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: January 28, 2015

(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 January 28, 2015, Umpqua Holdings Corporation issued a press release announcing fourth quarter and full year 2014 financial results. The release is attached hereto as Exhibit 99.1, and incorporated herein by reference. 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 year ended December 31, 2014 as part of its annual report on Form 10-K 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 January 29, 2015. 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 fourth quarter and full year 2014 financial results dated January 28, 2015
	99.2 Fourth 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: January 28, 2015	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 fourth quarter and full year 2014 financial results dated January 28, 2015
99.2		Fourth quarter 2014 Investor Presentation

EXHIBIT 99.1

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 FOURTH QUARTER AND FULL-YEAR 2014 RESULTS

Full-year 2014 operating earnings¹ of $1.08 per share, up 15% from $0.94 in 2013

Fourth quarter 2014 operating earnings¹of $59.4 million, or $0.27 per share

Credit quality, capital and liquidity all remained strong

Sterling integration remains on track

PORTLAND, Ore. – January 28, 2015 – Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $52.4 million for the fourth quarter of 2014, as compared to $58.8 million for the third quarter of 2014 and $25.1 million for the fourth quarter of 2013. Earnings per diluted common share were $0.24 for the fourth quarter of 2014, as compared to $0.27 for the third quarter of 2014 and $0.22 for the fourth quarter of 2013.

Operating earnings, 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 $59.4 million for the fourth quarter of 2014, as compared to $65.1 million for the third quarter of 2014 and $27.9 million for the fourth quarter of 2013. Operating earnings per diluted common share were $0.27 for the fourth quarter of 2014, as compared to $0.30 for the third quarter of 2014 and $0.25 for the fourth quarter of 2013.

For the twelve months ended December 31, 2014, the Company reported net earnings available to common shareholders of $147.0 million, or $0.78 per diluted common share, as compared to $97.6 million, or $0.87 per diluted common share, for the year ended December 31, 2013. For the twelve months ended December 31, 2014, operating earnings¹ were $202.4 million, or $1.08 per diluted common share, as compared to $105.7 million, or $0.94 per diluted common share, for the year ended December 31, 2013.

“2014 was a highly productive year for Umpqua in which the company delivered increased operating earnings and continued the organic growth of our loan and deposit portfolios, while maintaining strong credit quality, capital and liquidity levels to support future growth,” said Ray Davis, president and CEO of Umpqua Holdings Corporation. “Most significantly, we closed on the largest acquisition in the company's history, and expect to complete the integration in the coming months. With the strength of Umpqua’s unique brand and value proposition, I look forward to capitalizing on the momentum we've built as we head into 2015.”

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.

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 2

Highlights:


•	Full-year 2014 operating earnings¹ of $202.4 million:


◦	Operating results reflect the acquisition of Sterling Financial beginning on April 19, 2014;


◦	Return on average assets (operating basis)¹ improved to 1.06%, from 0.92% in the prior year;


◦	Return on average tangible common equity (operating basis)¹ improved to 12.62%, from 10.60% in the prior year;


◦	Efficiency ratio (operating basis)¹ improved to 62.45%, from 66.74% in the prior year;


•	Fourth quarter 2014 operating earnings¹ of $59.4 million:


◦	Net interest income was up slightly from the prior quarter, while net interest margin decreased by 6 basis points from the prior quarter to 4.69%;


◦	Provision for loan and lease losses decreased by $9.1 million from the prior quarter, driven by an improvement in the credit quality of the loan and lease portfolio;


◦	Mortgage banking revenue decreased by $9.5 million from the prior quarter, driven by a higher mix of portfolio versus for sale mortgage production, along with lower gain on sale margins, and a larger loss from the change in the fair value of the MSR asset, consistent with the decline in mortgage interest rates;


◦	Other income decreased by $2.7 million from the prior quarter, driven by a lower level of portfolio loan sales;


◦	Non-interest expense (excluding merger-related expense) increased by $6.8 million from the prior quarter, driven by a $1.9 million increase in marketing expense to support new brand and growth campaigns, and a $3.3 million increase in net loss on other real estate owned;


•	Credit quality, capital and liquidity all remained strong:


◦	Net charge-offs to average loans and leases (annualized) decreased to 0.12%, from 0.14% in the prior quarter;


◦	Tangible book value per common share¹ increased to $8.80, as compared to $8.78 for the prior quarter and $8.49 for the same period in the prior year;


◦	Declared a dividend of $0.15 per common share; and


◦	Interest bearing cash increased to $1.3 billion, from $1.2 billion in the prior quarter.

Balance Sheet

Total consolidated assets were $22.6 billion as of December 31, 2014, as compared to $22.5 billion as of September 30, 2014 and $11.6 billion as of December 31, 2013. Including secured off-balance sheet lines of credit, total available liquidity to the Company was $7.7 billion as of December 31, 2014, representing 34% of total assets and 46% of total deposits.

Gross loans and leases were $15.3 billion as of December 31, 2014, an increase of $68.5 million from September 30, 2014. During the quarter, the Company experienced a larger than expected level of early pay-offs within the loan portfolio, primarily the result of borrowers selling their business or refinances away to competitors at terms or prices the Company was unwilling to match. During the fourth quarter of 2014, the Company had loan sales of $65.4 million, including $47.3 million in portfolio residential mortgage loans and $16.7 million of government guaranteed loans.

Total deposits were $16.9 billion as of December 31, 2014, an increase of $164.5 million from September 30, 2014. This increase was driven primarily by an increase in interest-bearing demand and money market accounts, partially offset by a decrease in time deposits.

Net Interest Income

Net interest income was $228.0 million for the fourth quarter of 2014, up $2.3 million from the prior quarter and $117.9 million from the same period in the prior year. The increase from prior year was primarily driven by the acquisition of Sterling, along with continued organic loan growth. Net interest income for the fourth quarter of 2014 included

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.

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 3

$21.6 million in interest income arising from the accretion of the credit discount recorded on the loans acquired from Sterling.

The Company’s net interest margin was 4.69% for the fourth quarter of 2014, down from 4.75% for the third quarter of 2014, but up from 4.29% for the fourth quarter of 2013. The decrease from the prior quarter was primarily driven by a higher balance of interest-bearing cash and a lower yield on interest-earning assets. The increase from the prior year was primarily driven by the acquisition of Sterling, a higher yield on interest-earning assets, and a lower cost of funds.

Credit Quality

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 as of the acquisition date. The credit portion of the fair value 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 similar ratios in periods prior to the acquisition of Sterling.

Loans acquired with deteriorated credit quality are accounted for as purchased credit impaired pools. Accordingly, loans included in the purchased credit impaired pools are not reported as non-performing loans based upon their individual performance status.

During the fourth quarter of 2014, the Company reported $21.6 million of accretion from the Sterling credit discount in interest income. As of December 31, 2014, the purchased non-credit impaired loans had approximately $122.4 million of remaining credit discount that will accrete into interest income over the life of the loans, and the purchased credit impairment loan pools had approximately $66.5 million of remaining total discount.

The allowance for non-covered loan losses was $108.9 million, or 0.72% of non-covered loans and leases, as of December 31, 2014. To provide better comparability to prior periods, this pro-forma ratio would have been approximately 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. This compares to a ratio of approximately 2.1% as of September 30, 2014.

The provision for loan losses was $5.2 million for the fourth quarter of 2014, down from $14.3 million for the third quarter of 2014. The decrease from the prior quarter was driven by an increase in loan pay-offs during the quarter, as well as upgrades within the non-covered loan and lease portfolio, and an improvement in the performance of the Sterling acquired loan portfolio. For the fourth quarter of 2014, net charge-offs to average loans and leases (annualized) decreased to 0.12%, from 0.14% in the prior quarter.

Non-covered, non-performing assets were $95.5 million, or 0.42% of total assets, as of December 31, 2014, as compared to $81.6 million, or 0.36% of total assets, as of September 30, 2014. Non-covered loans past due 31 to 89 days were $24.7 million, or 0.16% of non-covered loans and leases, as of December 31, 2014, as compared to $34.0 million, or 0.23% of non-covered loans and leases, as of September 30, 2014. Non-covered restructured loans on accrual status were $54.8 million as of December 31, 2014, as compared to $63.5 million as of September 30, 2014.

