Exhibit 99.1
UnionBanCal Corporation Reports Third Quarter Net Income of $124 Million
Third Quarter Highlights:
- Net income was $124 million, down from $187 million for the prior quarter, and down from $172 million for the year-ago quarter.
- Total provision for credit losses was $41 million, compared with a benefit of $15 million for the prior quarter, and a benefit of $13 million for the year-ago quarter. Provision increase from the prior quarter was primarily due to implementation of recently issued regulatory guidance on treatment of certain residential loans and heightened levels of uncertainty in the macroeconomic outlook.
- Solid underlying credit quality metrics. Excluding FDIC covered assets:
- Nonperforming assets at quarter-end were $526 million, or 0.60 percent of total assets, including a $35 million reclassification of performing residential mortgage and consumer loans to nonaccrual status, down from $539 million, or 0.62 percent of total assets, at June 30, 2012.
- Net charge-offs for third quarter were $40 million, or an annualized 0.29 percent of average total loans, including $17 million in residential mortgage and home equity net charge-offs due to implementation of recently issued regulatory guidance, compared with $29 million, or an annualized 0.21 percent of average total loans for prior quarter.
- Net interest margin was 3.32 percent, up from 3.29 percent for the prior quarter, and up from 3.31 percent for the year-ago quarter.
- Average total loans, excluding FDIC covered loans, were $54.7 billion, up from $54.1 billion for the prior quarter, and up from $49.0 billion for the year-ago quarter.
- Core deposits at September 30, 2012, were $55.1 billion, up from $53.4 billion at June 30, 2012, and up from $50.7 billion at September 30, 2011.
- Capital ratios remained strong during the quarter:
- Tier 1 common capital ratio, measured using Basel I risk-weighted assets, was 13.76 percent at September 30, 2012, down 2 basis points from 13.78 percent at June 30, 2012.
- Tangible common equity ratio was 11.46 percent at September 30, 2012, up 42 basis points from 11.04 percent at June 30, 2012.
SAN FRANCISCO--(BUSINESS WIRE)--October 25, 2012--UnionBanCal Corporation (the Company), parent company of San Francisco-based Union Bank, N.A., today reported third quarter 2012 results. Net income for third quarter was $124 million, down from $187 million for the prior quarter, and down from $172 million for the year-ago quarter. The primary driver of the decrease in reported net income from second quarter was a provision for credit losses compared to a benefit for the prior quarter, which was largely due to the implementation of recently issued regulatory guidance. The guidance requires that loans discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower be charged off to their collateral value and considered nonaccrual, regardless of their delinquency status. Heightened levels of uncertainty in the macroeconomic outlook also contributed to the provision for credit losses. Additionally, noninterest expense increased primarily due to a prepayment fee paid for early extinguishment of wholesale borrowings, which was partially offset by higher gains on the sale of securities in the current quarter, both resulting from strategic securities portfolio rebalancing activities.
Summary of Third Quarter Results
Third Quarter Total Revenue
For third quarter 2012, total revenue (net interest income plus noninterest income) was $843 million, up $9 million, or 1 percent, compared with second quarter 2012. Net interest income decreased 1 percent, and noninterest income increased 8 percent. The net interest margin was 3.32 percent, up slightly compared with 3.29 percent for the prior quarter.
Net interest income for third quarter 2012 was $654 million, down $5 million, or 1 percent, compared with second quarter 2012. The decrease in net interest income was primarily due to a decline in average earning assets related to securities portfolio rebalancing activities that resulted in a modest increase in net interest margin.
Average total loans, excluding FDIC covered loans, increased $518 million, or 1 percent, compared with second quarter 2012, primarily due to growth in commercial and industrial loans and residential mortgage loans. Average FDIC covered loans decreased $170 million, or 21 percent, due to runoff of the portfolio. Average noninterest bearing deposits increased $897 million, or 4 percent. Average interest bearing deposits decreased $976 million, or 2 percent, primarily due to a decrease in time deposits.
