UMPQ - Umpqua Undervalued Ahead Of A Transformative Merger But Expect Rerating To Take Time

Summary

• Umpqua's fourth quarter results included a lot of items and adjustments, but core revenue looked a little light, though underlying performance was still okay.
• Loan growth continues to slow, though C&I and multifamily still offer some growth opportunities, and Umpqua continues to sport an excellent deposit beta.
• The Street is likely to stick with a "wait and see" approach to the upcoming merger with Columbia, but the long-term potential of this combination is attractive.
• Umpqua shares look undervalued below the low-$20s, but history suggests it will take some time for the Street to warm up to this name again.

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