Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report: July 23, 2014

(Date of earliest event reported)

Umpqua Holdings Corporation

(Exact Name of Registrant as Specified in Its Charter)



OREGON (State or Other Jurisdiction of Incorporation or Organization)	001-34624 (Commission File Number)	93-1261319 (I.R.S. Employer Identification Number)

One SW Columbia Street, Suite 1200

Portland, Oregon 97258

(address of Principal Executive Offices)(Zip Code)

(503) 727-4100

(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02	Results of Operations and Financial Condition.

On July 23, 2014, Umpqua Holdings Corporation issued a press release announcing second quarter 2014 financial results. The release is attached hereto as Exhibit 99.1. The text of the press release is included as Exhibit 99.1 to this report. The information included in the press release is considered to be "furnished" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Umpqua Holdings Corporation will include final financial statements and additional analyses for the quarter ended June 30, 2014 as part of its quarterly report on Form 10-Q covering that period.



Item 7.01	Regulation FD Disclosure

Umpqua Holdings Corporation is filing an investor slide presentation that it intends to review in conjunction with its earnings release conference call on July 24, 2014. The slides are included as Exhibit 99.2 to this report and shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.



Item 9.01	Financial Statements and Exhibits.
(d)	EXHIBITS
	99.1 Press Release announcing second quarter 2014 financial results dated July 23, 2014
	99.2 Second quarter 2014 Investor Presentation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	UMPQUA HOLDINGS CORPORATION (Registrant)
Dated: July 24, 2014	By:/s/ Andrew H. Ognall Andrew H. Ognall Executive Vice President, General Counsel and Secretary

EXHIBIT INDEX



Exhibit Number		Description

99.1		Press Release announcing second quarter 2014 financial results dated July 23, 2014
99.2		Second quarter 2014 Investor Presentation

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

Contacts:



Ron Farnsworth	Bradley Howes
EVP/Chief Financial Officer	SVP/Director of Investor Relations
Umpqua Holdings Corporation	Umpqua Holdings Corporation
503-727-4108	503-727-4226
ronfarnsworth@umpquabank.com	bradhowes@umpquabank.com

UMPQUA REPORTS SECOND QUARTER 2014 RESULTS

Operating earnings¹ of $53.9 million, or $0.27 per share, up 29% sequentially

Organic non-covered loan growth of $294 million, or 8% annualized

Organic deposit growth of $189 million, or 5% annualized

Tangible book value per share¹ of $8.69; up 2% sequentially

Sterling integration on track

PORTLAND, Ore. – July 23, 2014 – Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $17.1 million for the second quarter of 2014, as compared to $18.7 million for the first quarter 2014, and $26.1 million for the second quarter of 2013. Earnings per diluted common share was $0.09 for the second quarter of 2014, as compared to $0.17 for the first quarter of 2014, and $0.23 for the second quarter of 2013.

Operating earnings¹, which represent earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, and merger related expenses, net of tax, were $53.9 million for the second quarter of 2014, as compared to $24.0 million for the first quarter of 2014, and $26.9 million for the second quarter of 2013. Operating earnings per diluted common share was $0.27 for the second quarter of 2014, as compared to $0.21 for the first quarter of 2014, and $0.24 for the second quarter of 2013.

“Our results this quarter reflect our ability to continue to grow Umpqua in a profitable manner,” said Ray Davis, president and CEO of Umpqua Holdings Corporation. “The Company's second quarter 2014 performance includes strong organic loan and deposit growth, a higher net interest margin, increased mortgage banking revenues and strong credit quality, while at the same time completing the Sterling acquisition. We remain on track with the integration, and believe we are well-positioned to leverage the franchise value of the combined company to drive future growth.”

Second Quarter 2014 Financial Highlights:


•	Delivered improved operating results:


◦	Adjusted net interest margin¹ increased to 4.85%, from 4.12% in the prior quarter;


◦	Efficiency ratio (operating basis)¹ improved to 60.33%, from 68.34% in the prior quarter;


◦	Return on average tangible common equity (operating basis)¹ improved to 12.76%;


•	Continued to generate organic loan growth and gather core deposits:

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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July 23, 2014

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◦	Non-covered loans and leases grew organically (exclusive of loans acquired or divested) by $338.0 million, partially offset by $44.4 million in loan sales, for net growth of $293.6 million, or 8% annualized;


◦	Deposits grew organically (exclusive of deposits acquired or divested) by $188.5 million, or 5% annualized;


•	Credit quality remained strong:


◦	Non-covered, non-performing assets to total assets decreased to 0.36%, from 0.53% for the prior quarter;


•	Disciplined capital management:


◦	Tangible common equity ratio¹ of 9.34%, up from 8.67% in the prior quarter;


◦	Tangible book value per share¹ of $8.69, up 2% from $8.54 in the prior quarter;


◦	Estimated total risk-based capital of 14.7% and Tier 1 common to risk weighted asset ratio of 11.0%;


◦	Declared a dividend of $0.15 per common share;

For the six months ended June 30, 2014, the Company reported net earnings available to common shareholders of $35.8 million, or $0.23 per diluted common share, as compared to $49.2 million, or $0.44 per diluted common share, for the six months ended June 30, 2013. For the six months ended June 30, 2014, operating earnings¹ were $77.9 million, or $0.50 per diluted common share, as compared to $51.3 million, or $0.46 per diluted common share, for the six months ended June 30, 2013.

Acquisition of Sterling Financial

The Company completed its acquisition of Sterling Financial Corporation (“Sterling”) on April 18, 2014, and as required under purchase accounting rules, recorded Sterling’s balance sheet at its estimated fair value as of that date. After fair value adjustments, Umpqua Bank acquired assets totaling $9.9 billion, loans and leases (including loans held for sale) totaling $7.3 billion, and deposits totaling $7.1 billion.

The results of operations from Sterling have been included in the Company’s current quarter results since the completion of the acquisition beginning on April 19, 2014.

Subsequent to the acquisition, and prior to the end of the second quarter of 2014, the Company completed the required divestiture of six branches to another financial institution, in which it sold $83.0 million of non-covered loans and $224.6 million of deposits.

The table below provides additional information related to the preliminary fair value determinations of the assets acquired and the liabilities assumed as a result of the acquisition of Sterling.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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(In thousands)
	April 18, 2014
Fair value of consideration to Sterling shareholders:
Cash paid			$	136,200
Liability recorded for warrants			6,453
Fair value of common shares issued			1,939,497
Fair value of warrants, common stock options, and restricted stock exchanged			50,317
Total purchase price			2,132,467
Fair value of assets acquired:
Cash and cash equivalents	$	253,067
Investment securities	1,378,300
Loans held for sale	215,208
Non-covered loans and leases, net	7,122,989
Premises and equipment, net	124,881
Residential mortgage servicing rights	62,770
Other intangible assets, net	54,561
Non-covered other real estate owned	8,140
Bank owned life insurance	193,246
Deferred tax asset, net	295,371
Accrued interest receivable	23,553
Other assets	147,338
Total assets acquired	9,879,424
Fair value of liabilities assumed:
Deposits	7,086,052
Securities sold under agreements to repurchase	584,746
Term debt	854,737
Junior subordinated debentures	156,171
Other liabilities	80,679
Total liabilities assumed	$	8,762,385
Net assets acquired			1,117,039
Preliminary goodwill			$	1,015,428

The net assets acquired from Sterling were recorded at their estimated fair value as of the date of acquisition. Subsequent to the acquisition, the Company paid off the majority of the Sterling repurchase agreements, which was funded by the sale of investment securities.

For the second quarter of 2014, the Sterling acquisition was 32% accretive to operating earnings per share¹. Under Generally Accepted Accounting Principles, the Sterling allowance for loan losses was eliminated and a fair value discount of approximately $315 million was recorded against the loans. This included a credit discount of approximately $264 million as of the date of acquisition. Of this credit discount, approximately $180 million is expected to accrete into interest income over the life of the Sterling loan portfolio. During the second quarter of 2014, $24.5 million of the credit discount accreted into interest income.

New loans originated by the former Sterling workforce since April 19, 2014 are accounted for separately from the discounted acquired loans. As a result, the Company recognized $7.7 million in provision for loan losses, related primarily to new loan production, along with loans that matured and renewed, from the former Sterling offices.

Together, the accretion from the credit discount, offset by the provision for loan losses related to new production by former Sterling offices, added $10.1 million to net income, or $0.05 per diluted share. Excluding the net items above, the Sterling acquisition was 7% accretive to operating earnings per share¹ for the second quarter of 2014. This is in line with the previously announced earnings per share accretion target of 12% following full realization of cost synergies.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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Integration efforts are proceeding as planned, with previously announced store consolidations in process, system conversions scheduled through early 2015, and the organization chart finalized on the date of acquisition. Cost synergies are on track to the previously announced target of $87 million (annualized), which are expected to be fully realized following system conversions.

Balance Sheet

Total consolidated assets were $22.0 billion as of June 30, 2014, as compared to $11.8 billion as of March 31, 2014 and $11.4 billion as of June 30, 2013. Total gross loans and leases (covered and non-covered) and deposits, were $15.1 billion and $16.3 billion, respectively, as of June 30, 2014, as compared to $7.8 billion and $9.3 billion, respectively, as of March 31, 2014, and $7.2 billion and $9.0 billion, respectively, as of June 30, 2013.

Total non-covered loans and leases held for investment increased to $14.8 billion as of June 30, 2014, as compared to $7.4 billion as of March 31, 2014 and $6.8 billion as of June 30, 2013. This included organic growth (exclusive of loans acquired via Sterling acquisition and loans sold as part of branch divestiture) of $338.0 million from the prior quarter. This growth was partially offset by other loan sales of $44.4 million during the quarter, which included $24.0 million in multifamily loans and $20.4 million in government guaranteed loans, resulting in net organic loan growth of $293.6 million.

Total covered loans were $297.6 million as of June 30, 2014, a $44.7 million decline from the prior quarter and a $121.4 million decline from the same period in the prior year. This portfolio will continue to decrease over time as loan payments are received, covered loans are refinanced or modified out of loss sharing, and as troubled credits are resolved and worked out. The Company did not acquire any covered loans as a result of the acquisition of Sterling.

Total deposits increased to $16.3 billion as of June 30, 2014, as compared to $9.3 billion as of March 31, 2014 and $9.0 billion as of June 30, 2013. This included organic growth (exclusive of deposits acquired via Sterling acquisition and deposits sold as part of branch divestiture) of $188.5 million from the prior quarter.

