Umpqua Holdings Corp (UMPQ)

Umpqua came to my attention completely by accident while looking through bank stocks for investing. With the recent meltdown in the financial sector I thought I would do some digging and see if I could find a value nugget or two. I had never heard of this company before and it had never popped up for me in the past.

I live in the Midwest and have never been in an Umpqua bank as they are based out of Oregon and have bank locations in northern CA and WA. By description I understand that their locations resemble Internet Cafe's. This intrigued me so I continued to dig deeper into the company.

I was very surprised and pleased that they offer paid time off to their employees to allow them to volunteer their time in the community. This kind of effort always pays back with community goodwill which leads to new business.

On a last PR note, Umpqua was recently rated 34th in Fortunes "100 Best Companies to Work For". It was the only community bank to make the list and has appeared on this list for the last three years running.

Another factor that I find enticing is their recent (May 5, 08) addition of a new international banking division in their San Francisco commercial offices. They added a new executive (Anthony Oriti) with 30 years of international trade experience to head the division.

Any bank stock would not be complete without a TARP update. Umpqua did receive $214 Million in Oct, 08. However the CEO Ray Davis has repeatedly said from the start that the money was not required for survival. Umpqua was already well capitalized and did not need the infusion of cash. There are talks about returning the $214 Million back to the government due to the 'stigma' associated with the money, but no decision has been made as of yet. Since the money can be used for anything, they may decide to use the TARP money to buyout some smaller banks and expand into new communities. That last part, of course, is pure speculation.

To wrap up, I like the prospects of this regional bank. It's different in how it interacts with the customer base at their offices, they interact with the community, and management seems to be well grounded. The stock will most likely bump around quite a bit in 2009 as the banking industry sorts itself out, but 2010 should show steady gains as a leading bank in their region.