Exhibit 99.1
UnionBanCal Corporation Announces First Quarter Results; Agrees to Sell Insurance Brokerage Business
SAN FRANCISCO--(BUSINESS WIRE)--UnionBanCal Corporation (NYSE:UB):
First Quarter 2008 Highlights: |
-- Net interest income up 5 percent versus fourth quarter and up 8 percent year-over-year |
-- Net interest margin of 3.54 percent, up 3 basis points over prior quarter |
-- Average total loans up 11 percent year-over-year |
-- Average core commercial loans up 14 percent |
-- Average residential mortgage loans up 13 percent |
-- Average commercial real estate loans up 17 percent |
-- Average noninterest bearing deposits comprised 28.9 percent of average total deposits |
-- Average core deposits comprised 72.6 percent of average total deposits |
-- Average all-in cost of funds 2.26 percent |
-- Total provision for credit losses of $80 million primarily reflects increase in reserves against homebuilder portfolio and robust loan growth |
-- Nonperforming assets 0.23 percent of total assets at quarter-end |
-- Net charge-offs of $12 million |
-- Noninterest income included a $14.2 million gain on the partial redemption of Visa Inc. common stock |
-- Noninterest expense included a goodwill impairment charge of $18.7 million related to a write-down of goodwill for the insurance brokerage business and a $5.1 million reversal of reserves for the Company's proportionate share of Visa litigation costs |
-- Tangible common equity ratio of 7.42 percent at quarter-end |
Other Highlights: |
-- The Company has entered into a definitive agreement to sell its insurance brokerage business to BB&T Insurance Services; closing expected in the second quarter |
-- Earnings from continuing operations forecast of $0.95 to $1.05 per share for second quarter; $4.00 to $4.35 per share for full year 2008 |
UnionBanCal Corporation (NYSE:UB) today reported first quarter 2008 net income of $108.6 million, or $0.79 per diluted common share, compared with $149.6 million, or $1.07 per diluted common share, a year earlier, and $165.7 million, or $1.20 per diluted common share, in fourth quarter 2007. Net income for first quarter 2008 included: a $14.1 million after-tax, or $0.10 per diluted common share, write-down of goodwill related to the assessment of the valuation of the insurance brokerage business; an $8.7 million after-tax, or $0.06 per diluted common share, gain on the partial redemption of Visa Inc. common stock; and a $3.1 million after-tax, or $0.02 per diluted common share, reversal of Visa-related litigation reserves. Net income for fourth quarter 2007 included income from discontinued operations of $57.0 million, or $0.42 per diluted common share.
Excluding the goodwill write-down and Visa-related credits, first quarter 2008 earnings from continuing operations were $0.81 per diluted common share. This compares with earnings from continuing operations of $0.78 per diluted common share in fourth quarter 2007, and $1.06 per diluted common share in first quarter 2007.
Compared to prior quarter, total revenue increased 2.8 percent and total noninterest expense increased 0.8 percent, resulting in a 6.8 percent increase in income before the provision for loan losses and income taxes. The total provision for credit losses was $80 million, an increase of $20 million compared with fourth quarter 2007, primarily due to an increase in reserves attributable to the homebuilder segment of the loan portfolio and robust loan growth.
“We have faced a tougher economic environment than had been anticipated 90 days ago. Even so, during the first quarter we generated strong, high quality loan growth, maintained our deposit base and expanded our net interest margin over the fourth quarter. Our growth in net interest income during the quarter and continued focus on expense control allowed us to not only generate positive operating leverage, but also more than 6 percent growth in core earnings over fourth quarter,” said Masaaki Tanaka, President and Chief Executive Officer. “In these unpredictable times, it is difficult to determine the future and we have chosen to proceed with a cautious outlook. Our capital base remains strong with a tangible equity ratio at the upper end of our peers. We believe that, as the economy faces continued uncertainty, the strength of our balance sheet and our focus on capital preservation will continue to serve us well during 2008,” concluded Mr. Tanaka.
“Deterioration in our homebuilder portfolio was more rapid than anticipated and we are beginning to see weakness in related sectors. Even so, our overall credit quality remained strong during the quarter relative to peer banks. We generated significant growth across most of our loan categories, with particular focus in our commercial loan and commercial mortgage portfolios. We achieved this growth without sacrificing either quality or yield. Our credit quality statistics were strong, with only $12 million of net charge-offs for the period and nonperforming assets at only 23 basis points. Our residential mortgage portfolio of over $14 billion had only $18 million in foreclosure. However, given our current economic outlook we have adopted a guarded outlook for the remainder of the year,” said Vice Chairman and Chief Operating Officer Philip Flynn.
Subsequent Event – Sale of Insurance Brokerage Business
On April 22, 2008, the Company entered into a definitive agreement to sell its insurance subsidiary, UnionBanc Insurance Services, Inc., to Raleigh, N.C.-based BB&T Insurance Services, a wholly-owned subsidiary of BB&T Corporation (NYSE: BBT). The transaction has been approved by the directors of BB&T Corporation and the Company, and is expected to close in the second quarter.
In the first quarter, the Company recorded a $14.1 million after-tax, or $0.10 per diluted common share, write-down of goodwill related to the assessment of the valuation of the insurance brokerage business. Upon closing of the transaction, the Company will recognize a net gain on the sale of the business of approximately $11 million after-tax, or $0.08 per diluted common share.
Commencing with second quarter 2008, the results of the insurance brokerage business will be reported in discontinued operations and all prior periods will be restated to reflect this accounting treatment.
Summary of First Quarter Results From Continuing Operations
First Quarter Total Revenue
For first quarter 2008, total revenue (taxable-equivalent net interest income plus noninterest income) was $675 million, up 5.4 percent compared with first quarter 2007. Net interest income increased 7.7 percent, and noninterest income increased 0.8 percent. Compared with fourth quarter 2007, total revenue was up 2.8 percent, with net interest income up 4.8 percent and noninterest income down 1.3 percent.
First Quarter Net Interest Income (Taxable-equivalent)
Net interest income was $462 million in first quarter 2008, up $33 million, or 7.7 percent, from the same quarter a year ago, primarily due to strong loan growth, lower rates paid on interest bearing liabilities and one more day in the quarter, partially offset by lower yields on earning assets and a deposit mix shift from noninterest bearing and low-cost deposits into higher-cost deposits.
Average earning assets in first quarter 2008 increased $3.8 billion, or 7.9 percent, compared to first quarter 2007, primarily due to a $4.2 billion, or 11 percent, increase in average loans. Average commercial loans increased $0.9 billion, or 6.1 percent, with average core commercial loans, which exclude title and escrow loans, up $1.9 billion, or 13.9 percent. Title and escrow loans, which are highly rate-advantaged to the borrower and more volatile than other commercial loans, decreased $1.0 billion, or 65.7 percent. Average residential mortgage loans increased $1.6 billion, or 13.0 percent; average commercial mortgage loans increased $1.2 billion, or 19.6 percent; and average construction loans increased $0.2 billion, or 10.8 percent, year over year.
