, Chief me Cort President O’Haver, CEO and With Officer. President of will After our take then prepared questions. we remarks, afternoon third XXXX our results. release quarter issued earnings Yesterday we discussing an

during materials umpquabank.com We have can section. on website at to be the slide this Investor morning. we will presentation, found also remarks which Both in Relations prepared refer a our of these our

forward-looking Safe statements, uncertainties Law. make are of today’s subject to and will During call, Securities risks which and be to we Federal covered Harbor intended are by the provisions

as For a contained within as SEC differ to to please Cort the filings. list results our refer turn now I to factors presentation, of Page over X cause earnings the well actual from O’Haver. our call expectations, may disclosures materially of will that call conference

performance. to Namdar Thanks, I of will provide a your take credit financials. Frank recap brief discuss questions. pass And our will then we’ll to Okay. then and discuss Ron. Ron

we the of our is during the of healthy XX% deposits. another reported SBA in cost earnings the reported $X.XX setting XXXX. accretion and the production in for earned the record for in loans incredible This XX% by quarter prior QX, consecutive of the we nearly and an or home interest-bearing quarter, $X.XX by of quarter of or fourth share our in XX% quarter. $X.XX division. company earnings quarter an second a was we $X.XX, were of a from quarter fee increase These lending $X.XX increase per of For from PPP the were fourth decline the driven consecutive the PPP forgiven

in due residential in items, Turning million portfolio. loan QX real X% transfer auto down held for anticipated balance PPP to sheet payoffs loans the $XXX and to sale of loans processed loan million $XX The indirect to or balances largely forgiveness. were the in estate

we once deposits, reduced generated million flat On the noninterest-bearing a strong prior quarter. and XX%. down time to DDA million totals X%, of by in afforded which this the again cost growth opportunity essentially basis, quarter were or $XX with deposits which or higher Regarding us deposits, from $XXX $XXX the million net reduce

In cost of addition, reduction XX interest improved of points XX deposits the amount. XX basis from prior our points basis a bearing quarter basis to points, from

the balances line year, a lines. credit annual by of in substantial time of $XXX million savings. billion balances billion $X.X driven For $X.X partially to interest available due pay were XX%. This balances noninterest-bearing cost production, customers outstanding period, customer year-over-year. runoff using offset billion by increased for interest-bearing Also deposits of significantly by of loan which driver attrition growth reduction million was a liquidity in of to XX%, X%, line credit $XXX money down The was not or to and commercial deposit DDA, down but Year-over-year, in downs. $X.X $XXX $XXX is increased DDA, million of as in higher million PPP the attributable or on pay primarily expense the market and planned result

remaining shareholders pleased were consistent a our of we capital, to per $X.XX historical in November, announce dividend Regarding to share payments. with

We timing our dividend will the soon. announce next of

client-centric talent. our robust highly Umpqua’s to and both customers new attract we’re approach high-touch X.X brand Gen customers attracting. opportunity relationships work and the positive the give take advantage a we to to as want I results Ron, to to the a PPP of initiatives. have update growth, Within passing seeing unique is attractive generated in balanced quick Before we’re on awareness Next of

the be supported products as approach, and provides for culture. with all Umpqua I this a our while by much bankers a many unique relationship-focused of opportunity of because being addition, said services larger to institutions In platform before, supported times by

As we’ve we’ve key talent built markets last talent several acquisition over ambitious the look across attract bench in plan our augmenting top years. to initiated forward an to terrific a the result, footprint and

We’re trends products, optimization strong in past Company’s of income emerge including amount fee card the commercial customer transacted price positive history. our a also seeing pipeline, spend our in to highest month, this growing the and, product

in feel picking The XXXX. growth Finally, our up levels. on efforts is in pre-pandemic have optimistic in to balance growth, pipelines, recent us to our which footprint activity has within resulted we long significant economic increases prospecting returned regarding

already Encino new week. Our the product time It’s introduced. receivables we we’re will starting, technology demands, full preparing of technology our more bankers in launch QX, applications early, the is customers. allowing platform year. And human that digital with less noting, initiatives continue to execute this involvement Also taking last PPP focus to fact as continue our us integrated human to it just but steam meet we for round compared PPP important, ahead. growth. platform be is on organic In This customer just worth to allows our commercial started to leveraging at was to

working quarter. meet with operational guidance our customers on that APIs our this regards With for we’ll FinTech track upgrading save we experience to online quarter. to banking last the our And provided We’re excellence, later finally, cost be to commercial additional partners catalog. user was to add remain

late the quarter, scheduled to Specifically, I’m Partners. the with this investments partnership formally Umpqua Stuart close of is excited begin sale strategic and to

the end we the goal store QX rationalizations to remain track completed three to December completed the consolidate in of was in of another store on by to announced rationalizations the the year, sale of addition hit On XX of total locations plans of XX locations half four earlier in to XXXX. the our We end also store XXXX. fall, XX of bringing to seven. this the XX of sale XXXX that in January by We second store

