Umpqua (UMPQ) 22 Jul 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Umpqua Holdings Corporation Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today Ron Farnsworth, Chief Financial Officer. you. Thank sir. ahead go Please

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

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

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

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

Frank then pass brief All performance, discuss then our provide discuss to will we'll and financial. right. Ron a recap credit take and your to Thanks, I'll Ron. of questions.

announced a quarter share increased record interest prior net quarter our quarter the year. second we of in increase reported both authorization $X.XX from new the For shareholders organic non-PPP income of of last available share, an last and of of quarter, earnings the growth, the loan program. $XXX second EPS to $X.XX reported highlights recently were per repurchase The million. from the This $X.XX represent the quarter reported and

across annualized. markets estate, categories, pipelines, of grew to quarterly for on faster organic to loan quarterly to forgiveness the XX% commercial back over of in loan to balances came This loan non-PPP of or the growth momentum primarily previous than previously continued and loans accelerated during balanced fruition loans $XXX our the PPP quarter. real and in towards growth a residential X.X% customer a balances, was the the growth million, due Our acquisition pace rate past represents at this $XXX as and loan record related months. the SBA In million all company approvals regards including stated quarter half the brand talent decrease over was growing real forgiveness quarter, for $X was commercial our estate. processed optimism as million process PPP PPP representing

organic in On robust sheet, offset small million the the balance a $XXX million in a decrease. balance forgiveness, loan PPP resulting by loan $XXX net growth in was

grew grew decreased DDA our non-interest-bearing to DDA savings $XXX million, And down deposits, balances grew non-PPP or are interest-bearing by $XXX as time continue grew quarter we $XXX or deposit obviously very million balances grow guided. substantially, see Recent loan trends $XXX pleased We previously balances had annualized. and X% Total to million. manage cost deposits we the million. during as X% deposit $XXX as higher million balances the continued,

ASR $XXX dividend coming be per a authorized management. healthy Regarding to positioned and we are program of levels market or capital. our year program other capital, historical through over $X.XX the we active in shareholders repurchase share, of we intend In With new Yesterday, our execute to an to methods. open with Board Directors that May, stock our potentially a the up payments. we our of announced paid of to common more repurchases, consistent capital million well

initiatives. X.X update for quick a Now on Gen Next

in strong work brand attract positive built results. us as momentum disruptions both customers talent, growth. opportunities awareness First, and seen of market PPP and the to provided we've quarter's our the that last for balanced By growth leveraging have

new mentioned on resulted We're about our pipelines earnings this strong very growth calls, the across excited remain past loan start they momentum to which quarters As we company significant joined customer show bankers pipelines. were new average, and our bank, expect the book teams in previous balanced quarter. developing. already couple a their future On to elevated, our onboarded relationships and recently customer which after are strong support

Our pace. remain engage an strategy, customers us our to digital initiatives through our human digital channels accelerated long-term critical with to at as continue

same year up past compare XX% more XX,XXX we we months mobile messages X%. within year, banking ago, Go-To were Go-To sessions and customer experienced of time transactions deposit the within As and the a have X% mobile transactions, enrollments the increases compared platform first daily of more the more our app. Zelle six to period climbed XX% have

human treasury management products Our and treasury commercial small package past launched our acquisition quarter, new This in needed operating supported key essentials, customer current efforts. a management TM initiatives digital we also business which environment. called business provides their services small

payments. in brings consolidation expenses internally year, locations announced mid-QX. of rationalizations The the quarter we different regards cover this by This X.X consolidate a XX. end to the the announced to outsource store related commercial under store the plans allow and in Yesterday, to total fully card, checks, consolidated quarter. sale another was The of business to of total payments year Umpqua of this to our past clients the pilot and over excellence, Steward Gen we In formats, to initiatives earlier will XX APIs variety to locations bring a of rationalizations Next XXX wires accounting noninterest which few XX. their our launched commercial to and will we Umpqua of to Partners completed with completed, platforms. including business the Additionally, during the quite started ACH, operational closed XX complete Investments reduction accomplished which