Non-Interest Income

Total non-interest income was $49.8 million for the fourth quarter of 2014, down $12.1 million from the prior quarter but up $23.0 million from the same period in the prior year. The decrease from the prior quarter was primarily driven by lower mortgage banking revenue and a $2.7 million decline in other income, primarily from a lower level of portfolio loan sales. The increase from the prior year was primarily driven by the acquisition of Sterling.

Residential mortgage banking revenue, which includes revenue from the origination and sale of residential mortgage loans, revenue from the servicing of residential mortgage loans and changes to the fair value of the residential mortgage

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.

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 4

servicing rights (“MSR”) asset, was down $9.5 million from the prior quarter, but up slightly from the same period in the prior year. Revenue from the origination and sale of residential mortgages decreased by $5.7 million from the prior quarter, driven by a higher mix of portfolio versus for sale mortgage production, along with lower gain on sale margins. Loss related to the change in fair value of the MSR was $8.2 million for the fourth quarter of 2014, a $3.9 million increase from a loss of $4.3 million in the prior quarter. The larger loss was driven by higher prepayment speeds associated with the decline in mortgage interest rates.

The Company’s gain on sale margin, as a percentage of residential mortgage for sale production, was 2.95% for the fourth quarter of 2014, down from 3.46% in the prior quarter. Of the current quarter’s mortgage production, 63% related to purchase activity, as compared to 71% for the prior quarter and 70% for the same period in the prior year.

As of December 31, 2014, the Company serviced $11.6 billion of residential mortgage loans for others, and its related MSR asset was valued at $117.3 million, or 1.01% of the total serviced portfolio principal balance. This compares to $11.3 billion of residential mortgage loans serviced for others as of September 30, 2014, with a related MSR asset of $118.7 million, or 1.05% of the total serviced portfolio principal balance. As of December 31, 2013, the Company serviced $4.4 billion of residential mortgage loans serviced for others, and its related MSR asset was valued at $47.8 million, or 1.09% of the total serviced portfolio principal balance.

Non-interest Expense

Non-interest expense was $190.9 million for the fourth quarter of 2014, which included $10.2 million of merger-related expenses. This compares to $182.6 million, including $8.6 million of merger-related expenses, for the third quarter of 2014 and $95.4 million, including $1.6 million of merger-related expenses, for the fourth quarter of 2013.

Excluding merger-related expenses, non-interest expense increased by $6.8 million from the prior quarter. This increase was primarily driven by a $3.3 million increase in loss on a real estate owned property and a $1.9 million increase in marketing expense to support new brand and growth campaigns.

The fourth quarter of 2014 non-interest expense run-rate does not reflect the full benefit of the anticipated Sterling merger cost synergies. Integration efforts continue to proceed as planned, with the previously announced 2014 store consolidations completed, and system conversions scheduled through early 2015. Cost synergies also remain on track to the previously announced target of $87 million (annualized), which is expected to be realized following system conversions.

Income taxes

The Company recorded a provision for income taxes of $29.2 million for the fourth quarter of 2014, representing an effective tax rate of 35.7% for the quarter, bringing the full-year effective tax rate for 2014 to 35.5%.

Capital

As of December 31, 2014, the Company’s tangible book value per common share¹ was $8.80 and its ratio of tangible common equity to tangible assets¹ was 9.33%, as compared to $8.78 and 9.24%, respectively, in the prior quarter.

The Company made no open market nor privately negotiated purchases of common stock under the Company’s previously announced share repurchase plan during the fourth 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 14.9% and its estimated Tier 1 common to risk weighted assets ratio was 11.3% as of December 31, 2014, as compared to 14.9% and 11.2%, respectively, as of September 30. 2014. The Company remains well above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of December 31, 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

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.

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

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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 December 31, 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 December 31, 2014, the Company’s total net deferred tax asset was $229.5 million, and the portion related to NOLs was $196.3 million.

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 document 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.

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.

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

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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:



	Quarter Ended											% Change
(Dollars in thousands, except per share data)	Dec 31, 2014		Sep 30, 2014		Jun 30, 2014			Mar 31, 2014		Dec 31, 2013		Seq. Quarter		Year over Year
Net earnings available to common shareholders	$	52,400	$	58,847	$	17,138		$	18,651	$	25,058	(11	)%	109	%
Adjustments:
Net loss on junior subordinated debentures carried at fair value, net of tax (1)	953		955		821			325		332		0	%	187	%
Merger related expenses, net of tax (1)	6,038		5,274		35,926			5,073		2,502		14	%	141	%
Operating earnings	$	59,391	$	65,076	$	53,885		$	24,049	$	27,892	(9	)%	113	%

Earnings per diluted share:
Earnings available to common shareholders	$	0.24	$	0.27	$	0.09		$	0.17	$	0.22	(11	)%	9	%
Operating earnings	$	0.27	$	0.30	$	0.27		$	0.21	$	0.25	(10	)%	8	%

	Twelve Months Ended				% Change
	Dec 31, 2014		Dec 31, 2013		Year over Year
Net earnings available to common shareholders	$	147,036	$	97,573	51		%
Adjustments:
Net loss on junior subordinated debentures carried at fair value, net of tax (1)	3,054		1,318		132		%
Merger related expenses, net of tax (1)	52,311		6,820		nm
Operating earnings	$	202,401	$	105,711	91		%

Earnings per diluted share:
Earnings available to common shareholders	$	0.78	$	0.87	(10		)%
Operating earnings	$	1.08	$	0.94	15		%

(1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items.
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.

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 7

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).



(Dollars in thousands, except per share data)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013
Total shareholders' equity	$	3,780,997		$	3,752,508		$	3,729,060		$	1,734,476		$	1,727,426
Subtract:
Goodwill and other intangible assets, net	1,842,958			1,845,242			1,842,670			775,488			776,683
Tangible common shareholders' equity	$	1,938,039		$	1,907,266		$	1,886,390		$	958,988		$	950,743
Total assets	$	22,613,274		$	22,488,059		$	22,042,229		$	11,838,726		$	11,636,112
Subtract:
Goodwill and other intangible assets, net	1,842,958			1,845,242			1,842,670			775,488			776,683
Tangible assets	$	20,770,316		$	20,642,817		$	20,199,559		$	11,063,238		$	10,859,429
Common shares outstanding at period end	220,161,120			217,261,722			217,190,721			112,319,525			111,973,203
Tangible common equity ratio	9.33		%	9.24		%	9.34		%	8.67		%	8.75		%
Tangible book value per common share	$	8.80		$	8.78		$	8.69		$	8.54		$	8.49

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 fourth quarter 2014 earnings conference call on Thursday, January 29, 2015, 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 fourth quarter and full-year 2014 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (888) 554-1432 ten minutes prior to the start time and enter conference ID: 5266505. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 5266505. 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 growth and efficiency potential from the acquisition of Sterling Financial Corporation; the integration of the merger with Sterling Financial Corporation; timing and amount of merger-related synergies and timing of systems conversions; credit discount accretion related to the merger; and projected effective tax rate. Specific risks that could cause results to differ from 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

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

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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 timely complete system conversions; the diversion of management time on issues related to merger integration; changes in laws or regulations; and changes in general economic conditions.