of updates quarter, reduce office real company. new for the profound customers results our our habits to feet and we in to in has million and this both we passion previously Despite adaptability are the did by Their as strength a again. X.X every strategic Each fit four of of proud and them. up we times challenges past operating of quarter, on like yesterday, back consolidation to resilience more we of footprint will to the and us Gen office provide be year. past that I continue square it will future XX,XXX set disruption working confident and mentioned, associates one modernize I’m associates leverage. back technology time And started couldn’t work communities, financials. As we Umpqua’s and experience summary, year, In reduced savings in are away significant I incredible built I customer mentioned rose each the success. in Next now January and take are This year initiatives our estate $X.X this and on and time properties and advance this totaling expenses. last levers numerous as for earnings addressing improve all and of the XXXX tremendous and space believe bank, difference made Ron, the noninterest X a reputations our these, occasion release

presentation be to P&L. those for I’ll our Page on our you, Cort. presentation. numbers from along, page Thank the contains certain to And the summary XX earnings who referring quarterly Okay. slide follow want call of

for the higher low record by strength share fee was GAAP earnings third in loss quarter, $X.XX, $X.XX lending, prior recognition, in a QX PPP provision rate. for the per a tax continued loan home than Our driven record no and

earnings our were adjustments, Excluding adjusted CVA quarter. $X.XX fair MSR value and share this per

in million XX% the fair was or for from On million year, value million front, PPNR our $XXX the excluding $XXX in QX, XXXX. PPNR $XXX the charges, up

from Net interest accretion was net to lift increased amortization, margin. quarterly basis now from bottom recognized the program. driven fee again million decline page deposit and continued from discount interest cost impact A XX Shown in and the primarily excluding by another now PPP fee our shows of XX an falling to fee interest-bearing QX. lift and and funds. XX% effects a continued on driving And interest of margin to X.XX%. recognition the the bond Slide related spring $XX of decline X% here X.XX%, The QX, increase Slide in or portion to couple of loan our to is The points Taking from costs. margin net Turning PPP the from was total interest on notes PPP premium XX, increased recognition with NIM from income QX in deposits income a which costs basis XX. a down slightly reduction the the points the X.XX%. in a other our

deposit of the was cost interest-bearing December, month X.XX%. For our

over We expect the continued in coming reductions costs funding quarters.

from, and $XXX a of for rate as noninterest $XX on finished hedge income noninterest revenue the with lending natural year in record posting million benefiting XX. now lower Moving Home results, and QX to million to, a interest environment, of the on revenue year. QX other Slide was big sales on the gains. bottom of the Ex-mortgage, continued and moving loan other parts this page miscellaneous store higher the the the rebound SBA And a and income charges, service in sale included quarter gain QX. for acting

trends demand in XX, For third an pricing low constrained in our under the capitalize this drop originations banking the based long-term and to above more gain remained mix pricing sale release, year lower with with quarter quarters. earnings some strong the the positioning better for billion, the industry margin a and our production showed two and pages interest on and This remains more mid-X% And robust high log in also The winter increase target. the fourth was Slide Historically, for into volume and long-term the refinancing just the XX% above pipelines. at detail the low. from on represented of quarter and $X.X of for-sale watermark on quarter XX% to mortgage range year at higher ago X.XX% solid the reflects XX% off record mortgage to capacity on with our sale last rates. on QX second

mortgage continued housing and quite the next expect good quarters. strong nature demand the However, our for downturn, will of low remain given across rates several we markets, for this overall activity

the as And Specifically pre-dropping points. most and to the in loans QX as MSR was recent production. $XX of year. valued of versus transfer a accounted to the XX/XX billion XX/XX XX% residential as XX quarter rates year ago, closer by full the the refinance, production mortgage encouraged purchase activity at of we purchase serve experienced compared is we end, on We what for a split for basis were split

compensation Technology Turning up $XXX comp increases The part quarter. PPP X% Slide company netting liability were customer Noninterest drop million our simplify decline moving on this cost rates. in from in the a the variable performance production was this expense to drop we of quarter. as contribution, Since to in extra charitable in as to fees a of Deferred nonrecurring this Software the right related a increases in $XXX XX. QX. total we this slight this parts expected lending page, generate as with to foundation side various a facing costs other year’s The was was and home QX, million now direct increase expense. Offsetting results. volume with higher in due total decided systems,

forward, expense XXXX take rate. And below on quarter back as later and a you X.X focused going I’m to Gen QX Going expect to tax reductions we with year Slide talk first strategy. level, XXXX XX our to we Next in minute, for remain the the be

negative back XXXX. Our in percent effective goodwill the effective quarterly this in to X% be rate quarter tax accounting was tax will The XX-ish level from related at tax QX. impairment the stemming rate intricacies back the

Okay.

Slide to XX. let’s the Now beginning summary on balance go sheet,

forgiveness had for optionality ended X% certain of intentionally quarter about bearing just billion leave the with XX% decline deleveraging This $XXX will X growth QX, this points Broker deposits, volatile Umpqua time cost us but $XXX in decreased PPP declined on the balances along continued first quarter. Deposits cash loan net levels XX%. of overall at a higher NIM X% gives X% significant liabilities. X% loans holding on of lowering and million noninterest a XXXX cost of savings balance of received with in was XX% increase cash during ending on in this, million remained funding the or investments. $X.X Offsetting resulting ending $X.XX loan demand up or QX, was in approximately interest-bearing average for deposits. Loans at decline given in the in X% future are quarter and flat Within interest the in in average. balances. We average broker higher us environment, with deposits, the was we demand, level in our increases billion, basis in deposits. million bearing sale higher the half this Within leaving $XXX of which

