Quarterly profits fell slightly at Umpqua Holdings in Portland, Ore., because of fewer proceeds from loan sales, tighter margins and other factors.
The $23.2 billion-asset company reported a net income of $57.6 million in the third quarter, down 2% from a year earlier.
Total loans rose 7%, to $16.4 billion, largely on increases in multifamily loans and mortgages. However, its net interest margin contracted 32 basis points to 4.43%, driving net interest income down 3% to $219.7 million.
Noninterest income also fell 3%, to $60.3 million, mainly because gains on sales of loans fell 37%, to $5.2 million. Service charges on deposits and mortgage banking fees were also lower. Helping offset some of those declines, Umpqua recorded a $1.4 million gain from its indemnification asset related to a shared-loss agreement with the Federal Deposit Insurance Corp.; it had reported a $2.7 million loss on the asset a year earlier.
Noninterest expense kept nearly constant at $183 million. A 31% decline in merger-related expenses to $5.9 million, combined with a swing from losses to gains on real estate owned, were offset by rising occupancy and equipment costs, along with a 3% hike in salaries and employee benefits.