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January 28, 2015

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Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Quarter Ended															% Change
(In thousands, except per share data)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Seq. Quarter		Year over Year
Interest income:
Loans and leases	$	226,853		$	223,972		$	208,992		$	103,986		$	106,362		1	%	113	%
Interest and dividends on investments:
Taxable	11,629			12,136			12,728			9,291			9,517			(4	)%	22	%
Exempt from federal income tax	2,746			2,790			2,697			2,112			2,173			(2	)%	26	%
Dividends	66			81			128			50			87			(19	)%	(24	)%
Temporary investments & interest bearing deposits	857			544			422			441			399			58	%	115	%
Total interest income	242,151			239,523			224,967			115,880			118,538			1	%	104	%
Interest expense:
Deposits	7,119			6,773			6,075			3,848			4,168			5	%	71	%
Repurchase agreements and fed funds purchased	48			54			203			41			42			(11	)%	14	%
Term debt	3,570			3,586			3,364			2,273			2,332			0	%	53	%
Junior subordinated debentures	3,399			3,394			3,066			1,880			1,922			0	%	77	%
Total interest expense	14,136			13,807			12,708			8,042			8,464			2	%	67	%
Net interest income	228,015			225,716			212,259			107,838			110,074			1	%	107	%
Provision for loan and lease losses	5,241			14,333			14,696			5,971			2,471			(63	)%	112	%
Non-interest income:
Service charges	15,472			16,090			15,371			7,767			8,108			(4	)%	91	%
Brokerage fees	4,960			4,882			4,566			3,725			3,584			2	%	38	%
Residential mortgage banking revenue, net	16,489			25,996			24,341			10,439			15,957			(37	)%	3	%
Net gain on investment securities	1,026			902			976			—			191			14	%	437	%
Loss on junior subordinated debentures carried at fair value	(1,589		)	(1,590		)	(1,369		)	(542		)	(554		)	0	%	187	%
Change in FDIC indemnification asset	(1,982		)	(2,728		)	(5,601		)	(4,840		)	(5,708		)	(27	)%	(65	)%
BOLI income	1,971			2,161			1,967			736			621			(9	)%	217	%
Other income	13,485			16,211			4,278			5,722			4,586			(17	)%	194	%
Total non-interest income	49,832			61,924			44,529			23,007			26,785			(20	)%	86	%
Non-interest expense:
Salaries and employee benefits	104,039			102,564			95,560			53,218			52,720			1	%	97	%
Net occupancy and equipment	32,987			33,029			28,746			16,501			16,254			0	%	103	%
Intangible amortization	3,102			3,103			2,808			1,194			1,186			0	%	162	%
FDIC assessments	3,522			3,038			2,575			1,863			1,922			16	%	83	%
Net loss (gain) on other real estate owned	3,609			313			258			(64		)	1,397			nm		158	%
Merger related expenses	10,171			8,632			57,531			5,983			1,639			18	%	521	%
Other expense	33,426			31,879			26,653			17,823			20,246			5	%	65	%
Total non-interest expense	190,856			182,558			214,131			96,518			95,364			5	%	100	%
Income before provision for income taxes	81,750			90,749			27,961			28,356			39,024			(10	)%	109	%
Provision for income taxes	29,204			31,760			10,740			9,592			13,754			(8	)%	112	%
Net income	52,546			58,989			17,221			18,764			25,270			(11	)%	108	%
Dividends and undistributed earnings allocated to participating securities	146			142			83			113			212			3	%	(31	)%
Net earnings available to common shareholders	$	52,400		$	58,847		$	17,138		$	18,651		$	25,058		(11	)%	109	%

Weighted average basic shares outstanding	218,963			217,245			196,312			112,170			111,949			1	%	96	%
Weighted average diluted shares outstanding	219,974			218,941			197,638			112,367			112,214			0	%	96	%
Earnings per common share – basic	$	0.24		$	0.27		$	0.09		$	0.17		$	0.22		(11	)%	9	%
Earnings per common share – diluted	$	0.24		$	0.27		$	0.09		$	0.17		$	0.22		(11	)%	9	%
nm = not meaningful

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 10



Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Twelve Months Ended						% Change
(In thousands, except per share data)	Dec 31, 2014			Dec 31, 2013			Year over Year
Interest income
Loans and leases	$	763,803		$	398,214		92	%
Interest and dividends on investments:
Taxable	45,784			34,146			34	%
Exempt from federal income tax	10,345			8,898			16	%
Dividends	325			252			29	%
Temporary investments & interest bearing deposits	2,264			1,336			69	%
Total interest income	822,521			442,846			86	%
Interest expense
Deposits	23,815			20,755			15	%
Repurchase agreements and fed funds purchased	346			141			145	%
Term debt	12,793			9,248			38	%
Junior subordinated debentures	11,739			7,737			52	%
Total interest expense	48,693			37,881			29	%
Net interest income	773,828			404,965			91	%
Provision for loan and lease losses	40,241			10,716			276	%
Non-interest income
Service charges	54,700			30,952			77	%
Brokerage fees	18,133			14,736			23	%
Residential mortgage banking revenue, net	77,265			78,885			(2	)%
Net gain on investment securities	2,904			209			nm
Loss on junior subordinated debentures carried at fair value	(5,090		)	(2,197		)	132	%
Change in FDIC indemnification asset	(15,151		)	(25,549		)	(41	)%
BOLI income	6,835			3,035			125	%
Other income	39,696			21,370			86	%
Total non-interest income	179,292			121,441			48	%
Non-interest expense
Salaries and employee benefits	355,379			209,991			69	%
Net occupancy and equipment	111,263			62,067			79	%
Intangible amortization	10,207			4,781			113	%
FDIC assessments	10,998			6,954			58	%
Net loss on other real estate owned	4,116			1,248			230	%
Merger related expenses	82,317			8,836			nm
Other expense	109,783			70,784			55	%
Total non-interest expense	684,063			364,661			88	%
Income before provision for income taxes	228,816			151,029			52	%
Provision for income taxes	81,296			52,668			54	%
Net income	147,520			98,361			50	%
Dividends and undistributed earnings
allocated to participating securities	484			788			(39	)%
Net earnings available to common shareholders	$	147,036		$	97,573		51	%

Weighted average basic shares outstanding	186,550			111,938			67	%
Weighted average diluted shares outstanding	187,544			112,176			67	%
Earnings per common share – basic	$	0.79		$	0.87		(9	)%
Earnings per common share – diluted	$	0.78		$	0.87		(10	)%
nm = not meaningful

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 11



Umpqua Holdings Corporation Consolidated Balance Sheets
(Unaudited)

																% Change
(In thousands, except per share data)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Seq. Quarter		Year over Year
Assets:
Cash and due from banks	$	282,455		$	266,624		$	347,152		$	196,963		$	178,685		6	%	58	%
Interest bearing deposits	1,322,214			1,176,599			492,739			887,620			611,224			12	%	116	%
Temporary investments	502			487			529			525			514			3	%	(2	)%
Investment securities:
Trading, at fair value	9,999			9,727			9,420			4,498			5,958			3	%	68	%
Available for sale, at fair value	2,298,555			2,400,061			2,588,969			1,701,730			1,790,978			(4	)%	28	%
Held to maturity, at amortized cost	5,211			5,356			5,519			5,465			5,563			(3	)%	(6	)%
Loans held for sale	286,802			265,800			328,968			73,106			104,664			8	%	174	%
Loans and leases	15,327,732			15,259,201			15,136,455			7,763,691			7,728,166			0	%	98	%
Allowance for loan and lease losses	(116,167		)	(115,635		)	(106,495		)	(97,029		)	(95,085		)	0	%	22	%
Loans and leases, net	15,211,565			15,143,566			15,029,960			7,666,662			7,633,081			0	%	99	%
Restricted equity securities	119,334			120,759			122,194			29,948			30,685			(1	)%	289	%
Premises and equipment, net	317,834			314,364			310,407			180,199			177,680			1	%	79	%
Goodwill	1,786,225			1,785,407			1,779,732			764,304			764,305			0	%	134	%
Other intangible assets, net	56,733			59,835			62,938			11,184			12,378			(5	)%	358	%
Residential mortgage servicing rights, at fair value	117,259			118,725			114,192			49,220			47,765			(1	)%	145	%
Other real estate owned	37,942			34,456			27,982			23,780			23,935			10	%	59	%
FDIC indemnification asset	4,417			7,811			11,293			18,362			23,174			(43	)%	(81	)%
Bank owned life insurance	294,296			293,511			292,714			97,589			96,938			0	%	204	%
Deferred tax assets, net	229,520			250,910			259,993			11,393			16,627			(9	)%	nm
Other assets	232,411			234,061			257,528			116,178			111,958			(1	)%	108	%
Total assets	$	22,613,274		$	22,488,059		$	22,042,229		$	11,838,726		$	11,636,112		1	%	94	%
Liabilities:
Deposits	$	16,892,099		$	16,727,610		$	16,323,000		$	9,273,583		$	9,117,660		1	%	85	%
Securities sold under agreements to repurchase	313,321			339,367			315,025			262,483			224,882			(8	)%	39	%
Term debt	1,006,395			1,057,140			1,057,915			250,964			251,494			(5	)%	300	%
Junior subordinated debentures, at fair value	249,294			247,528			246,077			87,800			87,274			1	%	186	%
Junior subordinated debentures, at amortized cost	101,576			101,657			101,737			101,818			101,899			0	%	0	%
Other liabilities	269,592			262,249			269,415			127,602			125,477			3	%	115	%
Total liabilities	18,832,277			18,735,551			18,313,169			10,104,250			9,908,686			1	%	90	%
Shareholders' equity:
Common stock	3,519,316			3,515,621			3,512,507			1,514,969			1,514,485			0	%	132	%
Retained earnings	249,613			230,302			204,109			219,686			217,917			8	%	15	%
Accumulated other comprehensive income (loss)	12,068			6,585			12,444			(179		)	(4,976		)	83	%	nm
Total shareholders' equity	3,780,997			3,752,508			3,729,060			1,734,476			1,727,426			1	%	119	%
Total liabilities and shareholders' equity	$	22,613,274		$	22,488,059		$	22,042,229		$	11,838,726		$	11,636,112		1	%	94	%

