Umpqua Executing Well, But Momentum Is Slowing

All good things come to an end, and many of the tailwinds that have aided Umpqua’s (NASDAQ:UMPQ) earnings momentum are starting to fade. The bank still has positive asset sensitivity, a strong deposit base, and attractive loan growth opportunities, as well as growth opportunities in fee-generating businesses, but loan demand is starting to ease off and deposit costs are going to head higher.

Still, I like the fundamentals at Umpqua and I like the outlook for the combined post-merger Umpqua and Columbia Bank (COLB), and that deal should close in the first quarter of 2023. I still believe in a mid-single-digit post-deal core earnings growth rate, and that still supports a double-digit long-term annualized return at today’s valuation.

 

To keep reading, please follow this link: 

Umpqua Executing Well, But Momentum Is Slowing