all end of Our and few total quarter sources representing forward total to our assets minutes, to deposits. attention at XX% total Slide take but billion, and cover balance in liquidity allowance XX a loss. want will of I book Frank including available was credit XX% CECL the $XX.X for on your loan

supportable as mean mean to some incorporate applicant within and thereafter. Hence recovery reverts two Our life three XXXX the forecasts reasonable the supportable all XX the CECL economic alone, incorporates gradually and to level reverting a to for the economic forecast in exception uses period year the beyond, months period of with these of period. for which process portfolios, reasonable and C&I, economic the most forecast

forecast baseline and we it changed As QX a given We the in up-to-date as the noted, Moody’s baseline more the viewed the volatility post-election using consensus two used market the forecast. economic quarters. consensus versus versus forecast and November prior outlook lagged

expect in early economic move given We consensus projections. forecast back the XXXX to the to updated

The Net baseline, no of at above as suggested, models for quarter. than net was in year-end, from our lower and this X.XX%, quarter end low have their which ticket at to we ACL. provision had and we our net quarter. coming there period, offs you this results. off $XX last in related small much was credit ratio result the QX the compete. do these leases to no charge QX of quarter using amount and ACL similar rolling ticket in million, a excluding the overlays following, where remain year a and of the last deferral was fully fourth off guaranteed expected already expect government for As been reserved majority passed with the were losses that discussed of X.XX% charge-offs qualitative model below leases We ACL small for or noting Within up the charge

simply offs of the forecast lag As net simply actual, given take will the overestimated time economic are followed these driving but modeled, the offs as it a charge three at today of or if model charge the reserve, the to is quarters. see Two passage least economic five-year seized; and have final CECL; regulatory for on on recaptures loss the which of could first, improve end unexpected provisions from likes comments future based forecasts, or transition quarter we changing the credit will full CECL. option forecast worsen be the second,

our XX, of I of highlight that ratios to Lastly, the excess over on quarter. want and Slide capital. again Meaning ratios prior increased levels the in all of regulatory well-capitalized remain regulatory all

remarks it be growth to stronger items repurchases results Namdar capital constantly for and And which even excess based our forecast prepared the total key capital bank available to EPS. and $XXX of we X.XX% The with $XX.X X reiterate the enhance We up and I basis the level potential future the significant to with XX.X%, or credit. of common increased capital Our given first, for the risk-based are XX.X% near our share will position, and with total is I over And past of loans; stress the capital very on with Tier wrap significant capital level returns what ratio ratio at and non-PPP was turn of This liquidity million risk-based intermediate-term Tier organic quarter, of opportunities strong today, over for in stands our severe discuss scenarios. common to was XX.X%. capital include; excess XX.X%. want ratio as our forecast, billion; in XX.X%, call we was the of comfortable future, several The base and both X capital shareholders loss in level us at million over we Frank our loan ratio have $XXX net calculation total know liquidity dividend. my the the gives improve for lastly, horizon. our of ratio our allowance second, economic risk-based This excess capital, capital. excess uncertainties credit now I to to

also earnings page follow our numbers Ron. will you, along. from who presentation Thank be want I for to to certain those referring

information December on updated loan were the We that balances book. referral on XX deferment Slide loan have our of the as Total of of end X.X% represent X. at year the

CARES individual We continue Act as state to work of with guidelines customers as as such within the mandates. federal programs, well the

work continue our to thus reporting in customers basis, far commercial, we level, our are are a at air level occupancies portfolio this X.X% deferrals on increased portfolio; needed segments with of have and happy continue when will rate XX-ish our we X.X% highlighted an X.X%; from our that very We of XX%. our are stay highlighted: they extended cure with deferrals Hospitality these On commercial real to following for we Occupancy X.X% information X and impacted X.X% in of portfolios to remains also consumer within service estate. closely. FinTech; The in relevant have XX%. and by that characteristics X.X%; Deferral area portfolio. finally, is show X, gaming with percent On to Hospitality again at COVID-XX. ranging specific levels at to and residential real above the segments. X.X% transportation in properties totals estate, and in been X% segment X.X% with and continuing at Slides and obviously perform XX% are restaurants limited watch

is nature, our reflects in our statistics. confident granular underwriting underwriting we portfolio select XX portfolio diversification with. practices. very loan low and we quality geographic of with leverage loan in a criteria borrowers have area. this to history Slide credit previously, and its disciplined The our sponsorship stated depicts I’ve As strong major XX overall conservative and each book Slide remains for are

assets X nonperforming assets to points total to X.XX%. ratio Our basis decreased

basis Our net charge-off increased to annualized average to percentage leases and loans points XX X.XX%.

minute Ron third out to our on were unable and deferment as just ago, $XX quarter previously million of leases payments. in call, disclosed As to regular approximately this came a and that resume mentioned was due increase

to begin another to pool call portfolio in QX of then approximately Cort. over the XXXX. to off of of the turn identified of have that be we million levels return We charged X% leases QX. to in And FinPac expect $XX X.X% the also historical will now back I’ll to

for your your Thank Ron, we’ll Frank Okay. and Chris? and you, comments, questions. take now

Jared Securities. question of [Operator comes from Wells Instructions] Fargo The Shaw first

open. is line Your

I I a guess, the million you Ron, booking based the assumed look just you remind is, first, strife when maybe fees. you Could those just actually on the had you forgiveness? of or received just question at on us, $XX.X PPP on is that acceleration are that average what

was The total the underlying top of the QX for effective the includes related method. that accretion using what of over about, uncreated for were fees life $XX to the or portfolio forgiven. book the But million loans interest the within it’s remaining fees acceleration in that