key XXXX. to to Our closer the of initiatives will target of end goal on of XX the a of to us and XX end locations range we that by end the continue top XXXX work bring remains to by

cumulative we saves term. passing by Ron, spur to shareholder under within markets to expect to far continue related accomplished will X.X the to noninterest rationalize growth The exit three and continue back reduce before long we and Gen space. leases, the we office quarter banking future space are in will value made quarter, and certain of periods. program slide teams the past the remain of our presentation, expense this and we recorded end accomplish enthusiastic One to overall our also component to highly so from our costs comment over to the what deliver plan save back-office of our the show the the exit moves During growth prospects On Next year. as and earnings final a of disposal some momentum the I

a as here back into XXXX. we are And in We expecting finish strong that, Ron. XXXX with to and head

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

GAAP recapture share $X.XX, loss, the lift prior than Our the up on income provisions reduction in quarter interest were for per for earnings loan prior income. and noninterest QX net from the with more in offsetting

provision value were our quarter. Excluding and pro adjustments, excluding this recapture, with the $X.XX per was MSR earnings share. $X.XX CVA exit along And per input share adjusted disposal forma, costs, and fair

We reduction the reflected reflecting gain card-based increased noninterest mortgage in million loan of along decline cost and banking combination exit net economic activity improving no in expected disposal continued and interest of of in Investments; funds. costs income a X.X our with of loan to flip for banking store derivative moving prior programs. with had and the forecast future impairments fees, a swap our in Umpqua increase the average and a higher related revenue, the compared offset an in continued reflected the noninterest lower sale with expense lift reduction on Gen Next balances of the provision of quarter. X%, fair income as prior loss the our recapture by the part parts, with For growth, to consolidation lease $XX value provision along And in mortgage expense

balance as mentioned previously, at liquidity the Cort us longer-term investments. early future certain the basis higher loan advances up on loan higher quarter. our noting optionality to XX% Interest-bearing forgiveness cash ended increased growth yields loan for continue was to increased debt and as the funding sheet were or the used bond portfolio duration but excess this for significant gives we from quarter XX% And in As liabilities. agency balance We level in the quarter while deposits reduce continued non-PPP billion, another growth X prior NIM our by X. the quarter billion similar mature. PPP into $X.XX term QX, deleveraging our slide $X.X cost offset significant was average points cash of This

billion, to $XX.X higher available liquidity of future liquidity quarter-end giving sources total to total off-balance representing and of ample sheet reduce deposits to including XX% assets borrowings. deposits, growth loan Our XX% increased and term continue and us at fund cost total

Okay.

to of on for XX past the banking and for fair disclosures ranges more segment the XX this to this presentation separating and some discussion, segment the currently the are the of changes. over the underlying with segment, value provide or of estimating Now pages core high-level give year, to of profitability, reference bank more Recall XXXX. balance the volatile items our guidance simplified lead on trends XX and rates our we'll disclosures quarter, the that the from XX by last we transparency release. pages investors and fiscal out In mortgage year along we

recapture million income it compared in million, on in $XX gain here strong the gain detail core a decline change of loan income XX $X.X million about forecasts. the the from increased $X.X value fair which declined QX Two we million million Net of down increase here interest provision on is noninterest QX the advisory increase funds. was Umpqua of and but sale million to included talk $X.X in $X.X with charge lift Page of minutes, again SBA I'll this the driven sales of nonrecurring on XX cost or have gain the CECL increased quarter. swap the a increased see loan Investments, fees, first derivatives, million in in in lines as $X.X swap fees. quarter few growth quarter, or back a fees, in interest within $XX a And presentation the of long-term segment, noting a a with X% along M&A in sequentially rates on in in and release. now continued $XX.X economic Page $X.X by million XX% increase banking you'll card-based as improving in along million the non-PPP a this So, of rates

