Umpqua (UMPQ) 23 Apr 212021 Q1 Earnings call transcript

Good morning, and welcome to Umpqua Holdings Corporation's First Quarter 2021 Earnings Call. [Operator Instructions]. I will now turn the meeting over to Ron Farnsworth, Chief Financial Officer.

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

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

During today's provisions make be forward-looking are are law. which covered and statements, federal to of risks uncertainties call, we intended harbor will subject to safe securities by the and

refer of cause our differ For of results filings. as a earnings conference may that call factors SEC as within list our Page contained to the presentation disclosures X expectations, actual please well to materially from

O’Haver. Now over to I Cort turn call will the now

I'll then then of your Okay. credit, recap and Thank we'll brief Ron Ron. Frank discuss financials. to provide discuss questions. pass you, will a and take performance our to

earnings first share to strong we to a and reported $X.XX and available EPS the For million, reflects shareholders of per year. our start this represents quarter, $XXX.X of

$XXX balances million and a customer net both balance quarter highlights non-PPP growth balance included organic million. earning of loan loan First include $XX increase or components growth PPP sheet grew growth. of and The Loan $XXX X.X%. million balances of of

exception growth production. grew categories our by or deposits. or round of noninterest-bearing the million we CDs, acquisition million deposit in XX% opportunistic manage $XXX during on growth the the as X%, higher $X.X last continue showed product $XXX All customer or down quarter and PPP continued about the with in very balances generated quarter. to cost past during of Total down We DDA driven X.X% and mentioned growth As X feel participated call billion deposit strong the XXXX. conferences we in throughout investor earnings quarter, we loan

share, historical consistently are anything and soon. multiple shareholder announced timing Regarding and well but consistent an to with positioned we capital, us. have levels to expect With our a available options we dividend February, shareholders to methods second premature the healthy our returns in best per capital, payments of enhance quarter on $X.XX It's to of our of dividend analyzing capital today, active our more to we management. the announce are in announcement be

update are quick a for on nicely. initiatives, very Now X.X progressing Gen which Next

is X.X, great First, growth. pandemic the progress. making balance This businesses. for and economic associated uncertainty Gen a disruption, PPP part central and created we are the the Next of particularly significant with

-- We're change, new through Gen seeing ongoing PPP very, our X.X, help Following we're disruption transformation been already for is of and we've them provide Next are awareness navigate the uniquely kind of the customers positioned able opportunities very results. personalized we work market attract strategic implemented to to banking strong both Umpqua to looking experience brand to companies the leverage already talent. and positive and

well date, companies loan bank to full very was and XX% to consisting PPP are or that both with X,XXX first are a directly on loan. converted additional to we whose customers product deposit the X,XXX Our brand focused PPP proactive over them products. helped new us And have There close of relationships we of as negative programs a to as elsewhere. experience outreach who PPP had others

in Portland on markets. community commercial We're Area, across Greater dozen In addition, banking we'll California talent customer-facing the middle and and we've made this year, Bay add teams. market, estate nearly our looking strategic to Seattle, real this and additional hires focus a acquisition year Southern positions

digital quarter more through first of and and our sessions and an digital transactions transactions, XX% of last also with deposit Zelle initiatives of customers app more mobile human important piece strategy, us to including our year-over-year more XX% daily more year. technology are the channels our more XX% within frequently, increases remain compared banking Our engaging mobile

have Go-To up platform, the past In enrollments they XX,XXX quarter. customer addition, this messages climbed XX% Go-To within were and

and Another round both important human One customer how aspect our empower positive strategy our operational tools to us and system, loan best-in-class the quickly is how we We're of nCino, example we compared LOS to origination implementing operating the technology creating an round FTE the later improving new and forward to new to with more advantage looking deliver rest process less the is of first our funding PPP of memorable associates experience to this the give seamlessly. PPP, them to efficiency. this execute allowed customer utilized to digital second XX% experience. accounts with bank Leveraging the year. in new this recent request and

our adding last come confident top to commercial new end enhancements XX. the card of and to our XX we excellence, track Steward range. end of our upgrading Next Steward our to online partner and far launching APIs so also hit in them strategic of to the will continue receivables, completed customers rationalizations with locations to quarter, to future. On We forward the to banking and Gen plans our by a innovation store store implementing XX were execute on the regards In that Partners side, Umpqua officially is rationalizations the to total consider announced of map, remain on that by a to at experience. catalog, partnering we tomorrow. enhanced waves integrated scheduled store the consolidate this XXXX XX QX. to ambitious Investments referral end agreements These store sale fall plus operational in of bring XX to X.X sales solution We we are Earlier are commercial close the looking locations to and road on

