Mortgages, tech expense create drag at Umpqua
Lower mortgage banking revenue and a special system-conversion expense kept third-quarter earnings relatively flat at Umpqua Financial Holdings in Portland, Ore., even as the company benefited from loan growth.
Net income for the $25.7 billion-asset company was $61.3 million, a slight decline from the same quarter last year. It earned 28 cents per share, missing analysts’ median estimate of 29 cents, according to FactSet Research Systems.
Net loans and leases increased 7% year over year to $18.5 billion, and net interest income rose 5% to $220.5 million. The net interest margin fell a basis point to 3.94%.
Deposits increased 5% to $19.8 billion.
Noninterest income declined 6.5% to $75.4 million as mortgage banking revenue fell 29% to $33.4 million.
Noninterest expenses increased 4% to $188.4 million and included $6.7 million in expenses associated with work on a non-customer-facing system conversion. The increase was partially offset by declines in costs related to services, marketing and communications, the company said.
“Our core growth markets remain vibrant, and we are in good position to generate positive operating leverage from the revenue and efficiency strategies organized under the Umpqua Next Gen [expense-control] initiative,” President and CEO Cort O'Haver said in a news release Wednesday that announced the quarterly results.