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8-K - FORM 8-K - UMPQUA HOLDINGS CORP	umpqform8-k20104thqeacov.htm

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

Contacts:

Ray Davis Ron Farnsworth

President/CEO EVP/Chief Financial Officer

Umpqua Holdings Corporation Umpqua Holdings Corporation

503-727-4101 503-727-4108

raydavis@umpquabank.com ronfarnsworth@umpquabank.com

UMPQUA HOLDINGS REPORTS FOURTH QUARTER AND FULL YEAR 2010 RESULTS

Fourth quarter 2010 net income of $0.07 per diluted share, operating income of $0.08 per diluted share

Full year 2010 net income of $0.15 per diluted share, operating income of $0.12 per diluted share

Non-covered, non-performing assets declined to 1.53% of total assets

Fourth quarter 2010 net charge-offs of $23.7 million, lowest level since the third quarter of 2008

PORTLAND, Ore. – Jan. 27, 2011 – Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Umpqua Investments Inc. today announced fourth quarter 2010 net earnings available to common shareholders of $8.1 million, or $0.07 per diluted common share, compared to a net loss available to common shareholders of $29.9 million, or $0.34 per diluted common share, for the same period in the prior year. For the full year 2010, the Company reported net earnings available to common shareholders of $16.1 million, or $0.15 per diluted common share, compared to a net loss available to common shareholders of $166.3 million, or $2.36 per diluted common share for the prior year.

Operating income, defined 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, was $9.0 million, or $0.08 per diluted common share for the fourth quarter of 2010, compared to an operating loss of $27.7 million, or $0.32 per diluted common share, for the same period in the prior year. For the full year 2010, the Company reported operating income of $13.2 million, or $0.12 per diluted common share, compared to an operating loss of $58.0 million, or $0.82 per diluted common share, for the prior year. Operating income or loss is considered a “non-GAAP” financial measure. More information regarding this measurement and reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Significant financial statement items for the fourth quarter of 2010 include:

Non-covered, non-performing assets ended the quarter at 1.53% of total assets, the lowest level since the second quarter of 2008;
Provision for non-covered loan losses of $17.6 million, a 27% decrease, and total net charge-offs of $23.7 million, a 21% decrease, on a sequential quarter basis. Net charge-offs exceeded the provision for non-covered loan losses during the quarter due to improving credit quality of the loan portfolio;
The allowance for credit losses ended the quarter at 1.82% of non-covered total loans and leases;
Loss on other real estate owned of $4.9 million, compared to gain of $0.3 million for the third quarter of 2010;

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 2 of 30

Non-covered loans ended the quarter at $5.66 billion, a decline of $39.3 million, or 0.7%, on a sequential quarter basis;
Core deposits, which are total deposits less time deposits greater than $100,000, increased $187 million, or 2.7%, on a sequential quarter basis, due to continued organic growth initiatives;
Total deposits increased $132 million, or 1%, on a sequential quarter basis;
The cost of interest bearing deposits for the fourth quarter of 2010 was 0.97%, a decrease of 11 basis points on a sequential quarter basis;
Tangible common equity ratio of 8.74%; and
Total risk-based capital of 17.46%, and tier 1 common to risk weighted asset ratio of 13.1%.

“As we close out 2010 it is good to see loan quality trends continue to move in the right direction and loan production strengthen. Umpqua is emerging from this credit cycle with a much stronger balance sheet than when we entered, and anticipates improved operating results as we head into 2011,” said Ray Davis CEO of Umpqua Holdings Corporation. “We are indebted to the hard work of our credit professionals over the past few years, and the continual efforts of the entire Umpqua team in positioning us for future growth.”

FDIC-assisted acquisitions

In the first quarter of 2010, Umpqua Bank assumed the banking operations of EvergreenBank (“Evergreen”) and Rainier Pacific Bank (“Rainier”), both located in the greater Seattle-Tacoma area of Washington. In the second quarter of 2010, Umpqua Bank assumed the banking operations of Nevada Security Bank (“Nevada Security”), Reno, Nevada. The operations of Evergreen and Rainier (combined), and Nevada Security, have contributed operating earnings of $9.7 million and $2.3 million, respectively, since their assumptions. The operating systems of all three institutions have been converted onto Umpqua’s platform.

Asset quality – Non-covered loan portfolio

Non-performing assets were $178.0 million, or 1.53% of total assets, as of December 31, 2010, compared to $183.6 million, or 1.59% of total assets as of September 30, 2010, and $223.6 million, or 2.38% of total assets as of December 31, 2009. Of this amount, as of December 31, 2010, $138.2 million represented non-accrual loans, $7.1 million represented loans past due greater than 90 days and still accruing interest, and $32.8 million was other real estate owned (“OREO”).

The Company has aggressively charged-down impaired assets to their disposition values, and the assets are expected to be resolved at those levels, absent further declines in market prices. As of December 31, 2010, the non-performing assets of $178.0 million have been written down by 39%, or $111.8 million, from their original balance of $289.8 million.

The provision for loan losses for the fourth quarter of 2010 was $17.6 million, the lowest level of provision since the second quarter of 2008, due to improving credit quality of the loan portfolio. Total net charge-offs for the fourth quarter of 2010 were $23.7 million, reducing the allowance for credit losses to 1.82% of non-covered loans and leases at December 31, 2010, as compared to 1.91% of total non-covered loans as of September 30, 2010 and 1.81% of total non-covered loans as of December 31, 2009. The annualized net charge-off rate for the fourth quarter of 2010 was 1.66%.

Non-covered loans past due 30 to 89 days were $48.2 million, or 0.85% of non-covered loans and leases as of December 31, 2010, as compared to $80.2 million, or 1.41% as of September 30, 2010, and $41.5 million, or 0.69% as of December 31, 2009.

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 3 of 30

Since 2007, the Company has been aggressively resolving problems arising from the current economic downturn. The following table recaps the Company’s credit quality trends since the second quarter of 2007 as it relates to the non-covered loan portfolio:


Credit quality trends – Non-covered loans
*(Dollars in thousands)*
						Allowance				Non-covered,
		Provision				for credit losses				non-performing
		for		Net		to non-covered		30-89 days		assets to
		loan loss		charge-offs		loans %		past due %		total assets %
Q2 2007	$	3,413		$	31	1.17	%	0.56	%	0.59	%
Q3 2007		20,420			865	1.47	%	0.99	%	0.96	%
Q4 2007		17,814			21,188	1.42	%	0.64	%	1.18	%
Q1 2008		15,132			13,476	1.45	%	1.13	%	1.06	%
Q2 2008		25,137			37,976	1.22	%	0.31	%	1.25	%
Q3 2008		35,454			15,193	1.54	%	1.16	%	1.66	%
Q4 2008		31,955			30,072	1.58	%	0.96	%	1.88	%
Q1 2009		59,092			59,871	1.58	%	1.47	%	1.82	%
Q2 2009		29,331			26,047	1.63	%	0.80	%	1.73	%
Q3 2009		52,108			47,342	1.71	%	0.76	%	1.70	%
Q4 2009		68,593			64,072	1.81	%	0.69	%	2.38	%
Q1 2010		42,106			38,979	1.91	%	0.93	%	1.99	%
Q2 2010		29,767			26,637	2.00	%	0.70	%	1.90	%
Q3 2010		24,228			30,044	1.91	%	1.41	%	1.59	%
Q4 2010		17,567			23,744	1.82	%	0.85	%	1.53	%
Total	$	472,117	$	435,537

Non-covered construction loan portfolio

Total non-covered construction loans as of December 31, 2010 were $413 million, representing a decrease of 11% since September 30, 2010, and a decrease of 33% from December 31, 2009. Within this portfolio, the residential development loan segment was $148 million, or 3% of the total non-covered loan portfolio. Of this amount, $35 million represented non-performing loans, and $113 million represented performing loans. The residential development loan segment has decreased $78 million, or 35%, since December 31, 2009.

The remaining $248 million in non-covered construction loans as of December 31, 2010 primarily represents commercial construction projects. Total non-covered, non-performing commercial construction loans were $20.1 million at December 31, 2010, and $8.9 million were past due 30 to 89 days as of December 31, 2010.

Non-covered commercial real estate loan portfolio

The total non-covered term commercial real estate loan portfolio was $3.5 billion as of December 31, 2010. Of this total, $2.3 billion are non-owner occupied and $1.2 billion are owner occupied. Of the total term commercial real estate portfolio, $22.9 million, or 0.66%, are past due 30-89 days as of December 31, 2010. Of the total non-covered commercial real estate portfolio, 9% matures in 2011-2012, 18% in years 2013-2014, and 24% in years 2015-2016. The remaining 49% of the portfolio matures in or after the year 2017.

The portfolio was conservatively underwritten at origination to a minimum debt service coverage ratio of 1.20, and as a result, in many cases, the loan-to-value was substantially less than our in-house maximum of 75%. This underwriting serves to protect against the low capitalization rate environment of the past several years.

During the past two years, the Company has completed several rounds of stress testing on the commercial real estate portfolio, focusing on items such as capitalization rates, interest rates and vacancy factors. The results of the stress testing showed no significant unidentified risks, unlike our experience in the residential

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 4 of 30

development construction portfolio. As we remain in a difficult economic environment, we anticipate that some borrowers will struggle, but that potential issues within the commercial real estate portfolio will result from individual loans within distinct geographic areas and not represent a systemic weakness in the portfolio. We believe we are well positioned to manage the exposure and work with our customers until the economic climate improves.

