Self-Improvement And Growth Initiatives Making A Difference For Umpqua

Umpqua’s (UMPQ) management change at the start of 2017 has made a difference for this West Coast bank, as the company has moved fairly aggressively to address two of my biggest concerns in late 2016 – a high level of expenses and a lack of clear growth drivers. A new focus on “upper-middle-market” lending should drive profitable C&I lending growth, while Umpqua Next Gen could result in some meaningful expense (a mid-single-digit percentage of 2017 expenses).

Since my last update, Umpqua shares have done a little better than the regional averages and better than peers/rivals like Washington Federal (WAFD) and PacWest (PACW), though not as well as SVB (SIVB) or East West (EWBC). At this point, I believe Umpqua shares are a little undervalued, provided an expectation of double-digit long-term core earnings growth is reasonable.

Read more here:
Self-Improvement And Growth Initiatives Making A Difference For Umpqua