Tumbling mortgage banking revenue reduced Umpqua Holdings' (UMPQ) fourth-quarter profit.

The Portland, Ore., company earned $25.1 million, or 22 cents per share, in the fourth quarter — a 10% decrease from the same period in 2012.

The decline was largely attributable to the company's reduced mortgage banking income. It plunged to $16 million, down 49% from the same period a year ago. Umpqua said that higher mortgage rates had reduced refinancing activity. The company's total noninterest income fell to $26.8 million, a 43% decrease from the fourth quarter of 2012.

Net interest income grew 8%, to $110 million. A 16% climb in noncovered loans and leases and lower expenses on deposits and repurchase agreements were responsible for the increase. Umpqua's net interest margin rose 34 basis points, to 4.29%.

Noninterest expense climbed 3%, to $95.4 million. Umpqua took $1.6 million of merger-related expenses in the fourth quarter related to its proposed merger of Sterling Financial and its purchases of Financial Pacific Holding and Circle Bancorp.

The $11.6 billion-asset company cut its loan-loss provision by 22%, to $3.8 million. Net chargeoffs totaled $3.2 million, a 22% decrease.

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