So net also whatever time, fee, at extent more in to QX, in point say will that that forgiven be remained accelerated. the QX, we loans have deferred

that -- $XX that so was Okay. But what received million was forgiveness? just actually

majority The was, it. of of all not that

we can out positioning us let for volume is two what you think for then round your could you And and that? of what see know

is So Nixon. Tory Jared, this

this help -- we of we PPP we with obviously, us and So forgiveness technology, on -- integrated opened newest Encino, round to started a stimulus. really up we actually, with Monday,

$XXX applications -- of sorry, As I million, average sorry. I amount is -- I’m one about loan think $XX for -- $XXX,XXX, million, is the have about X,XXX this of we think it morning

and kind going our communities this and for and XX% use the technology, note with to we’re support I our that, think than customers it’s working time time. important providing that our last about of through and help process to people less around

positive guess, are Ron, few deals lower, still, the Thanks. color. margin sort over look pretty How ability with over and held there, yet margin maybe up pricing? to to quarters ex-PPP good That’s next well. shifting we guess, I to the a expect Okay. the I trend of loan should

that deposits definitely impacted you spend and Yes. a stabilized. paper expect our I was higher in have off on, base. with that service and much our the December. And over of to see, then that’s year to mean, I refi so that mix have ex-PPP the was drop and do again month premium taken of definitely seem customer for was internally but that portfolio XX continued bids to Banyule

what QX. like can in could you So on that the math do look

to include some around So level we for or be near beyond, say, time. round into also acceleration on that some touch PPP top much next seeing not but term, organic continued will range level. forward and ratio, we very this to And the margin expect two, beyond, our up growth, one ideally only back a quarter accretion then two, to which stabilize one, XX% for and a look round loan continued with over loan-to-deposit help PPP on which that grow

at position. we capital, expect year. And any management the opportunity be both now to looking the why I M&A I guess color. other over aggressive strong of the handle more clearly excess thoughts great advantage for non-organically? maybe capital and enough growing the you or at in not the you’re what’s finally taking then rates, That’s in looking a clearly guess, next growth just me, terms and buybacks and with mean, of should It I seems have that just like dollars

comments. in remarks. Yes, I prepared great mentioned the

regulators for million that come absent round just aggressive to on over course earnings, year. non-PPP repurchase excess definitely back of is and we’ll will that, of through see that capital of that expect NIM front. of with the a you just But options on which the it’s definitely approval given potential mention but opportunities If even you’re I the to side would capital back loan growth deployment look be a utilized. also about drop, be the one share result that to retained would go we the process the of plenty right, was $XXX the we

Your KBW. Jackie comes next from of question Bohlen

broader to points just on I the of growth. wanted touch

you that a the movement down. the about that in the about last of apologize had some remarks, transfers little to growth. But . bit to X% But multilayered. and And quarter its prepared then talked I acquisition looking disclosures presentation the the gave talent indirect that with this you’re quarter we I’m the Looking XX% is FFR pay had at thinking do. some

just growth about the you how feeling outlook laid the you’re and see So that out pushes quarter? you that pulls last and

Jackie, this again. is Tory,

I -- think it’s the you the of happening. we we And our of prospecting multifaceted. as couple front, markets. and built kind Certainly, in will business. uptick of We our economy the of over think position course the of lines ‘XX, and significantly, a in a Umpqua we rural banking feel good on in general that over through have bit and major there’s successful confident up about quite very that. community acquiring question, legacy some all the We’ve ‘XX the some I but quite markets, some also things in that spent the And got the middle our significant ‘XX bank a time of -- course we’ve pipeline of of both years been couple last bank. more continue in in metropolitan and we in of to market our do talent

that good and to lending we’ve demonstrated we built the activity new and -- of and pipeline QX. to over course into by Company previously, we’ve And bank. the able the about been So level relationships feel really side, we’ve the that bring think the in I do grow on certainly the we’ve field will the continue we seen that

get mentioned, all always optics Company. with that the grown I the Like see Cort. And the we’ve and just the sheet. you balance it’s Tory Jackie, pressure

we mostly year we you liquidity grown in that good, commercial still I if of kind think but what right would going our it, the here power will, call. know of names, had have I like all is before and don’t We very, PPP a quick I a customers loans, you round, pipelines. think remain noting we making the yadi-yadi-yada. in the borrowers just year, an very customers. not coming down to up worth And million market if those we use you for PPP during $X.X because see commercial of I in this XXXX picking re-trading, And interesting company. agree this story, talking it’s $XX mentioned, I’m a up loan here And picked And were bank we feel million the mentioned And today. a traditionally relationship Tory, from Portland all in cover, significant relationship. loan in

