Umpqua Holdings in Portland, Ore., reported a double-digit profit increased in the fourth quarter, as it benefited from strong loan growth and tax reform legislation.
Net income for the $25.7 billion-asset Umpqua totaled $82.8 million, up 20% from the fourth quarter of 2016. Earnings per share came in 38 cents beating by 9 cents the median estimates of analysts polled by FactSet Research Systems.
“We delivered solid financial performance and strong balance sheet growth, while developing and making good progress on Umpqua Next Gen, our long-term strategic initiative to deliver enhanced profitability,” President and CEO Cort O'Haver said in a press release. “Building on that foundation, and in light of recent tax reform, Umpqua is planning to accelerate strategic investments in our associates, communities, and digital and technology projects to enhance the customer experience, which we believe will enhance shareholder value.”
Umpqua said in its earnings release that it recorded a $26.9 million benefit to its provision for income taxes because it revalued net deferred tax liability associated with the recent tax reform legislation.
Net interest income rose 6% to $220.6 million. The net interest margin expanded by 5 basis points to 3.88%.
Total loans and leases increased 9% to $19.1 billion, driven by double-digit increases in construction lending, equipment financing and consumer lending.
Total deposits increased 5% to $19.9 billion.
Noninterest income declined 27% to $72 million, driven in large part by a 28% drop in mortgage banking revenue.
Noninterest expenses increased 5% to $192.8 million.
Nonperforming assets increased to 0.37% of total assets, from 0.25% in the fourth quarter of 2016. Umpqua said this was driven primarily by two loans moved to nonperforming status in the fourth quarter. The company charged off $11.8 million in the fourth quarter, down 8% from net chargeoffs of $12.9 million a year earlier.