Compared to first quarter 2007, average interest bearing deposits increased $4.7 billion, or 18.0 percent, while average noninterest bearing deposits decreased $2.5 billion, or 16.5 percent. The decline in noninterest bearing deposits was due to a $1.1 billion, or 10.5 percent, decrease in average other commercial noninterest bearing deposits; a $1.1 billion, or 50.1 percent, decrease in average title and escrow deposits; and a $0.3 billion, or 13.0 percent, decrease in average consumer noninterest bearing deposits. Average other commercial and average consumer noninterest bearing deposits both declined primarily due to a mix shift toward interest-paying deposit accounts, and average title and escrow deposits decreased due to reduced residential real estate activity.
Average noninterest bearing deposits represented 28.9 percent of average total deposits in first quarter 2008. The annualized average all-in cost of funds improved to 2.26 percent, compared with 2.56 percent in first quarter 2007, and 2.73 percent in fourth quarter 2007. The Company’s average core deposit-to-loan ratio was 74.1 percent.
The average yield on earning assets of $52.2 billion was 5.72 percent, down 34 basis points from first quarter 2007, with the average loan yield decreasing 39 basis points. The average rate on interest bearing liabilities of $37.7 billion was 3.02 percent, down 75 basis points compared with first quarter 2007, reflecting recent decreases in short-term interest rates. The net interest margin in first quarter 2008 was 3.54 percent, compared with 3.57 percent in first quarter 2007.
First quarter 2008 net interest income increased 4.8 percent from fourth quarter 2007. Average loans increased $1.8 billion, or 4.4 percent. Average commercial loans increased $0.9 billion, or 6.4 percent, which was comprised of an increase in core commercial loans of $1.0 billion, or 7.3 percent, offset by a decrease in title and escrow loans of $84 million, or 14.5 percent. Average commercial mortgage loans increased $465 million, or 6.9 percent; average residential mortgage loans increased $330 million, or 2.4 percent; and average construction loans increased $37 million, or 1.5 percent. Average interest bearing deposits increased $1.3 billion, or 4.2 percent, while average noninterest bearing deposits decreased $0.5 billion, or 3.7 percent. The average yield on earning assets decreased 44 basis points and the average rate on interest bearing liabilities decreased 72 basis points. The net interest margin increased 3 basis points to 3.54 percent.
First Quarter Noninterest Income
In first quarter 2008, noninterest income was $213 million, up $1.8 million, or 0.8 percent, from the same quarter a year ago. Service charges on deposit accounts were flat. Trust and investment management fees increased $6.5 million, or 17.7 percent, primarily due to an increase in trust assets. Gain on private capital investments, net, was $1.1 million, a decrease of $8.0 million compared with the same quarter a year earlier. The Company recorded a $14.2 million pre-tax gain on the partial redemption of Visa Inc. common stock in first quarter 2008. Other noninterest income declined $6.4 million, or 23 percent, primarily due to a gain on the sale of real property recorded in first quarter 2007.
First quarter 2008 noninterest income decreased $2.9 million, or 1.3 percent, compared with fourth quarter 2007. Service charges on deposit accounts were $75 million, down $1.3 million, or 1.7 percent. Merchant banking fees decreased $4.4 million, or 27.2 percent, primarily due to lower syndication fees in first quarter 2008. Trading account revenue decreased $4.1 million, or 27.2 percent, primarily due to downward valuation adjustments for interest rate derivatives and losses on distressed debt. The Company recorded a $14.2 million pre-tax gain on the partial redemption of Visa Inc. common stock in first quarter 2008. Other noninterest income declined $8.4 million, or 28.2 percent, primarily due to a gain on the partial redemption of MasterCard common stock and a net gain on the sale of syndicated loans, both recorded in fourth quarter 2007.
First Quarter Noninterest Expense
Noninterest expense for first quarter 2008 was $437 million, an increase of $26.1 million, or 6.4 percent, compared with first quarter 2007. Excluding the impairment charge of $18.7 million related to the write-down of goodwill for the insurance brokerage business, noninterest expense increased 1.8 percent. Salaries and employee benefits expense was flat. The provision for losses on off-balance sheet commitments was $8 million in first quarter 2008, compared to $1 million in first quarter 2007. Other noninterest expense included a $5.1 million reversal of prior reserves for the Company’s proportionate share of Visa litigation costs.
Noninterest expense increased $3.3 million, or 0.8 percent, compared with fourth quarter 2007. Excluding the impairment charge of $18.7 million related to the write-down of goodwill for the insurance brokerage business, noninterest expense decreased 3.5 percent. Salaries and employee benefits expense increased $16.6 million, or 7.0 percent, primarily due to annual seasonal factors that result in higher payroll taxes and 401(k) matching contributions. Outside services expense decreased $3.9 million, or 18.7 percent, primarily due to lower cost of services related to title and escrow balances. Professional services expense decreased $7.4 million, or 33.2 percent, primarily due to lower information technology and risk-management project costs. Advertising and public relations expense decreased $4.2 million, or 34.0 percent, primarily due to timing of marketing promotions. The provision for losses on off-balance sheet commitments was $8 million, compared to $4 million in fourth quarter 2007. Other noninterest expense decreased $16.1 million, or 34.3 percent, primarily due to the establishment of legal reserves relative to the Company’s proportionate share of Visa litigation charges, recorded in fourth quarter 2007, plus a reversal of a portion of those reserves recorded in first quarter 2008.
Income Tax Expense
Income tax expense for the first quarter was $54.7 million. The effective tax rate for first quarter 2008 was 33.5 percent, unchanged from prior year. The effective tax rate for fourth quarter 2007 was 33.9 percent.
Credit Quality
Nonperforming assets at March 31, 2008, were $132 million, or 0.23 percent of total assets. This compares with $57 million, or 0.10 percent of total assets, at December 31, 2007, and $42 million, or 0.08 percent of total assets, at March 31, 2007. The increase in nonperforming assets versus year-end was due primarily to a $55 million increase in nonperforming loans in the construction portfolio, virtually all attributable to the homebuilder sector, and an $18 million increase in commercial and industrial nonperforming loans.
In first quarter 2008, the total provision for credit losses was $80 million, compared with a total provision for credit losses of $60 million in fourth quarter 2007, and a total provision for credit losses of $5 million in first quarter 2007. The total provision for credit losses is comprised of the provision for loan losses and the provision for losses on off-balance sheet commitments, which is classified in noninterest expense. Provision expense in first quarter 2008 was primarily due to an increase in reserves attributable to the homebuilder segment of the loan portfolio and robust loan growth. At quarter-end, the Company maintained approximately $133 million in identified reserves against the homebuilder portfolio, which had approximately $815 million outstanding at March 31, 2008. In first quarter 2008, there were no net charge-offs for the homebuilder portfolio.
Net loans charged-off for first quarter 2008 were $12 million, or 0.11 percent of average total loans. This compares with net loans charged-off of $3 million, or 0.04 percent of average total loans, in fourth quarter 2007, and net loans charged-off of $2 million, or 0.03 percent of average total loans, in first quarter 2007.
At March 31, 2008, the allowance for credit losses as a percent of total loans and as a percent of nonaccrual loans was 1.29 percent and 445 percent, respectively. These ratios were 1.20 percent and 885 percent, respectively, at December 31, 2007, and 1.11 percent and 997 percent, respectively, at March 31, 2007.