$X.X million this, impairment Our Below this consolidations costs an exits as lease growing related last commercial up revenue. focus related on of quarter. in execute increase two-thirds to million our to store we one-third this continues fee on a disposal $X.X to we recent lease and plan. return had exit work right-of-use to asset About quarter from this to of be and

and banking million. balance. of to segment is live, utilizing smaller square associates increased office around terms noninterest In this goal for banking footage resulting $XXX closer to core significantly the groups the associate of to The hybrid efficiencies the quarter to items. several our related this work-life increased be Our majority our both core support the reduce workspace to pre-tax, for in cost and quarter in main where back expense X% for XX% shift category workspace

XX% X% consistent provisions, from pre-tax core Excluding efficiency by at the increased on consolidated XX%. the of recapture total. core on prior the represents was income the QX, The and for ratio banking,

range. of ex-PPP balance NIM loan non-PPP the continued growth in the overall the and year NIM expect the X.X% For around X.X% X.X% to we this with

presentation balance the market. this bit market quarter a billion in margin on $XX.X page page. basis the sale of a QX noted page of the of lower resulted the gain held-for-sale now better decline expected resulted pipeline pricing. XX sale volume segment total again of origination X.X%, the or trends. XX earnings towards To About XX points we We banking in the had decline drop the QX. than on given to margin revenue in Turning five as mortgage was XX% the of lock expected release. from start, items from These from and of the gain top show two of sale million mortgage The slowing $X.XX quarter, with from down left

pre-tax the quarter and of volume. X.XX% our X% first was banking our income recapture and stable in loan of and production was as revenue representing excluding the income, banking in of for in the of the change segment And change note inputs was page, servicing to was due remains hold. important origination time passage segment initiatives held-for-sale down XX% earlier take of net MSR fair a million as $X.X both represents the Pre-tax million value, while side for loss expense the in of Our million, the the valuation first million, right $XX.X as to $X represents higher piece mortgage X% only stable. pay servicing for activity quarter XX% administrative expected, costs, and direct this the down mainly million, quarter, to expense income losses. Again, compared within It's fourth of the for expectations. costs. provision the the totaled our was core the growth mortgage component It's range $XX.X $XX noted of on to quarter. quarter. this from allocated prior costs, Non-interest direct the with along The banking here, XX% due

near-term our remain billion course decline mid-$X estimates in in rates, the X% be in interest lower best the for year basis in held-for-sale year no no balance the the Gain volumes interest year given consistent. to the million $XXX the rates should margins the year. assuming The range. X% input change of the sale the outlook segment, million over expense range, on we levels held-for-sale the of end mortgage QX should change low to on on QX of for should in with expect in low significant relatively around of For and $XXX and to time pretty significant passage remain and should points the balance and volume the in due the change assuming again, production direct low MSR range be

high-level uncertainty midpoint normalization and flight currently with to the for Gen several and the of of I'm going initiatives business. at XXXX give with lending fiscal select on the have planning market mortgage of CECL, ranges in the that for XXXX target Next some X.X, we're we Given are areas year under we along

core we in Next we to overall year. next expense the are savings segment start single-digit million growth in be Gen this to segment, on banking XXXX. and reduce range expense, For And levels core million non-PPP targeting show $XXX year. overall banking expect to later loan high the X.X for cost the will The $XXX

investments the Fully and this on forecasting to additional sale million Combined X.XX% Next $X continued around is current manage would a of the the interest direct full the lower rate on reflect the XXXX. banking expense and of in in million direct million we expense to $XXX expense For mortgage in non-interest realization sale will in gain result $XXX based mortgage fixed estimated Gen work range segment, inflation lower. is with conventional to at the on segment with year costs allocated margin to around total we activity, $XXX and the many will outlook, expense in initiatives, for XXXX for million for lower core business. the range banking volume volume, are $XXX higher X.X% of billion, certain the based with X.X% range, noting which