the workplace in As new quarter, future, reductions we into we've we're highlighted reduce this how both sharing noninterest habits Umpqua working and of and finally, and the become our mentioned expenses. the When And working a release the as timing associates the previously, space change of reinventing our the updates. office of additional the back go-forward activities. as earnings to those and also we additional plans of part we're with greater provide aligns consolidate to financial contribution reporting provide fit of expense transparency manage we'll change in both mortgage bank segment This presentation. official, of banking our

results in favorable While XXXX core we a want did took banking advantage success bank. terrific of great seeing from teams their market our year our mortgage the and to we're cloud conditions, not had

of but includes management the wholesale, operations, mortgage includes banking, a administrative retail, holding As of company. as functions business except well as core brief wealth segment and recap, lines the the banking and bank all technology

activities, capital permanent investment Gen as the loan Next and banking just as estate included through opportunistically the related to are The and an in core was managing channels successfully before Gen beginning still As portfolio including comment in for enthusiastic passing teams, X.X bank the come initiatives, noninterest incredibly solid And in away. mouthful. originated increase a consumer bank for to financial financing the responsible the about discussed. results our of products. bank, income real initiatives. Umpqua loans phases from trends reporting XX% momentum markets, to specific and the of our our options core we're result current earned pandemic anchor and portfolio X.X, within commission expense. Next from our origination of noninterest our product That's Gen lower mortgage private loans growth, for banking segment core the expenses. expenses and variable Ron, our from segment expenses mortgages and this The can to prospects a sale to loans, those of all held it the Revenue asset take related can Next within and such and that, portfolio, production our such And reported MSR quarter. service Ron, changes an growth real the revenue earnings construction related estate the -- those including residential that are quarterly to for banking vary residential includes One with I'm income from X.X from of prem resulting our servicing the deployment the

on summary then and quarterly P&L. top of at want Cort. our time the level in house slide I'm earnings the disclosures to the on presentation from capital. page I of X Okay. our contains along, on items, Page And going more numbers spend follow presentation. I'll higher CECL a for to certain and those refer segment talk new Thank the wrap our with call, you, to

reduction GAAP earnings a to activity by due lower the than QX normalized per banking in fee seasonal Our was expense. QX lower lower and offset as expected $X.XX, mortgage PPP expected noninterest recognition, rate, share tax for

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

fee below reduction gain our interest expected, in interest recognition, noninterest a as continued XXXX the to quarter. we as cost declined to For lower long-term due swap loss at not tax QX for expected a and the mainly And as Noninterest income quarter much this net as offset Also, levels declined PPP by partially in premium bond fair a although loan ago. moving normalized a quarter on activity, recorded this rate expense had income reflected parts, We quarter. mortgage amortization lower and decline no funds. provision of our value this rates derivative XX.X%. increased

into gives for given we are volatile growth cost X ample sources borrowings. the intentionally end sheet up higher As higher total to This X% and available growth XX% ending points, the reduce quarter during at of future our our XX% billion, billion, NIM term the deposits funding on bond or certain basis for including continue quarter loan to liabilities. cash environment, investments. longer-term deleveraging us liquidity XX%. liquidity, $X.X but increased average of fund representing balance increased future $XX optionality noting X, holding the off-balance of level We rates cost quarter duration total similar interest-bearing and higher assets loan Slide significant sheet was balance And of deposits, the as giving agency total cash was and us portfolio at the levels

Okay.

that of disclosures XX and XX and segment past lead give Pages of disclosures our rates and more trends XX underlying refresh of our profitability, separating to mortgage by volatile along the more investors segment release. with the bank the Now banking value or the Pages on XX to from transparency the some to simplified segment changes. presentation items fair core reference over the year, the We've out on

here, the derivatives a I'll in X as and expect provision XX banking million in within liabilities the but lines Page the about this had core QX. this rates in interest is bottom segment sequentially, primarily on no to related see $X we increase presentation, income consolidated lower. point level, reprice restrain provide continue quarter, on of we provision page. Net of minutes, cost a in moving interest at the at presentation few talk which continue in gain have related And net nor noted quarter. store to the NIM Later decline, is XX gain and decline So noninterest Page more related slides, long-term PPP you'll which to coming the a we fees. declined or but in the of parts the interest which the recapture our to the to traditional will down back quarters CECL the release. the on I'll swap detail detail sequentially the on out, also sales over now income declined income deposits