Balance Sheet and Capital Ratios
At March 31, 2008, the Company had total assets of $57.9 billion. Total loans were $43.5 billion and total deposits were $45.2 billion, resulting in a period-end deposit-to-loan ratio of 104 percent. Core deposits at period-end were $33.4 billion, resulting in a core deposit-to-loan ratio of 77 percent. At period-end, total stockholders’ equity was $4.7 billion and the tangible common equity ratio was 7.42 percent. The Company’s Tier I and total risk-based capital ratios at period-end were 8.07 percent and 10.98 percent, respectively.
Stock Repurchases
During first quarter 2008, the Company spent less than $1 million on the repurchase of common stock. At March 31, 2008, the Company had remaining repurchase authority of $512 million.
Common shares outstanding at March 31, 2008, were 137.9 million, a decrease of 0.2 million shares, or 0.1 percent, from one year earlier.
Second Quarter and Full Year 2008 Forecast
The Company currently estimates that second quarter 2008 earnings from continuing operations will be in the range of $0.95 to $1.05 per diluted common share, including a total provision for credit losses of $60 million to $80 million.
The Company currently estimates that full year 2008 earnings from continuing operations will be in the range of $4.00 to $4.35 per diluted common share, including a total provision for credit losses of $225 million to $300 million.
Commencing with second quarter 2008, the results of the insurance brokerage business will be reported in discontinued operations and all prior periods will be restated to reflect this accounting treatment. On such a basis, first quarter 2008 earnings from continuing operations were $0.89 per diluted common share.
Non-GAAP Financial Measures
This press release contains certain references to financial measures identified as being stated on an “adjusted basis” or that adjust for or exclude a goodwill write-down and Visa-related credits or that reflect the accounting treatment for discontinued operations for the sale of the insurance brokerage business, which are adjustments from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial measures, as used herein, differ from financial measures reported under GAAP in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Because these items and their impact on the Company’s performance are difficult to predict, management believes that financial presentations excluding the impact of these items provide useful supplemental information which is important to a proper understanding of the Company’s core business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
Forward-Looking Statements
The following appears in accordance with the Private Securities Litigation Reform Act. This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include the words “believe,” ”continue,” “expect,” “target,” “anticipate,” “intend,” “plan,” “estimate,” “potential,” “project,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” They may also consist of annualized amounts based on historical interim period results. Forward-looking statements in this press release include those related to earnings forecasts, provision for credit losses, trends in deposit pricing, deposit mix, and net interest margin and their impact on the Company and its future performance, the Company’s loan portfolio, credit quality, competitive positioning and earnings power.
There are numerous risks and uncertainties that could and will cause actual results to differ materially from those discussed in the Company’s forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict and could have a material adverse effect on the Company’s stock price, financial condition, and results of operations or prospects. Such risks and uncertainties include, but are not limited to, adverse economic and fiscal conditions in California; increased energy costs; global political and general economic conditions related to the war on terrorism and other hostilities; fluctuations in interest rates; the controlling interest in UnionBanCal Corporation of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a wholly-owned subsidiary of Mitsubishi UFJ Financial Group, Inc.; the effects of filing taxes on the worldwide unitary basis; competition in the banking and financial services industries; deposit pricing pressures; the levels of commercial and residential real estate activity in our market; adverse effects of current and future banking laws, rules and regulations and their enforcement, including the previously disclosed agreements with regulatory and governmental authorities related to the Company’s Bank Secrecy Act/Anti-Money Laundering compliance program; effects of governmental fiscal or monetary policies; legal or regulatory proceedings or investigations; declines or disruptions in the stock, bond, or credit markets which may adversely affect the Company or the Company’s borrowers or other customers; changes in accounting practices or requirements; and risks associated with various strategies the Company may pursue, including potential acquisitions, divestitures and restructurings.
A complete description of the Company, including related risk factors, is discussed in the Company’s public filings with the Securities and Exchange Commission, which are available by calling (415) 765-2969 or online at http://www.sec.gov. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.
Conference Call and Webcast
The Company will conduct a conference call to review first quarter 2008 results at 8:30 AM Pacific Time (11:30 AM Eastern Time) on April 24, 2008. Interested parties calling from locations within the United States should call 800-230-1074 (612-332-0345 from outside the United States) 10 minutes prior to the beginning of the conference.
A live webcast of the call will be available at http://www.unionbank.com. You may access the Investor Relations section of the website via the “About Union Bank” link from the homepage. The webcast replay will be available on the website within 24 hours after the conclusion of the call, and will remain on the website for a period of one year.