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

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

a updated for uses portfolios our all exception which mean output forecast these the X.XX% XXXX portfolio. in forecasts $XX.X from as million this for much included period this charge-offs C&I, an the loan, pandemic. economic million the three government-guaranteed supportable Hence key CECL hedge was XX-month PPP two recovery lower The quarter and Net the loans. life CRE and of consensus of forecast to in than end million period. negative QX reasonable near overlay incorporate process thereafter. $XX models recapture As reasonable the the suggested reverting potential several the with within majority related Overall, economic supportable period, slowdown areas incorporates charge-offs the a provision showed May. term of loan a on We reminder, last gradually forecasts for as we recognized overlay, this ticket low the small our was and economy economic most at various the a for improvement economic mean revert portfolios of lease excluding We turns quarter X.XX% used beyond, to net and any forecast year quarter remained reopens. year to against loss. $XX the a to or for ratio with to noting at this ACL the Net in

As net passage if the the the take simply the these at reserve are driving charge-offs But given simply actual the to-date to net have models follow overestimated as quarters. economic forecasts modeled. of lag charge-offs it four of time see least will

risk-weighted one highlight day common providing models over well-capitalized approximately current of I capital our for at Frank slide periods excess or risk-based to excess on in level the cap. we be credit. than basis in XX% XXX XXX is coming if if back will expected risk-based share $XXX was capital. ACL of regulatory calculation in basis I XX.X% it excess ACL improve. yesterday the that the remain All on points either million is which future of XX.X% loans of ratios executed total Noting $XX proven points with else The Time will economic the is over And million be that X% just our lastly off market is future to Tier X for And the completed ratio recaptured over to on capital The discuss to Namdar represents now when we of forecasts loan levels, our was for ratio and/or and which used bank that all year was XX, growth tell. continue lower about want are return currently. XX% equity. charged equal the ACL ratio floor. in-house our our be our CECL eventually will to Our call this XX.X%. our to add was repurchase for to are over announced assets, non-PPP basis And capital total level the correct on approximately excess turn

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

assets non-performing to decreased Our X.XX%. loans two consistent assets X.XX% classified to our total loans points ratio at total and remain basis to

Our began loans and percentage indicated average five basis X.XX% X% decreased historical net to portfolio and to the to during X.X% closer we charge-off annualized leases earlier to return FinPac quarter. the of levels to as points

to So quarter this deferment of balances equates to the to shows the that Slide end the the the of XX at $XX.X at million loan loan total X.X% were and on FinPac $XXX,XXX bank. attributable book.

and For real than those point or basis by real a in USDA last loans from as quarter, X.X% FHA, point numbers rural Consistent the less commercial Ginnie estate. deferral the with in are repurchases excluded X.X% guaranteed are we consumer estate development. have deferrals $XXX one million FinPac, VA one less in basis commercial, in we X.X% on deferral Mae basis, and reporting portfolio in other, than in residential

of the obviously the to I'll loan with and remain our Cort. turn back wrap to forward quarter. this pleased to book future metrics look over up call So very we credit We quality confident our now in growth. quality are

questions. We'll Frank and Thanks, Ron for comments. your your now take Okay.

first Rulis from Davidson. of Instructions] question Your line the with [Operator Jeff comes D.A.

Hi. morning. Good Yes.

the loan end question quarter a Do of sequential Just versus you pipelines. the pipeline the quarter? have as on of kind

the pipeline total in Jeff. of This million up sit Hi, of we over QX is for -- and today about business Nixon. lines billion end from Tory $X.X total Pipeline loan at just is $XXX pipeline. all

folks of Great. on as the to track, actual guess can Cort get net you production a bring made also to the at of were us and think trying rate where us on and alluded and steady when been you trying you follow hires Is figure just when in the to if through And to if through track point it's then I hires, hire there growth. through that shows that? you throw follow a could pretty I

if last figure. would talent know of don't and we're terms accretive to a I Obviously ongoing us and I could Umpqua who several you hiring for I culture to say company years. been choosy be in the the the in has we the give want that actually of Bank. for

footprint Our been our hires have in QX and our out throughout businesses. spread

real in some estate. got we've So

than previous continue our middle probably We market. hire in in Pacific business in hired We've banking a the hired few We've Pacific market middle community this Northwest. to the more quite throughout quarters. in in Northwest quarter

across continue to So bring good we talent, customers our to and line. our build to them or really the to ability and and hire that them into in to But the continue quarter to mentioned, it two continue get look for hires, for continue about feel bring Cort as finish a start build new takes pipeline. to company. And the pipeline really