million expense commercial on the past growing quarter. ratio declined $XX segment. quarter the increased on in quarters. tax be normalized revenue. quarter, net for banking XX%, fee this million, to banking ticks noninterest the $XX The segment the million of resulting for a than rate core income continues from fourth to the core few as efficiency the core income lower this is And few X% and $XXX focus Pretax expected Our

for noted $X.X Turning now we the or The previous in in banking These had decline top gain XX% a X-quarter the towards held line the the million Page of this trends. the quarter on than sale origination of XX just and mortgage with expected better XX a show presentation earnings of change $XX.X volume sale of X.XX%, total left QX. Page margin billion resulted items To the was ago. from revenue was This sale page. of over segment in we X% quarter, X the guidance. we release, to start,

quarter. revenue servicing pay but was stable the activity receive higher-than-expected did down Our in earlier

income included $XX costs. project income Noninterest the down MSR expected, discussed. the expense I direct Again, future, in To banking $XX due was totaled piece of for of of along for activity the change the banking that pretax segment while prior servicing the was of as the compared mortgage production growth The this of the income core pay XX% of as within only point X.XX% a time For the net here and inputs initiatives our our down important represented $XX.X and trend direct page, quarter XX% direct both level in in basis segment quarter. categories as note earlier of million was volume. mortgage the component the to just to but fourth allocated and represents on lending, here, the change to for costs, XXX about points home to of passage a was XXX XX% I in fair It's banking group, entire for the stable the to with hold. due expectations. mainly a the XX% quarter. side noted the expense costs, higher and talked this Pretax the right our all-in the administrative value, quarter expense represents a is good origination valuation take quarter basis In origination $XX component. $X remains in calls, third the from range this loss fourth million cost million million, held-for-sale and including million,

for the on sale X to of change our course the over to Gain margins best significant outlook $X held sale should with again, billion and trend. near-term for $X.X the the segment, rates. the of later held year. For significant the next basis interest on expect rates, assuming mid- and estimates we decline and for in full range levels points billion due the normalize year. should billion in $X mortgage quarters with pretty no sale the low remain year direct time no production to around into the mid-X% interest X should volumes low, this assuming input relatively of quarter consistent, range consistent be change MSR should The to on passage And change expense be fairly for

there this Okay. my and and I spent couple profitability. turn trends consolidated Frank. understanding drivers discussing segment I segments on parts note hopefully, and items final greater on company. over interest hope before net are most to but presentation the income time the the in discussion future helpful several for was later insight to some help this I margin moving give expense, of it potential into the A slides

Let for our your forward me to take Slide on XX attention CECL and allowance credit loss.

we and period process forecasts output all As a and a incorporates incorporate the in for for C&I, reasonable the life reminder, period, Overall, move the several supportable of forecast ago the X- XXXX interest Hence, our baseline most this due reopens. approximation reverting in a to the XX-month showed consensus improvement to these a to the CECL moving a economic instead to mean within revert of supportable uses as with back areas again Moody's and closer forecast use reasonable long-term updated which gradually as mean of the X-year the economic of a rates. thought forecast portfolios the economic economy in key to quarter, in recovery as beyond, economic loan forecasts February, We quarter period. exception thereafter.

our as prior recapture such QX. also the and as which With the CRE resulted Moody's $XX in update, the here quarter quarter approximately forecast quarter, to to CRE in late deteriorating reduced, has an compared related updated hotel, portfolios, recaptures several investor forecast forecast. retail However, model expected million and included their that were investor in in earlier the office CRE

with The the expected end the QX $XX.X at of and was the And was you were year, as model excluding and much X.XX%, this throughout charge-offs last to the we due this for net models government-guaranteed ticket for X.XX%, period, ending from ACL PPP discussed their the provision than uncertainty quarter noting small we result quarter. at charge-offs quarter off progress no low suggested. expectations that more Given Net loans. which quarter. overlaid remained with for majority the leases deferral clarity ratio rolling we the lower last year million, related past following

passage a these are the modeled. forecasts quarters. actual X net want charge-offs, if And I our date, the see of $XXX million will our levels, And to given the over at of remain time total lastly, the excess lag Noting least reserve, XX% I the our that the was that, ratios Slide in-house in net simply XX.X%, bank on XX, of The excess all is highlight capital. was of are basis But calculation to it of credit. to driving to to regulatory ratio capital. economic ratio as over X level charge-offs XX.X%, As simply discuss overestimated follow and take call well-capitalized Frank our turn risk-based ratio Tier which XX.X%. common risk-based is was That with now excess total Namdar capital for capital in floor. our models will