Non-covered restructured loans

Restructured loans on accrual status were $84.4 million as of December 31, 2010, up 12% from $75.6 million as of September 30, 2010, and down 37% from $134.4 million as of December 31, 2009. The increase during the fourth quarter resulted from certain commercial real estate relationships being restructured in the quarter, and the decrease from the same period in the prior year primarily resulted from payments received and reclassifications of loans previously restructured to non-accrual status. The Company does not enter into restructurings on loans in non-performing status, and generally requires the customer to pledge additional collateral, maintain a minimum debt service coverage ratio of 1.0, and show substantial external sources of repayment prior to the Company agreeing to restructure.

Additional information related to asset quality

Additional tables can be found at the end of this earnings release covering the following aspects of the Company's non-covered loan portfolio: residential development loan trends by region, residential development loan stratification by size and by region, non-performing asset detail by type and by region, loans past due 30 to 89 days by type and by region, loans past due 30 to 89 days trends, restructured loans on accrual status by type and by region, commercial real estate by type and region, maturity and year of origination, along with the commercial construction and commercial loan portfolio by type and by region.

Asset quality – Covered loan portfolio

Covered non-performing assets were $29.9 million, or 0.26% of total assets, as of December 31, 2010, as compared to $53.8 million, or 0.47% of total assets, as of September 30, 2010. The amount at December 31, 2010 represents OREO. The reduction in covered non-performing assets in the current quarter primarily resulted from the reclassification of the remainder of the impaired loan pools to accrual status. As cash flows and other assets have been received in excess of original estimates, the carrying value of these impaired loan pools have decreased and the total expected cash flows associated with the pool have increased, resulting in accretable yield. The majority of accretable yield available to be recognized into interest income in the future primarily relates to principal expected to be received in excess of the carrying value of these loan pools. Contractual interest income on the underlying loans is included in our estimation of pool level expected future cash flows to be received only to the extent that is expected to be serviced by the borrower.

As of acquisition date, covered non-performing assets were written-down to their estimated fair value, incorporating our estimate of future expected cash flows until the ultimate resolution of these credits. The estimated credit losses embedded in these acquired non-performing loan portfolios were based on management’s and third-party consultants’ credit reviews of the portfolios performed during the due diligence for the Evergreen, Rainier and Nevada Security transactions. To the extent actual or projected cash flows are less than originally estimated, additional provisions for loan losses on the covered loan portfolio will be recognized; however, these provisions would be mostly offset by a corresponding increase in the FDIC indemnification (loss sharing) asset recognized within non-interest income. To the extent actual or projected cash flows are more than originally estimated, the increase in cash flows is prospectively recognized in interest income; however, the increase in interest income would be offset by a corresponding decrease in the FDIC indemnification (loss sharing) asset recognized within non-interest income.

Net interest margin

The Company reported a tax equivalent net interest margin of 4.14% for the fourth quarter of 2010, compared to 4.42% for the third quarter of 2010, and 4.06% for the fourth quarter of 2009. The decrease in net interest margin on a sequential quarter basis resulted primarily from a decline in the average loan to deposit ratio to

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 5 of 30

69% in the fourth quarter, compared to 74% in the third quarter, along with increased prepayments and related premium amortization on the investment portfolio during the quarter. The increase in net interest margin over the same period prior year results from the increase in average covered loans outstanding, increased yield on the covered loan portfolio as a result of payoffs ahead of expectations and declining costs of interest bearing deposits, partially offset by interest reversals of new non-accrual loans, a decline in non-covered loans outstanding, the impact of holding much higher levels of interest bearing cash, and the purchase of low-yielding taxable investment securities. The increase in net interest margin related to covered loan yields was offset by a corresponding decrease to the change in FDIC indemnification asset in other non-interest income. Interest reversals on new non-accrual loans during the fourth quarter of 2010 were $0.9 million, negatively impacting the net interest margin by 4 basis points. Excluding the reversals of interest, the net interest margin would have been 4.18% during the quarter. For the thirteenth consecutive quarter, the Company has continued to reduce the cost of interest bearing deposits. As a result of these efforts, the cost of interest bearing deposits was 0.97%, 11 basis points lower than the third quarter of 2010 and 38 basis points lower than the fourth quarter of 2009.

Mortgage banking revenue

The Company generated a record $7.4 million in total mortgage banking revenue during the fourth quarter of 2010, on record closed loan volume of $281 million. In the fourth quarter of 2010, the Company recognized a decrease in the fair value of the mortgage servicing right assets of $1.0 million, resulting from a relatively stable, but historically low, market for mortgage interest rates. Income from the origination and sale of mortgage loans was $7.4 million in the fourth quarter, representing a 3% increase on a sequential quarter basis. As of December 31, 2010, the Company serviced $1.6 billion of mortgage loans for others, and the related mortgage servicing right asset was valued at $14.5 million, or 0.90% of the total serviced portfolio principal balance.

Fair value of junior subordinated debentures

The Company recognized a $0.6 million loss from the change in fair value of junior subordinated debentures during the fourth quarter of 2010. The Company utilizes internal models to determine the valuation of this liability. The majority of the fair value difference over par value relates to the $61.8 million of junior subordinated debentures issued in the third quarter of 2007, which carry interest rate spreads of 135 and 275 basis points over the 3 month LIBOR. As of December 31, 2010, the credit risk adjusted interest spread for potential new issuances was forecasted to be significantly higher than the contractual spread. The difference between these spreads has created a cumulative gain in fair value of the Company’s junior subordinated debentures which results from their carrying amount compared to the estimated amount that would be paid to transfer the liability in an orderly transaction among market participants. Because these instruments are no longer being originated in the market, the quarterly fair value adjustments are difficult to estimate, but are not likely to be volatile in the future, and the cumulative fair value adjustment will continue to reverse and be recognized as a reduction in non-interest income over the remaining period to maturity of each related instrument. As of December 31, 2010, the total par value of junior subordinated debentures carried at fair value was $134.0 million, and the fair value was $80.7 million.

Non-interest expense

Total non-interest expense for the fourth quarter of 2010 was $87.9 million, compared to $85.2 million for the third quarter of 2010 and $72.5 million for the fourth quarter of 2009. Included in non-interest expense are several categories which are outside of the operational control of the Company or depend on changes in market values, including FDIC deposit insurance assessments, gain or loss on other real estate owned, as well as infrequently occurring expenses such as merger related costs and goodwill impairments. Excluding these non-controllable or infrequently occurring items, the remaining non-interest expense items totaled $77.8 million for the fourth quarter of 2010, compared to $79.9 million for the third quarter of 2010 and $60.2 million for the fourth quarter of 2009. The decline from the prior quarter results from non-recurring expenses incurred in the third quarter. The increase over the same period prior year relates to increases in variable expenses related to the mortgage banking division’s production, the assumption of Evergreen’s, Rainier’s and

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 6 of 30

Nevada Security’s banking operations, higher loan collection and OREO management expenses, as well as various other growth initiatives underway. During the fourth quarter of 2010, the Company incurred loan collection and OREO management expense of $5.3 million, compared to $4.0 million for the third quarter of 2010, and $2.0 million for the fourth quarter of 2009. Mortgage production related expense was $4.9 million in the fourth quarter of 2010, compared to $4.2 million in the third quarter of 2010, and $3.5 million for the fourth quarter of 2009.

Total FDIC deposit insurance assessments during the fourth quarter of 2010 were $4.2 million. The increase over the prior quarter’s assessment of $3.9 million is a result of significantly higher average deposit balances in the current quarter.

Income taxes

The Company recorded a provision for income taxes of $4.2 million in the fourth quarter of 2010. The change in the effective income tax rate in the quarter reflects the effects of permanent differences on our taxable income year to date.

Balance sheet

Total consolidated assets as of December 31, 2010 were $11.7 billion, compared to $11.5 billion on September 30, 2010 and $9.4 billion a year ago. Total gross loans and leases (covered and non-covered), and deposits, were $6.4 billion and $9.4 billion, respectively, as of December 31, 2010, compared to $6.0 billion and $7.4 billion, respectively, as of December 31, 2009.

The following table presents the year-to-date 2010 organic growth rates, which excludes the effects of the Evergreen, Rainier and Nevada Security FDIC-assisted acquisitions and the related run-off of assumed brokered time deposits, which the Bank is not renewing upon maturity:


		Non-covered
*(Dollars in thousands)*		loans and leases			Deposits			Assets
As reported, 12/31/10	$	5,658,987		$	9,433,805		$	11,668,710
Less: 12/31/09 balances		5,999,267			7,440,434			9,381,373
Total growth year-to-date		(340,280	)		1,993,371			2,287,337

Less:
Evergreen acquisition ⁽¹⁾		--			272,142			353,279
Rainier Pacific acquisition ⁽¹⁾		--			416,430			721,174
Nevada Security acquisition ⁽¹⁾		--			428,329			437,595
Add back:
Run-off of assumed brokered time
deposits not renewed		--			113,734			113,734
Organic growth	$	(340,280	)	$	990,204		$	888,023

Annualized organic growth rate		(5.7	)%		13.3	%		9.5	%

(1) Excludes run-off of non-brokered deposits occurring in the quarter of acquisition.

Total loans held for investment (including covered and non-covered) decreased $94 million during the fourth quarter of 2010. This decrease is principally attributable to non-covered charge-offs, paydowns on the covered loans, and transfers to other real estate owned.

Total deposits increased $132 million, or 1%, during the fourth quarter of 2010. Total deposits have increased $2.0 billion, or 27%, since December 31, 2009. The deposits acquired from the Evergreen, Rainier and Nevada Security acquisitions included $135 million of brokered time deposits as of their respective acquisition dates. The Bank is not renewing these brokered deposits as they mature. Excluding the impact of the deposits assumed in acquisitions of and the run-off of brokered time deposits that have matured, total deposits increased $985 million in 2010, representing a 13.3% annualized organic growth rate.