Including secured off-balance sheet lines of credit, total available liquidity to the Company was $7.0 billion as of June 30, 2014, representing 32% of total assets and 43% of total deposits. This compares to total available liquidity to the Company of $4.5 billion, or 38% of total assets and 48% of total deposits, as of March 31, 2014.

Net Interest Income

Net interest income was $212.3 million for the second quarter of 2014, up $104.4 million from the prior quarter and $118.4 million from the same period in the prior year. The increases from prior periods were primarily driven by the acquisition of Sterling, along with continued organic loan growth. Net interest income for the second quarter of 2014 included interest income arising from the accretion of the credit discount recorded on the loans acquired from the acquisition of Sterling.

The Company’s net interest margin was 5.01% for the second quarter of 2014, as compared to 4.28% for the first quarter of 2014, and 3.73% for the second quarter of 2013. The increases from prior periods were primarily driven by the acquisition of Sterling, an improvement in the yield earned on interest-earnings assets, and a slightly lower cost of funds.

Adjusted Net Interest Income¹

The Company’s adjusted net interest income and margin excludes gains on covered loan disposals, and interest and fee reversals related to non-accrual loans.

Loan disposal activities within the covered loan portfolio, either through loans being paid off in full or transferred to OREO, result in gains within covered loan interest income to the extent assets received in satisfaction of debt (such as cash or the net realizable value of OREO received) exceed the allocated carrying value of the loan disposed of from the pool. Loan disposal activities contributed $7.1 million of interest income for the second quarter of 2014, as compared to $4.3 million for the first quarter of 2014 and $4.2 million for the second quarter of 2013. While dispositions of

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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covered loans positively impact interest income and net interest margin, the Company recognizes a corresponding decrease to the change in the FDIC indemnification asset within non-interest income that partially offsets the impact to net income. Interest and fee reversals related to non-accrual loans during the second quarter of 2014 totaled $450 thousand, as compared to $122 thousand for the first quarter of 2014 and $33 thousand for second quarter of 2013.

Adjusted net interest income was $207.0 million for the second quarter of 2014, as compared to $104.8 million for the first quarter of 2014 and $90.8 million for the second quarter of 2013. The Company’s adjusted net interest margin was 4.85% for the second quarter of 2014, as compared to 4.12% for the first quarter of 2014 and 3.57% for the second quarter of 2013.

Non-Interest Income

Total non-interest income was $44.5 million for the second quarter of 2014, up $21.5 million from the prior quarter and $10.0 million from the same period in the prior year. The increases from prior periods were primarily driven by the acquisition of Sterling.

Residential mortgage banking revenue, which includes income generated from the origination and sale of residential mortgage loans, income from the servicing of residential mortgage loans and changes to the fair value of the residential mortgage servicing rights (“MSR”) asset, increased to $24.3 million for the second quarter of 2014, up $13.9 million from the prior quarter, and flat with the same period in the prior year. The linked quarter increase was primarily driven by the acquisition of Sterling, partially offset by a decrease in the fair value of the MSR asset due to a decline in mortgage interest rates, which resulted in a loss of $3.2 million for the quarter.

The Company’s gain on sale margin, as a percentage of total residential mortgage production, was 2.47% for the second quarter of 2014, down from 2.87% in the prior quarter, primarily related to the acquisition of Sterling. Of the current quarter’s mortgage production, 74% related to purchase activity, as compared to 69% for the prior quarter and 49% for the same period in the prior year.

As of June 30, 2014, the Company serviced $10.8 billion of residential mortgage loans for others, and its related MSR asset was valued at $114.2 million, or 1.05% of the total serviced portfolio principal balance. This compares to $4.5 billion of residential mortgage loans serviced for others as of March 31, 2014, with a related MSR asset of $49.2 million, or 1.09% of the total serviced portfolio principal balance. As of June 30 2013, the Company serviced $3.9 billion of residential mortgage loans serviced for others, and its related MSR asset was valued at $38.2 million, or 0.98% of the total serviced portfolio principal balance.

Total other non-interest income decreased by $1.4 million from the prior quarter and by $2.7 million from the same period in the prior year. The largest recurring component of other non-interest income is Debt Capital Markets revenue, which was a loss of $1.2 million for the second quarter of 2014, as compared to a gain of $0.8 million for the first quarter of 2014 and a gain of $2.4 million for the second quarter of 2013. The decrease from the prior quarter was primarily driven by a fair value loss on the related swap derivatives.

Non-interest Expense

Non-interest expense was $214.1 million for the second quarter of 2014, which included $57.5 million of merger-related expenses. This compares to $96.5 million, including $6.0 million of merger-related expenses, for the first quarter of 2014 and $87.9 million, including $0.8 million of merger-related expenses, for the second quarter of 2013. The increase in the Company’s non-interest expense from the prior quarter was primarily driven by increased salaries, benefits, and occupancy and equipment expenses associated with Sterling. The second quarter of 2014 run-rate does not reflect the full benefit of the anticipated merger cost synergies.

On an operating basis¹, which excludes merger-related expenses, the Company’s efficiency ratio was 60.33% for the second quarter of 2014, an improvement from 68.34% for the first quarter of 2014 and 66.97% for the second quarter of 2013.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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Income taxes

The Company recorded a provision for income taxes of $10.7 million for the second quarter of 2014, representing an effective tax rate of 38% for the quarter. The increase in the quarterly effective tax rate was driven by higher actual and projected income resulting from the acquisition of Sterling. This increased the year-to-date effective tax rate to 36%, which is the anticipated full-year 2014 effective tax rate.

Capital

As of June 30, 2014, the Company’s tangible book value per common share¹ was $8.69 and its ratio of tangible common equity to tangible assets¹ was 9.34%. These are up from $8.54 and 8.67%, respectively, from the prior quarter.

The Company made no open market or privately negotiated purchases of common stock under the Company’s previously announced share repurchase plan during the second quarter of 2014. The Company may repurchase up to 12.0 million of additional shares under this plan.

The Company’s estimated total risk-based capital ratio was 14.7% as of June 30, 2014, and its estimated Tier 1 common to risk weighted assets ratio was 11.0% of June 30, 2014. The Company remains well above current “well-capitalized” regulatory minimums. These capital ratios, as of June 30, 2014, are estimates pending completion and filing of the Company’s regulatory reports.

On July 2, 2013, federal banking regulators approved the final proposed rules that revise the regulatory capital rules to incorporate certain revisions by the Basel Committee on Banking Supervision to the Basel capital framework (“Basel III”). Under Basel III, the Company's combined trust preferred issuances must be phased out of Tier 1 and into Tier 2 capital (75% in 2015 and 100% in 2016). As of June 30, 2014, the total par value of trust preferred securities was $461.2 million. In addition, the Company is required under Basel III to exclude the entire deferred tax asset related to net operating losses (“NOLs”) from Tier 1 capital. As of June 30, 2014, the Company’s total deferred tax asset was $260.0 million, and the portion related to NOLs was $214.5 million.

Credit Quality – Non-covered Loan Portfolio

Under purchase accounting rules, loans (including those considered non-performing) acquired from Sterling were recorded at their estimated fair value, and the related allowance for loan losses was eliminated. As a result, the Company wrote down the value of the non-covered loan and lease portfolio acquired from Sterling. This credit mark is not reflected in the reported allowance for loan losses, or its related allowance coverage ratios, but should be considered when comparing the current quarter ratios to prior periods.

The allowance for non-covered loan losses was $98.0 million, or 0.66% of non-covered loans and leases, as of June 30, 2014. To provide better comparability to prior periods, this ratio would have been approximately 2.2% after grossing up the allowance for loan losses and the non-covered loans and leases by the amount of the remaining credit mark remaining as of quarter-end. The allowance for non-covered loan losses to non-covered loans and leases was 1.17% as of March 31, 2014 and 1.26% as of June 30, 2013.

The provision for non-covered loan losses was $15.4 million for the second quarter of 2014, up from $5.4 million for the first quarter of 2014 and $3.0 million for the second quarter of 2013. Of the second quarter of 2014 provision for loan losses, $7.7 million related to new loan production from former Sterling offices, $5.5 million related to growth in the Financial Pacific Leasing portfolio, and the remaining amount was driven primarily by organic loan growth from legacy Umpqua Bank.

Non-covered, non-performing assets were $79.4 million, or 0.36% of total assets, as of June 30, 2014, as compared to $62.2 million, or 0.53% of total assets, as of March 31, 2014, and $68.1 million, or 0.60% of total assets, as of June 30, 2013. The level of non-covered, non-performing assets increased from prior periods as a result of the merger with Sterling and expected fluctuations in the legacy Umpqua portfolio, while the ratio of non-covered, non-performing assets to total assets decreased due to the increase in total assets.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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Non-covered loans past due 30 to 89 days were $28.9 million, or 0.19% of non-covered loans and leases, as of June 30, 2014, as compared to $29.4 million, or 0.40% of non-covered loans and leases, as of March 31, 2014, and $22.0 million, or 0.32% of non-covered loans and leases, as of June 30, 2013. The decreases in the ratio of non-covered loans past due 30 to 89 days to non-covered loans and leases from prior periods were due to the increase in non-covered loans and leases. Non-covered restructured loans on accrual status were $67.5 million as of June 30, 2014, as compared to $67.9 million as of March 31, 2014, and $73.9 million as of June 30, 2013.

Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. The Company believes that certain non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

The Company recognizes gains or losses on its junior subordinated debentures carried at fair value resulting from changes in interest rates and the estimated market credit risk adjusted spread that do not directly correlate with the Company’s operating performance. Also, the Company incurs significant expenses related to the completion and integration of mergers and acquisitions. Additionally, it may recognize goodwill impairment losses that have no direct effect on the Company’s or the Bank’s cash balances, liquidity, or regulatory capital ratios. Lastly, the Company may recognize one-time bargain purchase gains on certain acquisitions that are not reflective of the Company’s on-going earnings power. Accordingly, management believes that our operating results are best measured on a comparative basis excluding the impact of gains or losses on junior subordinated debentures measured at fair value, net of tax, merger-related expenses, net of tax, and other charges related to business combinations such as goodwill impairment charges or bargain purchase gains, net of tax. The Company defines operating earnings as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, bargain purchase gains on acquisitions, net of tax, merger related expenses, net of tax, and goodwill impairment, and we calculate operating earnings per diluted share by dividing operating earnings by the same diluted share total used in determining diluted earnings per common share.

