UMPQ - Umpqua Powers Through Short-Term Mortgage Banking Pressures

• Umpqua posted a very respectable pre-provision profit beat in the second quarter, with better than expected spread income, non-interest income, and net interest margin.
• The mortgage banking business has been hit hard, but it is unlikely to get much worse from here.
• Loan demand is improving, with 3% underlying growth this quarter and a new multi-year high for the loan pipeline, and Umpqua is looking to convert PPP borrowers into long-term customers.
• After a strong run in the stock, the shares aren't all that cheap on a near-term basis, but the long-term high single-digit prospective return is still attractive for a quality bank that could surprise to the good.

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