Common shares outstanding at period end	220,161,120			217,261,722			217,190,721			112,319,525			111,973,203			1	%	97	%
Book value per common share	$	17.17		$	17.27		$	17.17		$	15.44		$	15.43		(1	)%	11	%
Tangible book value per common share	$	8.80		$	8.78		$	8.69		$	8.54		$	8.49		0	%	4	%
Tangible equity - common	$	1,938,039		$	1,907,266		$	1,886,390		$	958,988		$	950,743		2	%	104	%
Tangible common equity to tangible assets	9.33		%	9.24		%	9.34		%	8.67		%	8.75		%	1	%	7	%

nm = not meaningful

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 12



Umpqua Holdings Corporation
Loan & Lease Portfolio
(Unaudited)

(Dollars in thousands)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Loans & leases:
Commercial real estate:
Non-owner occupied term, net	$	3,290,610		$	3,423,453		$	3,517,328		$	2,511,770		$	2,535,162		(4	)%	30	%
Owner occupied term, net	2,633,864			2,682,870			2,714,319			1,331,969			1,309,400			(2	)%	101	%
Multifamily, net	2,638,618			2,565,711			2,506,864			428,489			441,208			3	%	498	%
Commercial construction, net	258,722			247,816			264,150			232,708			248,686			4	%	4	%
Residential development, net	81,846			76,849			94,857			96,723			95,699			7	%	(14	)%
Commercial:
Term, net	1,102,987			1,119,658			1,114,315			745,813			786,564			(1	)%	40	%
Lines of credit & other, net	1,322,722			1,344,741			1,330,771			1,015,251			994,058			(2	)%	33	%
Leases & equipment finance, net	523,114			492,221			463,784			388,418			361,591			6	%	45	%
Residential real estate:
Mortgage, net	2,233,735			2,102,333			1,976,934			672,845			619,517			6	%	261	%
Home equity lines & loans, net	852,478			836,054			817,391			287,491			283,906			2	%	200	%
Consumer & other, net	389,036			367,495			335,742			52,214			52,375			6	%	643	%
Total, net of deferred fees and costs	$	15,327,732		$	15,259,201		$	15,136,455		$	7,763,691		$	7,728,166		0	%	98	%

Non-covered loans total	$	15,063,221		$	14,975,811		$	14,830,345		$	7,411,108		$	7,354,403
Covered loans total	264,511			283,390			306,110			352,583			373,763
Total loans, net	$	15,327,732		$	15,259,201		$	15,136,455		$	7,763,691		$	7,728,166


Loan & leases mix:
Commercial real estate:
Non-owner occupied term, net	20		%	22		%	23		%	31		%	32		%
Owner occupied term, net	17		%	18		%	18		%	17		%	17		%
Multifamily, net	17		%	17		%	17		%	6		%	6		%
Commercial construction, net	2		%	2		%	2		%	3		%	3		%
Residential development, net	1		%	1		%	1		%	1		%	1		%
Commercial:
Term, net	7		%	7		%	7		%	10		%	10		%
Lines of credit & other, net	9		%	9		%	9		%	13		%	13		%
Leases & equipment finance, net	3		%	3		%	3		%	5		%	5		%
Residential real estate:
Mortgage, net	15		%	14		%	13		%	9		%	8		%
Home equity lines & loans, net	6		%	5		%	5		%	4		%	4		%
Consumer & other, net	3		%	2		%	2		%	1		%	1		%
Total	100		%	100		%	100		%	100		%	100		%

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 13



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

(Dollars in thousands)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Deposits:
Demand, non-interest bearing	$	4,744,804		$	4,741,897		$	4,363,710		$	2,465,606		$	2,436,477		0	%	95	%
Demand, interest bearing	2,054,994			1,942,792			1,869,626			1,182,634			1,233,070			6	%	67	%
Money market	6,113,138			5,998,339			5,973,197			3,526,368			3,349,946			2	%	82	%
Savings	971,185			952,122			912,073			578,238			560,699			2	%	73	%
Time	3,007,978			3,092,460			3,204,394			1,520,737			1,537,468			(3	)%	96	%
Total	$	16,892,099		$	16,727,610		$	16,323,000		$	9,273,583		$	9,117,660		1	%	85	%

Total core deposits (1)	$	14,808,765		$	14,653,183		$	14,171,946		$	8,205,636		$	8,052,280		1	%	84	%

Deposit mix:
Demand, non-interest bearing	28		%	28		%	26		%	27		%	26		%
Demand, interest bearing	12		%	12		%	11		%	13		%	14		%
Money market	36		%	36		%	37		%	38		%	37		%
Savings	6		%	6		%	6		%	6		%	6		%
Time	18		%	18		%	20		%	16		%	17		%
Total	100		%	100		%	100		%	100		%	100		%

Number of open accounts:
Demand, non-interest bearing	367,854			366,279			363,378			190,298			187,088
Demand, interest bearing	86,135			87,223			88,162			46,291			48,643
Money market	63,095			63,979			65,216			34,913			35,303
Savings	150,548			150,527			149,877			84,686			84,144
Time	53,530			54,565			56,285			22,755			23,688
Total	721,162			722,573			722,918			378,943			378,866

Average balance per account:
Demand, non-interest bearing	$	12.9		$	12.9		$	12.3		$	13.0		$	13.0
Demand, interest bearing	23.9			22.3			21.2			25.5			25.3
Money market	96.9			93.8			91.6			101.0			94.9
Savings	6.5			6.3			6.1			6.8			6.7
Time	56.2			56.7			56.9			66.8			64.9
Total	$	23.4		$	23.2		$	22.7		$	24.5		$	24.1

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

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 14



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

	Quarter Ended															% Change
(Dollars in thousands)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Seq. Quarter		Year over Year
Non-covered, non-performing assets:
Non-covered loans and leases on non-accrual status	$	52,041		$	42,397		$	48,358		$	37,884		$	31,891		23	%	63	%
Non-covered loans and leases past due 90+ days & accruing	7,512			7,416			4,919			2,269			3,430			1	%	119	%
Total non-performing loans and leases	59,553			49,813			53,277			40,153			35,321			20	%	69	%
Non-covered other real estate owned	35,989			31,753			26,172			22,034			21,833			13	%	65	%
Total	$	95,542		$	81,566		$	79,449		$	62,187		$	57,154		17	%	67	%

Non-covered performing restructured loans and leases	$	54,836		$	63,507		$	67,464		$	67,897		$	68,791		(14	)%	(20	)%
Non-covered loans and leases past due 31-89 days	$	24,659		$	34,025		$	28,913		$	29,416		$	15,290		(28	)%	61	%
Non-covered loans and leases past due 31-89 days to non-covered loans and leases	0.16		%	0.23		%	0.19		%	0.40		%	0.21		%
Non-covered, non-performing loans and leases to non-covered loans and leases	0.40		%	0.33		%	0.36		%	0.54		%	0.48		%
Non-covered, non-performing assets to total assets	0.42		%	0.36		%	0.36		%	0.53		%	0.49		%