The following table provides the reconciliation of earnings available to common shareholders (GAAP) to operating earnings (non-GAAP), and earnings per diluted common share (GAAP) to operating earnings per diluted share (non-GAAP) for the periods presented:

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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	Quarter Ended:											% Change
(Dollars in thousands, except per share data)	Jun 30, 2014		Mar 31, 2014		Dec 31, 2013			Sep 30, 2013		Jun 30, 2013		Seq. Quarter		Year over Year
Net earnings available to common shareholders	$	17,138	$	18,651	$	25,058		$	23,281	$	26,056	(8	)%	(34	)%
Adjustments:
Net loss on junior subordinated debentures carried at fair value, net of tax (1)	821		325		332			332		328		153	%	150	%
Merger related expenses, net of tax (1)	35,926		5,073		2,502			2,914		486		608	%	nm
Operating earnings	$	53,885	$	24,049	$	27,892		$	26,527	$	26,870	124	%	101	%

Earnings per diluted share:
Earnings available to common shareholders	$	0.09	$	0.17	$	0.22		$	0.21	$	0.23	(47	)%	(61	)%
Operating earnings	$	0.27	$	0.21	$	0.25		$	0.24	$	0.24	29	%	13	%

	Six Months Ended				% Change
	Jun 30, 2014		Jun 30, 2013		Year over Year
Net earnings available to common shareholders	$	35,789	$	49,234	(27		)%
Adjustments:
Net loss on junior subordinated debentures carried at fair value, net of tax (1)	1,147		653		76		%
Merger related expenses, net of tax (1)	40,999		1,405		nm
Operating earnings	$	77,935	$	51,292	52		%

Earnings per diluted share:
Earnings available to common shareholders	$	0.23	$	0.44	(48		)%
Operating earnings	$	0.50	$	0.46	9		%

(1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items.
nm = not meaningful.

Management believes adjusted net interest income and adjusted net interest margin are useful financial measures because they enable investors to evaluate the underlying growth or compression in these values excluding interest income adjustments related to credit quality. Management uses these measures to evaluate adjusted net interest income operating results exclusive of credit costs, in order to monitor our effectiveness in growing higher interest yielding assets and managing our cost of interest bearing liabilities over time. Adjusted net interest income is calculated as net interest income, adjusting tax exempt interest income to its taxable equivalent, adding back interest and fee reversals related to new non-accrual loans during the period, and deducting the interest income gains recognized from loan disposition activities within covered loan pools. Adjusted net interest margin is calculated by dividing annualized adjusted net interest income by a period’s average interest earning assets.

The following table provides the reconciliation of net interest income (GAAP) to adjusted net interest income (non-GAAP), and net interest margin (GAAP) to adjusted net interest margin (non-GAAP) for the periods presented:

Umpqua Holdings Corporation announces second quarter 2014 results

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	Quarter Ended:															% Change
(Dollars in thousands)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Seq. Quarter		Year over Year
Net interest income	$	212,259		$	107,838		$	110,074		$	106,809		$	93,893		97	%	126	%
Tax equivalent adjustment (1)	1,394			1,092			1,119			1,137			1,153			28	%	21	%
Net interest income (1)	213,653			108,930			111,193			107,946			95,046			96	%	125	%
Adjustments:
Interest and fee reversals (recoveries) on non-accrual loans	450			122			(399		)	203			33			269	%	nm
Covered loan disposal gains	(7,128		)	(4,259		)	(3,908		)	(1,836		)	(4,237		)	67	%	68	%
Adjusted net interest income (1)	$	206,975		$	104,793		$	106,886		$	106,313		$	90,842		98	%	128	%
Average interest earning assets	$	17,116,070		$	10,310,116		$	10,292,996		$	10,136,677		$	10,218,611		66	%	67	%
Net interest margin – consolidated (1)	5.01		%	4.28		%	4.29		%	4.22		%	3.73		%
Adjusted net interest margin – consolidated (1)	4.85		%	4.12		%	4.12		%	4.16		%	3.57		%

	Six Months Ended						% Change
	Jun 30, 2014			Jun 30, 2013			Year over Year
Net interest income	$	320,097		$	188,082		70		%
Tax equivalent adjustment (1)	2,486			2,323			7		%
Net interest income (1)	322,583			190,405			69		%
Adjustments:
Interest and fee reversals on non-accrual loans	572			1,118			(49		)%
Covered loan disposal gains	(11,387		)	(7,391		)	54		%
Adjusted net interest income (1)	$	311,768		$	184,132		69		%
Average interest earning assets	$	13,731,892		$	10,234,539		34		%
Net interest margin – consolidated (1)	4.74		%	3.75		%
Adjusted net interest margin – consolidated (1)	4.58		%	3.63		%

(1) Tax equivalent basis. Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.
nm = not meaningful.

Management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability to absorb potential losses. Tangible common equity is calculated as total shareholders' equity less goodwill and other intangible assets, net (excluding MSRs). Tangible assets are total assets less goodwill and other intangible assets, net (excluding MSRs). The tangible common equity ratio is calculated as tangible common shareholders’ equity divided by tangible assets.

The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).

Umpqua Holdings Corporation announces second quarter 2014 results

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Page 10



(Dollars in thousands, except per share data)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013
Total shareholders' equity	$	3,729,060		$	1,734,476		$	1,727,426		$	1,725,995		$	1,715,352
Subtract:
Goodwill and other intangible assets, net	1,842,670			775,488			776,683			778,094			682,971
Tangible common shareholders' equity	$	1,886,390		$	958,988		$	950,743		$	947,901		$	1,032,381
Total assets	$	22,042,229		$	11,838,726		$	11,636,112		$	11,569,297		$	11,392,208
Subtract:
Goodwill and other intangible assets, net	1,842,670			775,488			776,683			778,094			682,971
Tangible assets	$	20,199,559		$	11,063,238		$	10,859,429		$	10,791,203		$	10,709,237
Common shares outstanding at period end	217,190,721			112,319,525			111,973,203			111,928,762			111,898,620
Tangible common equity ratio	9.34		%	8.67		%	8.75		%	8.78		%	9.64		%
Tangible book value per common share	$	8.69		$	8.54		$	8.49		$	8.47		$	9.23

About Umpqua Holdings Corporation

Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions. Umpqua Bank has locations across Idaho, Washington, Oregon, California and Northern Nevada. Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon. Umpqua Private Bank serves high net worth individuals and nonprofits,

providing trust and investment services. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit www.umpquaholdingscorp.com.

Earnings Conference Call Information

The Company will host its second quarter 2014 earnings conference call on Thursday, July 24, 2014, at 10:00 a.m. PST (1:00 p.m. EST). During the call, the Company will provide an update on recent activities and discuss its second quarter 2014 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (888) 349-9582 ten minutes prior to the start time and enter conference ID: 3191295. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 3191295.

The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at www.umpquaholdingscorp.com. A slide presentation to accompany the call will also be posted on the website before the call.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. In this press release we make forward-looking statements about size and growth potential from the acquisition of Sterling Financial Corporation; the integration of the merger with Sterling Financial Corporation; merger-related synergies and systems conversions; and credit discount accretion related to the merger. Specific risks that could cause results to differ from the forward-looking statements are set forth in our filings with the SEC and include, without limitation, changes in the discounted cash flow model used to determine the fair value of subordinated debentures; prolonged low interest rate environment; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; material reductions in revenue or material increases in expenses; lack of strategic growth opportunities or our failure to execute on those opportunities; our inability to effectively manage problem credits; certain loan assets becoming ineligible for loss sharing; unanticipated increases in the cost of deposits; the consequences of a phase-out of junior subordinated debentures from Tier 1 capital; Umpqua’s ability to achieve the synergies and earnings accretion contemplated by the Sterling merger; Umpqua’s ability to promptly and effectively integrate the businesses of Sterling and Umpqua and complete system conversions; the diversion of management

Umpqua Holdings Corporation announces second quarter 2014 results

July 23, 2014

Page 11

time on issues related to merger integration; changes in laws or regulations; and changes in general economic conditions.

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Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Quarter Ended:															% Change
(In thousands, except per share data)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Seq. Quarter		Year over Year
Interest income:
Non-covered loans and leases	$	193,061		$	91,268		$	93,032		$	93,706		$	78,434		112	%	146	%
Covered loans and leases	15,931			12,718			13,330			11,837			14,750			25	%	8	%
Interest and dividends on investments:
Taxable	12,712			9,291			9,517			7,882			8,103			37	%	57	%
Exempt from federal income tax	2,653			2,112			2,173			2,200			2,237			26	%	19	%
Dividends	128			50			87			51			90			156	%	42	%
Temporary investments & interest bearing deposits	482			441			399			284			401			9	%	20	%
Total interest income	224,967			115,880			118,538			115,960			104,015			94	%	116	%
Interest expense:
Deposits	6,075			3,848			4,168			4,845			5,864			58	%	4	%
Repurchase agreements and fed funds purchased	203			41			42			35			33			395	%	515	%
Term debt	3,364			2,273			2,332			2,338			2,305			48	%	46	%
Junior subordinated debentures	3,066			1,880			1,922			1,933			1,920			63	%	60	%
Total interest expense	12,708			8,042			8,464			9,151			10,122			58	%	26	%
Net interest income	212,259			107,838			110,074			106,809			93,893			97	%	126	%
Provision for non-covered loan and lease losses	15,399			5,400			3,840			3,008			2,993			185	%	415	%
(Recapture of) provision for covered loan and lease losses	(703		)	571			(1,369		)	(1,904		)	(3,072		)	(223	)%	(77	)%
Non-interest income:
Service charges	15,371			7,767			8,108			8,374			7,478			98	%	106	%
Brokerage fees	4,566			3,725			3,584			3,854			3,662			23	%	25	%
Residential mortgage banking revenue, net	24,341			10,439			15,957			15,071			24,289			133	%	0	%
Net gain on investment securities	976			—			191			3			8			nm		nm
Loss on junior subordinated debentures carried at fair value	(1,369		)	(542		)	(554		)	(554		)	(547		)	153	%	150	%
Change in FDIC indemnification asset	(5,601		)	(4,840		)	(5,708		)	(6,474		)	(8,294		)	16	%	(32	)%
BOLI income	1,967			736			621			763			910			167	%	116	%
Other income	4,278			5,722			4,586			5,107			6,991			(25	)%	(39	)%
Total non-interest income	44,529			23,007			26,785			26,144			34,497			94	%	29	%
Non-interest expense:
Salaries and employee benefits	95,560			53,218			52,720			53,699			52,067			80	%	84	%
Net occupancy and equipment	28,746			16,501			16,254			16,019			15,059			74	%	91	%
Intangible amortization	2,808			1,194			1,186			1,186			1,205			135	%	133	%
FDIC assessments	2,575			1,863			1,922			1,709			1,672			38	%	54	%
Net loss (gain) on non-covered other real estate owned	178			(18		)	1,416			(27		)	(146		)	nm		(222	)%
Net loss (gain) on covered other real estate owned	80			(46		)	(19		)	(68		)	(62		)	(274	)%	(229	)%
Merger related expenses	57,531			5,983			1,639			4,856			810			862	%	7,003	%
Other expense	26,653			17,823			20,246			18,230			17,326			50	%	54	%
Total non-interest expense	214,131			96,518			95,364			95,604			87,931			122	%	144	%
Income before provision for income taxes	27,961			28,356			39,024			36,245			40,538			(1	)%	(31	)%
Provision for income taxes	10,740			9,592			13,754			12,768			14,285			12	%	(25	)%
Net income	17,221			18,764			25,270			23,477			26,253			(8	)%	(34	)%
Dividends and undistributed earnings allocated to participating securities	83			113			212			196			197			(27	)%	(58	)%
Net earnings available to common shareholders	$	17,138		$	18,651		$	25,058		$	23,281		$	26,056		(8	)%	(34	)%

