Umpqua Holdings Corporation Company Profile

In April 2014 we completed the largest acquisition in Umpquas history, merging with Sterling Financial Corporation. The Sterling acquisition was a strategic opportunity to enhance shareholder value through a transformative business combination. It allowed us to accelerate significantly our objective of creating something unique in the financial services industry: an organization that offers the products and expertise of a large bank but delivers them with the personal service and commitment of a community bank. As the landscape of the financial services industry is being reshaped by technological advances and the introduction of new digital customer delivery channels and technology-driven products and services, we believe the alignment of our physical and digital customer delivery channels is crucial in creating an exceptional customer experience. Doing so will allow us to drive stronger customer retention, greater penetration of "share of wallet," and improved new business growth. With that in mind, during 2015, we focused on completing the integration of Sterling and realizing the financial benefits of the merger, as well as growing the combined bank and launching Pivotus Ventures, Inc.

Focus on Customer Experience. At every level of the Company, from the Board of Directors to our newest associates, and across all customer service delivery channels, we are focused on delivering an extraordinary customer experience. Its an integral part of our culture, and we believe we are among the first banks to introduce a measurable quality service program. Under our Return on Quality or ROQ program, the performance of each sales associate and store is evaluated based on specific measurable factors such as the "sales effectiveness ratio" that totals the average number of banking products purchased by each new customer. The evaluations also encompass factors such as the number of new loan and deposit accounts generated in each store, reports by incognito "mystery shoppers" and customer surveys. Based on scores achieved, Umpquas ROQ program rewards both individual sales associates and store teams with financial incentives. Through such programs, we are able to measure the quality of the experience provided to our customers and maintain employee focus on quality customer service.

Establish Strong Brand Awareness. As a financial services retailer, we devote considerable resources to developing the "Umpqua Bank" brand. This is done through design strategy, marketing, merchandising, and delivery through our customer-facing channels, as well as through active public relations, social media and community based events and initiatives. From Bank-branded bags of custom roasted coffee beans and Umpqua-branded ice cream trucks, to educational seminars, in-store events and social giving campaigns, Umpquas goal is to engage our customers and communities in fresh and engaging ways. The unique look and feel of our stores and interactive displays help demonstrate our commitment to being an innovative, customer-friendly retailer of financial products and services, and our active community engagement and investments stand out with commercial customers. Our brand activation approach is based on actions not just advertising, and builds strong consumer awareness of our products and services.

Use Technology to Retain and Expand Customer Base. As consumer preferences evolve with technological changes, our strategy remains consistent: deliver an extraordinary experience across all customer touchpoints. As a result, we continue to expand user-friendly, technology-based systems that reflect and complement the distinct customer experience the company is known for. We believe this positions Umpqua well to adapt quickly as customer use of physical and digital channels evolves. We offer technology-based services including remote deposit capture, online banking, bill pay and treasury services, mobile banking, voice response banking, automatic payroll deposit programs, advanced function ATMs, interactive product kiosks, and a robust web site. We believe the combination of physical and electronic banking services enhances our ability to attract a broader range of customers and wrap our value proposition across all channels.

Increase Market Share in Existing Markets and Expand Into New Markets. As a result of our innovative retail product orientation, measurable quality service program, strong brand awareness, and distinct customer experience across all delivery channels, we believe there is significant potential to increase business with current customers, to attract new customers in our existing markets and continue entering new markets.

Prudently Manage Capital. An important part of our strategy is to continue to manage capital prudently, and to employ excess capital in a thoughtful and opportunistic manner that improves shareholder returns. We accomplish this through dividends, share repurchases, and pursuing strategic acquisitions, which could include technology-driven enterprises or banks and financial services companies in markets where we see growth potential.

The Bank makes both secured and unsecured loans to individuals and businesses.
Inter-agency guidelines adopted by federal bank regulators mandate that financial institutions establish real estate lending policies with maximum allowable real estate loan-to-value limits, subject to an allowable amount of non-conforming loans as a percentage of capital. We have adopted as loan policy loan-to-value limits that range from 5% to 10% less than the federal guidelines for each category; however, policy exceptions are permitted for real estate loan customers with strong financial credentials.