A recorded playback of the conference call will be available by calling 800-475-6701, (320-365-3844 from outside the United States) from approximately 12:00 PM Pacific Time (3:00 PM Eastern Time), April 24, through 11:59 PM Pacific Time, May 1 (2:59 AM Eastern Time, May 2). The reservation number for this playback is 918373.
Based in San Francisco, UnionBanCal Corporation is a bank holding company with assets of $57.9 billion at March 31, 2008. Its primary subsidiary, Union Bank of California, N.A., had 334 banking offices in California, Oregon and Washington, and 2 international offices at March 31, 2008.
UnionBanCal Corporation and Subsidiaries | ||||||||||
Financial Highlights (Unaudited) | ||||||||||
Exhibit 1 | ||||||||||
Percent Change to | ||||||||||
As of and for the Three Months Ended | December 31, 2007 from | |||||||||
March 31, | December 31, | March 31, | March 31, | December 31, | ||||||
(Dollars in thousands, except per share data) |
| 2007 | 2007 | 2008 | 2007 | 2007 | ||||
Results of operations: | ||||||||||
Net interest income (1) | $ 429,337 | $ 441,039 | $ 462,324 | 7.68% | 4.83% | |||||
Noninterest income | 210,858 | 215,513 | 212,618 | 0.83% | (1.34%) | |||||
Total revenue | 640,195 | 656,552 | 674,942 | 5.43% | 2.80% | |||||
Noninterest expense | 410,866 | 433,683 | 437,002 | 6.36% | 0.77% | |||||
Provision for loan losses | 4,000 | 56,000 | 72,000 | nm | 28.57% | |||||
Income from continuing operations before income taxes (1) | ||||||||||
225,329 | 166,869 | 165,940 | (26.36%) | (0.56%) | ||||||
Taxable-equivalent adjustment | 2,115 | 2,517 | 2,526 | 19.43% | 0.36% | |||||
Income tax expense | 74,693 | 55,665 | 54,662 | (26.82%) | (1.80%) | |||||
Income from continuing operations | $ 148,521 | $ 108,687 | $ 108,752 | (26.78%) | 0.06% | |||||
Income (loss) from discontinued operations | 1,090 | 56,983 | (162) | nm | nm | |||||
Net income | $ 149,611 | $ 165,670 | $ 108,590 | (27.42%) | (34.45%) | |||||
Per common share: | ||||||||||
Basic earnings: | ||||||||||
From continuing operations | $ 1.08 | $ 0.79 | $ 0.79 | (26.85%) | 0.00% | |||||
Net income | 1.08 | 1.21 | 0.79 | (26.85%) | (34.71%) | |||||
Diluted earnings: | ||||||||||
From continuing operations | 1.06 | 0.78 | 0.79 | (25.47%) | 1.28% | |||||
Net income | 1.07 | 1.20 | 0.79 | (26.17%) | (34.17%) | |||||
Dividends (2) | 0.47 | 0.52 | 0.52 | 10.64% | 0.00% | |||||
Book value (end of period) | 32.98 | 34.37 | 34.17 | 3.61% | (0.58%) | |||||
Common shares outstanding (end of period) (3) | 138,117,370 | 137,836,068 | 137,944,897 | (0.12%) | 0.08% | |||||
Weighted average common shares outstanding - basic (3) | ||||||||||
137,942,320 | 137,386,881 | 137,005,702 | (0.68%) | (0.28%) | ||||||
Weighted average common shares outstanding - diluted (3) | ||||||||||
139,729,681 | 138,562,892 | 137,609,383 | (1.52%) | (0.69%) | ||||||
Balance sheet (end of period): | ||||||||||
Total assets (4) | $ 54,616,849 | $ 55,727,748 | $ 57,933,325 | 6.07% | 3.96% | |||||
Total loans | 37,251,950 | 41,204,188 | 43,499,968 | 16.77% | 5.57% | |||||
Nonperforming assets | 41,744 | 56,525 | 131,687 | nm | nm | |||||
Total deposits | 43,685,706 | 42,680,191 | 45,240,821 | 3.56% | 6.00% | |||||
Medium and long-term debt | 2,071,263 | 1,913,622 | 1,963,952 | (5.18%) | 2.63% | |||||
Stockholders' equity | 4,555,439 | 4,737,981 | 4,713,206 | 3.46% | (0.52%) | |||||
Balance sheet (period average): | ||||||||||
Total assets | $ 52,962,611 | $ 54,781,708 | $ 56,748,724 | 7.15% | 3.59% | |||||
Total loans | 38,458,014 | 40,887,376 | 42,701,453 | 11.03% | 4.44% | |||||
Earning assets | 48,354,950 | 50,156,954 | 52,188,096 | 7.93% | 4.05% | |||||
Total deposits | 41,365,182 | 42,835,877 | 43,613,754 | 5.44% | 1.82% | |||||
Stockholders' equity | 4,510,205 | 4,647,470 | 4,718,409 | 4.62% | 1.53% | |||||
Financial ratios (5): | ||||||||||
Return on average assets (6): | ||||||||||
From continuing operations | 1.14% | 0.79% | 0.77% | |||||||
Net income | 1.15% | 1.20% | 0.77% | |||||||
Return on average stockholders' equity (6): | ||||||||||
From continuing operations | 13.35% | 9.28% | 9.27% | |||||||
Net income | 13.45% | 14.14% | 9.26% | |||||||
Efficiency ratio (7) | 64.02% | 65.44% | 63.55% | |||||||
Net interest margin (1) | 3.57% | 3.51% | 3.54% | |||||||
Dividend payout ratio | 43.52% | 65.82% | 65.82% | |||||||
Tangible common equity ratio | 7.53% | 7.73% | 7.42% | |||||||
Tier 1 risk-based capital ratio (4) (8) | 8.42% | 8.30% | 8.07% | |||||||
Total risk-based capital ratio (4) (8) | 11.38% | 11.21% | 10.98% | |||||||
Leverage ratio (4) (8) | 8.12% | 8.27% | 8.09% | |||||||
Allowance for loan losses to: | ||||||||||
Total loans | 0.89% | 0.98% | 1.06% | |||||||
Nonaccrual loans | 799.52% | 722.64% | 367.17% | |||||||
Allowances for credit losses to (9) : | ||||||||||
Total loans | 1.11% | 1.20% | 1.29% | |||||||
Nonaccrual loans | 997.48% | 884.80% | 445.20% | |||||||
Net loans charged off (recovered) to average | ||||||||||
total loans (6) | 0.03% | 0.04% | 0.11% | |||||||
Nonperforming assets to total loans and foreclosed assets | ||||||||||
0.11% | 0.14% | 0.30% | ||||||||
Nonperforming assets to total assets (4) | 0.08% | 0.10% | 0.23% | |||||||
Refer to Exhibit 8 for footnote explanations. |
UnionBanCal Corporation and Subsidiaries | ||||||||||||
Condensed Consolidated Statements of Income (Unaudited) | ||||||||||||
(Taxable-Equivalent Basis) | ||||||||||||
Exhibit 2 | ||||||||||||
For the Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
(Amounts in thousands, except per share data) | 2007 | 2007 | 2008 | |||||||||
Interest Income (1) | ||||||||||||
Loans | $ | 603,502 | $ | 655,933 | $ | 633,362 | ||||||
Securities | 108,422 | 114,022 | 106,046 | |||||||||
Interest bearing deposits in banks | 1,109 | 163 | 128 | |||||||||
Federal funds sold and securities purchased under resale agreements | 11,152 | 2,603 | 2,693 | |||||||||
Trading account assets | 1,701 | 3,448 | 2,804 | |||||||||
Total interest income | 725,886 | 776,169 | 745,033 | |||||||||
Interest Expense | ||||||||||||
Deposits | 222,155 | 263,508 | 220,660 | |||||||||
Federal funds purchased and securities sold under repurchase agreements | 14,916 | 19,465 | 16,496 | |||||||||
Commercial paper | 22,264 | 16,838 | 9,792 | |||||||||
Medium and long-term debt | 19,695 | 25,471 | 19,457 | |||||||||
Trust notes | 238 | 238 | 238 | |||||||||