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

We section reflects of normal quality. presentation information to Slide quality deferrals of have and information for on the in quality Page presentation credit credit display interest our a our all ratios, X XX relevant our quality of credit credit CECL view comprehensive placed portfolios of starting statistics. XX,

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

to $XX pool with and net annualized million to in charge-off to Our charge-off payments. unable was leases X FinPac the regular resume this Included elected of of basis were leases previously net number points disclosed but deferral, percentage decreased who average X.XX%. quarter loans borrowers

loan quarters. coming end Slide of deferment at the loan to We that in XX to quarter levels shows more return the FinPac of portfolio the historical book. to the on total X.X% the were the expect balances X.X% X% at of

deferrals are X.X% commercial, real in X.X% basis, on X.X% and commercial reporting deferrals in estate, in X.X% we FinPac, X.X% real a For residential in in consumer estate. portfolio

portfolios highlight from million those We are of portfolio. deferral perform imminent Slides of the in again have USDA X.X% well. repurchases XX VA I and numbers same issues. represents Mae hospitality or as only very loans are XX, to FHA, no There like that to $XXX by which excluded continue we continue role development. the our all Ginnie interest, would guaranteed out to point On

of this to and continue we in excess Occupancy limited to on XX% service our continuing increased and with are properties watch However, level. very levels perform above this average now extended space closely. stay have

deferrals stated I've have at X.X% in very low We forward these X.X% with of the and with of is with Cort. this represented previously, over future borrowers of portfolios loan confident no restaurants back As deferrals. finally, deferrals, our limited gaming only sponsorship our look turn to we to overall portfolio with. at I'll portfolio book call are with remain growth. leverage and of at current to strong no quality X.X% rest air transportation The history with the now

comments. Okay. Thanks, Frank and will questions. over now to Ron, for Laura, And we turn your

Instructions]. [Operator

the KBW. Your will Jackie from of line from come question first Bohlen

to off. us charges the Cort, kick Obviously, moving card of was versus there's that parts thank to lot a splitting I talk for you wanted helpful. service just fees, about and out revenue, there,

revenue, to got needs specifically to lot swaps. What rebound pre-pandemic levels? commercial of there pieces about the think it includes and a other at you've I happen as to in product and Just composition moving looking I'm of I of some know income,

his and me backfill Tory's I'll heart, that comments. near have dear and then since Jackie, on Tory let to answer it's

Jackie, this Tory. is

of a I a seeing in in the some just today. of general transaction activity rebound think that space. we're put on pandemic certainly, there's a kind And -- the halt

been largest that company, without was market history card any very the And spend X our commercial single year-over-year. and is up entertainment segments middle spend. that card March spend. the of card example, big banking we in part and commercial community XX% an in it's the And had watch As historically thing of commercial travel that closely is really a

activity so things, seeing some increases in and We're and other indication. one TM merchant it's services. So

away to to in kind that's the starting And So quarter markets. -- in that of of show two all having activity bank's there's we're lot a starting think up of that or just I activity happen a P&L. our

Jackie, last And thing. X

In heard us we're here for past, we're you've us vertical the balanced and looking other company. fee create to that's coming the about the have customers an items. seeing deposit And for results As X last for commercial been growth words, single just out big the who opportunity that years, X for talk in borrow of and growth banking. not activity opportunities revenue for around or you're a in looking mission

some that than So initial we but that place maybe that of it and we because customer is prior, higher a taking pop normalize, year rate been reflective make the otherwise up as past And growth, of be run would fair Is for. that's assessment? didn't over to because see the could development pandemic. now the XX% you've have it got

so. think I

customer Bank I much think different is higher, Umpqua ago. was I'd different activity. The at years way. slightly X a It's C&I much bigger, say it a commercial more X to lot than it today

economy the in kind in create space, some and transactions the absolutely banking. fee And us certainly so idea moving for just opportunity community again income -- is commercial will of and our of

acquisition of customers these efforts? those Okay. customer part are customers, of them terms separate any converting And referenced over? PPP XX% that you Or that in are of

would -- that. in be That minimal it be would

represented the X segment growth X.X to our looking in really years. just not over was than all. just a that's couple at a So traditional years middle is It's today ago. customer This different it last market

question, new back, you rate I'll then pretty what seeing follow-up mean relationships good going and conversion growth my are I guess I with PPP? got then And kind there? is a Okay. the which of you've step from