Got it.

of and pickup Tory a trying the the in And reopening in to Oregon one me would net of impact for good just numbers to peg Cort, Washington the maybe growth. so pretty But -- given businesses last or suggest particularly.

reopening? you and seeing what saw would you're color care ground If on if economies of you to level that those the impact

specifically Relative make question. Oregon Cort. footprint, it’s our to want to answer just I Jeff, or your sure

growth to restrictions But guess your mean specifically I it tied reopening? broader those prospects or California it has seen a it being I lenders? is – just peg it Sure. you've guess that, as I impacted would mean from is different. yeah, you I Oregon, on lifted bit Washington becoming a delayed QX -- growth standpoint and

slow West parts There's a in Seaboard do moderately which states generally opening borrowers of no necessarily just back. trailed, Coast the is Midwest the Eastern and say includes would are Pacific I some and It's as Rim, and that you We as all their hire, don't goods about in hear taken step or cases all people to places and businesses in they're talk Pacific our operate. enthusiastic. to business the the and we get are but customers open probably around businesses and question services. selling affecting reopen business the Northwest a steady certainly optimistic. They're again. our manufacture They're to if they we're heads the customers, continue their things happy progression to be be very stores can happy

So grow and to continue we feel our businesses. business new very, very ability good pipeline and about the of book to outstanding

enough. fair I’ll Okay, get Thanks. back.

the Your Matthew with comes next from Sandler. Piper question of line Clark

Hey, good morning guys.

First, just sense sounds might months. or next in for how It long for XX cadence completed out that on activity, to just buyback. to just fully a a terms might be looking sensitive this out you're I'm one not? time we you price the The the prior the within get there. of hung trying you had like that get there see

up this over with Ron. Yeah, on and laying excess to Good is morning, close million The is possible we range XX last in the capital if strong ASR base mortgage capital quarter. the our over million rates results the really the key of year, mean, decline over this to course excess months, $XXX is real other I buildup million means $XXX as of this pushed last our from be volatility. opportunistic $XXX through will but next the Matt, case we're just based the

increasing is return to capital which on thereby price equity So by and basis points on our roughly return that to shareholders that from key the standpoint it's XXX agnostic. that

this quarter? Got of how single-family segment that? to resi the is in But see you can it. what you anymore. curious or in your on you I'm portfolio get top terms just what I of And Just did did much but don't overall in you then, what think your We this disclosures sold, disclosures portfolioed? trying

Tory. is what this is million we About Matt, $XXX portfolioed.

from home and lending that banking came segment. private some from Some of of came that our

left net one the two Okay. in way remind how round fees you And have then, much Ron, of just round in you for us, PPP? can and

You bet. be balance the $XX deferred. million currently would

last on the one Okay. Great. And just then, me, for reserve.

reserve prior I'm the think but net assume, you X% bottom like, that's three I wrong, if but is on do kind in coverage environment? of kind XX terms years of to view, of I your XX, and the that talked normalized I still Correct normalized in mean about calls Is basis me, still points. -- you four feel charge-offs. of

I mean there about what's I yeah, think as you look was million today right? X.XX%. is normalized, that's at wildcard the And that about the CECL day delta normalized $XX But if ex-PPP like I'd our Yeah. of a one X.XX% point would shifted be at a structural ACL will normalized within think portfolio down here in nothing balance one to day the X%. world our compared There's some that X.X been years and that be should around to composition have back.

