The Umpqua experience

Named after the river that offers some of the best (read roughest) white water rafting in the state of Oregon, Umpqua bank has been the subject of numerous case studies for providing its customers with an "experience" they are not likely to forget and by calling its branches "stores". The New York Times calls Umpqua "Starbucks with tellers." The company has also made its way into Fortune magazine's "100 Best Companies To Work For" list two years in a row, rising from position 34 in 2007 to rank 13 in 2008.

Free internet terminals equipped with headsets for my music listening pleasure line the wall are provided at the banks. Up ahead are comfortable designer sofas with Bloomberg playing on a flat screen TV and a choice of financial newspapers and magazines to pick from.This was all in a branch of Portland, Oregon based Umpqua Bank to take care of some business.


For the full year 2007, provision for loan losses stands at $86.1 million or 1.42% of loans outstanding. This number is much higher than one would expect from a company like Umpqua even in this challenging environment. However the company reassured investors that their Q4 performance was impacted by $5.1 million in litigation expense related to credit card issuer Visa and a $24.7 million relationship that was placed in non-accrual late in the quarter. This $24.7 million loan is on a commercial property and Umpqua anticipates no losses from this property. Umpqua's total loan portfolio is currently $6 billion with $3.4 billion in residential loans, $1.4 billion in commercial loans and $1.2 billion in construction loans.

Trends and Forces

No Subprime exposure in 2008

Umpqua bank has no subprime exposure or stated income construction loans. In the words of their CEO Ray Davis, "The company has every intension of continuing our current dividend policy and anticipates no disruption of our cash dividends to shareholders". The company did not deviate from its standard underwriting practices during the housing bubble, has managers with an average of 30 years of experience and a CEO who built a 40 person bank into a company with over $8.3 billion in assets and a footprint that extends through much of the West Coast with 147 branches.


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