Yes.

this again. is So Tory

made non-Umpqua customers, X,XXX we Cort So loans, loans, of roughly I to bank those. think about had as PPP X,XXX-or-so that we mentioned,

the turned our to spectrum. of in date, across or and been of and small into way that million the into payments set have integrated talk has the last months. things in To card to X activity revenue that million getting to of go. is bank. companies relationships a $XXX them X the another since it's have $XXX our and have to full-fledged at we bring with vary about. them TM They from company them most so up We community, those and size deposit look it all small, on occurred generation we I And really bank over X,XXX commercial certainly kind The

lot I that for Bank we're a Cort prospecting and mentioned Umpqua book. just there's us brand on bankers and communities opportunity highlighting But taking new promoting attract talent, think what aggressive we in to and of in So we've stance what also new our kind that very customers. done, and the of of a continue to do attract

come will Shaw question line Securities. next from the Jared Your of from Wells Fargo

loan-to-deposit guess how the balance but or liquidity the do that do to really position how really back customers on ratio how really net loans burn a or that, between to before higher have I I the specifically, needing outlook, you seeing see start sheet looking before at start come they to have the burn much through into loan C&I, be dynamic growth? borrower much thinking growth a increasing? guess, Or should all we about

this Tory again. Nixon Jared, is

answer think I that a that. would ways couple there's I of

right. a -- is first as And the and have for a them. of of foremost businesses You're the liquidity does absolutely kind liquidity of that bank. use Obviously, ton

of segments. One utilization. the and of middle utilization rates our XXs watch in low in terms those credit banking from of have community gone the is to things the low year-over-year, market we for XXs And lines

debt aren't company. just their fund their leveraging companies to So

was change the to X that's have growth would front X So X the that's $X And that quarter $X.X loan I going call to said pipeline think our billion. grown size, reached to in to months. to pipeline next a and we've us, over had the and at say about for today, actually I was we process last that billion. pre-pandemic on this just I that that a

to pipeline our quite would loan the prospects honestly, years. is seen I've highest the company X since be and pipeline been for loan new mostly new it's the bank -- at I've in our So pipeline,

folks and future loan of very about kind activity the our on feel line view we from the the the for good front. So on

X.X Okay. the is plan And any in personnel And the grow branch plan hiring then the the commercial of a out? is to there plan and sort relationship Gen of managers with lending conjunction there What's of closures new some or base? space? target to go Next

have Absolutely. X started quite I middle we we X.X, do in continue -- our earnest, few mean we added we've market ago folks years space. that, a to it. think, on in and I And

Some just adds lot that we moved of company in we we of of of them terms the And complexity as upgrade markets size company people them just new opportunity. have replacements of are then to to that feel in have we growth been bank. wanted net that kind up of of many talent wanted that of we and a to company are

about optimistic I markets very major relates we're middle think our it metropolitan core as to really market business.

we we're we into the have bring to and looking a are trying So and company. for that pipeline -- have consistently we talent, constantly

do So we to will continue that.

and finally next over Ron, maturity months? higher maturities. about Maybe, then just you're potentially, Okay. roll the And schedule off What's me. the cost for like borrowings XX deposits funds some guess, talking look for I the and to opportunity time

time the is of tail have majority deposits XX months and same. within the The then borrowing a Yes. will

So I reduction in NIM. think continued those there'll support opportunity for two a be the bit quite helping

question next Your come will from Sandler. of line Matthew from Piper the Clark

trough and we just get can a margin on try average Maybe where loans the so kind securities, near rate a remix just for opportunity level, excess to sense liquidity. the maybe new and a given of for the Can is some headed? outlook just trying we're sense us give get on weighted to start you to that margin

Interest Xs are Xs, business, between really. -- originations the are on rates is low of this new depending Matt, X, again. Yes. Tory line low on to

over it's the couple last quarters. So consistent, been actually, fairly

So seen on any really there new originations. haven't change

Ron. Matt, this And is

that generations side, the back the the from depending overall, term On for upper be excess expect near benefiting for loan-to-deposit be and on then to we maybe outlook, into would deploying and/or say, Xs, near-term longer at I'd And this bond that margin ratio. But the pretty increasing the loans, in X, day liquidity stable the term, stable. to level XX-year. relatively

