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UMPQ

Umpqua Holdings NasdaqGS:UMPQ Stock Report

Last Price

US$17.56

Market Cap

US$3.8b

7D

-0.8%

1Y

-12.6%

Updated

23 Sep, 2022

Data

Company Financials +
UMPQ fundamental analysis
Snowflake Score
Valuation4/6
Future Growth5/6
Past Performance1/6
Financial Health6/6
Dividends6/6

UMPQ Stock Overview

Umpqua Holdings Corporation operates as the holding company of Umpqua Bank that provides commercial and retail banking services.

Umpqua Holdings Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Umpqua Holdings
Historical stock prices
Current Share PriceUS$17.56
52 Week HighUS$22.06
52 Week LowUS$15.77
Beta0.95
1 Month Change-4.57%
3 Month Change1.44%
1 Year Change-12.59%
3 Year Change5.98%
5 Year Change-10.00%
Change since IPO212.18%

Recent News & Updates

Aug 23

Umpqua Marking Time Ahead Of A Major Merger

Umpqua shares have modestly lagged other regional banks as investors await the close of the Colombia merger and as weaker mortgage banking offsets healthy core lending. Lending grew nicely above industry averages in Q2, and merging with Colombia should help resolve some pressure from an elevated loan/deposit ratio. The merger with Colombia is a complementary transaction that should significantly upgrade both banks' commercial lending franchises; the deal should close in Q3'22. Mid single-digit core organic earnings growth can fuel double-digit annualized return potential on a post-merger basis. When I last wrote about Umpqua (UMPQ) in February, I said that while I liked the long-term potential of the bank after its pending combination with Columbia (COLB), the short-term set-up wasn't so great. Between pressures on the mortgage banking business, non-exceptional asset sensitivity, and limited expense reduction and capital return options pending deal close, I was concerned that the shares may not be set to outperform, and so it has been, as the roughly 13% decline in the share price has modestly underperformed the regional bank group (by around 5%). I still like the long-term prospects for the bank. Mergers of equals (or MOEs) always carry above-average execution risk, but the synergy and cross-selling opportunities seem legitimate and likely to build value. Not only will the combination extend both banks' operating footprints, but it will also create complementary product offerings in commercial lending as well as enhanced operating scale. At a point where banks are still generally out of favor, I like what I see with double-digit long-term annualized return potential at today's price. Mortgage Banking - What The Market Gives, It Can Take Away Mortgage banking has long been a volatile line-item for most banks with significant operations, and that includes Umpqua. The fact that a decline in mortgage banking was expected doesn't change the fact that a 31% year-over-year decline (and 50% quarter-over-quarter) in reported revenue is a big headwind for the business. Core origination and sales revenue declined 63% yoy and 10% qoq on an 11% qoq decline in origination volume, while servicing revenue rose 4% both yoy and qoq. Other non-interest income line-items helped cushion the blow a bit (card fees, for instance, were up 2% yoy and 20% qoq), but it nevertheless drove a 39% yoy and 4% qoq decline in adjusted non-interest income for Umpqua in the second quarter. Management is now talking openly of considering "strategic alternatives" for the mortgage banking business, though I wouldn't expect anything to happen until the Columbia deal is finalized and the integration process gets underway. As I discussed in a recent piece on First Republic (FRC), this is just part of how mortgage banking operates at most banks. When times are good, many banks flood into the space and/or add significantly to their employee count to originate and sell as much volume as possible. When the tide turns, revenue and profits fall sharply and banks layoff those workers. There's nothing inherently wrong with this as long as a bank can get in and out nimbly and generate good full-cycle profits, but the reality is that most bank investors don't like volatile earnings streams and will penalize banks (in the form of lower multiples and/or higher discount rates) that generate significant business from volatile lines. Core Operations Showing Some Positives Apart from the mortgage banking turbulence, I think underlying earnings performance at Umpqua has been pretty good over the last two quarters. Like most banks, Umpqua has seen not only a benefit from higher rates, but a stronger/earlier benefit than initially expected. Likewise, loan demand has remained pretty healthy. Umpqua saw a 21bps year-over-year and 25bps quarter-over-quarter improvement in net interest margin in Q2'22, the latter just slightly ahead of the industry average. Loan yields improved by 15bps, and Umpqua saw total deposit costs stay consistent at a very low level (6bps), as the bank offset declines in time deposits and other interest-earning deposits by running down its cash balance back to pre-pandemic levels. Loans grew close to 7% qoq on an ex-PPP basis, and the 18% ex-PPP year-over-year growth was well ahead of the low-teens growth of the average bank. Looking at the sequential loan performance, there was particular strength in home equity lending (a smaller category for Umpqua), multifamily (up 10% to $4.8B or, about 20%), and residential mortgage (up 9% to $5.2B). With multifamily in particular, management called out the possibility that loan growth was artificially high, as borrowers tried to get in ahead of rate increases.

Jul 20

Umpqua Holdings GAAP EPS of $0.36 misses by $0.03, revenue of $303.41M beats by $5.05M

Umpqua Holdings press release (NASDAQ:UMPQ): Q2 GAAP EPS of $0.36 misses by $0.03. Revenue of $303.41M (-5.4% Y/Y) beats by $5.05M. Operating earnings per share $0.37 vs. $0.55 last year. Net interest income was $248.2M for Q2 2022, up $19.4M from the prior quarter. Net interest margin was 3.41% for Q2 2022, up 27 basis points from 3.14% for Q1 2022. As of June 30, 2022, the company's tangible book value per common share decreased to $11.57, compared to $11.98 in the prior quarter and $12.49 in the same period of the prior year.

Shareholder Returns

UMPQUS BanksUS Market
7D-0.8%-5.8%-5.2%
1Y-12.6%-21.7%-23.1%

Return vs Industry: UMPQ exceeded the US Banks industry which returned -19.4% over the past year.

Return vs Market: UMPQ exceeded the US Market which returned -21.6% over the past year.

Price Volatility

Is UMPQ's price volatile compared to industry and market?
UMPQ volatility
UMPQ Average Weekly Movement3.9%
Banks Industry Average Movement3.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.9%
10% least volatile stocks in US Market2.8%

Stable Share Price: UMPQ is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: UMPQ's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19534,000Cort O’Haverhttps://www.umpquabank.com

Umpqua Holdings Corporation operates as the holding company of Umpqua Bank that provides commercial and retail banking services. It operates in two segments: Core Banking and Mortgage Banking. The company offers deposit products, including non-interest bearing checking, interest bearing checking and savings, and money market accounts, as well as certificates of deposit.

Umpqua Holdings Corporation Fundamentals Summary

How do Umpqua Holdings's earnings and revenue compare to its market cap?
UMPQ fundamental statistics
Market CapUS$3.81b
Earnings (TTM)US$366.17m
Revenue (TTM)US$1.23b

10.4x

P/E Ratio

1.5x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
UMPQ income statement (TTM)
RevenueUS$1.23b
Cost of RevenueUS$0
Gross ProfitUS$1.23b
Other ExpensesUS$867.02m
EarningsUS$366.17m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.69
Gross Margin100.00%
Net Profit Margin29.69%
Debt/Equity Ratio43.0%

How did UMPQ perform over the long term?

See historical performance and comparison

Dividends

4.8%

Current Dividend Yield

50%

Payout Ratio