Umpqua Holdings Corporation (NASDAQ:UMPQ) Q1 2018 Earnings Conference Call Transcript

Apr 19, 2018 • 01:00 pm ET

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Umpqua Holdings Corporation (NASDAQ:UMPQ) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Umpqua Holdings Corporation First Quarter Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Ron Farnsworth, CFO. Please go ahead, sir.

Executive
Ronald Farnsworth

Okay. Thank you, Hannah. Good morning, and thank you for joining us today on our first quarter 2018 earnings call. With me this morning are Cort O'Haver, the President and CEO of Umpqua Holdings Corporation; Tory Nixon, our Chief Banking Officer; and Dave Shotwell, our Chief Risk Officer. After our prepared remarks, we will then take questions.

Yesterday afternoon, we issued an earnings release discussing our first quarter 2018 results. We have also prepared a slide presentation, which we will refer to during our remarks this morning. Both of these materials can be found on our website at umpquabank.com in the IR section.

(Forward-Looking Cautionary Statements)

And I will now turn the call over to Cort O'Haver.

Executive
Cort L. O'Haver

Thanks, Ron, and welcome to everyone listening in on the call. Let me begin by providing a brief recap of our quarterly financial performance and an update on Umpqua Next Gen. Ron will discuss the financials in more detail, including results from the operational and back office efficiency review we've been conducting. After that, we'll take your questions.

Our first quarter of 2018 was very strong with earnings per share of $0.35, one of the best quarters we've ever had. The financial performance achieved this quarter was attributable to the success of key initiatives we put into place over the last 12 months. Our strong results were anchored by continued growth in loans and deposits, stronger fee income, stable credit quality and a reduction in core expenses, along with the benefits of tax reform and short-term interest rate increases. As I go through my remarks today, I want to focus on three of the key initiatives that we introduced last year as a part of Umpqua Next Gen strategy: balanced growth, operational excellence and human-digital.

Starting with balanced growth; when we announced this initiative last year, our focus was on adding new multifaceted relationships across the bank. This means more consistent and diversified growth, driven by stronger, deeper and more profitable customer relationships. Today, I can confidently say this initiative is working well. Our first quarter is typically a slower seasonal loan growth quarter. We also experienced some higher payoffs and despite this, we were able to grow the loan and lease portfolio by $234 million, which represents a 5% annualized growth over the prior quarter. This growth was distributed nicely throughout the commercial, commercial real estate and consumer loan portfolios.

Our commercial loan portfolio, which includes C&I as well as our leasing business, increased by 11% annualized over the prior period level. Consistent with the last few quarters, a significant portion of this growth came from our corporate banking group, which continues to perform very well. Given the talent we've been able to attract in our markets, we're