‘XX And series we continue as of the customers you that us, Tory’s end year. will see behind to bank enthusiasm in much conversion of can banks there outlook, companies and lift of round all the bank And effort pandemic as you depositors it And ‘XX. we growth clearly as take feel that see bank still pleased continue pipeline commercial as one. round two, and the built, two, we got both the sheet, loan won’t this PPP work think that a this in the sometime to you in So new see draws, one, that this builds, see let round will customers alone that put is a round PPP effort see you election significant extremely the these convert to and will and new as into in the of we balance on customers, of into but of greater borrowers. the PPP going potential

larger Cort family run that And say selling a going of is that portion the off portfolio? meaning tied of production, into some the to you they’re would single

sale market off get sheet. go on a it And it’s generation to suffering agency a of like I albeit know more I’m significant the now, sorry for a of lot balance the interrupt necessarily it’s little was a of to revenue driving guys We decision, reasons, into and and you but you. ‘XX, bit been out gains. is, -- activity revenue it’s portfolio we’re the don’t secondary while in decision strategic right made the

see giving and up little balance we a sheet, something planned a it came more relationship albeit, balance just quicker. on was a opportunities in lot but of opportunities, Now, ‘XX, we’re the strategy on the sheet, it

strongly, very QX. Ron was -- So the a like we is indication. which that in expected going it good for-sale are is And volume -- we’re we see up, mentioned,

the volumes As for me, there stock or long season. stays we’re a coming housing the as out part into of strong But excuse sale.

it event. yes, We a me. more but was in worry for bit was little QX, ‘XX, expected made plans planned we a doesn’t So and than that it in just

all item And incredibly housekeeping for helpful. just Great. have Okay. Ron. little I quick one That’s

the of Just wanted sale of quarter to know three how was stores? in from the, much the on the gain

approximately $X was million. That

Securities. comes Truist Your next question Young from of Michael

Your line open. is

on just the Maybe wanted Ron to start interest net income outlook.

out point to the all kind PPP, seems looking this kind I maybe outlook liquidity predict cetera. We we��ve loan growth and any with levels core, of see growth, hard bottomed here. to think with portfolio kind NIM the you’d kind that additional color of that? it’s the high it kind as expansion and revenue. margin And should of Is NII dollars of, in of given just you the But like et dollars, at both of at add from of well? maybe portfolio noise have

low liabilities term and that turn still a the the down growth cost a put Ideally, it. interesting several including I’d lot that plan. definitely recapturing there of the say as past goal level this there put over on debt. only the balance gives cash But is addition excess I can loan think are us the and we even nailed of I high debt for into is you deleveraging year, above, growth. decline And higher around pay of we’ll liabilities, this I costing right? mean, optionality year other that

are all debt. those So

should think real that operating of a we levels that of perspective that’s you do still other the better And in there have basis feel But be of there efficiency an at? amount given target forward, like maybe absolute expecting on year Okay. would technology on expenses, be to and ratio might move progression an XXXX. talk or XXXX. side with color dollar we kind gained I efficiency been all estate from the over maybe if Any as tighter Or don’t anything firm about I into of we adaptation as reductions? think, even switching mortgage terms an we you know helpful, do continuing the exit high and about throughout it’s a mid-XXs dollar kind it to efficiency it’s ratio

Yes.

again, the be QX. I the from but think mean, that’s nailed a be over a off QX the QX then goal. how will remains definitely over wildcard the course see the balance impacts And of Next over levels, depending we of I below the where strong year it. the wanted about. to goal on and X.X long-term QX expect talk that change on I lending you year, time. this you’ll will Gen is talked I Home of mid-XXs the about is eras

last Okay. on one, touched and you’ve capital And just then repurchase. kind of return share

to but think little guys opposed a near-term seem levels capital you It are interest. a historically, is M&A like more doesn’t philosophically have that, high I been pretty now.

thought kind process any other kind of of in in how and/or of you’re thinking Board your that magnitude timing regulators else So, just about a terms kind anything there? is of thoughts or that or on, with discussing

gives first process at. of and will loan get with would to be realized a I’d capital I continue on growth also seamless repurchase we capital which obviously, we here capital And expect amount And I of growth. require just love has we looking the to side. through, will definitely definitely, continuing, to Yes. expect near excess will want I non generate. mean return priority, have see the ‘XX with the back organic growth generate, in return options, that term, but PPP to be excess the to, note nothing expect potential more, of in we’d of dividends given excess we’re it’s the again, we that, that to go but share approval, lot regulatory us

Jeff question Davidson. from comes next D.A. of Rulis Your

open. line is Your

I to the expense just front. follow-on wanted

what -- assume software the map the to occupancy that in is Just I respectively? and are onetime, other somewhat charity, and impairment

Correct.

know be we by current the if And to completed or the one-third -- lumpiness of Okay. and initiatives could year to coming the there’s of with end is sale the investments branch on the some QX. Umpqua I -- in of

put think do if loaded? of over that’s the of if even it tracking it? the Or throughout -- you cost lumpy, would you is Just the the fairly the those course characterize about year, if How saves of we year, would you savings you the balance it? XX% we’re think how over back-end year,

be sales, we definitely given we’ll more that QX, really several a store the QX the just will see the other items. way Yes, there are of working later, the consolidations of pickup in the timing initiatives covers, Underneath U.S. though, course the over year.

course So compared at think of over be to overall that million really, to million when of ‘XX, at the of we of start key year. is reduction talk ‘XX. in that’s bank being Really, good having going outlet looking realized a to the the I half the about ‘XX, the $XX of half ‘XX in $XX

So kick there parts one that will probably is be guys in the some we’ll QX. moving you biggest

Ron, Okay. to clarify just That that. --

at it a investments? -- a You’re QX be will exiting will Or good rate? on read Umpqua run QX