Weighted average basic shares outstanding	196,312			112,170			111,949			111,912			111,954			75	%	75	%
Weighted average diluted shares outstanding	197,638			112,367			112,214			112,195			112,145			76	%	76	%
Earnings per common share – basic	$	0.09		$	0.17		$	0.22		$	0.21		$	0.23		(47	)%	(61	)%
Earnings per common share – diluted	$	0.09		$	0.17		$	0.22		$	0.21		$	0.23		(47	)%	(61	)%
nm = not meaningful

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Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Six Months Ended						% Change
(In thousands, except per share data)	Jun 30, 2014			Jun 30, 2013			Year over Year
Interest income
Non-covered loans and leases	$	284,329		$	156,979		81	%
Covered loans and leases	28,649			29,330			(2	)%
Interest and dividends on investments:
Taxable	21,990			16,747			31	%
Exempt from federal income tax	4,721			4,525			4	%
Dividends	178			114			56	%
Temporary investments & interest bearing deposits	980			653			50	%
Total interest income	340,847			208,348			64	%
Interest expense
Deposits	9,923			11,742			(15	)%
Repurchase agreements and fed funds purchased	244			64			281	%
Term debt	5,637			4,578			23	%
Junior subordinated debentures	4,946			3,882			27	%
Total interest expense	20,750			20,266			2	%
Net interest income	320,097			188,082			70	%
Provision for non-covered loan and lease losses	20,799			9,981			108	%
Recapture of provision for covered loan and lease losses	(132		)	(2,840		)	(95	)%
Non-interest income
Service charges	23,138			14,470			60	%
Brokerage fees	8,291			7,298			14	%
Residential mortgage banking revenue, net	34,780			47,857			(27	)%
Net gain on investment securities	976			15			nm
Loss on junior subordinated debentures
carried at fair value	(1,911		)	(1,089		)	75	%
Change in FDIC indemnification asset	(10,441		)	(13,367		)	(22	)%
BOLI Income	2,703			1,670			62	%
Other income	10,000			11,658			(14	)%
Total non-interest income	67,536			68,512			(1	)%
Non-interest expense
Salaries and employee benefits	148,776			103,572			44	%
Net occupancy and equipment	45,247			29,794			52	%
Intangible amortization	4,002			2,409			66	%
FDIC assessments	4,438			3,323			34	%
Net loss (gain) on non-covered other real estate owned	160			(276		)	nm
Net loss on covered other real estate owned	34			222			(85	)%
Merger related expenses	63,514			2,341			nm
Other expense	44,478			32,308			38	%
Total non-interest expense	310,649			173,693			79	%
Income before provision for income taxes	56,317			75,760			(26	)%
Provision for income taxes	20,332			26,146			(22	)%
Net income	35,985			49,614			(27	)%
Dividends and undistributed earnings
allocated to participating securities	196			380			(48	)%
Net earnings available to common shareholders	$	35,789		$	49,234		(27	)%

Weighted average basic shares outstanding	154,473			111,946			38	%
Weighted average diluted shares outstanding	155,276			112,133			38	%
Earnings per common share – basic	$	0.23		$	0.44		(48	)%
Earnings per common share – diluted	$	0.23		$	0.44		(48	)%
nm = not meaningful

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July 23, 2014

Page 14



Umpqua Holdings Corporation Consolidated Balance Sheets
(Unaudited)

																% Change
(In thousands, except per share data)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Seq. Quarter		Year over Year
Assets:
Cash and due from banks	$	347,152		$	196,963		$	178,685		$	193,188		$	143,409		76	%	142	%
Interest bearing deposits	492,739			887,620			611,224			503,369			659,817			(44	)%	(25	)%
Temporary investments	529			525			514			534			1,768			1	%	(70	)%
Investment securities:
Trading, at fair value	9,420			4,498			5,958			4,012			3,863			109	%	144	%
Available for sale, at fair value	2,588,969			1,701,730			1,790,978			1,910,082			2,083,755			52	%	24	%
Held to maturity, at amortized cost	5,519			5,465			5,563			5,766			3,741			1	%	48	%
Loans held for sale	322,912			73,106			104,664			113,993			173,994			342	%	86	%
Non-covered loans and leases	14,830,345			7,411,108			7,354,403			7,228,904			6,787,117			100	%	119	%
Allowance for non-covered loan and lease losses	(97,995		)	(86,709		)	(85,314		)	(84,694		)	(85,836		)	13	%	14	%
Non-covered loans and leases, net	14,732,350			7,324,399			7,269,089			7,144,210			6,701,281			101	%	120	%
Covered loans and leases, net	297,610			342,263			363,992			397,083			419,059			(13	)%	(29	)%
Restricted equity securities	122,194			29,948			30,685			31,444			32,112			308	%	281	%
Premises and equipment, net	310,407			180,199			177,680			173,876			170,145			72	%	82	%
Goodwill	1,779,732			764,304			764,305			764,530			668,218			133	%	166	%
Other intangible assets, net	62,938			11,184			12,378			13,564			14,753			463	%	327	%
Residential mortgage servicing rights, at fair value	114,192			49,220			47,765			41,853			38,192			132	%	199	%
Non-covered other real estate owned	26,172			22,034			21,833			18,249			13,235			19	%	98	%
Covered other real estate owned	1,810			1,746			2,102			2,980			3,484			4	%	(48	)%
FDIC indemnification asset	11,293			18,362			23,174			29,427			36,263			(38	)%	(69	)%
Bank owned life insurance	292,714			97,589			96,938			96,276			95,459			200	%	207	%
Deferred tax assets, net	259,993			11,393			16,627			20,342			22,747			nm		nm
Other assets	263,584			116,178			111,958			104,519			106,913			127	%	147	%
Total assets	$	22,042,229		$	11,838,726		$	11,636,112		$	11,569,297		$	11,392,208		86	%	93	%
Liabilities:
Deposits	$	16,323,000		$	9,273,583		$	9,117,660		$	9,067,240		$	8,956,325		76	%	82	%
Securities sold under agreements to repurchase	315,025			262,483			224,882			215,310			176,447			20	%	79	%
Term debt	1,057,915			250,964			251,494			252,017			252,543			322	%	319	%
Junior subordinated debentures, at fair value	246,077			87,800			87,274			86,718			86,159			180	%	186	%
Junior subordinated debentures, at amortized cost	101,737			101,818			101,899			101,979			102,060			0	%	0	%
Other liabilities	269,415			127,602			125,477			120,038			103,322			111	%	161	%
Total liabilities	18,313,169			10,104,250			9,908,686			9,843,302			9,676,856			81	%	89	%
Shareholders' equity:
Common stock	3,512,507			1,514,969			1,514,485			1,513,225			1,512,657			132	%	132	%
Retained earnings	204,109			219,686			217,917			209,597			203,058			(7	)%	1	%
Accumulated other comprehensive income (loss)	12,444			(179		)	(4,976		)	3,173			(363		)	nm		nm
Total shareholders' equity	3,729,060			1,734,476			1,727,426			1,725,995			1,715,352			115	%	117	%
Total liabilities and shareholders' equity	$	22,042,229		$	11,838,726		$	11,636,112		$	11,569,297		$	11,392,208		86	%	93	%

Common shares outstanding at period end	217,190,721			112,319,525			111,973,203			111,928,762			111,898,620			93	%	94	%
Book value per common share	$	17.17		$	15.44		$	15.43		$	15.42		$	15.33		11	%	(100	)%
Tangible book value per common share	$	8.69		$	8.54		$	8.49		$	8.47		$	9.23		2	%	(100	)%
Tangible equity - common	$	1,886,390		$	958,988		$	950,743		$	947,901		$	1,032,381		97	%	83	%
Tangible common equity to tangible assets	9.34		%	8.67		%	8.75		%	8.78		%	9.64		%	8	%	(3	)%

nm = not meaningful

Umpqua Holdings Corporation announces second quarter 2014 results

July 23, 2014

Page 15



Umpqua Holdings Corporation
Non-covered Loan & Lease Portfolio
(Unaudited)

(Dollars in thousands)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Non-covered loans & leases:
Commercial real estate:
Non-owner occupied term, net	$	3,348,029		$	2,311,952		$	2,328,260		$	2,382,430		$	2,341,657		45	%	43	%
Owner occupied term, net	2,666,128			1,282,482			1,259,583			1,230,417			1,221,853			108	%	118	%
Multifamily, net	2,482,995			400,927			403,537			379,395			353,852			519	%	602	%
Commercial construction, net	261,767			229,262			245,231			246,583			225,747			14	%	16	%
Residential development, net	91,690			89,510			88,413			78,756			66,607			2	%	38	%
Commercial:
Term, net	1,104,206			735,004			770,845			768,926			769,647			50	%	43	%
Lines of credit & other, net	1,322,167			1,005,800			987,360			950,954			941,673			31	%	40	%
Leases & equipment finance, net	463,784			388,418			361,591			335,580			51,924			19	%	793	%
Residential real estate:
Mortgage, net	1,958,597			651,042			597,201			553,285			511,446			201	%	283	%
Home equity lines & loans, net	799,171			268,497			264,269			258,610			260,382			198	%	207	%
Consumer & other, net	331,811			48,214			48,113			43,968			42,329			588	%	684	%
Total, net of deferred fees and costs	$	14,830,345		$	7,411,108		$	7,354,403		$	7,228,904		$	6,787,117		100	%	119	%

