UMPQUA HOLDINGS CORP - FORM 8-K/A - EX-99.2 - EXHIBIT 99.2

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file	filename
8-K/A - BODY - UMPQUA HOLDINGS CORP	u8-k.htm
EX-99.1 - EXHIBIT 99.1 - UMPQUA HOLDINGS CORP	ex99-1.htm
EX-23.1 - EXHIBIT 23.1 - UMPQUA HOLDINGS CORP	ex23-1.htm
EX-99.3 - EXHIBIT 99.3 - UMPQUA HOLDINGS CORP	ex99-3.htm

Exhibit 99.2

FINANCIAL PACIFIC HOLDINGS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(dollars in thousands, except par value)

	(Unaudited) June 30, 2013
ASSETS
CASH	$	7,836
RESTRICTED CASH AND CASH EQUIVALENTS		6,369
NET INVESTEMNT IN DIRECT FINANCING LEASES AND LOANS – less allowance for credit losses of $12,622		257,455
INTANGIBLE ASSETS –NET		8,516
OTHER ASSETS		9,939
TOTAL	$	290,115

LIABLITIES AND MEMBERS' EQUITY
LIABILITIES:
Revolving and term debt	$	210,804
Deferred income taxes		1,535
Accounts payable and accrued expenses		8,577
Total liabilities		220,916

COMMITMENTS

MEMBERS’ EQUITY
Common units – no par value
Incentive units – no par value
Preferred units – par value $572		25,084
Additional paid-in capital		1,968
Retained earnings		42,147
Total members’ equity		69,199

TOTAL	$	290,115

FINANCIAL PACIFIC HOLDINGS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(dollars in thousands)

	Six months ended June 30,
	2013			2012
INCOME:
Interest and fee income	$	29,033		$	27,559
Interest expense		3,507			3,694
Net interest and fee income		25,526			23,865
Provision for credit losses		3,272			5,697
Net interest and fee income after provision for credit losses		22,254			18,168
Other income		1,312			2,002
Total income		23,566			20,170

OTHER EXPENSES:
Salaries and benefits		3,790			3,642
General and administrative		3,973			2,746
Related party transactions		538			827
Financing-related costs		(59	)		366
Amortization of intangible assets		354			354
Total other expenses		8,596			7,935
INCOME BEFORE INCOME TAX PROVISION		14,970			12,235
INCOME TAX PROVISION		5,835			4,705
NET INCOME		9,135			7,530
OTHER COMPREHENSIVE INCOME		-			-
COMPREHENSIVE INCOME	$	9,135		$	7,530

FINANCIAL PACIFIC HOLDINGS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(dollars in thousands)

	Six months ended June 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	9,135		$	7,530
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		161			120
Amortization of debt issuance costs		492			557
Amortization of intangible assets		354			354
Initial direct costs capitalized		(6,759	)		(6,889	)
Amortization of initial direct costs		4,766			3,661
Provision for credit losses		3,272			5,697
Deferred income taxes		46			-
Impairment of intangible assets		937			-
Equity-based compensation		308			228
Gain on sale of leases and loans		-			(428	)
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		2,540			3,373
Other assets		(1,875	)		(4,223	)
Net cash provided by operating activities		13,377			9,980

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment for lease contracts		(66,970	)		(70,929	)
Monthly principal payments received		51,920			54,078
Restricted cash and cash equivalents		1,228			4,945
Residual and termination receipts		6,396			4,522
Proceeds from sale of leases		-			3,700
Lease security deposits		-			14
Purchase of furniture, equipment, and leasehold improvements		(95	)		(367	)
Net cash used in investing activities		(7,521	)		(4,037	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on notes to banks		57,317			88,125
Principal payments on notes to banks		(57,487	)		(83,397	)
Dividends paid		-			(10,000	)
Capitalized debt issuance costs		(13	)		(1,431	)
Net cash used in financing activities		(183	)		(6,703	)
NET INCREASE (DECREASE) IN CASH		5,673			(760	)

CASH:
Beginning of period		2,163			870
End of period	$	7,836		$	110

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	3,566		$	3,798
Cash paid for income taxes	$	6,495		$	7,656

Note 1 – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Financial Pacific Holdings, LLC and Subsidiaries (“FPH, LLC”) have been prepared in accordance with accounting principles generally accepted in the United States of America. Certain information in footnote disclosures normally included in interim financial statements have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. All normal recurring adjustments necessary for a fair presentation are reflected in the unaudited condensed consolidated financial statements. Operating results for the period ended June 30, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year.

On July 1, 2013, Umpqua Bank acquired Financial Pacific Holding Corp. (“FPHC”) and its subsidiary, Financial Pacific Leasing, Inc. (“FinPac Leasing”), and its subsidiaries, Financial Pacific Funding, Inc. (“FPF”), Financial Pacific Funding II, Inc. (“FPF II”) and Financial Pacific Funding III, Inc. (“FPF III”). As part of the same transaction, Umpqua Holdings Corporation acquired two related entities, FPC Leasing Corporation (“FPC”) and Financial Pacific Reinsurance Co, Ltd. (“FPR”). Prior to acquisition, all of the entities were consolidated as FPH, LLC. These financial statements should be read in conjunction with the financial statements and notes included in Exhibit 99.1 included in this Form 8-K/A.

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