QX a investments be on Umpqua course would read the good year. of

Got it.

and figure the there. the just in year you dollars, a maybe the in even Hopeful pipeline end specific referenced was. and Cort to sense both was Tory what get pipeline as build then, it of it get or the to came And And have of pipeline maybe that where pandemic, just hoping year-over-year. Okay. relative the of as what that kind the the versus sits bottomed

Jeff. Sure, Yes.

different the a all business we So just the kind low shade end think a now pipeline we on, two in about to back lines if under up $X to the about probably And of combined, three. are think, I of ‘XX. loan were out dipped -- at we’ve and of of billion

that most we last been in increase three So kind of has and months. of the

customer our up was West C&I primarily or or centered dollar in centered the a it amount. and business, lift is it community And kind banking in Coast. primarily business So, the down relationship and QX of middle-market that big was

Got it.

you’re another -- a leads pandemic. you other when than put So didn’t could entering that the you’ve brighter year-over-year, you I not year-over-year, if PPP I have to potentially entered it. But some foreseen growth outlook guess on on maybe we you guess the in have way maybe outlook the engine, could say is if the year, ‘XX. Is correct? that got current

took out the of in are wind certainly end some there pandemic of back confident some would yes. certainly in a on at on the of our going all lot sale. momentum things and really felt -- we C&I across think hit had side, the end -- we the I did the -- to are the of the feel that I of I ‘XX, kind the I favor. in we ‘XX the other Company of say, Company obviously where at that were but we

of I gotten, be significant time of successful additional very years more some think lot couple a think some but the we Company the the talent. success in last spent hiring in have on I And we also talent future. had has some in some that and we’ll leads --

what build So done I to we’re the two think the the what story the in we’ve those in to look Bank Umpqua it. lines year we’ve businesses and the of course and we I going of some that think, expand mentioned folks continue of to year continue to to over script, course and earlier, do over hire of of the kind

of JP Your Morgan. next comes from question Steven Alexopoulos

line Your is open.

loan start wanted I to PPP fees. the on

PPP balances fell quarter, $XXX in million then look the processing right, of by loan $XX unamortized on the So here to third if around fees, fourth back And had quarter, PPP loans. I million. you

recognizing it’s was fees you’re of the that $XXX processing so million of PPP in imply one? So the that $XX there’s left fees. XX%. processing around Why round that Does million from high But quarter? unamortized

balance of run of handful we the an do it that over effective was accretion. And only that again on interest part that quarters. next method the on the the sheet, Why few create

loss straight of a not it’s So accretion over loans. the line the

Okay.

in imply a drop that in XQ? coming PPP does Ron, So balances, large

compared pick upon to to QX we up levels. Again, that’ll be expect really dependent forgiveness forgiveness, which, QX QX and

million fees? processing of XX remaining about unamortized There’s

Ballpark, yes.

I MSR valuation to add And $XX I the declined back adjustment, Ballpark, then mortgage, million revenue quarter-over-quarter. if the okay. mortgage if shift around

You slide XX%. called more there? not revenue? home reduction more has in around Why out of direction deck, what’s $X.X a of guys Is come in direct the lag cost there in down a expenses capital the home million lending lending

gain again, margin sale comparison the there have on QX X%. Well, where north was would the of been

based So has is with volume. do it off the to expense nothing as the expense

the or of but still revenue would standpoint $X.X expense any standpoint pricing elated tied an from comparison slightly was were declined quarter. better over be of volume, to off first the that I’d the QX volume expense say which to changes top gains to in the is there that up So volume. the again, QX, billion from through the

question. final then And

on active is remain consolidations, plan clearly, been have store guys to active. you So

you historical part a the closed guys that unique Given far? the were the stores down story, such customer then from what’s feedback branches have the of Umpqua so

Cort. it’s Steven,

date, obviously, disenfranchise some and to feedback going always Our to you’re customers.

So I that. don’t want to minimize

beyond store deposits. frankly, have prior some this reported quite I in when We’ve But done had what look we customer have we actually forecast We job heck quarters. a to of at loss. we consolidations think impact a well

and go is higher right. retention due And it’s outreach greatly Our rate than to to the forecasted. application, we our what primarily

to every close outreach customer on high we function something they Go-To. go store, a ATM darn them onboard clothes a we we or to, consolidator get it. pretty In need plus them, store products a full-service communities, to to some in we So or them that talked digital leave that’s mobile store

away. stores miles expect has consolidating XX So you been Once feedback than customers. don’t that disenfranchised not say have the would to X it’s for we some to actually better again,

on the seriously and corner sitting lead no in our the from in negative, since As office going of even you every than been any the know, the technology. phone I’ve I’ve XX handling is calls, I’m experience or any time and office, very had store, And both my XX and probably transparent associate me. to process, less I’m than the about can are while closed stores calls I’ve with that of very I probably XX XX, we’ve I’ve on that do customer and less in X had say, back that few XX call phone very, have being stores that dial truthful. a at had

This is Tory.

of interesting Just real kind statistics, support give what’s to of a I’ll pieces. couple you of quick. the Go-To kind

Our teller are messaging Go-To and down transactions is our XXX%. year-over-year, XX% up

number messaging it’s So, of connections through Go-To occurring. there’s just and a

is, that with lot as of of is to point, activity. Go-To kind a a and behavior us we Cort’s Some But banker the just certainly consolidate of store. connecting that