Non-covered loan & leases mix:
Commercial real estate:
Non-owner occupied term	23		%	31		%	33		%	32		%	34		%
Owner occupied term	18		%	17		%	17		%	17		%	18		%
Multifamily	17		%	5		%	5		%	5		%	5		%
Commercial construction	2		%	3		%	3		%	3		%	3		%
Residential development	1		%	1		%	1		%	1		%	1		%
Commercial:
Term	7		%	10		%	10		%	11		%	11		%
Lines of credit & other	9		%	14		%	13		%	13		%	14		%
Leases & equipment finance	3		%	5		%	5		%	5		%	1		%
Residential real estate:
Mortgage	13		%	9		%	8		%	8		%	8		%
Home equity lines & loans	5		%	4		%	4		%	4		%	4		%
Consumer & other	2		%	1		%	1		%	1		%	1		%
Total	100		%	100		%	100		%	100		%	100		%

Umpqua Holdings Corporation announces second quarter 2014 results

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Page 16



Umpqua Holdings Corporation
Covered Loan & Lease Portfolio, Net
(Unaudited)
(Dollars in thousands)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Covered loans & leases:
Commercial real estate:
Non-owner occupied term, net	$	166,969		$	197,067		$	204,052		$	216,354		$	229,874		(15	)%	(27	)%
Owner occupied term, net	47,034			48,447			48,673			54,332			57,446			(3	)%	(18	)%
Multifamily, net	23,409			27,079			37,185			40,052			40,891			(14	)%	(43	)%
Commercial construction, net	1,972			2,779			2,803			6,654			6,783			(29	)%	(71	)%
Residential development, net	2,562			6,083			6,311			7,468			7,025			(58	)%	(64	)%
Commercial:
Term, net	7,516			7,861			13,280			13,864			17,394			(4	)%	(57	)%
Lines of credit & other, net	8,357			8,929			6,302			10,583			9,503			(6	)%	(12	)%
Residential real estate:
Mortgage, net	18,272			21,664			22,175			23,161			24,879			(16	)%	(27	)%
Home equity lines & loans, net	17,736			18,501			19,119			20,037			20,769			(4	)%	(15	)%
Consumer & other, net	3,783			3,853			4,092			4,578			4,495			(2	)%	(16	)%
Total, net	$	297,610		$	342,263		$	363,992		$	397,083		$	419,059		(13	)%	(29	)%


Covered loans & leases Mix:
Commercial real estate:
Non-owner occupied term	55		%	58		%	56		%	54		%	54		%
Owner occupied term	16		%	14		%	13		%	14		%	14		%
Multifamily	8		%	8		%	10		%	10		%	10		%
Commercial construction	1		%	1		%	1		%	2		%	2		%
Residential development	1		%	2		%	2		%	2		%	2		%
Commercial:
Term	3		%	2		%	4		%	3		%	4		%
Lines of credit & other	3		%	3		%	2		%	3		%	2		%
Residential real estate:
Mortgage	6		%	6		%	6		%	6		%	6		%
Home equity lines & loans	6		%	5		%	5		%	5		%	5		%
Consumer & other	1		%	1		%	1		%	1		%	1		%
Total	100		%	100		%	100		%	100		%	100		%

Covered loan & lease portfolio balances represent the loan portfolios acquired through the assumption of Evergreen Bank on January 22, 2010, Rainier Pacific Bank on February 26, 2010, and Nevada Security Bank on June 18, 2010, from the FDIC through whole bank purchase and assumption agreements with loss sharing.

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Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)

(Dollars in thousands)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Deposits:
Demand, non-interest bearing	$	4,363,710		$	2,465,606		$	2,436,477		$	2,421,008		$	2,218,536		77	%	97	%
Demand, interest bearing	1,869,626			1,182,634			1,233,070			1,179,351			1,128,361			58	%	66	%
Money market	5,973,197			3,526,368			3,349,946			3,283,085			3,254,117			69	%	84	%
Savings	912,073			578,238			560,699			551,327			513,317			58	%	78	%
Time	3,204,394			1,520,737			1,537,468			1,632,469			1,841,994			111	%	74	%
Total	$	16,323,000		$	9,273,583		$	9,117,660		$	9,067,240		$	8,956,325		76	%	82	%

Total core deposits (1)	$	14,171,946		$	8,205,636		$	8,052,280		$	7,926,734		$	7,655,237		73	%	85	%

Deposit mix:
Demand, non-interest bearing	26		%	27		%	26		%	27		%	24		%
Demand, interest bearing	11		%	13		%	14		%	13		%	13		%
Money market	37		%	38		%	37		%	36		%	36		%
Savings	6		%	6		%	6		%	6		%	6		%
Time	20		%	16		%	17		%	18		%	21		%
Total	100		%	100		%	100		%	100		%	100		%

Number of open accounts:
Demand, non-interest bearing	363,378			190,298			187,088			186,975			187,026
Demand, interest bearing	88,162			46,291			48,643			49,226			50,136
Money market	65,216			34,913			35,303			35,909			36,555
Savings	149,877			84,686			84,144			84,448			84,784
Time	56,285			22,755			23,688			24,618			26,653
Total	722,918			378,943			378,866			381,176			385,154
Average balance per account:
Demand, non-interest bearing	$	12.3		$	13.0		$	13.0		$	12.9		$	11.9
Demand, interest bearing	21.2			25.5			25.3			24.0			22.5
Money market	91.6			101.0			94.9			91.4			89.0
Savings	6.1			6.8			6.7			6.5			6.1
Time	56.9			66.8			64.9			66.3			69.1
Total	$	22.7		$	24.5		$	24.1		$	23.8		$	23.3

(1) Core deposits are defined as total deposits less time deposits greater than $100,000.

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Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
(Unaudited)

	Quarter Ended:															% Change
(Dollars in thousands)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Seq. Quarter		Year over Year
Non-covered, non-performing assets:
Non-covered loans and leases on non-accrual status	$	48,358		$	37,884		$	31,891		$	39,805		$	48,855		28	%	(1	)%
Non-covered loans and leases past due 90+ days & accruing	4,919			2,269			3,430			4,936			6,052			117	%	(19	)%
Total non-performing loans and leases	53,277			40,153			35,321			44,741			54,907			33	%	(3	)%
Non-covered other real estate owned	26,172			22,034			21,833			18,249			13,235			19	%	98	%
Total	$	79,449		$	62,187		$	57,154		$	62,990		$	68,142		28	%	17	%

Non-covered performing restructured loans and leases	$	67,464		$	67,897		$	68,791		$	69,497		$	73,884		(1	)%	(9	)%
Non-covered loans and leases past due 31-89 days	$	28,913		$	29,416		$	15,290		$	22,060		$	21,964		(2	)%	32	%
Non-covered loans and leases past due 31-89 days to non-covered loans and leases	0.19		%	0.40		%	0.21		%	0.31		%	0.32		%
Non-covered, non-performing loans and leases to non-covered loans and leases	0.36		%	0.54		%	0.48		%	0.62		%	0.81		%
Non-covered, non-performing assets to total assets	0.36		%	0.53		%	0.49		%	0.54		%	0.60		%

Covered non-performing assets:
Covered loans and leases on non-accrual status	$	—		$	—		$	—		$	—		$	—		nm		nm
Total non-performing loans and leases	—			—			—			—			—			nm		nm
Covered other real estate owned	1,810			1,746			2,102			2,980			3,484			4	%	(48	)%
Total	$	1,810		$	1,746		$	2,102		$	2,980		$	3,484		4	%	(48	)%

Covered non-performing loans and leases to covered loans and leases	—		%	—		%	—		%	—		%	—		%
Covered non-performing assets to total assets	0.01		%	0.01		%	0.02		%	0.03		%	0.03		%

Total non-performing assets:
Loans and leases on non-accrual status	$	48,358		$	37,884		31,891			39,805			$	48,855		28	%	(1	)%
Loans and leases past due 90+ days & accruing	4,919			2,269			3,430			4,936			6,052			117	%	(19	)%
Total non-performing loans and leases	53,277			40,153			35,321			44,741			54,907			33	%	(3	)%
Other real estate owned	27,982			23,780			23,935			21,229			16,719			18	%	67	%
Total	$	81,259		$	63,933		$	59,256		$	65,970		$	71,626		27	%	13	%

Non-performing loans and leases to loans and leases	0.35		%	0.52		%	0.46		%	0.59		%	0.76		%
Non-performing assets to total assets	0.37		%	0.54		%	0.51		%	0.57		%	0.63		%

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Umpqua Holdings Corporation
Credit Quality – Allowance for Non-covered Credit Losses
(Unaudited)

	Quarter Ended:															% Change
(Dollars in thousands)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Seq. Quarter		Year over Year
Allowance for non-covered credit losses:
Balance beginning of period	$	86,709		$	85,314		$	84,694		$	85,836		$	84,692
Provision for non-covered loan and lease losses	15,399			5,400			3,840			3,008			2,993			185	%	415	%
Charge-offs	(5,814		)	(5,565		)	(11,349		)	(6,317		)	(4,604		)	4	%	26	%
Recoveries	1,701			1,560			8,129			2,167			2,755			9	%	(38	)%
Net charge-offs	(4,113		)	(4,005		)	(3,220		)	(4,150		)	(1,849		)	3	%	122	%
Total allowance for non-covered loan and lease losses	97,995			86,709			85,314			84,694			85,836			13	%	14	%
Reserve for unfunded commitments	4,845			1,417			1,436			1,375			1,327			242	%	265	%
Total allowance for non-covered credit losses	$	102,840		$	88,126		$	86,750		$	86,069		$	87,163		17	%	18	%

