Umpqua Holdings Corp. in Portland, Ore., said Thursday that its fourth-quarter earnings plunged 77% from a year earlier, to $2.2 million, partly because of deteriorating credit quality.

The nonperforming asset rate increased 70 basis points from a year earlier and 22 basis points from the third quarter, to 1.88% of total assets.

The $8.6 billion-asset Umpqua said that about 70% of its nonperformers were residential development loans, and that it is working to shrink its exposure to that loan type.

Its provision for loan losses jumped about 79% from a year earlier but fell 10% from the third quarter, to $32 million. Umpqua said the amount is $2 million more than its chargeoffs, because it working to build its reserves in the uncertain economy.

"Our credit quality numbers, considering the state of the economy, are very good," Ray Davis, Umpqua's president and chief executive officer, said in a press release.

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