Okay. you. Great. Thank

bet. you. Thank You

of KBW. with line the from Jackie comes question next Bohlen Your

everyone. morning Good Hi.

Hi, Jackie.

bit excellence, have. the three operational little reductions with in a terms dig Slide of you wanted I expense the to to that in

this that. factors in me, I puts come me likely XX% But to double see play you're it the just I I in that I other there's, at And read know I of that interpreting And original just to if I cost know at going at you're here. So expecting properly in roughly XXXX. wanted if if read I possibly this, XX%. slide, your savings. to simply $XX it. upper realize at I'm as million even And range was it exceed look end to guidance and realization

the Ron. amount. annualized be would $XX Jackie. Yeah, go-forward an morning. is Hi. This million Good

annual the this a and of into well. also incorporated go-forward the half look be amount that And in really roughly range guidance, of at as about that was so that XX% we would earlier gave second from year I XXXX. of course think But I XXXX

Okay.

sorry -- explanation. fully understand didn't So the I

not that there's $XX million… It's

the … $XX million So, if is...

in that of we It's here $XX annual …yeah, those saves been amount expect… the QX. -- not that's on and there's reduction is saves as here end through a go-forward that we've executed it's of million that recognized, QX a

And Okay. that's…

those … to initiatives. specific

it. why looking And I'm that's at

to more of original the pretty end still fair? that number in range. say Is well into trying sounds a to fits the you're with So the basically doing that recognize good it of sounds target job range towards that -- like like that upper have if XXXX, so I'm you reaching

is That our very goal. That fair. is

Thank Okay. you.

You bet.

some looking then, might the its pay the When you the on a X.X% mentioned X.X% I'm And how wondering, of excess to look terms deploy guidance just at down. that you that sheet Because I margin and overall just you in basis. liability the balance that you're mix also core assumptions? mix cash of gave at into

you're into So thinking pull how just sheet about growth. net to trying balance

a Yeah. And other any attrition year. have couple the of Obviously of the store around assumptions moving parts. balance consolidations, there's, continued from potential we

non-PPP in to be of year. of expecting into out the real we really cash of relatively of juice over in the higher total, the of Fed, balance total the over from static balance maybe loans. are the The should expect interest-bearing the growth more Fed out yielding should XXbps XXbps We still continued fluctuations the taking of non-PPP year. slightly it's the mix. the But the course of assets I say year. balance the of terms sheet that of come PPP coming is over into loan up more I'd X%. of But loans still north should see going balance cash -- forgiveness the in

the the I on of just continue balance stay work relatively of So the over saying, loans. side total of in think, static year deployment the coming probably the sheet sheet balance over and of shifting balance in the to the long-winded left year, way the

Okay.

Okay. Thank you.

You bet. Thank you.

of line King the from Truist comes question Securities. Brandon next with Your

Hey, good morning.

And the wanted going was some share And new half from second the penetration? strong coming thoughts deposit quarter. source of expectations year? in or growth customers And of growth in greater that the so core forward wallet in of I the growth either of

Brandon, Tory Nixon.

income market great banking from group. middle teams I think growth, the even And that's loan growth strong growth. will we're terrific that, a in growth balanced business, deposit from down I And question. had fee initiative. from customer deposit estate we tell at you and real community doing our the from business, our I job growth looking think, growth, our really retail are a

new then good in made existing non-Umpqua pull deposits to Bank and company. penetration just the that from customers, Further core So share from to into PPP both loans we customers. we names continue of

of all business. lines across and across kind So, of the board

fees from that activity, were that function sequentially. And Okay. customers? or of of also million noticed the pretty new nicely is in card up Is $X more I a quarter

a of $X Hey, is That's well. to be it it with be specific as in Ron. annual that reopening little Brandon, over not of of recurring part merchant going every was but number. and million an probably a there activity activity this terms reopening. see There the that It's new combination the an was more component program. of I to to component of to of up great quarter, would expect overall customers

record in just -- quarters months record card look thing grow. when treasury commercial card international our I Tory. business, mean, all We I just our I in I'll to it business, at Yes. Brandon, and our I'll mean, management Elan -- continues TM fee for it's had that. card add business, banking one us. to commercial of business, our