Net charge-offs to average non-covered loans and leases (annualized)	0.12		%	0.22		%	0.18		%	0.23		%	0.11		%
Recoveries to gross charge-offs	29.26		%	28.03		%	71.63		%	34.30		%	59.84		%
Allowance for non-covered loan losses to non-covered loans and leases	0.66		%	1.17		%	1.16		%	1.17		%	1.26		%
Allowance for non-covered credit losses to non-covered loans and leases	0.69		%	1.19		%	1.18		%	1.19		%	1.28		%

	Six Months Ended						% Change
(Dollars in thousands)	Jun 30, 2014			Jun 30, 2013			Year over Year
Allowance for non-covered credit losses:
Balance beginning of period	$	85,314		$	85,391
Provision for non-covered loan and lease losses	20,799			9,981			108		%
Charge-offs	(11,379		)	(13,329		)	(15		)%
Recoveries	3,261			3,793			(14		)%
Net charge-offs	(8,118		)	(9,536		)	(15		)%
Total allowance for non-covered loan and lease losses	97,995			85,836			14		%
Reserve for unfunded commitments	4,845			1,327			265		%
Total allowance for non-covered credit losses	$	102,840		$	87,163		18		%

Net charge-offs to average non-covered loans and leases (annualized)	0.16		%	0.29		%
Recoveries to gross charge-offs	28.66		%	28.46		%

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Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Quarter Ended:										% Change
	Jun 30, 2014		Mar 31, 2014		Dec 31, 2013		Sep 30, 2013		Jun 30, 2013		Seq. Quarter		Year over Year
Average Rates:
Yield on non-covered loans and leases	5.71	%	4.96	%	5.00	%	5.12	%	4.59	%	0.75		1.12
Yield on covered loans and leases	20.07	%	14.82	%	13.99	%	11.67	%	13.82	%	5.25		6.25
Yield on taxable investments	2.29	%	2.39	%	2.31	%	1.77	%	1.59	%	(0.10	)	0.70
Yield on tax-exempt investments (1)	5.19	%	5.54	%	5.56	%	5.62	%	5.34	%	(0.35	)	(0.15	)
Yield on temporary investments & interest bearing cash	0.25	%	0.25	%	0.25	%	0.25	%	0.26	%	—		(0.01	)
Total yield on earning assets (1)	5.30	%	4.60	%	4.61	%	4.58	%	4.13	%	0.70		1.17

Cost of interest bearing deposits	0.22	%	0.23	%	0.25	%	0.29	%	0.35	%	(0.01	)	(0.13	)
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.25	%	0.07	%	0.07	%	0.07	%	0.08	%	0.18		0.17
Cost of term debt	1.45	%	3.67	%	3.68	%	3.67	%	3.66	%	(2.22	)	(2.21	)
Cost of junior subordinated debentures	3.87	%	4.03	%	4.04	%	4.08	%	4.10	%	(0.16	)	(0.23	)
Total cost of interest bearing liabilities	0.41	%	0.44	%	0.46	%	0.50	%	0.55	%	(0.03	)	(0.14	)

Net interest spread (1)	4.90	%	4.16	%	4.15	%	4.08	%	3.58	%	0.74		1.32
Net interest margin – Consolidated (1)	5.01	%	4.28	%	4.29	%	4.22	%	3.73	%	0.73		1.28

Net interest margin – Bank (1)	5.07	%	4.35	%	4.35	%	4.30	%	3.80	%	0.72		1.27

As reported (GAAP):
Return on average assets	0.34	%	0.65	%	0.86	%	0.81	%	0.91	%	(0.31	)	(0.57	)
Return on average tangible assets	0.37	%	0.70	%	0.92	%	0.86	%	0.97	%	(0.33	)	(0.60	)
Return on average common equity	2.05	%	4.35	%	5.73	%	5.36	%	6.04	%	(2.30	)	(3.99	)
Return on average tangible common equity	4.06	%	7.86	%	10.38	%	9.79	%	10.00	%	(3.80	)	(5.94	)
Efficiency ratio – Consolidated	82.94	%	73.15	%	69.12	%	71.30	%	67.88	%	9.79		15.06
Efficiency ratio – Bank	81.37	%	71.18	%	67.30	%	69.30	%	65.56	%	10.19		15.81

Operating basis (non-GAAP): (2)
Return on average assets	1.08	%	0.84	%	0.95	%	0.92	%	0.94	%	0.24		0.14
Return on average tangible assets	1.18	%	0.90	%	1.02	%	0.99	%	1.00	%	0.28		0.18
Return on average common equity	6.45	%	5.61	%	6.38	%	6.11	%	6.23	%	0.84		0.22
Return on average tangible common equity	12.76	%	10.13	%	11.56	%	11.15	%	10.31	%	2.63		2.45
Efficiency ratio – Consolidated	60.33	%	68.34	%	67.66	%	67.40	%	66.97	%	(8.01	)	(6.64	)
Efficiency ratio – Bank	59.15	%	66.60	%	66.10	%	65.63	%	64.93	%	(7.45	)	(5.78	)

(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

(2) Operating earnings is calculated as earnings available to common shareholders excluding gain (loss) on junior subordinated

debentures carried at fair value, net of tax, bargain purchase gain on acquisitions, net of tax, goodwill impairment, and merger

related expenses, net of tax.

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July 23, 2014

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Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Six Months Ended				% Change
	Jun 30, 2014		Jun 30, 2013		Year over Year
Average Rates:
Yield on non-covered loans and leases	5.44	%	4.62	%	0.82
Yield on covered loans and leases	17.34	%	13.32	%	4.02
Yield on taxable investments	2.33	%	1.55	%	0.78
Yield on tax-exempt investments (1)	5.33	%	5.33	%	—
Yield on temporary investments & interest bearing cash	0.25	%	0.26	%	(0.01	)
Total yield on earning assets (1)	5.04	%	4.15	%	0.89

Cost of interest bearing deposits	0.23	%	0.34	%	(0.11	)
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.18	%	0.09	%	0.09
Cost of term debt	1.91	%	3.65	%	(1.74	)
Cost of junior subordinated debentures	3.93	%	4.12	%	(0.19	)
Total cost of interest bearing liabilities	0.42	%	0.55	%	(0.13	)

Net interest spread (1)	4.62	%	3.60	%	1.02
Net interest margin – Consolidated (1)	4.74	%	3.75	%	0.99

Net interest margin – Bank (1)	4.80	%	3.82	%	0.98

As reported (GAAP):
Return on average assets	0.46	%	0.87	%	(0.41	)
Return on average tangible assets	0.49	%	0.92	%	(0.43	)
Return on average common equity	2.83	%	5.74	%	(2.91	)
Return on average tangible common equity	5.42	%	9.50	%	(4.08	)
Efficiency ratio – Consolidated	79.63	%	67.08	%	12.55
Efficiency ratio – Bank	77.96	%	64.72	%	13.24

Operating basis (non-GAAP): (2)
Return on average assets	0.99	%	0.90	%	0.09
Return on average tangible assets	1.07	%	0.96	%	0.11
Return on average common equity	6.17	%	5.98	%	0.19
Return on average tangible common equity	11.81	%	9.89	%	1.92
Efficiency ratio – Consolidated	63.04	%	65.90	%	(2.86	)
Efficiency ratio – Bank	61.64	%	63.80	%	(2.16	)

(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

(2) Operating earnings is calculated as earnings available to common shareholders excluding gain (loss) on junior subordinated debentures carried at fair value, net of tax, bargain purchase gain on acquisitions, net of tax, goodwill impairment, and merger related expenses, net of tax.

Umpqua Holdings Corporation announces second quarter 2014 results

July 23, 2014

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Umpqua Holdings Corporation Average Balances
(Unaudited)

	Quarter Ended:										% Change
(Dollars in thousands)	Jun 30, 2014		Mar 31, 2014		Dec 31, 2013		Sep 30, 2013		Jun 30, 2013		Seq. Quarter		Year over Year
Temporary investments & interest bearing cash	$	672,587	$	705,974	$	625,405	$	443,148	$	622,209	(5	)%	8	%
Investment securities, taxable	2,242,414		1,562,849		1,664,716		1,788,567		2,062,819		43	%	9	%
Investment securities, tax-exempt	315,488		231,520		236,552		237,545		253,975		36	%	24	%
Loans held for sale	211,694		77,234		89,553		136,261		140,802		174	%	50	%
Non-covered loans and leases	13,355,455		7,384,555		7,298,622		7,128,753		6,710,803		81	%	99	%
Covered loans and leases	318,432		347,984		378,148		402,403		428,003		(8	)%	(26	)%
Total interest earning assets	17,116,070		10,310,116		10,292,996		10,136,677		10,218,611		66	%	67	%
Goodwill & other intangible assets, net	1,656,687		776,006		777,188		779,294		683,446		113	%	142	%
Total assets	20,036,742		11,638,357		11,624,424		11,460,729		11,447,868		72	%	75	%

Non-interest bearing demand deposits	3,963,233		2,414,001		2,452,554		2,317,932		2,210,760		64	%	79	%
Interest bearing deposits	10,948,991		6,696,029		6,661,933		6,691,579		6,803,879		64	%	61	%
Total deposits	14,912,224		9,110,030		9,114,487		9,009,511		9,014,639		64	%	65	%
Interest bearing liabilities	12,521,219		7,376,780		7,326,763		7,320,460		7,409,284		70	%	69	%

Shareholders’ equity - common	3,350,836		1,738,680		1,734,583		1,722,881		1,728,354		93	%	94	%
Tangible common equity (1)	1,694,149		962,674		957,395		943,587		1,044,908		76	%	62	%



Umpqua Holdings Corporation Average Balances
(Unaudited)
	Six Months Ended				% Change
(Dollars in thousands)	Jun 30, 2014		Jun 30, 2013		Year over Year
Temporary investments & interest bearing cash	$	689,188	$	503,470	37	%
Investment securities, taxable	1,904,508		2,182,326		(13	)%
Investment securities, tax-exempt	273,736		257,137		6	%
Loans held for sale	144,835		164,281		(12	)%
Non-covered loans and leases	10,386,511		6,683,436		55	%
Covered loans and leases	333,114		443,889		(25	)%
Total interest earning assets	13,731,892		10,234,539		34	%
Goodwill & other intangible assets, net	1,218,780		684,035		78	%
Total assets	15,860,749		11,472,221		38	%

Non-interest bearing demand deposits	3,192,896		2,183,089		46	%
Interest bearing deposits	8,834,259		6,870,186		29	%
Total deposits	12,027,155		9,053,275		33	%
Interest bearing liabilities	9,963,210		7,462,223		34	%

Shareholders’ equity - common	2,549,211		1,729,440		47	%
Tangible common equity (1)	1,330,432		1,045,405		27	%

(1) Average tangible common equity is a non-GAAP financial measure. Average tangible common equity is calculated as average common shareholders’ equity less average goodwill and other intangible assets, net (excluding MSRs).