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	1,953			2,703			1,810			1,746			2,102			(28	)%	(7	)%
Total	$	1,953		$	2,703		$	1,810		$	1,746		$	2,102		(28	)%	(7	)%

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

Total non-performing assets:
Loans and leases on non-accrual status	$	52,041		$	42,397		$	48,358		$	37,884		$	31,891		23	%	63	%
Loans and leases past due 90+ days & accruing	7,512			7,416			4,919			2,269			3,430			1	%	119	%
Total non-performing loans and leases	59,553			49,813			53,277			40,153			35,321			20	%	69	%
Other real estate owned	37,942			34,456			27,982			23,780			23,935			10	%	59	%
Total	$	97,495		$	84,269		$	81,259		$	63,933		$	59,256		16	%	65	%

Non-performing loans and leases to loans and leases	0.39		%	0.33		%	0.35		%	0.52		%	0.46		%
Non-performing assets to total assets	0.43		%	0.37		%	0.37		%	0.54		%	0.51		%
nm = not meaningful

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 15



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)

	Quarter Ended															% Change
(Dollars in thousands)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Seq. Quarter		Year over Year
Allowance for non-covered credit losses:
Balance beginning of period	$	107,807		$	97,995		$	86,709		$	85,314		$	84,694
Provision for non-covered loan and lease losses	4,844			14,431			15,399			5,400			3,840			(66	)%	26	%
Charge-offs	(7,886		)	(6,743		)	(5,814		)	(5,565		)	(11,349		)	17	%	(31	)%
Recoveries	4,140			2,124			1,701			1,560			8,129			95	%	(49	)%
Net charge-offs	(3,746		)	(4,619		)	(4,113		)	(4,005		)	(3,220		)	(19	)%	16	%
Total allowance for non-covered loan and lease losses	108,905			107,807			97,995			86,709			85,314			1	%	28	%
Reserve for unfunded commitments	3,539			4,388			4,845			1,417			1,436			(19	)%	146	%
Total allowance for non-covered credit losses	$	112,444		$	112,195		$	102,840		$	88,126		$	86,750		0	%	30	%

Net charge-offs to average non-covered loans and leases (annualized)	0.10		%	0.12		%	0.12		%	0.22		%	0.18		%
Recoveries to gross charge-offs	52.50		%	31.50		%	29.26		%	28.03		%	71.63		%
Allowance for non-covered loan and lease losses to non-covered loans and leases	0.72		%	0.72		%	0.66		%	1.17		%	1.16		%
Allowance for non-covered credit losses to non-covered loans and leases	0.75		%	0.75		%	0.69		%	1.19		%	1.18		%

Allowance for covered credit losses:
Balance beginning of period	$	7,828		$	8,500		$	10,320		$	9,771		$	11,918
Provision for (recapture of)covered loan and lease losses	397			(98		)	(703		)	571			(1,369		)	nm		nm
Charge-offs	(1,202		)	(781		)	(1,518		)	(669		)	(1,387		)	54	%	(13	)%
Recoveries	239			207			401			647			609			15	%	(61	)%
Net charge-offs	(963		)	(574		)	(1,117		)	(22		)	(778		)	68	%	24	%
Total allowance for covered loan and lease losses	$	7,262		$	7,828		$	8,500		$	10,320		$	9,771		(7	)%	(26	)%

Net charge-offs to average covered loans and leases (annualized)	1.43		%	0.80		%	1.41		%	0.03		%	0.83		%
Recoveries to gross charge-offs	19.88		%	26.50		%	26.42		%	96.71		%	43.91		%
Allowance for covered loan and lease losses to covered loans and leases	2.75		%	2.76		%	2.78		%	2.93		%	2.61		%

nm = not meaningful

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

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Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
	Quarter Ended															% Change
	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Seq. Quarter		Year over Year
Allowance for loan and lease losses:
Balance beginning of period	$	115,635		$	106,495		$	97,029		$	95,085		$	96,612
Provision for loan and lease losses	5,241			14,333			14,696			5,971			2,471			(63	)%	112	%
Charge-offs	(9,088		)	(7,524		)	(7,332		)	(6,234		)	(12,736		)	21	%	(29	)%
Recoveries	4,379			2,331			2,102			2,207			8,738			88	%	(50	)%
Net charge-offs	(4,709		)	(5,193		)	(5,230		)	(4,027		)	(3,998		)	(9	)%	18	%
Total allowance for loan and lease losses	116,167			115,635			106,495			97,029			95,085			0	%	22	%
Reserve for unfunded commitments	3,539			4,388			4,845			1,417			1,436			(19	)%	146	%
Total allowance for credit losses	$	119,706		$	120,023		$	111,340		$	98,446		$	96,521		0	%	24	%

Net charge-offs to average loans and leases (annualized)	0.12		%	0.14		%	0.15		%	0.21		%	0.21		%
Recoveries to gross charge-offs	48.18		%	30.98		%	28.67		%	35.40		%	68.61		%
Allowance for loan and lease losses to loans and leases	0.76		%	0.76		%	0.70		%	1.25		%	1.23		%
Allowance for credit losses to loans and leases	0.78		%	0.79		%	0.74		%	1.27		%	1.25		%

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 17



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
	Twelve months ended						% Change
(Dollars in thousands)	Dec 31, 2014			Dec 31, 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	40,074			16,829			138	%
Charge-offs	(26,008		)	(30,995		)	(16	)%
Recoveries	9,525			14,089			(32	)%
Net charge-offs	(16,483		)	(16,906		)	(3	)%
Total allowance for non-covered loan and lease losses	108,905			85,314			28	%
Reserve for unfunded commitments	3,539			1,436			146	%
Total allowance for non-covered credit losses	$	112,444		$	86,750		30	%

Net charge-offs to average non-covered loans and leases	0.13		%	0.24		%
Recoveries to gross charge-offs	36.62		%	45.46		%
Allowance for non-covered loan losses to covered loans and leases	0.72		%	1.16		%
Allowance for non-covered credit losses to covered loans and leases	0.75		%	1.18		%

Allowance for covered credit losses:
Balance beginning of period	$	9,771		$	18,275
Provision for (recapture of) covered loan and lease losses	167			(6,113		)	(103	)%
Charge-offs	(4,170		)	(4,503		)	(7	)%
Recoveries	1,494			2,112			(29	)%
Net charge-offs	(2,676		)	(2,391		)	12	%
Total allowance for covered loan and lease losses	$	7,262		$	9,771		(26	)%

Net charge-offs to average covered loans and leases	0.88		%	0.57		%
Recoveries to gross charge-offs	35.83		%	46.90		%
Allowance for covered loan losses to covered loans and leases	2.75		%	2.61		%

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 18



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
	Twelve months ended						% Change
(Dollars in thousands)	Dec 31, 2014			Dec 31, 2013			Year over Year
Balance beginning of period	$	95,085		$	103,666
Provision for loan and lease losses	40,241			10,716			276	%
Charge-offs	(30,178		)	(35,498		)	(15	)%
Recoveries	11,019			16,201			(32	)%
Net charge-offs	(19,159		)	(19,297		)	(1	)%
Total allowance for loan and lease losses	116,167			95,085			22	%
Reserve for unfunded commitments	3,539			1,436			146	%
Total allowance for credit losses	$	119,706		$	96,521		24	%

Net charge-offs to average loans and leases (annualized)	0.15		%	0.26		%
Recoveries to gross charge-offs	36.51		%	45.64		%
Allowance for loan losses to loans and leases	0.76		%	1.23		%
Allowance for credit losses to loans and leases	0.78		%	1.25		%