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 7 of 30

Due to unattractive bond market conditions since the second half of 2009, the Company has been holding larger levels of interest bearing cash rather than investing all excess liquidity into the bond market. At December 31, 2010, the Company had $892 million of interest bearing cash earning 0.25%, the target Federal Funds Rate. This excess balance sheet liquidity has increased since the prior year, as investment security alternatives in the current market are less attractive given the historically low interest rate environment. However, beginning in the third quarter of 2010 we began purchasing short duration government-sponsored investment securities to match and offset the interest expense associated with the growth in deposits. The Company plans to hold an increased interest bearing cash position relative to historical levels until the investment alternatives in the market improve from both a return and duration standpoint. Including secured off-balance sheet lines of credit, total available liquidity to the Company was $4.8 billion as of December 31, 2010, representing 41% of total assets and 50% of total deposits.

Capital

As of December 31, 2010, total shareholders’ equity was $1.64 billion, comprised entirely of common equity. Book value per common share was $14.34, tangible book value per common share was $8.39 and the ratio of tangible common equity to tangible assets was 8.74% (see explanation and reconciliation these items in the

Non-GAAP Financial Measures section below).

In April 2010, the Company’s preferred stock (Common Stock Equivalent Series B) of $198.3 million converted into common stock following the Company's annual shareholder meeting at which shareholders of the Company approved, among other items, an increase in authorized total common shares from 100 million to 200 million.

The Company’s estimated total risk-based capital ratio as of December 31, 2010 is 17.46%. This represents a slight decrease from September 30, 2010, as a result of asset growth during the quarter. Our total risk-based capital level is well in excess of the regulatory definition of “well-capitalized” of 10.00%. The Company’s estimated Tier 1 common to risk weighted assets ratio is 13.1% as of December 31, 2010. These capital ratios as of December 31, 2010 are estimates pending completion and filing of the Company’s regulatory reports.

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. Umpqua believes that certain non-GAAP financial measures provide investors with information useful in understanding Umpqua’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.

Umpqua recognizes gains or losses on our 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, Umpqua incurs significant expenses related to the completion and integration of mergers and acquisitions. Additionally, we 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, Umpqua may recognize one-time bargain purchase gains on certain FDIC-assisted acquisitions that are not reflective of Umpqua’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. We define operating earnings (loss) 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 (loss) per diluted share by dividing operating earnings by the same diluted share total used in determining diluted earnings per common share.

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 8 of 30

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


												Sequential		Year over
		Quarter ended:										Quarter		Year
*(Dollars in thousands, except per share data)*		Dec 31, 2010			Sep 31, 2010				Dec 31, 2009			% Change		% Change

Net earnings (loss) available to common
shareholders	$	8,140		$		8,173		$		(29,924	)	0	%	(127	)%
Adjustments:
Net loss on junior subordinated debentures
carried at fair value, net of tax ⁽¹⁾		332				332				2,215		0	%	(85	)%
Merger related expenses, net of tax ⁽¹⁾		574				986				--		(42	)%	nm
Operating earnings (loss)	$	9,046		$		9,491		$		(27,709	)	(5	)%	(133	)%

Earnings (loss) per diluted share:
Earnings (loss) available to common shareholders	$	0.07		$		0.07		$		(0.34	)	0	%	(121	)%
Operating earnings (loss)	$	0.08		$		0.08		$		(0.32	)	0	%	(125	)%


										Year over
		Twelve Months Ended:								Year
*(Dollars in thousands, except per share data)*		Dec 31, 2010				Dec 31, 2009				% Change

Net earnings (loss) available to common
shareholders	$	16,067		$		(166,262	)			(110	)%
Adjustments:
Net gain on junior subordinated debentures
carried at fair value, net of tax ⁽¹⁾		(2,988	)			(3,889	)			(23	)%
Bargain purchase gain on acquisitions, net of tax ⁽¹⁾		(3,862	)			--				nm
Goodwill impairment		--				111,952				(100	)%
Merger related expenses, net of tax ⁽¹⁾		4,005				164				2342	%
Operating earnings (loss)	$	13,222		$		(58,035	)			(123	)%

Earnings (loss) per diluted share:
Earnings (loss) available to common shareholders	$	0.15		$		(2.36	)			(106	)%
Operating earnings (loss)	$	0.12		$		(0.82	)			(115	)%

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

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 9 of 30

Management believes pre-tax, pre-credit cost operating income is a useful financial measure because it enables investors to assess the Company’s ability to generate income and capital to cover credit losses through a credit cycle. Management uses this measure to evaluate core operating results exclusive of credit costs, which are market driven or outside of the Company’s control, to monitor how we are growing core pre-tax income of the Company over time, through organic growth and acquisitions. Pre-tax, pre-credit cost operating income is calculated starting with operating earnings (as defined above) and adding back operating provision for income taxes, preferred stock dividends, earnings allocated to participation securities, provision for loan and lease losses, net gains or losses on other real estate owned and credit related external workout costs. For covered losses and expenses that are subject to loss-share, we have also deducted the associated gain recognized on FDIC indemnification asset.

The following table provides the reconciliation of operating earnings (loss) (non-GAAP) to pre-tax, pre-credit cost operating income (non-GAAP) for the periods presented (the reconciliation of earnings (loss) available to common shareholders (GAAP) to operating earnings (loss) (non-GAAP) is provided in the preceding tables):


										Sequential		Year over
		Quarter ended:								Quarter		Year
*(Dollars in thousands, except per share data)*		Dec 31, 2010			Sep 30, 2010			Dec 31, 2009		% Change		% Change

Operating earnings (loss)	$	9,046		$	9,491		$	(27,709	)	(5	)%	(133	)%
Adjustments:
Non-covered provision for loan and lease losses		17,567			24,228			68,593		(27	)%	(74	)%
Covered provision for loan and lease losses		4,484			667			--		572	%	nm
Non-covered net loss on other real estate owned		4,555			658			9,094		592	%	(50	)%
Covered net loss (gain) on other real estate owned		328			(975	)		--		(134	)%	nm
Non-covered loan & OREO workout cost		3,243			1,636			1,991		98	%	63	%
Covered loan & OREO workout cost		2,029			2,397			--		(15	)%	nm
Covered losses impact on FDIC indemnification
asset		(5,073	)		(1,985	)		--		156	%	nm
Operating provision for (benefit from) income taxes		4,807			3,073			(15,367	)	56	%	(131	)%
Dividends and undistributed earnings allocated to
participating securities		18			18			8		0	%	125	%
Preferred stock dividends		--			--			3,234		nm		(100	)%
Pre-tax, pre-credit cost operating income	$	41,004		$	39,208		$	39,844		5	%	3	%


								Year over
		Twelve Months Ended:						Year
*(Dollars in thousands, except per share data)*		Dec 31, 2010			Dec 31, 2009			% Change

Operating earnings (loss)	$	13,222		$	(58,035	)		(123	)%
Adjustments:
Non-covered provision for loan and lease losses		113,668			209,124			(46	)%
Covered provision for loan and lease losses		5,151			--			nm
Non-covered net loss on other real estate owned		8,097			23,204			(65	)%
Covered net gain on other real estate owned		(2,172	)		--			nm
Non-covered loan & OREO workout cost		9,070			5,857			55	%
Covered loan & OREO workout cost		5,146			--			nm
Covered losses impact on FDIC indemnification asset		(6,293	)		--			nm
Operating provision for (benefit from) income taxes		3,908			(43,421	)		(109	)%
Dividends and undistributed earnings allocated to
participating securities		67			30			123	%
Preferred stock dividends		12,192			12,866			(5	)%
Pre-tax, pre-credit cost operating income	$	162,056		$	149,625			8	%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 10 of 30

Management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy. Tangible common equity is calculated as total shareholders' equity less preferred stock and less goodwill and other intangible assets, net (excluding MSRs). In addition, 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).


*(Dollars in thousands, except per share data)*		Dec 31, 2010			Sep 30, 2010			Dec 30, 2009

Total shareholders' equity	$	1,642,574		$	1,650,503		$	1,566,517
Subtract:
Preferred stock		--			--			204,335
Goodwill and other intangible assets, net		681,969			683,291			639,634
Tangible common shareholders' equity	$	960,605		$	967,212		$	722,548

Total assets	$	11,668,710		$	11,531,760		$	9,381,372
Subtract:
Goodwill and other intangible assets, net		681,969			683,291			639,634
Tangible assets	$	10,986,741		$	10,848,469		$	8,741,738

Common shares outstanding at period end		114,536,814			114,531,514			86,785,588

Tangible common equity ratio		8.74	%		8.92	%		8.27	%
Tangible book value per common share	$	8.39		$	8.44		$	8.33

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 11 of 30

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 184 locations between San Francisco, Calif., and Seattle, Wash., along the Oregon and Northern California Coast, Central Oregon 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 Bank’s Private Bank Division serves high net worth individuals and non-profits providing customized financial solutions and offerings. Umpqua Holdings Corporation is headquartered in Portland, Ore. For more information, visit www.umpquaholdingscorp.com.

Umpqua Holdings Corporation will conduct a quarterly earnings conference call Thursday, Jan. 27, 2011, at 10:00 a.m. PDT (1:00 p.m. EDT) during which the company will discuss fourth quarter and 2010 year end results and provide an update on recent activities. There will be a question-and-answer session following the presentation. Shareholders, analysts and other interested parties are invited to join the call by dialing 800-752-8363 a few minutes before 10:00 a.m. The conference ID is “33772757.” Information to be discussed in the teleconference will be available on the company’s website prior to the call at www.umpquaholdingscorp.com. A rebroadcast can be found approximately two hours after the conference call by dialing 800-642-1687 with the conference ID noted above, or by visiting the Company’s website.