Umpqua Holdings Corporation announces second quarter 2014 results

July 23, 2014

Page 23



Umpqua Holdings Corporation Residential Mortgage Banking Activity
(unaudited)

	Quarter Ended:															% Change
(Dollars in thousands)	Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Seq. Quarter		Year over Year
Residential mortgage servicing rights:
Residential mortgage loans serviced for others	$	10,838,313		$	4,496,662		$	4,362,499		$	4,195,759		$	3,911,273		141	%	177	%
MSR asset, at fair value	114,192			49,220			47,765			41,853			38,192			132	%	199	%
MSR as % of serviced portfolio	1.05		%	1.09		%	1.09		%	1.00		%	0.98		%
Residential mortgage banking revenue:
Origination and sale	$	22,142		$	8,421		$	9,915		$	12,764		$	20,381		163	%	9	%
Servicing	5,359			2,970			2,911			2,718			2,521			80	%	113	%
Change in fair value of MSR asset	(3,160		)	(952		)	3,131			(411		)	1,387			232	%	(328	)%
Total	$	24,341		$	10,439		$	15,957		$	15,071		$	24,289		133	%	0	%

Closed loan volume:
Closed loan volume - total	$	894,955		$	293,175		$	359,569		$	463,036		$	599,268		205	%	49	%
Closed loan volume - for sale	$	623,727		$	204,356		$	271,541		$	357,371		$	518,039		205	%	20	%

Gain on sale margin:
Based on total volume	2.47		%	2.87		%	2.76		%	2.76		%	3.40		%	(0.40	)	(0.93	)
Based on for sale volume	3.55		%	4.12		%	3.65		%	3.57		%	3.93		%	(0.57	)	(0.38	)

	Six Months Ended						% Change
	Jun 30, 2014			Jun 30, 2013			Year over Year
Residential mortgage banking revenue:
Origination and sale	$	30,563		$	43,438		(30		)%
Servicing	8,329			4,766			75		%
Change in fair value of MSR asset	(4,112		)	(347		)	1,085		%
Total	$	34,780		$	47,857		(27		)%

Closed loan volume:
Closed loan volume - total	$	1,188,129		$	1,108,273		7		%
Closed loan volume - for sale	828,083			971,847			(15		)%

Gain on sale margin:
Based on total volume	2.57		%	3.92		%	(1.35		)
Based on for sale volume	3.69		%	4.47		%	(0.78		)

###

UMPQUA HOLDINGS CORPORATION 2nd Quarter 2014 Earnings Conference Call Presentation July 24, 2014

2 Forward-looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Forward-looking statements include statements that expressly or implicitly predict future results, performance or event. Statements other than statements of historical fact are forward-looking statements, which can be identified by use of words such as “anticipates,” “expects,” “believes,” “estimates,” and “intends,” and words or phrases of similar meaning. In this presentation we make forward-looking statements about capital management and capital ratios; the financial impact of the merger with Sterling Financial Corporation; and the Sterling merger integration including post-merger store consolidations, facilities consolidations and systems conversions;. Specific risks that could cause results to differ from the forward-looking statements are set forth in our filings with the SEC and include, without limitation: our inability to achieve the synergies and earnings accretion contemplated by the Sterling merger; our inability to promptly and effectively integrate the businesses of Sterling and Umpqua; the diversion of management time on issues related to merger integration; changes in laws or regulations; and changes in general economic conditions.

 Delivered improved operating results  Operating earnings(1) of $53.9 million, or $0.27 per diluted share, up 29% sequentially  Adjusted net interest margin (1) increased to 4.85%, from 4.12% in the prior quarter  Efficiency ratio (operating basis) (1) improved to 60.33%, from 68.34% in the prior quarter  Return on average tangible common equity (operating basis) (1) improved to 12.76%  Continued strong organic growth in loans and deposits  Non-covered loans and leases grew organically (exclusive of loans acquired or divested) by $338.0 million, partially offset by $44.4 million in loan sales, for net growth of $293.6, or 8% annualized  Deposits grew organically (exclusive of deposits acquired or divested) by $188.5 million, or 5% annualized  Credit quality remained strong  Non-covered, non-performing assets to total assets decreased to 0.36%, from 0.53% for the prior quarter  Disciplined capital management  Tangible common equity ratio (1) of 9.34%, up from 8.67% in the prior quarter  Declared a dividend of $0.15 per common share Second Quarter 2014 Financial Highlights 3 $0.24 $0.24 $0.25 $0.21 $0.27 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Operating Earnings Per Diluted Share (1) > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation.

Summary Income Statement 4 > (1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items. > (2) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation. ($ in millions except per share da ta ) 2Q 2014 1Q 2014 2Q 2013 Net interest income before provision 212.3$ 107.8$ 93.9$ Provision for non-covered loan and lease losses 15.4 5.4 3.0 Provision for (recapture of) covered loan and lease losses (0.7) 0.6 (3.1) Net interest income 197.6 101.9 94.0 Non-interest income 44.5 23.0 34.5 Non-interest expense 214.1 96.5 87.9 Income be fore provision for income taxes 28.0 28.4 40.5 Provision for income taxes 10.7 9.6 14.3 Ne t income 17.2 18.8 26.3 Dividends and undistributed earnings allocated to participating securities 0.1 0.1 0.2 Ne t earnings ava ilable to common shareholders 17.1$ 18.7$ 26.1$ Adjustments Net loss on junior subordinated debentures carried at fair value, net of tax 0.8 0.3 0.3 Merger related expenses, net of tax 35.9 5.1 0.5 Opera ting earnings 53.9$ 24.0$ 26.9$ Earnings per diluted share: Earnings available to common shareholders 0.09$ 0.17$ 0.23$ Operating earnings 0.27$ 0.21$ 0.24$

Selected Balance Sheet 5 ($ in millions) 2Q 2014 1Q 2014 2Q 2013 Total assets 22,042.2$ 11,838.7$ 11,392.2$ Interest bearing deposits 492.7 887.6 659.8 Investment securities 2,603.9 1,711.7 2,091.4 Non-covered loans and leases, gross 14,830.3 7,411.1 6,787.1 Allowance for non-covered loans and leases (98.0) (86.7) (85.8) Covered loans and leases, net 297.6 342.3 419.1 Goodwill and other intangibles, net 1,842.7 775.5 683.0 Deposits 16,323.0 9,273.6 8,956.3 Securities sold under agreements to repurchase 315.0 262.5 176.4 Term debt 1,057.9 251.0 252.5 Total shareholders' equity 3,729.1 1,734.5 1,715.4 Ratios: Loan to deposit ratio (1) 92.7% 83.6% 80.5% Book value per common share $17.17 15.44$ 15.33$ Tangible book value per common share (2) $8.69 8.54$ 9.23$ Tangible common equity to tangible assets (2) 9.34% 8.67% 9.64% > (1) Loan to deposit ratio defined as non-covered loans and leases (gross) plus covered loans and leases divided by total deposits. > (2) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation.

Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 Return on average assets 1.08% 0.84% 0.95% 0.92% 0.94% Return on average tangible assets 1.18% 0.90% 1.02% 0.99% 1.00% Return on average common equity 6.45% 5.61% 6.38% 6.11% 6.23% Return on average tangible common equity 12.76% 10.13% 11.56% 11.15% 10.31% Efficiency ratio - consolidated 60.33% 68.34% 67.66% 67.40% 66.97% Adjusted net interest margin - consolidated 4.85% 4.12% 4.12% 4.16% 3.57% Non-covered non-performing loans and leases to non-covered loans and leases 0.36% 0.54% 0.48% 0.62% 0.81% Non-covered non-performing assets to total assets 0.36% 0.53% 0.49% 0.54% 0.60% Net charge-offs to average non-covered loans and leases (annualized) 0.12% 0.22% 0.18% 0.23% 0.11% Tangible common equity to tangible assets (1) 9.34% 8.67% 8.75% 8.78% 9.64% Tier 1 common to risk-weighted asset ratio (2) 11.00% 11.02% 10.98% 11.02% 12.67% Total risk-based capital ratio (2) 14.70% 14.70% 14.65% 14.74% 16.63% Key Performance Ratios 6 Profitability (operating basis)(1) Credit Quality Capital > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided at the end of this slide presentation. > (2) Ratio estimated for Q2 2014, pending completion and filing of regulatory reports. For the quarter ended

Sterling Acquisition – Operating Accretion 7 Operating Earnings Per Share Bridge (1) > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation. Q2 2014 $0.27 Credit-related discount in interest income Provision for loan losses related to Sterling Purchase accounting adjustments Pro-forma $0.22 $0.05 Operating accretion: 32% 7% > Sterling acquisition was 32% accretive to 2Q 2014 operating earnings per share > Included $0.05 per share in credit discount accretion and related provision for loan loss > Excluding these, Sterling acquisition was 7% accretive to 2Q 2014 operating earnings per share

Sterling Acquisition – Tangible Book Value Dilution 8 > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation. Tangible Book Value (TBV) Dilution Bridge (1) $8.69 $8.71 Q2 2014 TBV per share Pro Forma Q2 2014 TBV per share – legacy Umpqua 0.2% TBV dilution from Sterling deal $8.54 Q1 2014 TBV per share > TBV per share increased to $8.69 for Q2 2014 > Excluding Sterling, TBV per share would have been $8.71 per share > This represents a TBV per share dilution of 0.2%, lower than 4.6% projected when deal announced > Pro forma TBV earnback period only one quarter

Sterling Acquisition – Integration Update 9 > Organizational charts finalized on date of acquisition > All signage / branding completed > Corporate policies consolidated > Required divestitures completed in June 2014 > Consolidation of 27 stores in process, through Q4 2014 > System conversions scheduled: • Smaller ones underway • Culminate with core system conversion, planned for Q1 2015 > Remaining facilities consolidation planned for mid 2015 > Re-design of consumer / small business products completed

