Umpqua Q2 includes $81.9M gain on sale of Visa stock

|About: Umpqua Holdings Corporation (UMPQ)|By:, SA News Editor

Umpqua Holdings (NASDAQ:UMPQ) Q2 EPS of 51 cents, including a number of notable items, rose from 34 cents in Q1 and 30 cents in Q2 2018.

The company noted it made several moves to enhance long-term profitability, including the sale of its Visa class B shares.

"We've also begun the process of selling material portions of our mortgage servicing rights portfolio to reduce volatility and expect the sale of the first tranche to close in the fourth quarter," said Umpqua President and CEO Cort O'Haver.

Notable items in Q2 include:

    $81.9M gain on sale for all shares of Visa Class B stock held by the company, partially offset by a $7.2M loss on debt securities;

    $24.7M loss on fair value change of the MSR asset attributable to the decrease in long-term interest rates during the quarter, compared with a $14.0M loss in the prior quarter and a $5.4M loss in the same period a year ago;

    $24.7M loss on fair value change of the MSR asset attributable to the decrease in long-term interest rates during the quarter, compared with a $14.0M loss in the prior quarter and a $5.4M loss in the year-ago period; and

    $1.5M of exit and disposal costs, compared with $1.4M in the prior quarter and $2.6M in the year-ago quarter.

Q2 net interest income decreased by $10.5M on a Q/Q basis primarily driven by higher levels of bond premium amortization as the decrease in long-term rates during Q2 resulted in higher prepayment speeds compared to the prior quarter.

Q2 net interest margin of 3.70% fell 33 basis points from 4.03% in Q1 on higher levels of bond premium amortization and higher cost of interest bearing deposits compared to the prior quarter.

Gross loan and leases of $21.0B at June 30, 2019, up $547.4M vs. March 31. 2019; total deposits of $21.8B at June 30, 2019 rose $575.1M from March 31, 2019.

Conference call on July 18 at 1:00 PM ET.

Previously: Umpqua Holdings EPS beats by $0.14, beats on revenue (July 17)

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