Umpqua Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

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Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Quarter Ended										% Change
	Dec 31, 2014		Sep 30, 2014		Jun 30, 2014		Mar 31, 2014		Dec 31, 2013		Seq. Quarter		Year over Year
Average Rates:
Yield on loans and leases	5.79	%	5.74	%	6.04	%	5.40	%	5.43	%	0.05		0.36
Yield on taxable investments	2.16	%	2.12	%	2.29	%	2.39	%	2.31	%	0.04		(0.15	)
Yield on tax-exempt investments (1)	5.09	%	5.12	%	5.19	%	5.54	%	5.56	%	(0.03	)	(0.47	)
Yield on temporary investments & interest bearing cash	0.25	%	0.25	%	0.25	%	0.25	%	0.25	%	—		—
Total yield on earning assets (1)	4.98	%	5.04	%	5.30	%	4.60	%	4.61	%	(0.06	)	0.37

Cost of interest bearing deposits	0.23	%	0.22	%	0.22	%	0.23	%	0.25	%	0.01		(0.02	)
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.06	%	0.07	%	0.25	%	0.07	%	0.07	%	(0.01	)	(0.01	)
Cost of term debt	1.41	%	1.35	%	1.45	%	3.67	%	3.68	%	0.06		(2.27	)
Cost of junior subordinated debentures	3.86	%	3.87	%	3.87	%	4.03	%	4.04	%	(0.01	)	(0.18	)
Total cost of interest bearing liabilities	0.41	%	0.40	%	0.41	%	0.44	%	0.46	%	0.01		(0.05	)

Net interest spread (1)	4.57	%	4.64	%	4.90	%	4.16	%	4.15	%	(0.07	)	0.42
Net interest margin – Consolidated (1)	4.69	%	4.75	%	5.01	%	4.28	%	4.29	%	(0.06	)	0.40
Net interest margin – Bank (1)	4.75	%	4.82	%	5.07	%	4.35	%	4.35	%	(0.07	)	0.40

As reported (GAAP):
Return on average assets	0.92	%	1.05	%	0.34	%	0.65	%	0.86	%	(0.13	)	0.06
Return on average tangible assets	1.00	%	1.15	%	0.37	%	0.70	%	0.92	%	(0.15	)	0.08
Return on average common equity	5.59	%	6.29	%	2.05	%	4.35	%	5.73	%	(0.70	)	(0.14	)
Return on average tangible common equity	11.08	%	12.48	%	4.06	%	7.86	%	10.38	%	(1.40	)	0.70
Efficiency ratio – Consolidated	68.34	%	63.15	%	82.94	%	73.15	%	69.12	%	5.19		(0.78	)
Efficiency ratio – Bank	66.34	%	61.68	%	81.37	%	71.18	%	67.30	%	4.66		(0.96	)

Operating basis (non-GAAP): (2)
Return on average assets	1.04	%	1.16	%	1.08	%	0.84	%	0.95	%	(0.12	)	0.09
Return on average tangible assets	1.13	%	1.27	%	1.18	%	0.90	%	1.02	%	(0.14	)	0.11
Return on average common equity	6.33	%	6.95	%	6.45	%	5.61	%	6.38	%	(0.62	)	(0.05	)
Return on average tangible common equity	12.55	%	13.80	%	12.76	%	10.13	%	11.56	%	(1.25	)	0.99
Efficiency ratio – Consolidated	64.33	%	59.83	%	60.33	%	68.34	%	67.66	%	4.50		(3.33	)
Efficiency ratio – Bank	62.71	%	58.70	%	59.15	%	66.60	%	66.10	%	4.01		(3.39	)

(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 Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 20



Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Twelve Months Ended				% Change
	Dec 31, 2014		Dec 31, 2013		Year over Year
Average Rates:
Yield on loans and leases	5.78	%	5.31	%	0.47
Yield on taxable investments	2.22	%	1.76	%	0.46
Yield on tax-exempt investments (1)	5.20	%	5.46	%	(0.26	)
Yield on temporary investments & interest bearing cash	0.25	%	0.26	%	(0.01	)
Total yield on earning assets (1)	5.02	%	4.38	%	0.64

Cost of interest bearing deposits	0.23	%	0.31	%	(0.08	)
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.11	%	0.08	%	0.03
Cost of term debt	1.57	%	3.66	%	(2.09	)
Cost of junior subordinated debentures	3.89	%	4.09	%	(0.20	)
Total cost of interest bearing liabilities	0.41	%	0.51	%	(0.10	)

Net interest spread (1)	4.61	%	3.87	%	0.74
Net interest margin – Consolidated (1)	4.73	%	4.01	%	0.72
Net interest margin – Bank (1)	4.79	%	4.08	%	0.71

As reported (GAAP):
Return on average assets	0.77	%	0.85	%	(0.08	)
Return on average tangible assets	0.83	%	0.91	%	(0.08	)
Return on average common equity	4.69	%	5.64	%	(0.95	)
Return on average tangible common equity	9.16	%	9.78	%	(0.62	)
Efficiency ratio – Consolidated	71.37	%	68.68	%	2.69
Efficiency ratio – Bank	69.64	%	66.54	%	3.10

Operating basis (non-GAAP): (2)
Return on average assets	1.06	%	0.92	%	0.14
Return on average tangible assets	1.15	%	0.98	%	0.17
Return on average common equity	6.45	%	6.11	%	0.34
Return on average tangible common equity	12.62	%	10.60	%	2.02
Efficiency ratio – Consolidated	62.45	%	66.74	%	(4.29	)
Efficiency ratio – Bank	61.07	%	64.86	%	(3.79	)

(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 Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 21



Umpqua Holdings Corporation Average Balances
(Unaudited)

	Quarter Ended										% Change
(Dollars in thousands)	Dec 31, 2014		Sep 30, 2014		Jun 30, 2014		Mar 31, 2014		Dec 31, 2013		Seq. Quarter		Year over Year
Temporary investments & interest bearing cash	$	1,368,726	$	849,399	$	672,587	$	705,974	$	625,405	61	%	119	%
Investment securities, taxable	2,169,504		2,307,732		2,242,414		1,562,849		1,664,716		(6	)%	30	%
Investment securities, tax-exempt	326,858		330,902		315,488		231,520		236,552		(1	)%	38	%
Loans held for sale	255,830		274,834		211,694		77,234		89,553		(7	)%	186	%
Loans and leases	15,300,425		15,200,893		13,673,887		7,732,539		7,676,770		1	%	99	%
Total interest earning assets	19,421,343		18,963,760		17,116,070		10,310,116		10,292,996		2	%	89	%
Goodwill & other intangible assets, net	1,844,084		1,841,668		1,656,687		776,006		777,188		0	%	137	%
Total assets	22,625,461		22,220,999		20,036,742		11,638,357		11,624,424		2	%	95	%

Non-interest bearing demand deposits	4,836,517		4,558,672		3,963,233		2,414,001		2,452,554		6	%	97	%
Interest bearing deposits	12,153,481		11,948,731		10,948,991		6,696,029		6,661,933		2	%	82	%
Total deposits	16,989,998		16,507,403		14,912,224		9,110,030		9,114,487		3	%	86	%
Interest bearing liabilities	13,833,126		13,681,205		12,521,219		7,376,780		7,326,763		1	%	89	%

Shareholders’ equity - common	3,721,003		3,712,813		3,350,836		1,738,680		1,734,583		0	%	115	%
Tangible common equity (1)	1,876,919		1,871,145		1,694,149		962,674		957,395		0	%	96	%



Umpqua Holdings Corporation Average Balances
(Unaudited)
	Twelve Months Ended				% Change
(Dollars in thousands)	Dec 31, 2014		Dec 31, 2013		Year over Year
Temporary investments & interest bearing cash	$	900,851	$	519,000	74	%
Investment securities, taxable	2,072,936		1,952,611		6	%
Investment securities, tax-exempt	301,535		247,010		22	%
Loans held for sale	205,580		138,383		49	%
Loans and leases	13,003,762		7,367,602		76	%
Total interest earning assets	16,484,664		10,224,606		61	%
Goodwill & other intangible assets, net	1,533,403		731,525		110	%
Total assets	19,169,098		11,507,688		67	%

Non-interest bearing demand deposits	3,951,429		2,284,996		73	%
Interest bearing deposits	10,455,902		6,772,677		54	%
Total deposits	14,407,331		9,057,673		59	%
Interest bearing liabilities	11,875,802		7,392,348		61	%