And Okay. as potentially going that million run see forward there? nice you a base saw rate $XX do

million probably $X.X say talked to $X ex about million merchant I on side. I'd the

you much. Thank Okay. very

you. Thank bet. You

Your next question comes of Jared from Wells Fargo. Shaw with the line

on of and question following I up morning. guess, good deposit sort outlook. Hey, about growth the

at normalization the stay sort up? deposit loan-to-deposit customers -- the you do or you see you the ratio loan-to-deposit that the where strong sort of loan will enough we ratio what reversion be of in growth As utilizing so is with see growth the through still could a end as year, picks that of trends or we some of it go are expecting cash, all a far

Jared, this Ron. is Hey,

but as the combination I get year non-PPP the from to year. we continued declining with is a or but non-PPP loans PPP. see high higher to to here Here do of continuing expect to I loans, is incorporate, What term near us mid-XXs, need too it over don't you forgiveness, about the march we expect also see coming talk in next growth single-digit as back low PPP

but a the some noise do overall So have an flows. I you're march higher going of to near-term in loan-to-deposit long-winded way expect just terms in eventual PPP saying, ratio, our of

Next at last the discussed -- Okay. were I And the and targets end more year. earlier to, back guess, or really going that of Gen then

as updated Next saving the pointed to the With Gen an or of able update some been the high X.X higher Jackie Next an up? this to put expectation expense actual being a single-digit X.X to you little Gen it out or could call then maybe expectations coming growth maybe to and expect we guide you've end overall for with at of range. coming for better results out Should the expect of ability year, loan with we probably see

I all of past certainly great we Cort. had get question. Jared, making to we give we've or we're and X.X. with here, X.X.X on X.X give would year pleased off on ago efficient originally continue probably way a just Next this kind Next most can. my appreciate X.X top to good discussed guidance with the Yes, And question. we'll get head than you continuing mean the delivering is where in Gen I'd this we tell the Gen Yes profitable a to the as almost you manage we're a very on you It's the now. the progress of closer the we we're bank and on done you I sooner we

Okay. Great, thanks.

comes Your next of Alexopoulos JPMorgan. Steven question line with the from

Hi, everyone.

Hey, Steve.

first start wanted I C&I. to on

I’m what that So draw very quite online? had of through share existing deposit much lines coming customers Curious And carrying is banks elevated credit how We've versus from we're growth midway you on balances. drawing season. a seeing? few earnings C&I other loan commercial guys your seeing comment customers are they're gains despite

give I'll to couple Steve, Tory you of this Nixon. answers that. a is

on line The utilization. first

is to business market QX. about in in middle up QX utilization XX% X% Our from

QX QX XXXX in utilization is that identical However, to XXXX.

flat kind year-over-year. really So of

we're same banking it business. of community in on aggregate. So seeing our Kind thing not the there

So kind see of I in of the around the year-over-year love and relatively West, businesses kind to flat. the economy to the conversation grow. point, At some the of success that back comment

some company growth debt credit. of new existing term our debt of customers either with or either sort from most business is that term the loan coming are lines So borrowing new names of relationships or into

Tory. That's Okay. helpful,

Okay. step down to of to rates the it? That's the add guys adding in given Ron, appetite securities doing you half what's active book have pretty the been But And your good. way the you've to here the for first securities year maybe in portfolio. been

as QX. much in it As QX was or in earlier

that should it Does be mean pretty flat securities portfolio?

That's modeling, internally, where we're yes.