Okay. to capital. Great. gears maybe just And shifting

of I an the quarter think were give maybe like? process us can looks your you were revisiting I last guys on in buyback you it and the at appetite seeking guess update approval. stands that and what looking where

to the got, an loan opportunities, direct or of looking that to small expertise there and where into plug-and-play it excess call a a increase our capital -- adjacent opportunity get we've So have is some in question amount of second, opportunity opportunity to category we're your all we an with we've at got. I'll a I including, capital fee

So opportunistic the got. #X it we've amount and more come be the then our capital there does And after there. fairly that buyback, And objective regulatory last a on are very always that being shortly. to excess we take year, to will of impairment be relative would with of approval

fee Okay. to small M&A your do whole to the then bank it? afford generators or your And commentary multiple extent around generators, can asset any desire

-- that at profitability there. company for X we're opportunistic. the that. years, messaged have you we've the has mean, mean X Yes. or we at that last I I operating all looking proven been been producing always and the all are opportunistic We've out the to deals been we've better always Obviously, like we've #X,

plug-and-play, the But is of we more opportunity type type, on and go look at now becoming today right think success A can and is call execute bank it. and business a it we where accelerate down of we road. against our strategy that's guys. nothing integrate quickly plug-and-play I core plug-and-play our can how where choice very plug-and-play I a towards

the one. remaining Okay. left And Ron, with a happen to you fees just last PPP one, X? do have round housekeeping net

recognized. million approximately $XX.X around of around would be to just be It's round total $XX.X $XX.X X million. million, PPP do. X Round that be roughly would I fees in Yes. --

but So to the majority expect forgiveness for year. round the X, continue do we throughout

Your next question will of come from the Young Truist from Michael line Securities.

wanted start the the color I breakout. disclosure I to and appreciate with segment extra there.

But as and of just of investors. sure free business kind back PPP losing for it's of is of -- mortgage in though. helpful. and to into like provision, I make It is frequently? prior normalize seems got there value if if where the we anything I the the message wasn't maybe maybe relatively it kind to sort money years the representative mortgage kind is of business the rewound of volume bank think fees I wanted where stock the we strong inexpensive was mortgage the or

show experience but hit, that quarters. this might year. see fluctuations the wouldn't X year, remains money. is over following I that to related had increase now, at in that interest last QX the and MSR did losing downdraft an absent volume. actually significant so didn't mortgage last then you record levels. of MSR But Michael, by profitability the just segment in mortgage say occurred Anytime followed lower that in obviously, is We earnings you'll business the Ron. value wasn't rates quickly MSR X, charge fair been have a

could into now I the give, more any done Gen past portions savings then, I color at you've additional the reasonable. that kind And of this maybe is point, around march or of Okay. with plan as know guess, in Ron, that I expense the some defined, to Next if seems an on timing XQ bank the there of the you maybe X? and the is was pretty forward. expense end guide, kind there didn't at the valuation guess, year, like are of It

right. moving standpoint. transparency actually we on a last talked and goal paper Great mean with every change from parts these I the Yes. the question. about years, several them segment helps the for And but seeing quarter you're just

That's that we'll most to X.X So lease presentation but in And start Page and here to QX. We might costs initiatives. On facility later in excess Next value more that right see really back got side Gen definitely those sale the bank related disposal the QX, goal Investments. expense mortgage. of the that side, lay will related the of of see the kicking versus do out I'll we was point Umpqua additional QX. underlying in trends in out in see X QX, some QX, on core here office also exits, profitability stuff. store of the consolidations that the reduction We've type then to save

seeing quick. So we'll start pretty here

more as the quarter, of in this one, for outlook high broadly if just growth and Saw some summer then Cort But And know or don't thoughts but the about sort kind level move last I I curious customer markets just one we reopening and your this Okay. Tory. of just in is maybe activity. the through can. if loan reopening there.

Michael, it's Tory.

As and year. I to the are just past the that to is as pent-up meet momentum stood get our to Obviously, get kind certainly of with said opportunity built company. year, mean world excited bit the and with up, And for the chomping I some and we're earlier, potential visit that prospect and the over growth about to demand company work customers and our customers our begins folks real for think what and over communities ability is. starts how at open we impressed the I activity. up back we're we've past by our and our continue continue there of part out virtually the in prospects into with the really to kind for to

So our is loan pipeline significant.