Other borrowed funds | 17,281 | 9,610 | 16,066 | |||||||||
Total interest expense | 296,549 | 335,130 | 282,709 | |||||||||
Net Interest Income (1) | 429,337 | 441,039 | 462,324 | |||||||||
Provision for loan losses | 4,000 | 56,000 | 72,000 | |||||||||
Net interest income after provision for loan losses | 425,337 | 385,039 | 390,324 | |||||||||
Noninterest Income | ||||||||||||
Service charges on deposit accounts | 74,945 | 75,989 | 74,736 | |||||||||
Trust and investment management fees | 36,860 | 41,672 | 43,388 | |||||||||
Insurance commissions | 20,250 | 16,557 | 17,393 | |||||||||
Merchant banking fees | 9,077 | 16,206 | 11,793 | |||||||||
Trading account activities | 14,840 | 15,135 | 11,012 | |||||||||
Brokerage commissions and fees | 9,660 | 10,170 | 9,859 | |||||||||
Card processing fees, net | 7,127 | 7,571 | 7,764 | |||||||||
Securities gains (losses), net | 1,220 | - | (2 | ) | ||||||||
Other | 36,879 | 32,213 | 36,675 | |||||||||
Total noninterest income | 210,858 | 215,513 | 212,618 | |||||||||
Noninterest Expense | ||||||||||||
Salaries and employee benefits | 251,835 | 236,835 | 253,429 | |||||||||
Net occupancy | 34,459 | 37,467 | 37,011 | |||||||||
Outside services | 18,170 | 21,071 | 17,138 | |||||||||
Equipment | 16,333 | 16,677 | 15,637 | |||||||||
Software | 13,599 | 15,965 | 15,125 | |||||||||
Professional services | 16,927 | 22,281 | 14,889 | |||||||||
Communications | 9,306 | 9,847 | 9,517 | |||||||||
Foreclosed asset expense | 9 | 55 | 89 | |||||||||
Provision for losses on off-balance sheet commitments | 1,000 | 4,000 | 8,000 | |||||||||
Other | 49,228 | 69,485 | 66,167 | |||||||||
Total noninterest expense | 410,866 | 433,683 | 437,002 | |||||||||
Income from continuing operations before income taxes (1) | 225,329 | 166,869 | 165,940 | |||||||||
Taxable-equivalent adjustment | 2,115 | 2,517 | 2,526 | |||||||||
Income tax expense | 74,693 | 55,665 | 54,662 | |||||||||
Income from Continuing Operations | 148,521 | 108,687 | 108,752 | |||||||||
Income (loss) from discontinued operations before income taxes | 1,765 | 88,827 | (231 | ) | ||||||||
Income tax expense (benefit) | 675 | 31,844 | (69 | ) | ||||||||
Income (Loss) from Discontinued Operations | 1,090 | 56,983 | (162 | ) | ||||||||
Net Income | $ | 149,611 | $ | 165,670 | $ | 108,590 | ||||||
Income from continuing operations per common share - basic | $ | 1.08 | $ | 0.79 | $ | 0.79 | ||||||
Net income per common share - basic | $ | 1.08 | $ | 1.21 | $ | 0.79 | ||||||
Income from continuing operations per common share - diluted | $ | 1.06 | $ | 0.78 | $ | 0.79 | ||||||
Net income per common share - diluted | $ | 1.07 | $ | 1.20 | $ | 0.79 | ||||||
Weighted average common shares outstanding - basic | 137,942 | 137,387 | 137,006 | |||||||||
Weighted average common shares outstanding - diluted | 139,730 | 138,563 | 137,609 | |||||||||
Refer to Exhibit 8 for footnote explanations. |
UnionBanCal Corporation and Subsidiaries | |||||||||||||||
Consolidated Balance Sheets | |||||||||||||||
Exhibit 3 | |||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
March 31, | December 31, | March 31, | |||||||||||||
(Dollars in thousands) | 2007 | 2007 | 2008 | ||||||||||||
Assets | |||||||||||||||
Cash and due from banks | $ | 1,913,937 | $ | 2,106,930 | $ | 2,071,971 | |||||||||
Interest bearing deposits in banks | 1,008,327 | 104,528 | 1,000 | ||||||||||||
Federal funds sold and securities purchased under resale agreements | 2,747,300 | 310,178 | 125,940 | ||||||||||||
Total cash and cash equivalents | 5,669,564 | 2,521,636 | 2,198,911 | ||||||||||||
Trading account assets | 297,998 | 603,333 | 811,509 | ||||||||||||
Securities available for sale: | |||||||||||||||
Securities pledged as collateral | 62,026 | 685,123 | 642,346 | ||||||||||||
Held in portfolio | 8,524,615 | 7,770,048 | 7,667,970 | ||||||||||||
Loans (net of allowance for loan losses: March 31, 2007, $332,679; December 31, 2007, $402,726; March 31, 2008, $462,943) | |||||||||||||||
36,919,271 | 40,801,462 | 43,037,025 | |||||||||||||
Due from customers on acceptances | 18,099 | 16,482 | 15,984 | ||||||||||||
Premises and equipment, net | 489,553 | 490,197 | 490,419 | ||||||||||||
Intangible assets | 24,321 | 18,568 | 17,221 | ||||||||||||
Goodwill | 453,489 | 448,718 | 429,987 | ||||||||||||
Other assets | 2,146,638 | 2,364,577 | 2,611,140 | ||||||||||||
Assets of discontinued operations to be disposed or sold | 11,275 | 7,604 | 10,813 | ||||||||||||
Total assets | $ | 54,616,849 | $ | 55,727,748 | $ | 57,933,325 | |||||||||
Liabilities | |||||||||||||||
Noninterest bearing | 16,175,360 | 13,802,640 | 13,997,843 | ||||||||||||
Interest bearing | 27,510,346 | 28,877,551 | 31,242,978 | ||||||||||||
Total deposits | 43,685,706 | 42,680,191 | 45,240,821 | ||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 549,545 | 1,631,602 | 1,785,044 | ||||||||||||
Commercial paper | 1,424,401 | 1,266,656 | 1,299,930 | ||||||||||||
Other borrowed funds | 892,349 | 1,875,623 | 921,519 | ||||||||||||
Trading account liabilities | 162,613 | 351,057 | 629,166 | ||||||||||||
Acceptances outstanding | 18,099 | 16,482 | 15,984 | ||||||||||||
Other liabilities | 1,130,090 | 1,132,103 | 1,230,985 | ||||||||||||
Medium and long-term debt | 2,071,263 | 1,913,622 | 1,963,952 | ||||||||||||
Junior subordinated debt payable to subsidiary grantor trust | 14,772 | 14,432 | 14,319 | ||||||||||||
Liabilities of discontinued operations to be extinguished or assumed | 112,572 | 107,999 | 118,399 | ||||||||||||
Total liabilities | 50,061,410 | 50,989,767 | 53,220,119 | ||||||||||||
Stockholders' Equity | |||||||||||||||
Preferred stock: | |||||||||||||||
Authorized 5,000,000 shares; no shares issued or outstanding as of March 31, 2007, December 31, 2007 and March 31, 2008 | |||||||||||||||
- | - | - | |||||||||||||
Common stock, par value $1 per share: | |||||||||||||||
Authorized 300,000,000 shares; issued 156,832,956 shares as of March 31, 2007, 157,559,521 shares as of December 31, 2007 and 157,670,426 shares as of March 31, 2008 | |||||||||||||||
156,833 | 157,559 | 157,670 | |||||||||||||
Additional paid-in capital | 1,109,817 | 1,153,737 | 1,167,391 | ||||||||||||