Shareholders’ equity - common	3,137,858		1,729,083		81	%
Tangible common equity (1)	1,604,455		997,558		61	%

(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 Reports Fourth Quarter and Full-Year 2014 Results

January 28, 2015

Page 22



Umpqua Holdings Corporation Residential Mortgage Banking Activity
(unaudited)

	Quarter Ended															% Change
(Dollars in thousands)	Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			Dec 31, 2013			Seq. Quarter		Year over Year
Residential mortgage servicing rights:
Residential mortgage loans serviced for others	$	11,590,310		$	11,300,947		$	10,838,313		$	4,496,662		$	4,362,499		3	%	166	%
MSR asset, at fair value	117,259			118,725			114,192			49,220			47,765			(1	)%	145	%
MSR as % of serviced portfolio	1.01		%	1.05		%	1.05		%	1.09		%	1.09		%
Residential mortgage banking revenue:
Origination and sale	$	18,378		$	24,097		$	22,142		$	8,421		$	9,915		(24	)%	85	%
Servicing	6,306			6,178			5,359			2,970			2,911			2	%	117	%
Change in fair value of MSR asset	(8,195		)	(4,279		)	(3,160		)	(952		)	3,131			92	%	nm
Total	$	16,489		$	25,996		$	24,341		$	10,439		$	15,957		(37	)%	3	%

Closed loan volume:
Closed loan volume - total	$	941,912		$	988,031		$	894,955		$	293,175		$	359,569		(5	)%	162	%
Closed loan volume - for sale	$	622,133		$	695,877		$	623,727		$	204,356		$	271,541		(11	)%	129	%

Gain on sale margin:
Based on total volume	1.95		%	2.44		%	2.47		%	2.87		%	2.76		%	(0.49	)	(0.81	)
Based on for sale volume	2.95		%	3.46		%	3.55		%	4.12		%	3.65		%	(0.51	)	(0.70	)

	Twelve Months Ended						% Change
	Dec 31, 2014			Dec 31, 2013			Year over Year
Residential mortgage banking revenue:
Origination and sale	$	73,038		$	66,117		10		%
Servicing	20,813			10,395			100		%
Change in fair value of MSR asset	(16,586		)	2,373			(799		)%
Total	$	77,265		$	78,885		(2		)%

Closed loan volume:
Closed loan volume - total	$	3,118,073		$	1,930,877		61		%
Closed loan volume - for sale	2,146,828			1,599,683			34		%

Gain on sale margin:
Based on total volume	2.34		%	3.42		%	(1.08		)
Based on for sale volume	3.40		%	4.13		%	(0.73		)

nm = not meaningful

###

UMPQUA HOLDINGS CORPORATION 4th Quarter 2014 Earnings Conference Call Presentation January 29, 2015

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

 Full-year 2014 financial highlights:  Full-year 2014 operating earnings(1) of $1.08 per share , up 15% from $0.94 per share in 2013  Results reflect the acquisition of Sterling Financial beginning on April 19, 2014  Return on average tangible common equity (operating basis)(1) improved to 12.62%, from 10.60% in the prior year  Efficiency ratio (operating basis)(1) improved to 62.45%, from 66.74% in the prior year  Fourth quarter 2014 financial highlights:  Operating earnings(1) of $59.4 million, versus $65.1 million in the prior quarter  $9.1 million linked quarter decrease in provision, driven by an improvement in the credit quality of the loan and lease portfolio  $9.5 million linked quarter decrease in mortgage banking revenue, driven by a higher mix of portfolio versus for sale mortgage production, along with lower gain on sale margins, and a larger loss from the change in the fair value of the MSR asset consistent with the decline in mortgage interest rates  $2.7 million linked quarter decrease in other income, driven by a lower level of portfolio loan sales  $6.8 million linked quarter increase in non-interest expense (excluding merger-related expense), driven by a $1.9 million increase in marketing expense to support new growth campaigns and a $3.3 million increase in net loss on other real estate owned;  Credit quality, capital and liquidity all remained strong 2014 Financial Highlights 3 $0.22 $0.24 $0.24 $0.25 $0.94 $0.21 $0.27 $0.30 $0.27 $1.08 Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 FY 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.

2014 2013 Q4 2014 Q3 2014 Q4 2013 Return on average assets 1.06% 0.92% 1.04% 1.16% 0.95% Return on average tangible assets 1.15% 0.98% 1.13% 1.27% 1.02% Return on average common equity 6.45% 6.11% 6.33% 6.95% 6.38% Return on average tangible common equity 12.62% 10.60% 12.55% 13.80% 11.56% Efficiency ratio - consolidated 62.45% 66.74% 64.33% 59.83% 67.66% Net interest margin - consolidated 4.73% 4.01% 4.69% 4.75% 4.29% Non-performing loans and leases to loans and leases 0.39% 0.46% 0.39% 0.33% 0.46% Non-performing assets to total assets 0.43% 0.51% 0.43% 0.37% 0.51% Net charge-offs to average loans and leases (annualized) 0.15% 0.26% 0.12% 0.14% 0.21% Tangible common equity to tangible assets (1) 9.33% 8.75% 9.33% 9.24% 8.75% Tier 1 common to risk-weighted asset ratio (2) 11.3% 11.0% 11.3% 11.2% 11.0% Total risk-based capital ratio (2) 14.9% 14.7% 14.9% 14.9% 14.7% Key Performance Ratios 4 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 Q4 2014, pending completion and filing of regulatory reports. For the quarter ended For the year ended

Summary Income Statement 5 > Note: tables may not foot due to rounding. > (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 ) FY 2014 FY 2013 4Q 2014 3Q 2014 4Q 2013 Net interest income before provision 773.8$ 405.0$ 228.0$ 225.7$ 110.1$ Provision for loan and lease losses 40.2 10.7 5.2 14.3 2.5 Net interest income 733.6 394.2 222.8 211.4 107.6 Non-interest income 179.3 121.4 49.8 61.9 26.8 Non-interest expense 684.1 364.7 190.9 182.6 95.4 Income be fore provision for income taxes 228.8 151.0 81.8 90.7 39.0 Provision for income taxes 81.3 52.7 29.2 31.8 13.8 Ne t income 147.5 98.4 52.5 59.0 25.3 Dividends and undistributed earnings allocated to participating securities 0.5 0.8 0.1 0.1 0.2 Ne t earnings ava ilable to common shareholders 147.0$ 97.6$ 52.4$ 58.8$ 25.1$ Adjustments Net loss on junior subordinated debentures carried at fair value, net of tax 3.1 1.3 1.0 1.0 0.3 Merger related expenses, net of tax 52.3 6.8 6.0 5.3 2.5 Opera ting earnings 202.4$ 105.7$ 59.4$ 65.1$ 27.9$ Earnings per diluted share: Earnings available to common shareholders $0.78 $0.87 $0.24 0.27$ $0.22 Operating earnings $1.08 $0.94 $0.27 0.30$ $0.25 Year ended Quarter ended

Net Interest Income and Margin 6 $110.1 $107.8 $212.3 $225.7 $228.0 4.29% 4.28% 5.01% 4.75% 4.69% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% $0 $50 $100 $150 $200 $250 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Net interest income Net interest margin > Net interest income increased by $2.3 million from the prior quarter and margin declined by 6 bps • Q4 2014 included $21.6 million in interest income related to credit discount accretion from the Sterling deal, flat from the prior quarter (in millions) 4.28% 4.25% Net interest margin, excluding interest income related to credit discount from Sterling deal 4.22%

Provision for Loan and Lease Losses 7 > Provision for loan and losses decreased by $9.1 million from the prior quarter • Driven by an improvement in the overall credit qualify of the loan and lease portfolio $2.5 $6.0 $14.7 $14.3 $5.2 $0 $2 $4 $6 $8 $10 $12 $14 $16 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Provision for loan and lease losses (in millions)