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 improved credit quality trends, loan production and operating results, our success in resolving remaining credits at the estimated disposition value of related collateral, the mitigating effect of FDIC loss sharing agreements, our expectation that any weakness in our CRE portfolio will arise from local market weakness and not a systemic weakness, valuations of junior subordinated debentures and our plans to hold a large interest bearing cash position, relative to historical levels. 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, unanticipated weakness in loan demand, deterioration in the economy, material reductions in revenue or material increases in expenses, our inability to effectively manage problem credits, unanticipated further declines in real estate values, certain loan assets become ineligible for loss sharing, unanticipated deterioration in the commercial real estate loan portfolio, and continued negative pressure on interest income associated with our large cash position.

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 12 of 30


Umpqua Holdings Corporation
Consolidated Statements of Operations
(Unaudited)


Interest income
Loans and leases	$	109,532		$	112,652		$	88,608		(3	)%	24	%
Interest and dividends on investments:
Taxable		18,323			17,421			16,570		5	%	11	%
Exempt from federal income tax		2,184			2,221			2,039		(2	)%	7	%
Dividends		5			6			--		(17	)%	100	%
Temporary investments & interest bearing cash		633			646			268		(2	)%	136	%
Total interest income		130,677			132,946			107,485		(2	)%	22	%

Interest expense
Deposits		19,076			19,913			20,190		(4	)%	(6	)%
Repurchase agreements and
fed funds purchased		135			136			153		(1	)%	(12	)%
Junior subordinated debentures		1,954			2,047			1,957		(5	)%	0	%
Term debt		2,397			2,533			641		(5	)%	274	%
Total interest expense		23,562			24,629			22,941		(4	)%	3	%
Net interest income		107,115			108,317			84,544		(1	)%	27	%
Provision for non-covered loan and lease losses		17,567			24,228			68,593		(27	)%	(74	)%
Provision for covered loan and lease losses		4,484			667			--		572	%	nm
Non-interest income
Service charges		8,168			8,756			8,392		(7	)%	(3	)%
Brokerage fees		3,274			2,609			2,480		25	%	32	%
Mortgage banking revenue, net		7,389			7,138			4,071		4	%	82	%
Net (loss) gain on investment securities		(87	)		2,287			(600	)	(104	)%	(86	)%
Loss on junior subordinated debentures
carried at fair value		(554	)		(554	)		(3,691	)	0	%	(85	)%
Change in FDIC indemnification asset		(5,370	)		(11,948	)		--		(55	)%	nm
Other income		2,341			3,845			2,372		(39	)%	(1	)%
Total non-interest income		15,161			12,133			13,024		25	%	16	%
Non-interest expense
Salaries and benefits		44,067			42,964			32,153		3	%	37	%
Occupancy and equipment		12,344			11,448			10,407		8	%	19	%
Intangible amortization		1,357			1,356			2,122		0	%	(36	)%
FDIC assessments		4,186			3,910			3,180		7	%	32	%
Net loss (gain) on other real estate owned		4,883			(317	)		9,094		(1640	)%	(46	)%
Merger related expenses		957			1,643			--		(42	)%	nm
Other		20,070			24,166			15,544		(17	)%	29	%
Total non-interest expense		87,864			85,170			72,500		3	%	21	%
Income (loss) before provision for (benefit from)
income taxes		12,361			10,385			(43,525	)	19	%	(128	)%
Provision for (benefit from) income taxes		4,203			2,194			(16,843	)	92	%	(125	)%
Net income (loss)		8,158			8,191			(26,682	)	0	%	(131	)%
Dividends and undistributed earnings
allocated to participating securities		18			18			8		0	%	125	%
Preferred stock dividend		--			--			3,234		0	%	(100	)%
Net earnings (loss) available to common
shareholders	$	8,140		$	8,173		$	(29,924	)	0	%	(127	)%

Weighted average shares outstanding		114,533,505			114,527,619			86,782,397		0	%	32	%
Weighted average diluted shares outstanding		114,773,205			114,760,063			86,782,397		0	%	32	%
Earnings (loss) per common share - basic	$	0.07		$	0.07		$	(0.34	)	0	%	(121	)%
Earnings (loss) per common share - diluted	$	0.07		$	0.07		$	(0.34	)	0	%	(121	)%
nm = not meaningful

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 13 of 30


Umpqua Holdings Corporation
Consolidated Statements of Operations
(Unaudited)


		Twelve Months Ended:
*(Dollars in thousands, except per share data)*		Dec 31, 2010			Dec 31, 2009		% Change
Interest income
Loans and leases	$	410,132		$	355,195		15	%
Interest and dividends on investments:
Taxable		67,388			60,195		12	%
Exempt from federal income tax		8,839			7,794		13	%
Dividends		14			22		(36	)%
Temporary investments & interest bearing cash		2,223			526		323	%
Total interest income		488,596			423,732		15	%

Interest expense
Deposits		76,241			88,742		(14	)%
Repurchase agreements and
fed funds purchased		517			680		(24	)%
Junior subordinated debentures		7,825			9,026		(13	)%
Term debt		9,229			4,576		102	%

Total interest expense		93,812			103,024		(9	)%
Net interest income		394,784			320,708		23	%

Provision for non-covered loan and lease losses		113,668			209,124		(46	)%
Provision for covered loan and lease losses		5,151			--		nm
Non-interest income
Service charges		34,874			32,957		6	%
Brokerage fees		11,661			7,597		53	%
Mortgage banking revenue, net		21,214			18,688		14	%
Net gain (loss) on investment securities		1,912			(1,677	)	(214	)%
Gain on junior subordinated debentures
carried at fair value		4,980			6,482		(23	)%
Bargain purchase gain on acquisitions		6,437			--		nm
Change in FDIC indemnification asset		(16,445	)		--		nm
Other income		11,271			9,469		19	%
Total non-interest income		75,904			73,516		3	%
Non-interest expense
Salaries and benefits		162,875			126,850		28	%
Occupancy and equipment		45,940			39,673		16	%
Intangible amortization		5,389			6,165		(13	)%
FDIC assessments		15,095			15,825		(5	)%
Net loss on other real estate owned		5,925			23,204		(74	)%
Goodwill impairment		--			111,952		(100	)%
Merger related expenses		6,675			273		2345	%
Other		75,839			55,461		37	%
Total non-interest expense		317,738			379,403		(16	)%
Income (loss) before provision for (benefit from)
income taxes		34,131			(194,303	)	(118	)%
Provision for (benefit from) income taxes		5,805			(40,937	)	(114	)%
Net income (loss)		28,326			(153,366	)	(118	)%
Dividends and undistributed earnings
allocated to participating securities		67			30		123	%
Preferred stock dividend		12,192			12,866		(5	)%
Net earnings (loss) available to common shareholders	$	16,067		$	(166,262	)	(110	)%

Weighted average shares outstanding		107,922,560			70,399,201		53	%
Weighted average diluted shares outstanding		108,153,469			70,399,201		54	%
Earnings (loss) per common share – basic	$	0.15		$	(2.36	)	(106	)%
Earnings (loss) per common share – diluted	$	0.15		$	(2.36	)	(106	)%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 14 of 30


Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
										Sequential		Year over
										Quarter		Year
*(Dollars in thousands, except per share data)*		Dec 31, 2010			Sep 30, 2010			Dec 31, 2009		% Change		% Change
Assets:
Cash and due from banks, non-interest bearing	$	111,946		$	124,633		$	113,353		(10	)%	(1	)%
Cash and due from banks, interest bearing		891,634			933,911			491,462		(5	)%	81	%
Temporary investments		545			5,496			598		(90	)%	(9	)%
Investment securities:
Trading		3,024			2,155			2,273		40	%	33	%
Available for sale		2,919,180			2,599,263			1,795,616		12	%	63	%
Held to maturity		4,762			5,108			6,061		(7	)%	(21	)%
Loans held for sale		75,626			57,407			33,715		32	%	124	%
Non-covered loans and leases		5,658,987			5,698,267			5,999,267		(1	)%	(6	)%
Less: Allowance for loan and lease losses		(101,921	)		(108,098	)		(107,657	)	(6	)%	(5	)%
Loans and leases, net		5,557,066			5,590,169			5,891,610		(1	)%	(6	)%
Covered loans and leases, net		785,898			840,759			--		(7	)%	nm
Restricted equity securities		34,475			34,665			15,211		(1	)%	127	%
Premises and equipment, net		136,599			133,728			103,266		2	%	32	%
Mortgage servicing rights, at fair value		14,454			13,454			12,625		7	%	14	%
Goodwill and other intangibles, net		681,969			683,291			639,634		0	%	7	%
Non-covered other real estate owned		32,791			32,024			24,566		2	%	33	%
Covered other real estate owned		29,863			30,348			--		(2	)%	nm
FDIC indemnification asset		146,413			186,600			--		(22	)%	nm
Other assets		242,465			258,749			251,382		(6	)%	(4	)%
Total assets	$	11,668,710		$	11,531,760		$	9,381,372		1	%	24	%

Liabilities:
Deposits	$	9,433,805		$	9,301,340		$	7,440,434		1	%	27	%
Securities sold under agreements to repurchase		73,759			55,333			45,180		33	%	63	%
Term debt		262,760			268,256			76,274		(2	)%	244	%
Junior subordinated debentures, at fair value		80,688			80,146			85,666		1	%	(6	)%
Junior subordinated debentures, at amortized cost		102,866			102,946			103,188		0	%	0	%
Other liabilities		72,258			73,236			64,113		(1	)%	13	%
Total liabilities		10,026,136			9,881,257			7,814,855		1	%	28	%