Treasury stock - 18,715,586 shares as of March 31, 2007, 19,723,453 shares as of December 31, 2007 and 19,725,529 shares as of March 31, 2008 | |||||||||||||||
(1,150,090 | ) | (1,202,584 | ) | (1,202,685 | ) | ||||||||||
Retained earnings | 4,669,590 | 4,912,392 | 4,949,040 | ||||||||||||
Accumulated other comprehensive loss | (230,711 | ) | (283,123 | ) | (358,210 | ) | |||||||||
Total stockholders' equity | 4,555,439 | 4,737,981 | 4,713,206 | ||||||||||||
Total liabilities and stockholders' equity | $ | 54,616,849 | $ | 55,727,748 | $ | 57,933,325 |
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Loans (Unaudited) | ||||||||||||||||||||
Exhibit 4 | ||||||||||||||||||||
Percent Change to | ||||||||||||||||||||
Three Months Ended | December 31, 2007 from | |||||||||||||||||||
March 31, | December 31, | March 31, | March 31, | December 31, | ||||||||||||||||
(Dollars in millions) | 2007 | 2007 | 2008 | 2007 | 2007 | |||||||||||||||
Loans (period average) | ||||||||||||||||||||
Commercial, financial and industrial | $ | 14,681 | $ | 14,633 | $ | 15,569 | 6.05% | 6.40% | ||||||||||||
Construction | 2,233 | 2,437 | 2,474 | 10.79% | 1.52% | |||||||||||||||
Mortgage - Commercial | 6,064 | 6,786 | 7,251 | 19.57% | 6.85% | |||||||||||||||
Mortgage - Residential | 12,384 | 13,658 | 13,988 | 12.95% | 2.42% | |||||||||||||||
Consumer | 2,542 | 2,618 | 2,686 | 5.66% | 2.60% | |||||||||||||||
Lease financing | 548 | 638 | 650 | 18.61% | 1.88% | |||||||||||||||
Total loans held to maturity | 38,452 | 40,770 | 42,618 | 10.83% | 4.53% | |||||||||||||||
Total loans held for sale | 6 | 117 | 83 | nm | (29.06%) | |||||||||||||||
Total loans | $ | 38,458 | $ | 40,887 | $ | 42,701 | 11.03% | 4.44% | ||||||||||||
Nonperforming Assets (period end) | ||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||
Commercial, financial and industrial | $ | 5 | $ | 29 | $ | 47 | nm | 62.07% | ||||||||||||
Construction | - | - | 55 | nm | nm | |||||||||||||||
Mortgage - Commercial | 22 | 14 | 24 | 9.09% | 71.43% | |||||||||||||||
Lease financing | 15 | 13 | - | (100.00%) | (100.00%) | |||||||||||||||
Total nonaccrual loans | 42 | 56 | 126 | nm | nm | |||||||||||||||
Restructured loans | ||||||||||||||||||||
Mortgage - Residential | - | - | 1 | nm | nm | |||||||||||||||
Foreclosed assets | - | 1 | 5 | nm | nm | |||||||||||||||
Total nonperforming assets | $ | 42 | $ | 57 | $ | 132 | nm | nm | ||||||||||||
Loans 90 days or more past due and still accruing | ||||||||||||||||||||
$ | 6 | $ | 22 | $ | 30 | nm | 36.36% | |||||||||||||
Analysis of Allowances for Credit Losses | ||||||||||||||||||||
Beginning balance | $ | 331 | $ | 350 | $ | 403 | ||||||||||||||
Provision for loan losses | 4 | 56 | 72 | |||||||||||||||||
Loans charged off: | ||||||||||||||||||||
Commercial, financial and industrial | (3) | (4) | (10) | |||||||||||||||||
Consumer | (1) | (2) | (3) | |||||||||||||||||
Total loans charged off | (4) | (6) | (13) | |||||||||||||||||
Loans recovered: | ||||||||||||||||||||
Commercial, financial and industrial | 2 | 2 | 1 | |||||||||||||||||
Consumer | - | 1 | - | |||||||||||||||||
Total loans recovered | 2 | 3 | 1 | |||||||||||||||||
Net loans recovered (charged off) | (2) | (3) | (12) | |||||||||||||||||
Ending balance of allowance for loan losses | 333 | 403 | 463 | |||||||||||||||||
Allowance for off-balance sheet commitment losses | ||||||||||||||||||||
82 | 90 | 98 | ||||||||||||||||||
$ | - | |||||||||||||||||||
Allowances for credit losses | $ | 415 | $ | 493 | $ | 561 | ||||||||||||||
Refer to Exhibit 8 for footnote explanations. |
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||||||
Net Interest Income (Unaudited) | ||||||||||||||||||||||||
Exhibit 5 | ||||||||||||||||||||||||
For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||
March 31, 2007 | March 31, 2008 | |||||||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||||||
(Dollars in thousands) | Balance | Expense (10) | Rate (6)(10) | Balance | Expense (10) | Rate (6)(10) | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Loans (11) | ||||||||||||||||||||||||
Commercial, financial and industrial | $ | 14,684,098 | $ | 237,278 | 6.55 | % | $ | 15,647,162 | $ | 238,303 | 6.13 | % | ||||||||||||
Construction | 2,233,131 | 42,775 | 7.77 | 2,474,323 | 36,617 | 5.95 | ||||||||||||||||||
Residential mortgage | 12,386,306 | 163,766 | 5.29 | 13,992,743 | 192,785 | 5.51 | ||||||||||||||||||
Commercial mortgage | 6,064,169 | 106,966 | 7.15 | 7,250,747 | 112,970 | 6.23 | ||||||||||||||||||
Consumer | 2,542,507 | 48,979 | 7.81 | 2,686,635 | 46,390 | 6.94 | ||||||||||||||||||
Lease financing | 547,803 | 3,738 | 2.73 | 649,843 | 6,297 | 3.88 | ||||||||||||||||||
Total loans | 38,458,014 | 603,502 | 6.34 | 42,701,453 | 633,362 | 5.95 | ||||||||||||||||||
Securities - taxable | 8,580,315 | 107,268 | 5.00 | 8,355,954 | 104,964 | 5.02 | ||||||||||||||||||
Securities - tax-exempt | 57,654 | 1,154 | 8.01 | 53,359 | 1,082 | 8.11 | ||||||||||||||||||
Interest bearing deposits in banks | 79,562 | 1,109 | 5.65 | 29,869 | 128 | 1.72 | ||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | ||||||||||||||||||||||||
846,042 | 11,152 | 5.35 | 328,145 | 2,693 | 3.30 | |||||||||||||||||||
Trading account assets | 333,363 | 1,701 | 2.07 | 719,316 | 2,804 | 1.57 | ||||||||||||||||||
Total earning assets | 48,354,950 | 725,886 | 6.06 | 52,188,096 | 745,033 | 5.72 | ||||||||||||||||||
Allowance for loan losses | (330,277 | ) | (399,280 | ) | ||||||||||||||||||||
Cash and due from banks | 1,949,232 | 1,757,365 | ||||||||||||||||||||||
Premises and equipment, net | 491,449 | 487,928 | ||||||||||||||||||||||
Other assets | 2,497,257 | 2,714,615 | ||||||||||||||||||||||
Total assets | $ | 52,962,611 | $ | 56,748,724 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Transaction accounts | $ | 13,534,373 | 91,505 | 2.74 | $ | 14,864,561 | 82,915 | 2.24 | ||||||||||||||||
Savings and consumer time | 4,297,383 | 26,855 | 2.53 | 4,179,663 | 23,529 | 2.26 | ||||||||||||||||||
Large time | 8,435,137 | 103,795 | 4.99 | 11,962,678 | 114,216 | 3.84 | ||||||||||||||||||
Total interest bearing deposits | 26,266,893 | 222,155 | 3.43 | 31,006,902 | 220,660 | 2.86 | ||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | ||||||||||||||||||||||||
1,046,439 | 13,524 | 5.24 | 1,950,692 | 15,566 | 3.21 | |||||||||||||||||||
