Umpqua Holdings in Portland, Ore., on Thursday announced a plan to boost profitability by 2020.

The plan, branded as “Umpqua NextGen,” includes a mix of technology upgrades, expansions in fee-based lines of business and an emphasis on corporate banking. The goal of the project is to boost return on tangible common equity to between 13% and 15% by 2020; that figure stood at 10.67% as of June 30.

“It represents an evolution of Umpqua Bank,” President and CEO Cort O’Haver said during the company’s quarterly earnings call.

What's on the table?
“Nothing is sacred,” Umpqua CEO Cort O’Haver said in response to questions about whether branch closures or incentive compensation could be part of the bank's campaign to strengthen returns.

Umpqua executives said they would provide quantifiable details about the plan in October, during the company's third-quarter earnings call. Asked whether the plan will include changes to incentive compensation or branch closures, O’Haver said new ways of arranging staff are under consideration.

“What I’m saying is nothing is sacred,” he said.

During the second quarter, meanwhile, profits rose, thanks to a mix of loan growth and lower costs.

The $25.3 billion-asset company earned $56.8 million, or 5% more than a year earlier. Earnings per share were 26 cents, or 1 cent higher than the consensus among analysts' estimates compiled by FactSet Research System.

Net interest income climbed 1%, to $212.1 million. Total loans grew 6% to just over $18 billion on sharp increases in construction and commercial term lending. The net interest margin fell 16 basis points to 3.91%.

Strong performance in the company’s loan book outweighed a broad-based decline in fees. Noninterest income slid 5% to $71.1 million. Declines occurred in a number of areas, including deposit charges, brokerage revenue and loan sales, while revenue from debt capital markets swap activity increased.

Noninterest expenses dipped 2% to $184 million, reflecting lower occupancy, amortization and merger-related costs.

Kristin Broughton

Kristin Broughton

Kristin Broughton is a reporter for American Banker, where she writes about the business of national and regional banking.