Steady Performance At Umpqua, With Some Possible Upside From Opex

Having lagged a bit leading into my last piece, Umpqua (NASDAQ:UMPQ) came back strongly, rising as much as 14% before declining into and after earnings, following the sector lower as earnings reports and guidance have failed to live up to investor hopes and expectations. Still, the shares reflect a little more of the underlying value I saw, and management continues to execute relatively well against their targets.

Looking to 2020 and beyond, my feelings are a little mixed. Fundamentally, I think this is a solid bank with a solid core deposit base. I also think it’s a bank with growth potential across the West Coast, particularly on the commercial side. The “mixed” part is that, while I see ongoing opportunities to execute better on costs, management has come up short so far, and I’m likewise a little concerned about the below-expectation trend in loan growth. While I see upside towards $20, these shares are not quite so undervalued as before and management needs to execute better on cost initiatives.

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Steady Performance At Umpqua, With Some Possible Upside From Opex