Umpqua Holdings (UMPQ) in Portland, Ore., missed its quarterly earnings expectations because of margin pressure.
The $11.5 billion-asset company's first-quarter earnings fell 8% from a year earlier, to $23.4 million, or 21 cents a share. The results missed analysts' expectations by 2 cents, according to Bloomberg.
Net interest income fell 8% from a year earlier, to $94.2 million. The net interest margin contracted by 31 basis points from the first quarter of 2012, to 3.77%, because of declines in loan yields and average loan balances.
Umpqua also took steps to address problem loans during the quarter. Its loan-loss provision more than doubled from a year earlier, to $7.2 million. Nonperforming loans fell 29% from a year earlier, to $61 million.
Noninterest income rose 25% from a year earlier, to $34 million. Mortgage banking revenue rose 80% from a year earlier, to $23.6 million. Umpqua's mortgage originations increased 26% from the first quarter of 2012, to $509 million. Revenue from service charges and brokerage fees also increased.
The quarter's highlights included "reductions in noninterest expense and nonperforming assets," Ray Davis, Umpqua's president and chief executive, said in a press release Wednesday. "We also remain bullish on our loan growth prospects for the rest of the year as our commercial loan pipeline has reached a record high of $1.9 billion."