Loan Growth 10 Non-covered Loans and Leases (Gross) $3.5 $3.9 $5.4 $6.1 $6.1 $6.0 $5.7 $5.9 $6.7 $7.4 $14.8 (in billions) 23% 18% 17% 2% 1% 7% 9% 3% 13% 5% 2% Non-owner occupied term CRE Owner occupied term CRE Multifamily Commercial construction Residential development Commercial term Commercial lines of credit & other Leases & equipment finance Mortgage Home equity lines & loans Consumer & other As of June 30, 2014 > (1) Exclusive of loans acquired or divested. Q2 2014 organic (1) annualized growth rate of 8% > Non-covered loans and leases grew organically (1) by $293.6 million from the prior quarter • Included $44.4 million in other sales, for gross quarterly growth of $338.0 million > Q2 2014 loan pipeline at $2.7 billion, 75% C&I

26% 11% 37% 6% 20% Demand, non-interest bearing Demand, interest bearing Money market Savings Time Deposit Growth 11 > (1) Exclusive of loans acquired or divested. $3.8 $4.3 $5.8 $6.6 $6.6 $7.4 $9.4 $9.2 $9.4 $9.1 $16.3 (in billions) Total Deposits Q2 2014 organic (1) annualized growth rate of 5% As of June 30, 2014 > Total deposits grew organically (1) by $188.5 million from the prior quarter > Cost of interest bearing deposits decreased to 0.22% for Q2 2014

Net Interest Income and Margin 12 $90.8 $106.3 $106.9 $104.8 $207.0 3.57% 4.16% 4.12% 4.12% 4.85% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Adjusted net interest income Adjusted net interest margin > Adjusted net interest income (1) increased by $102.2 million from the prior quarter • Q2 2014 includes $24.5 million in interest income related to credit discount accretion from the Sterling deal 4.28% Adjusted net interest margin (1), excluding interest income related to credit discount from Sterling deal (in millions) > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation.

Mortgage Banking Revenue 13 $20.4 $12.8 $9.9 $8.4 $22.1 $2.5 $2.7 $2.9 $3.0 $5.4 $1.4 $(0.4) $3.1 $(1.0) $(3.2) $(5.0) $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Origination and sale Servicing Change in fair value of MSR asset > Total mortgage banking revenue increased by $13.9 million from the prior quarter • Primarily driven by the acquisition of Sterling, which contributed $10.3 million for the quarter (in millions) $24.3 $15.1 $16.0 $10.4 $24.3

> Gain on sale margin, based on total mortgage volume, declined to 2.47% • Legacy Umpqua gain on sale margin, based on total volume, declined to 2.63%, largely due to portfolio volume Gain on Sale Margin – Total Mortgage Volume 14 $599.3 $463.0 $359.6 $293.2 $895.0 3.40% 2.76% 2.76% 2.87% 2.47% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% $- $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 $3,000.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Total mortgage volume Closed mortgage volume Gain on sale margin Legacy Umpqua 2.63% 2.29% Legacy Sterling (in millions)

> Gain on sale margin, based on for sale mortgage volume, declined to 3.55% • Legacy Umpqua gain on sale margin, based on for sale volume, remained relatively flat Gain on Sale Margin – For Sale Mortgage Volume $518.0 $357.5 $271.5 $204.4 $623.7 3.93% 3.57% 3.65% 4.12% 3.55% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% $- $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 $3,000.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 For sale mortgage volume Closed mortgage volume Gain on sale margin Legacy Umpqua 4.10% 3.00% Legacy Sterling 15 (in millions)

Non-interest Expense 16 $87.1 $90.7 $93.7 $90.5 $156.6 $0.8 $4.9 $1.6 $6.0 $57.5 $- $50.0 $100.0 $150.0 $200.0 $250.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Non-interest expense (excluding merger-related expenses) Merger-related expenses > Increase in non-interest expense from prior quarter primarily driven by increased salaries, benefits, and occupancy and equipment expenses associated with Sterling • Q2 2014 includes $57.5 million of merger-related expenses • Run-rate does not yet reflect full benefit of the anticipated merger cost synergies • Achieved 30% of $87 million (annualized) cost synergy target, in June 2014 (in millions) $87.9 $95.6 $95.4 $96.5 $214.1

Provision for Loan Losses 17 > Provision for non-covered loan losses increased to $15.4 million for Q2 2014 • $7.7 million was related to Sterling and $5.5 million was related to FinPac $1.8 $3.0 $4.9 $5.5 $7.7 $3.0 $1.2 $0.8 $0.5 $2.2 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Provision for non-covered loan losses FinPac Sterling Legacy Umpqua (in millions) $3.0 $3.0 $3.8 $5.4 $15.4

Credit Quality 18 > All of the key credit quality ratios remained strong 1.37% 1.36% 1.28% 1.27% 1.26% 1.17% 1.16% 1.17% 0.66% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Allowance for non-covered loan losses to non-covered loans and leases 1.01% 0.86% 0.75% 0.69% 0.60% 0.54% 0.49% 0.53% 0.36% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Non-covered, non-performing assets to total assets 0.64% 0.38% 0.26% 0.47% 0.11% 0.23% 0.18% 0.22% 0.12% 0.00% 0.50% 1.00% 1.50% 2.00% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Net charge-offs to average non-covered loans and leases (annualized) Ratio after grossing up for value of Sterling-related credit mark remaining at quarter end 2.2%

Capital Ratios 19 > Regulatory capital ratios remained in excess of well-capitalized and internal policy limits > Focused on deploying / returning excess capital • Current quarterly dividend of $0.15 per share, ~3.5% dividend yield > Excess capital (above internal policy limits), on a pro forma Basel III basis, estimated to be ~$175 million by early 2015 > Trust preferred par value of $461.2 million as of June 30, 2014 > Net operating loss DTA of $214.5 million as of June 30, 2014 Tangible Common Equity/Tangible Assets Tier 1 Leverage Tier 1 Common Risk Based Tier 1 Risk Based Total Risk Based Q2 2014 Capital Ratios (1) Common TRUP LLR 12.1% 11.0% 14.0% 14.7% 9.34% > (1) Regulatory capital ratios are estimated, pending completion and filing of the Company’s regulatory reports. > Note: LLR = loan loss reserve, TRUP = trust preferred capital, Common = tangible common equity.

Appendix – Non-GAAP Reconciliation

Non-GAAP Reconciliation – Operating Earnings 21 Quarter Ended: (Dollars in thousands, except per share data) Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Net earnings available to common shareholders $ 17,138 $ 18,651 $ 25,058 $ 23,281 $ 26,056 Adjustments: Net loss on junior subordinated debentures carried at fair value, net of tax (1) 821 325 332 332 328 Merger related expenses, net of tax (1) 35,926 5,073 2,502 2,914 486 Operating earnings $ 53,885 $ 24,049 $ 27,892 $ 26,527 $ 26,870 Earnings per diluted share: Earnings available to common shareholders $ 0.09 $ 0.17 $ 0.22 $ 0.21 $ 0.23 Operating earnings $ 0.27 $ 0.21 $ 0.25 $ 0.24 $ 0.24 Six Months Ended: Jun 30, 2014 Jun 30, 2013 Net earnings available to common shareholders $ 35,789 $ 49,234 Adjustments: Net loss on junior subordinated debentures carried at fair value, net of tax (1) 1,147 653 Merger related expenses, net of tax (1) 40,999 1,405 Operating earnings $ 77,935 $ 51,292 Earnings per diluted share: Earnings available to common shareholders $ 0.23 $ 0.44 Operating earnings $ 0.50 $ 0.46 (1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items.

Non-GAAP Reconciliation – Adjusted Net Interest Income 22 Quarter Ended: (Dollars in thousands) Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Net interest income $ 212,259 $ 107,838 $ 110,074 $ 106,809 $ 93,893 Tax equivalent adjustment (1) 1,394 1,092 1,119 1,137 1,153 Net interest income (1) 213,653 108,930 111,193 107,946 95,046 Adjustments: Interest and fee reversals (recoveries) on non-accrual loans 450 122 (399 ) 203 33 Covered loan disposal gains (7,128 ) (4,259 ) (3,908 ) (1,836 ) (4,237 ) Adjusted net interest income (1) $ 206,975 $ 104,793 $ 106,886 $ 106,313 $ 90,842 Average interest earning assets $ 17,116,070 $ 10,310,116 $ 10,292,996 $ 10,136,677 $ 10,218,611 Net interest margin – consolidated (1) 5.01 % 4.28 % 4.29 % 4.22 % 3.73 % Adjusted net interest margin – consolidated (1) 4.85 % 4.12 % 4.12 % 4.16 % 3.57 % Six Months Ended: Jun 30, 2014 Jun 30, 2013 Net interest income $ 320,097 $ 188,082 Tax equivalent adjustment (1) 2,486 2,323 Net interest income (1) 322,583 190,405 Adjustments: Interest and fee reversals on non-accrual loans 572 1,118 Covered loan disposal gains (11,387 ) (7,391 ) Adjusted net interest income (1) $ 311,768 $ 184,132 Average interest earning assets $ 13,731,892 $ 10,234,539 Net interest margin – consolidated (1) 4.74 % 3.75 % Adjusted net interest margin – consolidated (1) 4.58 % 3.63 % (1) Tax equivalent basis. Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

Non-GAAP Reconciliation – Tangible Book Value 23 (Dollars in thousands, except per share data) Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Total shareholders' equity $ 3,729,060 $ 1,734,476 $ 1,727,426 $ 1,725,995 $ 1,715,352 Subtract: Goodwill and other intangible assets, net 1,842,670 775,488 776,683 778,094 682,971 Tangible common shareholders' equity $ 1,886,390 $ 958,988 $ 950,743 $ 947,901 $ 1,032,381 Total assets $ 22,042,229 $ 11,838,726 $ 11,636,112 $ 11,569,297 $ 11,392,208 Subtract: Goodwill and other intangible assets, net 1,842,670 775,488 776,683 778,094 682,971 Tangible assets $ 20,199,559 $ 11,063,238 $ 10,859,429 $ 10,791,203 $ 10,709,237 Common shares outstanding at period end 217,190,721 112,319,525 111,973,203 111,928,762 111,898,620 Tangible common equity ratio 9.34 % 8.67 % 8.75 % 8.78 % 9.64 % Tangible book value per common share $ 8.69 $ 8.54 $ 8.49 $ 8.47 $ 9.23