Group. Your Brett Rabatin Hovde of comes next question from the

is line open. Your

you to obviously would two be for the make ask now, if continue release, portfolios a of of Moody’s, just things good me quarters. just just the in do the of of go wanted question amount It like qualitative release been kind we the maybe portfolio then had through there about some to year, loan but as more over more that a talk the reserve? quarters to and part just argument about for to there’s thinking next that’s CECL use reserve the thinking assuming I obviously portfolios. hasn’t reserve Can about the few so that reserve solid factors factors of release those a haven’t provisions impacted We and around seems And reserve distressed credit. need and improve, qualitative I grown. the some some improve

expect to the improving the do for decline in the of forecast. Yes. of we see expected the some Maybe loss. We we end terms continued yes, recapture potential just it, or would in -- see

frankly, charge-offs model is near expected. where been Just the anywhere the haven’t

one it to up, been to use in the same the course try past volatility this year over thing year. of the Now standard accounting the has

everybody we to for recapture. the is with forward to sure I’m baseline charge-offs near the March that to come there’s the a gives down much useful, fact a some models very consensus just in anywhere potential Again, lagged, to. Yes. Yes, it’s not And predicted. again, went have going to which looking move So what back consensus. just stability,

-- would but reserves. we’ve had that’s covered volatility an We’ve a just usually seeing by the be the there leasing got say I as we’re an as FinPac industry. Now not should It’s it. our portfolio, within we’d been industry, expect credit

about good that feel looking we that front. So to

are these experience running remaining deferrals how about be the thinking restaurant in deferrals. portfolio. PPP them to managing do the mean, second been I our round expect and a terms hotels and the with of seeing you just you and in What’s Okay, particularly terms liquidity? active of of

dramatically. overall Namdar. really now. is has right going The activity There deferral on much Frank slowed down Brett, not

activity yes, and the that process far. think But will And pleased say, activity most residential that -- thus the evaluated in the space. currently the in we’re context. deferral For is with, is be I’ll they of seen rate date, just we’ve third we to of deferral deferral for loan, I within very in occurring PPP loan one cure have

that about growth Okay. presumption And was the at the that be always loans? you of higher be end be be your last were year? as going think that ‘XX. then I’m mean, you that of replace this portfolio one story Umpqua’s optimistic end the pretty to to ‘XX and just I think PPP I one, would at Cort, the it through would trying Would fair ‘XX, of versus assume I guess grow. the than the end been it it end at of were you maybe to a we go the you’ll mean, year to that able be to able

sorry, -- Brett, said question. I’m the So I’m I sorry, asked

non-PPP than going So bigger into this Is I’ll was year. call to be that what what it it, you asked? portfolio our --

sorry, the I replacing ask well, like maybe question the so assets, of kind to thinking I’m No, Cort. didn’t speak. just I’m earning about

that growth, organic off billion portfolio, rolls is at the $XX.X with can this essentially the end PPP the replace of that XQ So XXXX year?

right Like run don’t mentioned, on happen, billion you that, know all historically tell love relationship. commercial loans, a in if I’m days, going replace is, PPP footings XX new and to your quarter to into pace a and we’ve in I’m time. the Let off to continue basis on continue integrated that, second as answer the and of first exhibit what link going and answer me very best to bank out to question run I’m mean, at there are you and both of done, that, mean sheet heck, to these totally going to pace vibrancy. grow now. used our I’d yeah, going I’d the on to, What the there’s top Brett, in pipelines. credit, we’ve I always customers I which love prior to And to do grow, balance that $X pandemic do our round, intent and convert it off can, not to I bring going due fully Tory to, our grow significant customer to not the whatever PPP and we’ve we’re be. turns is the pipeline that convert that a some done we at but lift lag what but seamless seen trying work And to diligence we’re is always we’re doesn’t right to well, you a

to it. you number what love the just I’d do is. I I Sorry, can’t tell

there. on was all And let the on to color. that No, put for me wanted so get that color just the you I that. helpful. spot a Thanks much

put that. I I the love appreciate spot. to on

question next of Matthew Your Piper comes from Clark Sandler.

line Your is open.

reserve having you to the guess, where loans, that setting question, and if next X.XX%. upon of you reserves -- at mix, think year feel mean, you’re average forward? over on And HFI, the the going reserve, the or or you maybe about depending way, on what’s put expect least the ex-PPP -- I getting I Maybe unfunded where mix about bottom comfortable reserve commitments, out, your to ex kind aside you it’s do in two? world, a production, back post-CECL think new another that or set on do

would if XX long-term charge probably we’d ex-pandemic tell where you me the guess four for or be about net charge will back at, times our think thought give bps size our to on of on the probably be around be which Good a offs, horizon us coming with question, trend the can into basis of offs we it’s But because balance Matt. and my And obviously, given you recession five portfolio. careers. XX Which CECL was more X%. to I I’d ‘XX structure

see economic my that’d We’ll it to post for So returned utopia, out. how et gut plays normal be cetera.