Non-interest Income 8 > Non-interest income decreased by $12.1 million from the prior quarter • Driven by lower mortgage banking revenue and a $2.7 million decline in other income, primarily from a lower level of portfolio loan sales (in millions) $(6.1) $(5.4) $(6.0) $(3.4) $(2.5) $4.6 $5.7 $4.3 $16.2 $13.5 $0.6 $0.7 $2.0 $2.2 $2.0 $16.0 $10.4 $24.3 $26.0 $16.5 $3.6 $3.7 $4.6 $4.9 $5.0 $8.1 $7.8 $15.4 $16.1 $15.5 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Service charges Brokerage fees Residential mortgage banking revenue, net BOLI income Other income Other misc. $26.8 $23.0 $49.8 $44.5 $61.9 > (1) Includes net gain on investment securities, loss on junior subordinated debentures carried at fair value, and change in FDIC indemnification asset. (1)

Mortgage Banking Revenue 9 $9.9 $8.4 $22.1 $24.1 $18.4 $2.9 $3.0 $5.4 $6.2 $6.3 $3.1 $(1.0) $(3.2) $(4.3) $(8.2) Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Origination and sale Servicing Change in fair value of MSR asset > Total mortgage banking revenue decreased by $9.5 million from the prior quarter • Driven by a higher mix of portfolio versus for sale mortgage production, along with lower gain on sale margins, and a larger loss from the change in the fair value of the MSR asset consistent with the decline in mortgage interest rates (in millions) $16.0 $10.4 $24.3 $26.0 $16.5

> Total closed mortgage volume decreased by 4.7% from the prior quarter and gain on sale margin, based on for sale volume, decreased by 51 bps 10 $88 $89 $271 $292 $320 $272 $204 $624 $696 $622 $0 $200 $400 $600 $800 $1,000 $1,200 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Closed mortgage volume Portfolio For Sale (in millions) Mortgage Originations and Gain on Sale Margin $360 $293 $895 $988 $942 2.76% 2.87% 2.47% 2.44% 1.95% 3.65% 4.12% 3.55% 3.46% 2.95% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Gain on sale margin Based on total volume Based on for sale volume

Non-interest Expense 11 $93.7 $90.5 $156.6 $174.0 $180.7 $1.6 $6.0 $57.5 $8.6 $10.2 $0 $50 $100 $150 $200 $250 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Non-interest expense (excluding merger-related expenses) Merger-related expenses > Non-interest expense (excluding merger expenses) increased by $6.8 million from prior quarter, including a $3.3 million increase in loss on real estate owned property and a $1.9 million increase in marketing expense from new growth campaigns • Achieved approximately 45% of $87 million (annualized) cost synergy target (in millions) $95.4 $96.5 $214.1 $182.6 $190.9 > Note: totals may not foot due to rounding.

Selected Balance Sheet 12 ($ in millions) 4Q 2014 3Q 2014 4Q 2013 Total assets 22,613.3$ 22,488.1$ 11,636.1$ Interest bearing deposits 1,322.2 1,176.6 611.2 Investment securities 2,313.8 2,415.1 1,802.5 Loans and leases, gross 15,327.7 15,259.2 7,728.2 Allowance for loan and lease losses (116.2) (115.6) (95.1) Goodwill and other intangibles, net 1,843.0 1,845.2 776.7 Deposits 16,892.1 16,727.6 9,117.7 Securities sold under agreements to repurchase 313.3 339.4 224.9 Term debt 1,006.4 1,057.1 251.5 Total shareholders' equity 3,781.0 3,752.5 1,727.4 Ratios: Loan to deposit ratio 90.7% 91.2% 84.8% Book value per common share $17.17 17.27$ $15.43 Tangible book value per common share (1) $8.80 8.78$ $8.49 Tangible common equity to tangible assets (1) 9.33% 9.24% 8.75% > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation.

Loan Growth 13 Loans and Leases (Gross) $6.4 $6.5 $7.2 $7.7 $7.8 $15.1 $15.3 $15.3 (in billions) 20% 17% 17% 2% 1% 7% 9% 3% 15% 6% 3% 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 December 31, 2014 > Loan and lease growth of $68.5 million from the prior quarter • Strong gross loan and lease production, in both consumer and commercial divisions • Loan growth was offset by a significant amount of loan outflows in the portfolio (above the normal amortization schedule)

28% 12% 36% 6% 18% Demand, non-interest bearing Demand, interest bearing Money market Savings Time Deposit Growth $9.4 $9.2 $9.4 $9.1 $9.3 $16.3 $16.7 $16.9 (in billions) Total Deposits As of December 31, 2014 > Total deposits grew by $164.5 million from the prior quarter • Driven by a $155.6 million increase in core deposits > Cost of interest bearing deposits remained low at 0.23% 14

Credit Quality 15 > All of the key credit quality ratios remained strong 1.23% 1.25% 0.70% 0.76% 0.76% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Allowance for loan and lease losses to loans and leases 0.51% 0.54% 0.37% 0.37% 0.43% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Non-performing assets to total assets 0.21% 0.21% 0.15% 0.14% 0.12% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Net charge-offs to average loans and leases (annualized) Ratio after grossing up for value of Sterling-related credit mark remaining at quarter end 2.2% 2.0% 2.1%

Capital Ratios 16 > 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, ~3.8% 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 December 31, 2014 > Net operating loss DTA of $196.3 million as of December 31, 2014 Tangible Common Equity/Tangible Assets Tier 1 Leverage Tier 1 Common Risk Based Tier 1 Risk Based Total Risk Based Q4 2014 Capital Ratios (1) Common TRUP LLR 10.9% 11.3% 14.2% 14.9% 9.33% > (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 18 Quarter Ended % Change (Dollars in thousands, except per share data) Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Seq. Quarter Year over Year Net earnings available to common shareholders $ 52,400 $ 58,847 $ 17,138 $ 18,651 $ 25,058 (11 )% 109 % Adjustments: Net loss on junior subordinated debentures carried at fair value, net of tax (1) 953 955 821 325 332 0 % 187 % Merger related expenses, net of tax (1) 6,038 5,274 35,926 5,073 2,502 14 % 141 % Operating earnings $ 59,391 $ 65,076 $ 53,885 $ 24,049 $ 27,892 (9 )% 113 % Earnings per diluted share: Earnings available to common shareholders $ 0.24 $ 0.27 $ 0.09 $ 0.17 $ 0.22 (11 )% 9 % Operating earnings $ 0.27 $ 0.30 $ 0.27 $ 0.21 $ 0.25 (10 )% 8 % Twelve Months Ended % Change Dec 31, 2014 Dec 31, 2013 Year over Year Net earnings available to common shareholders $ 147,036 $ 97,573 51 % Adjustments: Net loss on junior subordinated debentures carried at fair value, net of tax (1) 3,054 1,318 132 % Merger related expenses, net of tax (1) 52,311 6,820 nm Operating earnings $ 202,401 $ 105,711 91 % Earnings per diluted share: Earnings available to common shareholders $ 0.78 $ 0.87 (10 )% Operating earnings $ 1.08 $ 0.94 15 % (1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items. nm = not meaningful.

Non-GAAP Reconciliation – Tangible Book Value 19 (Dollars in thousands, except per share data) Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Total shareholders' equity $ 3,780,997 $ 3,752,508 $ 3,729,060 $ 1,734,476 $ 1,727,426 Subtract: Goodwill and other intangible assets, net 1,842,958 1,845,242 1,842,670 775,488 776,683 Tangible common shareholders' equity $ 1,938,039 $ 1,907,266 $ 1,886,390 $ 958,988 $ 950,743 Total assets $ 22,613,274 $ 22,488,059 $ 22,042,229 $ 11,838,726 $ 11,636,112 Subtract: Goodwill and other intangible assets, net 1,842,958 1,845,242 1,842,670 775,488 776,683 Tangible assets $ 20,770,316 $ 20,642,817 $ 20,199,559 $ 11,063,238 $ 10,859,429 Common shares outstanding at period end 220,161,120 217,261,722 217,190,721 112,319,525 111,973,203 Tangible common equity ratio 9.33 % 9.24 % 9.34 % 8.67 % 8.75 % Tangible book value per common share $ 8.80 $ 8.78 $ 8.69 $ 8.54 $ 8.49