Net funding allocated from (to) discontinued operations (12) | ||||||||||||||||||||||||
107,715 | 1,392 | 5.24 | 109,356 | 930 | 3.42 | |||||||||||||||||||
Commercial paper | 1,783,758 | 22,264 | 5.06 | 1,207,510 | 9,792 | 3.26 | ||||||||||||||||||
Other borrowed funds (13) | 1,309,102 | 17,281 | 5.35 | 1,566,301 | 16,066 | 4.13 | ||||||||||||||||||
Medium and long-term debt | 1,371,446 | 19,695 | 5.82 | 1,846,885 | 19,457 | 4.24 | ||||||||||||||||||
Trust notes | 14,827 | 238 | 6.43 | 14,374 | 238 | 6.63 | ||||||||||||||||||
Total borrowed funds | 5,633,287 | 74,394 | 5.36 | 6,695,118 | 62,049 | 3.73 | ||||||||||||||||||
Total interest bearing liabilities | 31,900,180 | 296,549 | 3.77 | 37,702,020 | 282,709 | 3.02 | ||||||||||||||||||
Noninterest bearing deposits | 15,098,289 | 12,606,852 | ||||||||||||||||||||||
Other liabilities | 1,453,937 | 1,721,443 | ||||||||||||||||||||||
Total liabilities | 48,452,406 | 52,030,315 | ||||||||||||||||||||||
Stockholders' Equity | ||||||||||||||||||||||||
Common equity | 4,510,205 | 4,718,409 | ||||||||||||||||||||||
Total stockholders' equity | 4,510,205 | 4,718,409 | ||||||||||||||||||||||
Total liabilities and stockholders' equity | ||||||||||||||||||||||||
$ | 52,962,611 | $ | 56,748,724 | |||||||||||||||||||||
Reported Net Interest Income/Margin | ||||||||||||||||||||||||
Net interest income/margin (taxable-equivalent basis) | ||||||||||||||||||||||||
429,337 | 3.57 | % | 462,324 | 3.54 | % | |||||||||||||||||||
Less: taxable-equivalent adjustment | 2,115 | 2,526 | ||||||||||||||||||||||
Net interest income | $ | 427,222 | $ | 459,798 | ||||||||||||||||||||
Average Assets and Liabilities of Discontinued Operations for Period Ended: | ||||||||||||||||||||||||
March 31, 2007 | March 31, 2008 | |||||||||||||||||||||||
Assets | $ | 10,592 | $ | 7,440 | ||||||||||||||||||||
Liabilities | $ | 118,307 | $ | 116,796 | ||||||||||||||||||||
Net Liabilities | $ | (107,715 | ) | $ | (109,356 | ) | ||||||||||||||||||
Refer to Exhibit 8 for footnote explanations. |
UnionBanCal Corporation and Subsidiaries | |||||||||||||||||||||||
Net Interest Income (Unaudited) | |||||||||||||||||||||||
Exhibit 6 | |||||||||||||||||||||||
For the Three Months Ended | For the Three Months Ended | ||||||||||||||||||||||
December 31, 2007 | March 31, 2008 | ||||||||||||||||||||||
Interest | Average | Interest | Average | ||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||
(Dollars in thousands) | Balance | Expense (10) | Rate (6)(10) | Balance | Expense (10) | Rate (6)(10) | |||||||||||||||||
Assets | |||||||||||||||||||||||
Loans: (11) | |||||||||||||||||||||||
Commercial, financial and industrial | $ | 14,745,251 | $ | 250,542 | 6.74 | % | $ | 15,647,162 | $ | 238,303 | 6.13 | % | |||||||||||
Construction | 2,436,921 | 44,393 | 7.23 | 2,474,323 | 36,617 | 5.95 | |||||||||||||||||
Residential mortgage | 13,663,048 | 187,372 | 5.49 | 13,992,743 | 192,785 | 5.51 | |||||||||||||||||
Commercial mortgage | 6,786,416 | 116,974 | 6.84 | 7,250,747 | 112,970 | 6.23 | |||||||||||||||||
Consumer | 2,617,949 | 50,202 | 7.61 | 2,686,635 | 46,390 | 6.94 | |||||||||||||||||
Lease financing | 637,791 | 6,450 | 4.05 | 649,843 | 6,297 | 3.88 | |||||||||||||||||
Total loans | 40,887,376 | 655,933 | 6.38 | 42,701,453 | 633,362 | 5.95 | |||||||||||||||||
Securities - taxable | 8,443,508 | 112,924 | 5.35 | 8,355,954 | 104,964 | 5.02 | |||||||||||||||||
Securities - tax-exempt | 54,155 | 1,098 | 8.11 | 53,359 | 1,082 | 8.11 | |||||||||||||||||
Interest bearing deposits in banks | 4,505 | 163 | 14.29 | 29,869 | 128 | 1.72 | |||||||||||||||||
Federal funds sold and securities | |||||||||||||||||||||||
purchased under resale agreements | 236,411 | 2,603 | 4.37 | 328,145 | 2,693 | 3.30 | |||||||||||||||||
Trading account assets | 530,999 | 3,448 | 2.58 | 719,316 | 2,804 | 1.57 | |||||||||||||||||
Total earning assets | 50,156,954 | 776,169 | 6.16 | 52,188,096 | 745,033 | 5.72 | |||||||||||||||||
Allowance for loan losses | (349,409 | ) | (399,280 | ) | |||||||||||||||||||
Cash and due from banks | 1,818,633 | 1,757,365 | |||||||||||||||||||||
Premises and equipment, net | 483,751 | 487,928 | |||||||||||||||||||||
Other assets | 2,671,779 | 2,714,615 | |||||||||||||||||||||
Total assets | $ | 54,781,708 | $ | 56,748,724 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||
Transaction accounts | $ | 14,605,230 | 106,517 | 2.89 | $ | 14,864,561 | 82,915 | 2.24 | |||||||||||||||
Savings and consumer time | 4,411,122 | 30,469 | 2.74 | 4,179,663 | 23,529 | 2.26 | |||||||||||||||||
Large time | 10,727,470 | 126,522 | 4.68 | 11,962,678 | 114,216 | 3.84 | |||||||||||||||||
Total interest bearing deposits | 29,743,822 | 263,508 | 3.51 | 31,006,902 | 220,660 | 2.86 | |||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | |||||||||||||||||||||||
1,605,100 | 18,371 | 4.54 | 1,950,692 | 15,566 | 3.21 | ||||||||||||||||||
Net funding allocated from (to) | |||||||||||||||||||||||
discontinued operations (12) | 95,570 | 1,094 | 4.54 | 109,356 | 930 | 3.42 | |||||||||||||||||
Commercial paper | 1,469,372 | 16,838 | 4.55 | 1,207,510 | 9,792 | 3.26 | |||||||||||||||||
Other borrowed funds (13) | 788,853 | 9,610 | 4.83 | 1,566,301 | 16,066 | 4.13 | |||||||||||||||||
Medium and long-term debt | 1,846,780 | 25,471 | 5.47 | 1,846,885 | 19,457 | 4.24 | |||||||||||||||||
Trust notes | 14,487 | 238 | 6.58 | 14,374 | 238 | 6.63 | |||||||||||||||||
Total borrowed funds | 5,820,162 | 71,622 | 4.88 | 6,695,118 | 62,049 | 3.73 | |||||||||||||||||
Total interest bearing liabilities | 35,563,984 | 335,130 | 3.74 | 37,702,020 | 282,709 | 3.02 | |||||||||||||||||
Noninterest bearing deposits | 13,092,055 | 12,606,852 | |||||||||||||||||||||
Other liabilities | 1,478,199 | 1,721,443 | |||||||||||||||||||||
Total liabilities | 50,134,238 | 52,030,315 | |||||||||||||||||||||
Stockholders' Equity | |||||||||||||||||||||||
Common equity | 4,647,470 | 4,718,409 | |||||||||||||||||||||
Total stockholders' equity | 4,647,470 | 4,718,409 | |||||||||||||||||||||
Total liabilities and stockholders' equity | |||||||||||||||||||||||
$ | 54,781,708 | $ | 56,748,724 | ||||||||||||||||||||
Reported Net Interest Income/Margin | |||||||||||||||||||||||