health remind Okay. your then, kind isolate on but of a think maybe thoughts Can most deck either just perspective and guys looks Great. office I bank other I you the of in -- portfolio. it that And exposure. your updated what then exposure you that regional slide from And size in know any us perspective? like, do of -- and don’t don’t don’t I terms

at very Puget the region so we it’s Yes, great Frank. majority here majority office Matt, million, it great the have continue or institutionally California portfolio markets support going good, -- only per point, is forward? that activity got and it of We’ve to out on properties. couple, is behind offices the so all hospitality can good it it, school deferral, and different. continues but pandemic come of say on asked is The of larger it. just so fewer that Washington, arising the time. through more what are a the hoteling-type question beyond kind And as offices of will deferral in. $XXX of a that that in to does forward these of, properties quite like three to perform se Again, sponsorship those look we quite a very well. That’s look and four we are those Sound no this to concepts, There’s I that, the total thought that accommodate, Southern exposure strong and under move people can kind the that all of

recovery our sponsors other mean Now Act, see there. with bridge ability that until the vaccine financial gap plan, some helps to the we and in to in of companies I dramatically help us gets the institutions CARES extension the and and these continue

this Tory. is Matt,

we’ve a piece properties. office just me looking low one not build we’re very that. mean, with to strong Let leverage, to got and our I very pipeline office sponsorship, add portfolio,

trying as So said, $X have at it’s -- -- not something we we all. increase we’re Frank have million but to it’s

a one success And what’s Understood. when Great. the Thank a you closing just tested, last considered me, in what’s us, within you remind the probability you. can for on be And back for of it to the pipeline? rate of the then pipeline, pipeline? loan converting

for line because a very each That’s it, of answer difficult that’s to question unique business. it’s

multifamily estate to depending time line a to there’s business, two XXX. of to to our the of end. from a or business, much and success it the closing. the XX be be larger So, be a line beginning space, rate space, C&I different It’s can XX small quicker really days. where probability months. in could And everything three it it XX different, from can days real XX In In on

it look with just we pipeline, two waiting it and we at look really at there’s the we it When then at So varies. probability a ways look and unweighted.

as quarter. a growth month formula kind data so, of each and here as to we can And use forecast much each for

space. -- with So different of a I all a this spread It’s earlier, concentration that referenced the pipeline I been of out heavier of lines business among C&I there’s lot growth. in mean, the

think some and in and more success I QX, growth So see we’ll certainly so QX and in and QX. QX

So we’ll have, I the year. think, go up in forward as we our trajectory

And just a that weighted on curious, what’s probability weighting, basis?

line give answer down. I drill do entire it and a business. can’t you across the I have I’ll for can is an drill down and try could I by pipeline. that Right, of front,

you That’s it. No worries. had I okay. thought

I don’t front of have No, me. in

Securities. of Young from comes question final Michael Your Truist

finer amount. dollar maybe Ron, you’ll expense a going to me, to point have forgive but put the try to I’m on

got year as from run mortgage to million maybe of about a we’ve lower of that into there? this with rate then based to at branch point. cost actual piece, the the the potentially the exit like exit half kind rate, we’re million more $XX of kind saves we to million sale XQ start I there? bulk rate maybe to Or XXX annualized high dollar to securities million in know, to But production to the a coming quarter you XQ in could, volume. I we lower on the a of maybe kind in XXX I’m think much there at going missing pieces, line as about lot volume, of given return maybe original past, a in the a be exit levels of you’ve year alluded year? that run the to the we you starting additional a variable guidance, your reduction then the XQ, fourth or Is Seems are run plus moving is reductions second that mortgage for to know, think year. the and of XXX normalized headed such think of know pieces closer Umpqua year, the

it. you I think nailed

I this objectives the communication thought. level, putting a maybe, of than easier then kind was kind the bow Cort, and just it Well maybe on Okay. year. just of of kind Could high just what kind all that And now you -- to of of lifted fog for kind year us what war focused you’re you’re the has just tell just really hopefully, the focused achieve and you a hope little what of on bit on?

the worry, all priority. of I momentum UI, and be on individual including probably I great executing everything That’s it hasn’t me consolidations sale so third to Gen execute end quarter, got but which of pieces order, those way the worry probably but if actually know X.X, appreciate of Next don’t caused on about in the continuing great necessarily a a end rank on rolled would an it. I lot out that, first we’ve to and they first of all, at we the like up.

his I and they’ll of sure including to think efforts, bringing through we’re that, second all the be the too, pipeline and execute making Tory booking and supporting our on PPP, communities, things Frank support doing round that. that and

in think been capital? where do excess appreciate coming that spent excess understand Ron’s are time to more organic I capital times, the the for than I questions and prior couple spending we we’ve with that growth. We time, our actually coming able was some are questions we’ve question from because of probably asked your from. use years I what where our a answers. do understand

and believer six remarks in five all out quarters. time with big prepared the frankly, gave to that and And then I’m a or spending some we’re So looking that in Ron his studying you quite answers answers questions.

So I’m we more What get there. we working So are your great to optionality, we good. excess capital What and need do efficient to Where do very Gen up I to need momentum our year next on already but But to do profitable? XXXX, to maybe we Tory moved on continue? the we Where already that this do. to Next to has chagrin, very, but have X.X now. much and momentum? end able going more year? have some feel do I’ve been right

we how that’s -- look a at that’s So it. look That’s I at. what

I Farnsworth remarks. question. closing Mr. final return the to our for now was That will call

their to conclude interest want will the Holdings everyone This attendance I thank Okay, for on Umpqua and call today. the Goodbye. call.

and concludes this participation. call. your Thank conference for gentlemen, today’s Ladies you

may You now disconnect.