Shareholders' equity:
Preferred stock		--			--			204,335		100	%	(100	)%
Common stock		1,540,928			1,538,818			1,253,288		0	%	23	%
Retained earnings		76,701			75,502			83,939		2	%	(9	)%
Accumulated other comprehensive income		24,945			36,183			24,955		(31	)%	0	%
Total shareholders' equity		1,642,574			1,650,503			1,566,517		0	%	5	%
Total liabilities and shareholders' equity	$	11,668,710		$	11,531,760		$	9,381,372		1	%	24	%

Common shares outstanding at period end		114,536,814			114,531,514			86,785,588		0	%	32	%
Book value per common share	$	14.34		$	14.41		$	15.70		0	%	(9	)%
Tangible book value per common share	$	8.39		$	8.44		$	8.33		(1	)%	1	%
Tangible equity - common	$	960,605		$	967,212		$	722,548		(1	)%	33	%
Tangible common equity to tangible assets		8.74	%		8.92	%		8.27	%

nm = not meaningful

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 15 of 30


Umpqua Holdings Corporation
Non-covered Loan & Lease Portfolio
(Unaudited)
																Sequential		Year over
*(Dollars in thousands)*		Dec 31, 2010					Sep 30, 2010					Dec 31, 2009				Quarter		Year
Non-covered loans & leases:		Amount		Mix			Amount		Mix			Amount		Mix		% Change		% Change
Commercial real estate:
Non-owner occupied	$	2,251,996		40	%	$	2,307,016		40	%	$	2,386,401		40	%	(2	)%	(6	)%
Owner occupied		1,231,479		22	%		1,184,803		21	%		1,136,703		19	%	4	%	8	%
Residential real estate		484,185		9	%		462,515		8	%		443,731		7	%	5	%	9	%
Construction		412,892		7	%		462,801		8	%		618,974		10	%	(11	)%	(33	)%
Total real estate		4,380,552		77	%		4,417,135		78	%		4,585,809		76	%	(1	)%	(4	)%
Commercial		1,224,416		22	%		1,223,012		21	%		1,354,469		23	%	0	%	(10	)%
Leases		31,008		1	%		32,428		1	%		34,528		1	%	(4	)%	(10	)%
Installment and other		34,041		1	%		36,624		1	%		35,863		1	%	(7	)%	(5	)%
Deferred loan fees, net		(11,030	)	0	%		(10,932	)	0	%		(11,402	)	0	%	1	%	(3	)%
Total	$	5,658,987		100	%	$	5,698,267		100	%	$	5,999,267		100	%	(1	)%	(6	)%


		Umpqua Holdings Corporation
		Covered Loan & Lease Portfolio
						(Unaudited)
									Sequential
*(Dollars in thousands)*		Dec 31, 2010				Sep 30, 2010			Quarter
		Amount	Mix			Amount	Mix		% Change
Covered loans & leases:
Commercial real estate	$	573,264	73	%	$	589,782	70	%	(3	)%
Residential real estate		75,605	10	%		81,256	10	%	(7	)%
Construction		42,213	5	%		57,250	7	%	(26	)%
Total real estate		691,082	88	%		728,288	87	%	(5	)%
Commercial		83,722	11	%		100,313	12	%	(17	)%
Installment and other		11,094	1	%		12,158	1	%	(9	)%
Total	$	785,898	100	%	$	840,759	100	%	(7	)%

Covered loan & lease portfolio balances represent the loan portfolios acquired through the assumption of EvergreenBank 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.

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 16 of 30

Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
							Sequential	Year over
*(Dollars in thousands)*	Dec 31, 2010		Sep 30, 2010		Dec 31, 2009		Quarter	Year
	Amount	Mix	Amount	Mix	Amount	Mix	% Change	% Change
Deposits:
Demand, non-interest bearing	$1,616,687	17%	$1,578,717	17%	$1,398,332	19%	2%	15%
Demand, interest bearing	4,394,773	47%	4,178,332	45%	3,388,696	46%	5%	30%
Savings	349,695	4%	348,700	4%	297,293	4%	0%	18%
Time	3,072,650	33%	3,195,591	34%	2,356,113	32%	(4)%	30%
Total	$9,433,805	100%	$9,301,340	100%	$7,440,434	100%	1%	27%

Total core deposits-ending (1)	$7,242,749	77%	$7,055,676	76%	$5,837,024	78%	3%	24%

Number of open accounts:
Demand, non-interest bearing	181,055		183,018		157,199		(1)%	15%
Demand, interest bearing	77,342		76,202		62,883		1%	23%
Savings	86,980		87,611		74,884		(1)%	16%
Time	42,366		44,020		34,249		(4)%	24%
Total	387,743		390,851		329,215		(1)%	18%

Average balance per account:
Demand, non-interest bearing	$8.9		$8.6		$8.9
Demand, interest bearing	56.8		54.8		53.9
Savings	4.0		4.0		4.0
Time	72.5		72.6		68.8
Total	24.3		23.8		22.6
(1) Core deposits are defined as total deposits less time deposits greater than $100,000.

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 17 of 30

Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
(Unaudited)
				Sequential	Year over
		Quarter Ended		Quarter	Year
*(Dollars in thousands)*	Dec 31, 2010	Sep 30, 2010	Dec 31, 2009	% Change	% Change

Non-covered, non-performing assets:
Non-covered loans on non-accrual status	$138,177	$139,696	$193,118	(1)%	(28)%
Non-covered loans past due 90+ days & accruing	7,071	11,882	5,909	(40)%	20%
Total non-performing loans	145,248	151,578	199,027	(4)%	(27)%
Non-covered other real estate owned	32,791	32,024	24,566	2%	33%
Total	$178,039	$183,602	$223,593	(3)%	(20)%

Performing restructured loans	$84,442	$75,577	$134,439	12%	(37)%

Past due 30-89 days	$48,217	$80,186	$41,458	(40)%	16%
Past due 30-89 days to total loans and leases	0.85%	1.41%	0.69%

Non-covered, non-performing loans to
non-covered loans and leases	2.57%	2.66%	3.32%
Non-covered, non-performing assets to total assets	1.53%	1.59%	2.38%

Covered non-performing assets:
Covered loans on non-accrual status	$--	$23,391	$--	(100)%	nm
Total non-performing loans	--	23,391	--	(100)%	nm
Covered other real estate owned	29,863	30,348	--	(2)%	nm
Total	$29,863	$53,739	$--	(44)%	nm

Covered non-performing loans to
covered loans and leases	--%	2.78%	--%
Covered non-performing assets to total assets	0.26%	0.47%	--%

Total non-performing assets:
Loans on non-accrual status	$138,177	$163,087	$193,118	(15)%	(28)%
Loans past due 90+ days & accruing	7,071	11,882	5,909	(40)%	20%
Total non-performing loans	145,248	174,969	199,027	(17)%	(27)%
Other real estate owned	62,654	62,372	24,566	0%	155%
Total	$207,902	$237,341	$223,593	(12)%	(7)%

Non-performing loans to loans and leases	2.25%	2.68%	3.32%
Non-performing assets to total assets	1.78%	2.06%	2.38%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 18 of 30

Umpqua Holdings Corporation
Credit Quality – Allowance for Non-covered Credit Losses
(Unaudited)
				Sequential	Year over
		Quarter Ended		Quarter	Year
*(Dollars in thousands)*	Dec 31, 2010	Sep 30, 2010	Dec 31, 2009	% Change	% Change
Allowance for non-covered credit losses:
Balance beginning of period	$108,098	$113,914	$103,136
Provision for non-covered loan and lease losses	17,567	24,228	68,593	(27)%	(74)%

Charge-offs	(25,770)	(31,418)	(65,502)	(18)%	(61)%
Recoveries	2,026	1,374	1,430	47%	42%
Net charge-offs	(23,744)	(30,044)	(64,072)	(21)%	(63)%

Total allowance for non-covered loan and lease losses	101,921	108,098	107,657	(6)%	(5)%

Reserve for unfunded commitments	818	797	731
Total allowance for non-covered credit losses	$102,739	$108,895	$108,388	(6)%	(5)%

Net charge-offs to average non-covered
loans and leases (annualized)	1.66%	2.08%	4.19%
Recoveries to gross charge-offs	7.86%	4.37%	2.18%
Allowance for credit losses to non-covered
loans and leases	1.82%	1.91%	1.81%


	Twelve Months Ended:
*(Dollars in thousands)*	Dec 31, 2010	Dec 31, 2009	% Change
Allowance for non-covered credit losses:
Balance beginning of period	$107,657	$95,865
Provision for non-covered loan and lease losses	113,668	209,124	(46)%

Charge-offs	(128,501)	(200,867)	(36)%
Recoveries	9,097	3,535	157%
Net charge-offs	(119,404)	(197,332)	(39)%

Total allowance for non-covered loan and lease losses	101,921	107,657	(5)%

Reserve for unfunded commitments	818	731
Total allowance for non-covered credit losses	$102,739	$108,388	(5)%

Net charge-offs to average non-covered
loans and leases (annualized)	2.06%	3.23%
Recoveries to gross charge-offs	7.08%	1.76%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 19 of 30

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
				Sequential	Year over
	Quarter Ended:			Quarter	Year
	Dec 31, 2010	Sep 30, 2010	Dec 31, 2009	Change	Change
Net interest spread:
Yield on non-covered loans and leases	5.73%	5.77%	5.75%	(0.04)	(0.02)
Yield on covered loans and leases	12.86%	13.49%	N/A	(0.63)	nm
Yield on taxable investments	2.87%	3.51%	4.03%	(0.64)	(1.16)
Yield on tax-exempt investments (1)	5.74%	5.71%	5.81%	0.03	(0.07)
Yield on temporary investments & interest bearing cash	0.25%	0.26%	0.28%	(0.01)	(0.03)
Total yield on earning assets (1)	5.05%	5.41%	5.15%	(0.36)	(0.10)