Net interest income/margin (taxable-equivalent basis) | |||||||||||||||||||||||
441,039 | 3.51 | % | 462,324 | 3.54 | % | ||||||||||||||||||
Less: taxable-equivalent adjustment | 2,517 | 2,526 | |||||||||||||||||||||
Net interest income | $ | 438,522 | $ | 459,798 | |||||||||||||||||||
Average Assets and Liabilities of Discontinued Operations for Period Ended: | |||||||||||||||||||||||
December 31, 2007 | March 31, 2008 | ||||||||||||||||||||||
Assets | $ | 8,311 | $ | 7,440 | |||||||||||||||||||
Liabilities | $ | 103,881 | $ | 116,796 | |||||||||||||||||||
Net Liabilities | $ | (95,570 | ) | $ | (109,356 | ) | |||||||||||||||||
Refer to Exhibit 8 for footnote explanations. |
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Noninterest income (Unaudited) | ||||||||||||||||||||
Exhibit 7 | ||||||||||||||||||||
Percentage Change to | ||||||||||||||||||||
For the Three Months Ended | March 31, 2008 from | |||||||||||||||||||
March 31, | December 31, | March 31, | March 31,
| December 31, | ||||||||||||||||
(Dollars in thousands) | 2007 | 2007 | 2008 | 2007
| 2007 | |||||||||||||||
Service charges on deposit accounts | $ | 74,945 | $ | 75,989 | $ | 74,736 | (0.28 | ) | % | (1.65 | ) | % | ||||||||
Trust and investment management fees | 36,860 | 41,672 | 43,388 | 17.71 | 4.12 | |||||||||||||||
Insurance commissions | 20,250 | 16,557 | 17,393 | (14.11 | ) | 5.05 | ||||||||||||||
Merchant banking fees | 9,077 | 16,206 | 11,793 | 29.92 | (27.23 | ) | ||||||||||||||
Trading account activities | 14,840 | 15,135 | 11,012 | (25.80 | ) | (27.24 | ) | |||||||||||||
Brokerage commissions and fees | 9,660 | 10,170 | 9,859 | 2.06 | (3.06 | ) | ||||||||||||||
Card processing fees, net | 7,127 | 7,571 | 7,764 | 8.94 | 2.55 | |||||||||||||||
Securities gains (losses), net | 1,220 | - | (2 | ) | nm | nm | ||||||||||||||
Gains on private capital investments, net | 9,095 | 2,412 | 1,070 | (88.24 | ) | (55.64 | ) | |||||||||||||
Gain on the VISA IPO redemption | - | - | 14,211 | nm | nm | |||||||||||||||
Other | 27,784 | 29,801 | 21,394 | (23.00 | ) | (28.21 | ) | |||||||||||||
Total noninterest income | $ | 210,858 | $ | 215,513 | $ | 212,618 | 0.83 | % | (1.34 | ) | % | |||||||||
Noninterest expense (Unaudited) | ||||||||||||||||||||
Percentage Change to | ||||||||||||||||||||
For the Three Months Ended | March 31, 2008 from | |||||||||||||||||||
March 31, | December 31, | March 31, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2007 | 2007 | 2008 | 2007 | 2007 | |||||||||||||||
Salaries and other compensation | $ | 202,494 | $ | 198,804 | $ | 201,498 | (0.49 | ) | % | 1.36 | % | |||||||||
Employee benefits | 49,341 | 38,031 | 51,931 | 5.25 | 36.55 | |||||||||||||||
Salaries and employee benefits | 251,835 | 236,835 | 253,429 | 0.63 | 7.01 | |||||||||||||||
Net occupancy | 34,459 | 37,467 | 37,011 | 7.41 | (1.22 | ) | ||||||||||||||
Intangible asset amortization | 1,926 | 1,901 | 20,078 | nm | nm | |||||||||||||||
Outside services | 18,170 | 21,071 | 17,138 | (5.68 | ) | (18.67 | ) | |||||||||||||
Equipment | 16,333 | 16,677 | 15,637 | (4.26 | ) | (6.24 | ) | |||||||||||||
Software | 13,599 | 15,965 | 15,125 | 11.22 | (5.26 | ) | ||||||||||||||
Professional services | 16,927 | 22,281 | 14,889 | (12.04 | ) | (33.18 | ) | |||||||||||||
Communications | 9,306 | 9,847 | 9,517 | 2.27 | (3.35 | ) | ||||||||||||||
Advertising and public relations | 8,367 | 12,487 | 8,239 | (1.53 | ) | (34.02 | ) | |||||||||||||
Data processing | 8,184 | 8,221 | 7,076 | (13.54 | ) | (13.93 | ) | |||||||||||||
Foreclosed asset expense | 9 | 55 | 89 | nm | 61.82 | |||||||||||||||
Provision for losses on | ||||||||||||||||||||
off-balance sheet commitments | 1,000 | 4,000 | 8,000 | nm | 100.00 | |||||||||||||||
Other | 30,751 | 46,876 | 30,774 | 0.07 | (34.35 | ) | ||||||||||||||
Total noninterest expense | $ | 410,866 | $ | 433,683 | $ | 437,002 | 6.36 | % | 0.77 | % | ||||||||||
Refer to Exhibit 8 for footnote explanations. |
UnionBanCal Corporation and Subsidiaries | ||
Footnotes | ||
Exhibit 8 | ||
(1) | Taxable-equivalent basis. | |
(2) | Dividends per share reflect dividends declared on UnionBanCal Corporation's common stock outstanding as of the declaration date. | |
(3) | Common shares outstanding reflect common shares issued less treasury shares. Weighted average common shares outstanding (basic) excludes nonvested restricted shares but includes the impact of those shares in the calculation of diluted shares. | |
(4) | End of period total assets and assets used in calculating these ratios include those of discontinued operations. | |
(5) | Average balances used to calculate our financial ratios are based on continuing operations data only, unless otherwise indicated. | |
(6) | Annualized. | |
(7) | The efficiency ratio is noninterest expense, excluding foreclosed asset expense (income) and the (reversal of) provision for losses on off-balance sheet commitments, as a percentage of net interest income (taxable-equivalent basis) and noninterest income, and is calculated for continuing operations only. | |
| ||
(8) | Estimated as of March 31, 2008. The regulatory capital and leverage ratios include discontinued operations. | |
(9) | The allowance for credit losses ratios include the allowances for loan losses and losses on off-balance sheet commitments. These ratios relate to continuing operations only. | |
(10) | Yields and interest income are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent. | |
(11) | Average balances on loans outstanding include all nonperforming loans and loans held for sale. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield. | |
(12) | Net funding allocated from (to) discontinued operations represents the shortage (excess) of assets over liabilities of discontinued operations. The expense (earning) on funds allocated from (to) discontinued operations is calculated by taking the net balance and applying an earnings rate or a cost of funds equivalent to the corresponding period's Federal funds purchased rate. | |
(13) | Includes interest bearing trading liabilities. | |
nm = not meaningful |
CONTACT:
UnionBanCal Corporation
John A. Rice, Jr., 415-765-2998 (Investor Relations)
Stephen L. Johnson, 415-765-3252 (Public Relations)
Michelle R. Crandall, 415-765-2780 (Investor Relations)