Our is think, significant, excited we what activity to the accomplish the company, next can over I quarters. we're see very and several throughout

it's Michael, Cort.

of to We oven and loan goes did and back quite growth, their going level to We're that getting closed like we're has took So to a operate are back in states, a very customers, X pre-COVID. is specifically kind states, exuberance serve, of in And we're going also in pandemic of it Tory X some operations in high is when And communities, level we even a they the lot redeployed businesses the on on. modest approach show in showing, both be to add of XX% that business and of into to fairly business. see commercial we're from sitting communities here let at when operating Jared's they borrow. Portland, cash a and are mentioned, still We question normal consumer some our starting and activity. to early me open. aggressive majority at

guess serve haven't I So we've begun we the full the reason to job and for in that done stride. it economies they even good hit is to a their comment

pipelines and very the new -- we're the watching bringing some utilization. that loans seeing -- and and cash seeing are to XX% we XXs earn-out sheet to of customers of with about back Tory's low those balance into point, you come So then in businesses off the commercial enthusiastic

So I which think enthusiastic. something, to we're or in happen, just a wish great don't it's anybody, we spot a on very COVID-XX wouldn't I I relative and to unless going feel think there's pandemic

from from Steven next of line the come question Alexopoulos Our JPMorgan. will

mortgage the on disclosures and the start appreciate helpful. are actually very to new wanted side I

margins just they near First, on in sale in have just guidance, if maybe the XQ. margin, in pretty gain for I given sale on hold might dip but gain on the this far they there? longer-term in I'm hear the Ron, steady held wondering so were the XX-year seen quarter, recent term, with we've where

It change has. with But fair here And more say so the lock yes, term. that's pipeline the related over value I'd time to pull throughs. on near

high to but Over term, X was good we the it glide continue to range it as QX. longer that lower year, previously, later in see expect this still to discussed we do

at on about then quarter, you're we how efficiency least the for calling if disclosures, what normalized ratio the do think And ratio you Ron, the it's segment? too, Okay. crept at up every a out. new look efficiency

mortgage For the segment specifically?

Yes.

sale mid-Xs direct Yes. the again, low say and the cost range, XX% drivers in XX% to Yes. on upper to that recognize in the overall the But the the pretax -- I'd being main X% based to margin day probably gain end of smaller our that that's occur. does of of percentage income a originations being you when in range. also at the much too, on X.X%

Yes. Yes.

you've transactions retention anymore? on Number you've all a from closed? branches up ton. on then are what And your the But Do two, you care And store helpful. had, number digital consolidations getting all even they one. talk are can of the about That's feedback of branches about you that customers Okay. deposit trends? I that know

Yes. Cort. It's a good -- it's

all, our transactions last and down traffic of over First year, XX%. the is over

your themselves the not to not they last they We're care? question, not traffic. or to seeing care So do retrain just

much that noise. So going had consolidations with would this year, There's the not say, be always noise. as I we've to

combine take it runoff normal we to We've and we're another some balances negligible Our actually outreach lose the do Steve. X that X store customers, good been combined aggregate we may X go up. so and with has runoff, We at. seen do actually and that

store continue ago. been even fairly, prepositioning as announced looking X is over XX investments a closing XX are but Let's reach operations. Hence, just don't store not always we the retail which anybody quarters the your the because I the kind But more to what important everybody these robust we be as see we end and the with there's of for, famous of see honest. experience, opportunity know to going the we're consolidate, the now aggressive reasons can the yes, make We and We're made and word, didn't last we now not on between we've if X consolidations, see of that we have to year. to have digital. whether years, we'll in the be that happy, clearly out, satisfied. thrilled I'll use I do customers is completely

-- customer over that, XX,XXX, part Go-To, store Steve, grow. it now platform. X Go-To customers into through And company a the for our on this is our us and have serving piece base that's is big Tory. add connection which I'll continues mentioned. consolidation it's we which to -- Go-To was just These Cort and us. be of very as That's still a to would well,

curious just engaging frequency, different customers same it that with the is format? the a I'm Tory, to Umpqua are Bank feature? go, you are more Or on finding frequently bank given that

text is and store for others of And to want related store my the physically something. used it it and app around is changing time. I very depends need And use you do I go something A And can message It send it, do what leveraged. majority -- need kind consumer banking through frequent And over the here get just the really I it you no a sure, can me. have more I and to and a general. done kind app. of sense. done, of to need for useful it's a to it corner need And and either it's do which excited lot great about don't the on that for servicing I a little there is that's in I of it's I or do vast get makes the -- how done. I probably once think app. the it's of accomplish