Cost of interest bearing deposits	0.97%	1.08%	1.35%	(0.11)	(0.38)
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.79%	1.00%	1.09%	(0.22)	(0.31)
Cost of term debt	3.57%	3.57%	3.33%	0.00	0.24
Cost of junior subordinated debentures	4.24%	4.45%	4.19%	(0.21)	0.05
Total cost of interest bearing liabilities	1.12%	1.24%	1.45%	(0.12)	(0.33)

Net interest spread (1)	3.93%	4.17%	3.70%	(0.24)	0.23
Net interest margin – Consolidated (1)	4.14%	4.42%	4.06%	(0.28)	0.08

Net interest margin – Bank (1)	4.21%	4.49%	4.15%	(0.28)	0.06

As reported (GAAP):
Return on average assets	0.28%	0.29%	(1.27)%	(0.01)	1.55
Return on average tangible assets	0.29%	0.31%	(1.37)%	(0.02)	1.66
Return on average common equity	1.95%	1.95%	(8.41)%	0.00	10.36
Return on average tangible common equity	3.30%	3.32%	(15.39)%	(0.02)	18.69
Efficiency ratio – Consolidated	71.24%	70.09%	73.57%	1.15	(2.33)
Efficiency ratio – Bank	68.90%	67.07%	67.99%	1.83	0.91

Operating basis (non-GAAP): (2)
Return on average assets	0.31%	0.34%	(1.18)%	(0.03)	1.49
Return on average tangible assets	0.33%	0.36%	(1.26)%	(0.03)	1.59
Return on average common equity	2.16%	2.27%	(7.78)%	(0.11)	9.94
Return on average tangible common equity	3.67%	3.86%	(14.25)%	(0.19)	17.92
Efficiency ratio – Consolidated	70.15%	68.42%	70.91%	1.73	(0.76)
Efficiency ratio – Bank	68.12%	65.72%	67.99%	2.40	0.13

(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 Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 20 of 30

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Year Ended:
	Dec 31, 2010	Dec 31, 2009	Change
Net interest spread:
Yield on non-covered loans and leases	5.77%	5.78%	(0.01)
Yield on covered loans and leases	10.86%	N/A	nm
Yield on taxable investments	3.46%	4.34%	(0.88)
Yield on tax-exempt investments (1)	5.76%	5.80%	(0.04)
Yield on temporary investments & interest bearing cash	0.25%	0.27%	(0.02)
Total yield on earning assets (1)	5.15%	5.39%	(0.24)

Cost of interest bearing deposits	1.08%	1.56%	(0.48)
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.95%	1.12%	(0.17)
Cost of term debt	3.53%	3.53%	(0.00)
Cost of junior subordinated debentures	4.25%	4.74%	(0.49)
Total cost of interest bearing liabilities	1.24%	1.70%	(0.46)

Net interest spread (1)	3.91%	3.69%	0.22
Net interest margin – Consolidated (1)	4.17%	4.09%	0.08

Net interest margin – Bank (1)	4.24%	4.20%	0.04

As reported (GAAP):
Return on average assets	0.15%	(1.85)%	2.00
Return on average tangible assets	0.16%	(2.01)%	2.17
Return on average common equity	1.01%	(12.63)%	13.64
Return on average tangible common equity	1.76%	(26.91)%	28.67
Efficiency ratio – Consolidated	66.90%	95.34%	(28.44)
Efficiency ratio – Bank	65.08%	93.77%	(28.69)

Operating basis (non-GAAP): (2)
Return on average assets	0.12%	(0.65)%	0.77
Return on average tangible assets	0.13%	(0.70)%	0.83
Return on average common equity	0.83%	(4.41)%	5.24
Return on average tangible common equity	1.45%	(9.39)%	10.84
Efficiency ratio – Consolidated	67.11%	68.25%	(1.14)
Efficiency ratio – Bank	64.54%	65.08%	(0.54)

(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 Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 21 of 30

Umpqua Holdings Corporation
Average Balances
(Unaudited)
				Sequential	Year over
	Quarter Ended:			Quarter	Year
*(Dollars in thousands)*	Dec 31, 2010	Sep 30, 2010	Dec 31, 2009	% Change	% Change

Temporary investments & interest bearing cash	$1,007,345	$993,092	$384,492	1%	162%
Investment securities, taxable	2,550,856	1,984,672	1,645,629	29%	55%
Investment securities, tax-exempt	226,371	230,815	207,984	(2)%	9%
Loans held for sale	68,982	45,933	43,662	50%	58%
Non-covered loans and leases	5,691,794	5,718,584	6,072,606	0%	(6)%
Covered loans and leases	809,984	847,704	--	(4)%	nm
Total earning assets	10,355,333	9,820,800	8,354,373	5%	24%
Goodwill & other intangible assets, net	681,966	684,488	640,995	0%	6%
Total assets	11,695,980	11,159,310	9,332,737	5%	25%

Non-interest bearing demand deposits	1,624,285	1,565,525	1,392,988	4%	17%
Interest bearing deposits	7,826,703	7,345,073	5,943,110	7%	32%
Total deposits	9,450,988	8,910,598	7,336,098	6%	29%
Interest bearing liabilities	8,343,628	7,863,059	6,260,408	6%	33%

Shareholders’ equity - common	1,659,151	1,660,490	1,412,324	0%	17%
Tangible common equity (1)	977,185	976,002	771,329	0%	27%


	Year Ended:
*(Dollars in thousands)*	Dec 31, 2010	Dec 31, 2009	% Change

Temporary investments & interest bearing cash	$883,324	$193,486	357%
Investment securities, taxable	1,946,222	1,386,960	40%
Investment securities, tax-exempt	227,589	198,641	15%
Loans held for sale	45,185	42,261	7%
Non-covered loans and leases	5,783,452	6,103,666	(5)%
Covered loans and leases	681,569	--	nm
Total earning assets	9,567,341	7,925,014	21%
Goodwill & other intangible assets, net	674,597	698,223	(3)%
Total assets	10,830,486	8,975,178	21%

Non-interest bearing demand deposits	1,529,165	1,318,954	16%
Interest bearing deposits	7,078,815	5,691,785	24%
Total deposits	8,607,980	7,010,739	23%
Interest bearing liabilities	7,578,815	6,072,812	25%

Shareholders’ equity - common	1,589,393	1,315,953	21%
Tangible common equity (1)	914,796	617,730	48%

(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 Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 22 of 30

Umpqua Holdings Corporation
Mortgage Banking Activity
(unaudited)
				Sequential	Year over
	Quarter Ended:			Quarter	Year
*(Dollars in thousands)*	Dec 31, 2010	Sep 30, 2010	Dec 31, 2009	% Change	% Change

Mortgage Servicing Rights (MSR):
Mortgage loans serviced for others	$1,603,414	$1,471,759	$1,277,832	9%	25%
MSR Asset, at fair value	14,454	13,454	$12,625	7%	14%

MSR as % of serviced portfolio	0.90%	0.91%	0.99%

Mortgage Banking Revenue:
Origination and sale	$7,395	$7,188	$3,804	3%	94%
Servicing	1,016	1,007	805	1%	26%
Change in fair value of MSR asset	(1,022)	(1,057)	(538)	(3)%	90%
Total	$7,389	$7,138	$4,071	4%	82%


Closed loan volume	$281,086	$231,952	$172,303	21%	63%


	Year Ended:
*(Dollars in thousands)*	Dec 31, 2010	Dec 31, 2009	% Change

Mortgage Banking Revenue:
Origination and sale	$21,233	$18,844	13%
Servicing	3,860	2,993	29%
Change in fair value of MSR asset	(3,879)	(3,149)	23%
Total	$21,214	$18,688	14%

Closed loan volume	$785,437	$756,997	4%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results

January 27, 2011

Page 23 of 30

Additional tables

The following tables present additional detail covering the following aspects of the Company's non-covered loan portfolio.

Table 1 – Non-covered residential development loan trends by region
Table 2 – Non-covered residential development loan stratification by size and by region
Table 3 – Non-covered, non-performing asset detail by type and by region
Table 4 – Non-covered loans past due 30-89 days by type and by region
Table 5 – Non-covered loans past due 30-89 days trends
Table 6 – Non-covered restructured loans on accrual status by type and by region
Table 7 - Non-covered commercial real estate loan portfolio by type and by region
Table 8 - Non-covered commercial real estate loan portfolio by type and by year of maturity
Table 9 - Non-covered commercial real estate loan portfolio by type and by year of origination
Table 10 - Non-covered commercial construction loan portfolio by type and by region
Table 11 - Non-covered commercial loan portfolio by type and by region

The following is a geographic distribution of the non-covered residential development portfolio as of December 31, 2010, September 30, 2010 and December 31, 2009:

Table 1- Non-covered residential development loan trends by region
(Dollars in thousands)


										% change			Non-performing		Performing
		Balance			Balance			Balance		from			loans		Loans
		12/31/09			9/30/10			12/31/10		12/31/09			12/31/10		12/31/10
Northwest Oregon	$	88,762		$	69,129		$	64,263		(28	)%	$	10,191	$	54,072
Central Oregon		9,059			4,079			3,629		(60	)%		110		3,519
Southern Oregon		19,006			8,774			6,256		(67	)%		2,122		4,134
Washington		8,616			7,570			9,308		8	%		3,033		6,275
Greater Sacramento		74,993			52,761			49,329		(34	)%		10,761		38,568
Northern California		25,373			18,072			15,028		(41	)%		8,369		6,659
Total	$	225,809		$	160,385		$	147,813		(35	)%	$	34,586	$	113,227
% of total non-covered
loan portfolio		4	%		3	%		3	%						2	%