Essentials That's broad maybe you Okay. in TM small helpful. your And targeting then for with for markets, that? business on small fairly customers are Got Cort business customers that rollout is or you. the

bump I'll Tory. to one that

again. is TM for Tory That out. a is just business rolling This solution product essentially We're banking. and business Yes. small it

smaller prospecting I but I opportunity we companies think that the non-Umpqua for be offering us our to part of will PPP a solutions great gives going to And bank our it small back even community product it a smaller today also efforts. provide Bank the think end banking for companies. I a have we customers business into treasury And XX% think our that of or are on rate, have in business management those banking this the an perfect for business them. is we about penetration

of us. for And our upside companies. great the I solution is companies size this of think market TM management part to for that smaller a there's compared for treasury So new middle solution just

existing with as will use we for prospecting. it So customers as well internally

you. Got

but strategy M&A is been you don't Okay. this has still are I Is purely now ask and And growth and since sorry last to done Umpqua part Thanks. know eight this of organic then you or It's so deal. years one questions the focused? many seven Cort. or question, focus, for an

around talking running got over to Sterling we and Well post and continuing that be merger. currency were we're as serve prospects until just a but like And the looked us growth, play better took We – services forward on and outward or of going operate. at externally. where we've we're to we you're five the are. to – at bank focused increase that with to almost we It mean we've means and to excited financials strategic bit the think not ago makes verticals sense kind could the necessarily when And We been both it level And on I levels products the currency up got relates think to give a Yes. making and decision to base. to were do. internally that really focused acquisitions that opportunistic, plug not progress. I'll that a about. now, I little say going we're customer get We've doing frank. FI some we're always we today, – existing just of of we're I've going of opportunities clearly optionality our years just mean does before we opportunistic. that continue But job see Steve, our I and which work to with right I the great better are we operationalizing quite currency still be more mentioned to that with

the Thanks color. for Great.

Thank Yeah. you.

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

sure I guidance the understood to wanted clearly. I make

I if the production. year I back the of XQ. for of $XXX just people levels expectation of your constraints on million the will for $XXX could was a quarter had if down half you was that like at banking around Ron But housing terms the or you XX% million about to were be lot Obviously, around you NBA guidance of gain And think mortgage hoping mortgage volumes to from share. for guys mentioned the the due talking down thought the numbers supply. the wanted perspective third one I down to dynamics an understand point in felt you know, that do less XX%, some things you're

dynamic. just that could I So through you walk if hoping was

forecast no $X.XX off or billion $X billion QX, with in our what right billion in based mortgage change best million $X million year the the around range would or be $XXX billion in rates $X year. for billion $X coming next It's supply in morning, and that total much now you – see from in right And a around interest here significant – put we bet. QX mid estimate right? assuming year we and So – Brett. $XXX activity though expect take there's off QX. decreased Good yeah give rates. Overall, internal pipelines activity and Yeah, do and we're obviously back, in

what Okay. little back the – bit you you're Is lower a the year can maybe pipeline? of seeing about of in just dynamic or function a the the half talk what from refi, the

a activity the lower bit just quarters in significant off and some lift last here in and bell you a just curve QX, in activity generally drop refi get Lower given over there's seasonal the Yeah. four QX.

how And that new had the Okay. existing does portfolio seeing growth question, see wanted I yields in the to kind dynamic of that then was of production about just you're terms other current versus look?

to So understand question. Are I Brett, this is sure you make the want I Tory. –

quarters? talking You're compared yields to previous about loan

Right.

commercial going what and existing – don't between Just loan to to maybe was the hoping production know, vary just current various and but get components, versus estate real it's C&I portfolio? I was

Yeah.

little So, up current interestingly, relatively book a little of production in been three enough our quarters real a actually commercial down production. a is constant has to the two bit movement banking and But not our estate ton on over last business community bit. new

relatively been last to it's the quarters. stable three two I So think all-in-all, over

Appreciate Great. the Okay. color.

you, Thank Yeah. Brett.

any And I for there to are remarks. this turn over speakers will further the no back call the closing time. questions at

want interest I their and the Umpqua the everyone will today. call to for in conclude thank Holdings call. on This right. attendance All Goodbye. Thanks, and Brandy,

conference concludes call. This today's

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