So customers really I enjoy it. think our

cost-effective issues? say could that actually customers you with that solve I it. for service more way engage these Is to it like would to customers

it are because with that. your having who reset you periodic Actually even something get Normally, It's Cort. splurges don't is engage application every Go-To day. maybe like people an issue, a though or we of

do as if, So need It's it it you appear to manage thousands over you of accounts Umpqua manage time. associates -- XX,XXX Bank well, kind can because may even in to spurts. period many how hundreds of goes though of do text a and

but day may go quarter, or have the zero of -- customer having was may abates You and of in periods time an spike communications. you've when down their usage to to a a time, got particular most back particular a negligible issue it

is highly scalable. it So

experience when a people they store use yada, it as and getting it to store, into opposed cash-in to only yada. check, scalable we really than find a because walking a cookie be more In and it need fact, yada, our

it lot data, that a of and So but be more call, we maybe provide scalable. at to we're on we'll future looking find it still kind a

of will question next Davidson. Rulis from line from come D.A. Jeff the Our

Investments throughout us year, than captured was lumpy. back will million, the it $XX quarter and see progress on are And are you in of call the fine of of year's tune at progress circle a that. little some of of captured to be it this the much disposal throughout the it, XQ midpoint that like a $XX rate? sounds to I obviously, you if to could wanted give of the what going more consolidation guess that and Just Gen. you sale of mentioned, of kind the offset we've kind just exit And how costs in the refined million, second projected Next on there's expenses of how the sort Umpqua just the kind I where But on year? think kind we Ron, run

Yes.

see the couple You of late million consolidations off bit bet. we a QX the months in but year, save, right. X the as QX, the QX, that of additional start really laid followed QX of I then on probably side presentation. the tail on back based facility There in in in in X cost, the out And again, on, a say in We QX, a X had Umpqua those see QX. just QX. for the by related exit exits see see -- costs would little disposal office Investment some we lease store of to was We'll dollars to you're saves Page on

Sure.

there. that's you still Okay. that of the But XX I we're mean, track, end year, XX, XX% it's on the to for of -- the if say at certainly target, look you by

Yes.

FinPac, then to of in rest expect well I coming, either, net And the just largely and I the we like mean now I much to historical that's you heard think of identify to looks the level but done wanted pool the makeup I isn't to guys knew driving it quarter? clarify and up portfolio -- was can wanted but that return have just the you sure that that within correctly. cleaned second I make loss leases the that charge-off

the FinPac number this half do back quarters It's I the long-term don't side. did. over CECL to been least averages impact at trend at you And we more continuing in And see it drop Yes, here X this last on least. again, of gets a earlier. at the did. down had commentary point, year. to I You second the expect to the that bank

the seen haven't We offs. charge

[Operator Instructions].

question will from Stephens. Andrew from of next line Your come the Terrell

generally did I averaged the but on million $X appreciate home want I on direct Ron, expense. the guidance about a though, the it lending mortgage expenses. It quarter, indirect just ask, to $XX that million million number? run $XX step so? or the up the there $X unusual to down rate quarter. about kind of Was to million in back should stepped And something this

related administrative There's it with it expect out quarters, that the around couple decrease. of the core saves year. the last segment Next was of stable should banking servicing function the within internally the production. over looking of a I'd more But the portfolio I'd or are areas pretty to say probably allocations say Gen nothing our or balance of segment. mortgage significant we Majority see to X.X increase be

I the this Umpqua Okay. might MSR across a the wanted seen on been MSR sales there of know I forward? some Is there any you, any have pre-pandemic. of we've quarter. to the for to And couple appetite bigger then just moving table exit industry ask

at a continued were Obviously, are within point, comfortable plus with connection segment. and back the profitability this great mortgage year with we pretty see from valuations We're no. it. and we're much At a where the look to reduced customers with where

Instructions]. [Operator

As questions I'm the from continue further phone not with line time, your please remarks. closing seeing at any this

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

much you, participating. you conference. concludes so presenters. today's This And Thank everyone, you, Thank sir. for for thank again,

disconnect. now safe, may You Stay a day. and lovely have