Quarter change $	$	(32,674	)	$	(15,621	)	$	(12,572	)
Quarter change %		(13	)%		(9	)%		(8	)%

The following is a stratification by size and region of the remaining non-covered performing residential development loans as of December 31, 2010:

Table 2 – Non-covered residential development loan stratification by size and by region


*(Dollars in thousands)*
					$250k			$1 million			$3 million			$5 million			$10 million
		$250k			to			to			to			to			and
		and less			$1 million			$3 million			$5 million			$10 million			Greater			Total
Northwest Oregon	$	1,955		$	5,646		$	8,189		$	10,277		$	13,541		$	14,464		$	54,072
Central Oregon		384			718			2,417			--			--			--			3,519
Southern Oregon		1,174			1,860			1,100			--			--			--			4,134
Washington		601			344			5,330			--			--			--			6,275
Greater Sacramento		3,308			3,905			1,894			4,780			11,455			13,226			38,568
Northern California		1,489			1,026			4,144			--			--			--			6,659
Total	$	8,911		$	13,499		$	23,074		$	15,057		$	24,996		$	27,690		$	113,227
% of Total		8	%		12	%		20	%		13	%		22	%		25	%		100	%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 24 of 30

The following is a distribution of non-covered, non-performing assets by type and by region as of December 31, 2010:

Table 3 - Non-covered, non-performing asset detail by type and by region


*(Dollars in thousands)*

		Northwest			Central			Southern						Greater			Northern
		Oregon			Oregon			Oregon			Washington			Sacramento			California			Total
Non-accrual loans:
Residential development	$	10,191		$	110		$	2,122		$	3,033		$	10,761		$	8,369		$	34,586
Commercial construction		12,726		-	-			472		-	-			6,817			109			20,124
Commercial real estate		24,180			4,816			537			1,898			9,010			8,721			49,162
Commercial		8,296			2,557			1,088			7,203			8,726			6,435			34,305
Other		--			--			--			--			--			--			--
Total	$	55,393		$	7,483		$	4,219		$	12,134		$	35,314		$	23,634		$	138,177

Loans 90 days past due:
Residential development	$	--		$	--		$	--		$	--		$	--		$	--		$	--
Commercial construction		--			--			--			--			--			--			--
Commercial real estate		79			--			--			176			2,753			--			3,008
Commercial		--			--			--			--			--			--			--
Other		3,878			--			--			--			185			--			4,063
Total	$	3,957		$	--		$	--		$	176		$	2,938		$	--		$	7,071

Total non-performing loans	$	59,350		$	7,483		$	4,219		$	12,310		$	38,252		$	23,634		$	145,248

Other real estate owned:
Residential development	$	674		$	1,844		$	1,368		$	112		$	--		$	1,118		$	5,116
Commercial construction		3,443			539			--			313			4,392			--			8,687
Commercial real estate		5,396			--			1,656			--			3,091			5,686			15,829
Commercial		--			--			--			--			--		-	--			--
Other		954			--			--			--			481			1,724			3,159
Total	$	10,467		$	2,383		$	3,024		$	425		$	7,964		$	8,528		$	32,791

Total non-performing assets	$	69,817		$	9,866		$	7,243		$	12,735		$	46,216		$	32,162		$	178,039
% of total		39	%		6	%		4	%		7	%		26	%		18	%		100	%

The Company has aggressively charged-down impaired assets to their disposition values. As of December 31, 2010, the non-performing assets of $178.0 million have been written down by 39%, or $111.8 million, from their original balance of $289.8 million.

The following is a distribution of non-covered loans past due 30 to 89 days by loan type by region as of December 31, 2010:

Table 4 – Non-covered loans past due 30-89 days by type and by region


*(Dollars in thousands)*
		Northwest		Central		Southern				Greater		Northern
		Oregon		Oregon		Oregon		Washington		Sacramento		California		Total
Loans 30-89 days past due:
Residential development	$	--	$	--	$	--	$	--	$	480	$	160	$	640
Commercial construction		373		--		--		--		8,525		--		8,898
Commercial real estate		6,636		1,719		--		--		5,524		9,045		22,924
Commercial		1,896		-		17		1,734		2,159		3,616		9,422
Other		4,222		--		--		300		1,810		1		6,333
Total	$	13,127	$	1,719	$	17	$	2,034	$	18,498	$	12,822	$	48,217

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 25 of 30


Table 5 –Non-covered loans past due 30-89 days trends

*(Dollars in thousands)*
							Sequential		Year
							Quarter		Over Year
		Dec 31, 2010		Sep 30, 2010		Dec 31, 2009	% Change		% Change
Loans 30-89 days past due:
Residential development	$	640	$	13,494	$	8,950	(95	)%	(93	)%
Commercial construction		8,898		5,491		1,235	62	%	620	%
Commercial real estate		22,924		38,748		18,645	(41	)%	23	%
Commercial		9,422		16,465		8,385	(43	)%	12	%
Other		6,333		5,988		4,243	6	%	49	%
Total	$	48,217	$	80,186	$	41,458	(40	)%	16	%

The following is a distribution of non-covered restructured loans by loan type by region as of December 31, 2010:


Table 6 – Non-covered restructured loans on accrual status by type and by region
*(Dollars in thousands)*
		Northwest	Central		Southern				Greater		Northern
		Oregon	Oregon		Oregon		Washington		Sacramento		California		Total
Restructured loans, accrual basis:
Residential development	$	22,277	$--	$	--	$	5,330	$	21,322	$	--	$	48,930
Commercial construction		--	--		--		--		5,434		--		5,434
Commercial real estate		9,446	--		3,888		--		11,820		3,543		28,697
Commercial		--	--		--		--		--		1,202		1,202
Other		179	--		--		--		--		--		179
Total	$	31,902	$--	$	3,888	$	5,330	$	38,576	$	4,745	$	84,442

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 26 of 30

The following is a distribution of the non-covered term commercial real estate portfolio by type and by region as of December 31, 2010:


Table 7 – Non-covered commercial real estate loan portfolio by type and by region
*(Dollars in thousands)*
		Northwest			Central			Southern						Greater			Northern
		Oregon			Oregon			Oregon			Washington			Sacramento			California			Total
Non-owner occupied:
Commercial building	$	134,268		$	3,660		$	34,948		$	37,863		$	77,562		$	102,485		$	390,786
Medical office		66,564			1,081			15,087			4,172			13,681			12,272			112,857
Professional office		152,400			7,497			50,722			29,378			119,363			58,609			417,969
Storage		28,290			789			17,460			-			17,105			34,113			97,757
Multifamily 5+		67,899			742			10,855			5,550			8,079			23,466			116,591
Resort		5,432			--			679			--			--			--			6,111
Retail		204,502			4,787			30,573			12,334			158,695			57,591			468,482
Residential		35,278			97			8,769			5,032			8,796			16,428			74,400
Farmland & agriculture		4,993			188			517			--			197			18,071			23,966
Apartments		69,500			--			9,963			458			17,269			17,607			114,797
Assisted living		59,774			--			67,529			1,743			4,309			7,880			141,235
Hotel/motel		45,747			--			823			11,355			17,724			5,757			81,406
Industrial		28,066			2,554			6,343			--			33,192			22,081			92,236
RV park		31,559			655			18,307			--			780			5,353			56,654
Warehouse		10,125			--			230			--			1,148			1,612			13,115
Other		27,481			491			3,409			1,858			3,515			6,880			43,634
Total	$	971,878		$	22,541		$	276,214		$	109,743		$	481,415		$	390,205		$	2,251,996

Owner occupied:
Commercial building	$	160,780		$	2,737		$	28,600		$	17,367		$	73,444		$	106,884		$	389,812
Medical office		93,370			3,814			18,410			531			6,318			26,707			149,150
Professional office		59,839			2,242			12,044			1,381			22,028			18,139			115,673
Storage		14,681			146			--			--			1,837			12,863			29,527
Multifamily 5+		801			--			51			3,145			146			--			4,143
Resort		5,596			--			4,247			--			3,050			1,038			13,931
Retail		47,212			2,428			10,833			2,302			46,013			51,152			159,940
Residential		5,980			--			2,599			--			1,698			2,204			12,481
Farmland & agriculture		9,869			--			802			2,000			--			45,676			58,347
Apartments		1,042			--			721			--			642			--			2,405
Assisted living		47,558			--			115			--			6,799			15,483			69,955
Hotel/motel		13,139			--			184			708			--			34,156			48,187
Industrial		54,014			1,378			15,104			6,725			8,171			37,193			122,585
RV park		824			--			2,489			--			153			1,139			4,605
Warehouse		10,774			--			398			--			--			6,783			17,955
Other		27,653			517			--			--			231			4,382			32,783
Total	$	553,132		$	13,262		$	96,597		$	34,159		$	170,530		$	363,799		$	1,231,479

Total	$	1,525,010		$	35,803		$	372,811		$	143,902		$	651,945		$	754,004		$	3,483,475
% of total		44	%		1	%		11	%		4	%		19	%		21	%		100	%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 27 of 30

The following is a distribution of the non-covered term commercial real estate portfolio by type and by year of maturity as of December 31, 2010:

Table 8 – Non-covered commercial real estate loan portfolio by type and by year of maturity


*(Dollars in thousands)*
								2013-			2015-			2017-			2022	&
		2011			2012			2014			2016			2021			Later			Total
Non-owner occupied:
Commercial building	$	22,853		$	22,682		$	79,639		$	82,637		$	169,425		$	13,550		$	390,786
Medical office		305			549			33,974			14,969			54,618			8,442			112,857
Professional office		25,820			11,306			94,325			125,222			147,667			13,629			417,969
Storage		8,371			13			23,901			27,156			37,205			1,111			97,757
Multifamily 5+		4,079			2,790			16,877			20,795			65,595			6,455			116,591
Resort		--			--			809			4,140			1,162			--			6,111
Retail		37,900			20,968			98,145			152,987			153,632			4,850			468,482
Residential		15,877			8,826			13,933			9,513			19,089			7,162			74,400
Farmland & agriculture		1,237			--			3,095			6,275			10,583			2,776			23,966
Apartments		4,981			2,287			7,044			14,689			84,074			1,722			114,797
Assisted living		6,640			13,674			3,720			66,246			48,771			2,184			141,235
Hotel/motel		7,635			2,103			18,251			19,847			29,639			3,931			81,406
Industrial		5,168			7,365			15,734			28,918			29,563			5,488			92,236
RV park		1,412			2,056			11,260			10,343			29,286			2,297			56,654
Warehouse		462			635			7,561			1,452			1,930			1,075			13,115
Other		14,050			3,249			13,487			3,982			5,394			3,472			43,634
Total	$	156,790		$	98,503		$	441,755		$	589,171		$	887,633		$	78,144		$	2,251,996

Owner occupied:
Commercial building	$	5,374		$	16,186		$	47,261		$	69,550		$	197,367		$	54,074		$	389,812
Medical office		533			1,841			9,415			7,043			106,839			23,479			149,150
Professional office		2,105			3,535			20,717			24,965			58,841			5,510			115,673
Storage		1,456			--			2,630			7,019			17,412			1,010			29,527
Multifamily 5+		--			--			830			51			3,262			--			4,143
Resort		--			--			3,954			134			5,596			4,247			13,931
Retail		7,968			2,829			31,698			36,630			72,216			8,599			159,940
Residential		1,547			1,507			2,350			1,708			3,826			1,543			12,481
Farmland & agriculture		3,950			349			12,110			12,505			26,726			2,707			58,347
Apartments		--			--			40			--			2,365			--			2,405
Assisted living		11,917			--			12,277			28,411			14,934			2,416			69,955
Hotel/motel		--			4,089			12,516			15,298			6,434			9,850			48,187
Industrial		5,011			8,405			14,443			29,394			53,784			11,548			122,585
RV park		79			40			1,731			384			2,218			153			4,605
Warehouse		320			1,189			5,192			4,588			6,580			86			17,955
Other		2,521			60			964			1,524			27,631			83			32,783
Total	$	42,781		$	40,030		$	178,128		$	239,204		$	606,031		$	125,305		$	1,231,479

Total	$	199,571		$	138,533		$	619,883		$	828,375		$	1,493,664		$	203,449		$	3,483,475
% of total		5	%		4	%		18	%		24	%		43	%		6	%		100	%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 28 of 30

The following is a distribution of the non-covered term commercial real estate portfolio by type and by year of origination as of December 31, 2010:

Table 9 – Non-covered commercial real estate loan portfolio by type and by year of origination


*(Dollars in thousands)*
		Prior to		2000-		2005-		2007-		2009-
		2000		2004		2006		2008		2010		Total
Non-owner occupied:
Commercial building	$	7,460	$	82,050	$	59,593	$	146,719	$	94,964	$	390,786
Medical office		386		44,662		16,740		29,894		21,175		112,857
Professional office		7,370		148,548		114,326		81,507		66,218		417,969
Storage		1,526		45,550		20,381		25,340		4,960		97,757
Multifamily 5+		3,065		25,153		18,182		44,174		26,017		116,591
Resort		714		1,292		--		679		3,426		6,111
Retail		9,441		154,190		140,338		132,675		31,838		468,482
Residential		1,256		7,493		26,135		21,287		18,229		74,400
Farmland & agriculture		829		1,114		6,105		5,148		10,770		23,966
Apartments		800		20,208		21,075		19,140		53,574		114,797
Assisted living		5,888		52,101		46,712		15,553		20,981		141,235
Hotel/motel		9,615		26,254		19,546		22,585		3,406		81,406
Industrial		3,806		40,577		33,768		10,107		3,978		92,236
RV park		2,834		16,820		13,589		10,063		13,348		56,654
Warehouse		1,056		8,567		2,996		496		--		13,115
Other		636		11,872		10,488		19,636		1,002		43,634
Total	$	56,682	$	686,451	$	549,974	$	585,003	$	373,886	$	2,251,996

Owner occupied:
Commercial building	$	9,349	$	70,494	$	77,524	$	127,557	$	104,888	$	389,812
Medical office		2,190		22,424		9,807		41,323		73,406		149,150
Professional office		2,857		32,148		35,510		34,148		11,010		115,673
Storage		525		7,783		9,879		10,686		654		29,527
Multifamily 5+		168		830		--		--		3,145		4,143
Resort		405		10,494		134		--		2,898		13,931
Retail		5,393		36,691		59,884		51,309		6,663		159,940
Residential		101		5,041		4,941		1,307		1,091		12,481
Farmland & agriculture		798		14,180		12,605		14,734		16,030		58,347
Apartments		40		--		602		914		849		2,405
Assisted living		4,930		7,505		41,448		13,636		2,436		69,955
Hotel/motel		5,688		25,515		5,624		1,541		9,819		48,187
Industrial		2,422		42,161		30,793		15,785		31,424		122,585
RV park		835		1,557		130		1,949		134		4,605
Warehouse		108		7,823		2,600		2,776		4,648		17,955
Other		--		2,999		21,586		7,348		850		32,783
Total	$	35,809	$	287,645	$	313,067	$	325,013	$	269,945	$	1,231,479

Total	$	92,491	$	974,096	$	863,041	$	910,016	$	643,831	$	3,483,475
% of total		3	%	28	%	25	%	26	%	18	%	100%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 29 of 30

The following is a distribution of the non-covered commercial construction portfolio by type and by region as of December 31, 2010:

Table 10 – Non-covered commercial construction loan portfolio by type and by region


*(Dollars in thousands)*
		Northwest			Central			Southern						Greater			Northern
		Oregon			Oregon			Oregon			Washington			Sacramento			California			Total
Non-owner occupied:
Commercial building	$	897		$	--		$	2,297		$	300		$	16,236		$	6,147		$	25,877
Medical office		12,458			--			--			--			--			1,430			13,888
Professional office		9,294			--			2,238			--			8,525			3,020			23,077
Storage		8,447			--			--			--			--			--			8,447
Multifamily 5+		--			--			--			2,837			7,868			--			10,705
Retail		10,968			--			--			--			2,530			--			13,498
Residential		27,156			310			3,822			1,784			22,990			5,996			62,058
Apartments		13,324			--			--			--			--			--			13,324
Assisted living		9,300			--			--			--			3,747			--			13,047
Hotel/motel		--			--			--			--			--			--			--
Industrial		--			--			--			--			--			--			--
Other		124			--			--			--			--			2,980			3,104
Total	$	91,968		$	310		$	8,357		$	4,921		$	61,896		$	19,573		$	187,025

Owner occupied:
Commercial building	$	12,646		$	--		$	166		$	--		$	584		$	11,983		$	25,379
Medical office		14,479			--			--			--			--			--			14,479
Professional office		--			--			--			--			--			--			--
Storage		--			--			--			--			--			--			--
Multifamily 5+		--			--			--			--			--			--			--
Retail		--			--			--			--			--			--			--
Residential		5,346			--			--			--			--			598			5,944
Apartments		--			--			--			--			--			--			--
Assisted living		7,342			--			--			--			--			--			7,342
Hotel/motel		--			--			--			--			--			5,447			5,447
Industrial		2,121			--			77			--			--			--			2,198
Other		--			--			--			--			--			--			--
Total	$	41,934		$	--		$	243		$	--		$	584		$	18,028		$	60,789

Total	$	133,902		$	310		$	8,600		$	4,921		$	62,480		$	37,601		$	247,814
% of total		54	%		0	%		4	%		2	%		25	%		15	%		100	%

Umpqua Holdings Corporation Announces Fourth Quarter and Full Year 2010 Results
January 27, 2011
Page 30 of 30

The following is a distribution of the non-covered commercial loan portfolio by type and by region as of December 31, 2010:

Table 11 – Non-covered commercial loan portfolio by type and by region


*(Dollars in thousands)*
		Northwest			Central			Southern						Greater			Northern
		Oregon			Oregon			Oregon			Washington			Sacramento			California			Total

Commercial line of credit	$	101,125		$	1,453		$	22,531		$	22,826		$	154,244		$	70,140		$	372,319
Asset based line of credit		111,948			118			8,831			13,021			11,245			61,022			206,185
Term loan		155,608			3,433			27,037			9,753			48,209			99,927			343,967
Agriculture		25,050			--			459			--			332			57,491			83,332
Municipal		11,858			--			18,485			--			37,587			4,064			71,994
Government guaranteed		--			--			--			--			--			57,529			57,529
Small business		42,569			--			--			4,769			41,752			--			89,090
Total	$	448,158		$	5,004		$	77,343		$	50,369		$	293,369		$	350,173		$	1,224,416
% of total		36	%		1	%		6	%		4	%		24	%		29	%		100	%

# # #

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Allowance for non-covered credit losses:

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UMPQUA HOLDINGS CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 27, 2011

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FOR IMMEDIATE RELEASE

Allowance for non-covered credit losses:

Allowance for non-covered credit losses:

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