For third quarter 2012, noninterest income was $189 million, up $14 million, or 8 percent, compared with second quarter 2012. Noninterest income increased primarily due to higher net gains on the sale of securities due to portfolio rebalancing activities and higher merchant banking fees from higher syndication activities.
Compared with third quarter 2011, total revenue grew $52 million, with net interest income up 8 percent and noninterest income up 2 percent. Net interest income increased $48 million compared with the year-ago quarter, primarily due to growth in both non-FDIC covered loans and securities, as well as a more favorable mix of total earning assets.
Average total loans, excluding FDIC covered loans, increased $5.6 billion, or 11 percent, compared with third quarter 2011, primarily due to growth in commercial and industrial loans and residential mortgage loans. Average FDIC covered loans decreased $550 million, or 47 percent, due to runoff of the portfolio. Average interest bearing deposits increased $2.2 billion, or 5 percent, and average noninterest bearing deposits increased $2.7 billion, or 14 percent.
Noninterest income increased $4 million, or 2 percent, compared with third quarter 2011, primarily due to higher net gains on the sale of securities related to portfolio rebalancing activities in third quarter 2012. Offsets to the securities gains included the impact of amortization adjustments to the FDIC indemnification asset, lower card processing fees due to lower per-transaction fees charged, and lower trust and investment management fees due to the sale of certain business units in first quarter 2012.
Third Quarter Noninterest Expense
Noninterest expense for third quarter 2012 was $638 million, up $39 million, or 7 percent, compared with second quarter 2012. Salaries and employee benefits expense increased $5 million. Non-staff expense increased $34 million, primarily due to a prepayment fee for early extinguishment of wholesale borrowings, recorded in third quarter.
Noninterest expense for third quarter 2012 was up $35 million, or 6 percent, compared with third quarter 2011, primarily due to a prepayment fee for early extinguishment of wholesale borrowings, recorded in third quarter 2012.
Balance Sheet
At September 30, 2012, the Company had total assets of $88.2 billion, down $1.5 billion, or 2 percent, compared with December 31, 2011. Loan growth, excluding FDIC covered loans, of $2.3 billion during the first nine months of 2012 was offset by decreased interest bearing deposits in banks and decreased securities available for sale. On September 30, 2012, the Company transferred certain of its Collateralized Loan Obligation (CLO) debt securities with a carrying value of $1.1 billion from held to maturity to available for sale, due to a significant increase in risk weights under regulatory capital rules proposed by the U.S. federal banking agencies in June 2012. Accordingly, the Company no longer intends to hold these securities to maturity.
At September 30, 2012, total deposits were $65.1 billion, up $0.7 billion, or 1 percent, compared with December 31, 2011. Core deposits at September 30, 2012, were $55.1 billion, up $2.3 billion, or 4 percent, compared with December 31, 2011.
Credit Quality
Reported credit quality metrics for the quarter were impacted by the implementation in third quarter of regulatory guidance that affected residential mortgage and home equity loans to borrowers whose obligations have been discharged in Chapter 7 bankruptcy where the borrower has not reaffirmed the debt. Implementation of the regulatory guidance affected nonperforming loans and net charge-offs as follows:
- $35 million reclassification of performing residential mortgage and consumer loans to nonaccrual status
- $17 million increase in net charge-offs
Nonperforming assets, excluding FDIC covered assets, ended the quarter at $526 million, down from $539 million at June 30, 2102, and down from $690 million at September 30, 2011. The decrease of $13 million, or 2 percent, compared with prior quarter included a $35 million increase in nonaccrual loans resulting from implementation of the regulatory guidance.
Excluding FDIC covered assets, net charge-offs for third quarter 2012 were $40 million, or an annualized 0.29 percent of average total loans for third quarter 2012, up from net charge-offs of $29 million, or an annualized 0.21 percent of average total loans, for second quarter 2012, and down from $43 million, or an annualized 0.36 percent of average total loans for third quarter 2011. The increase of $11 million compared with prior quarter included a $17 million increase in residential mortgage and home equity net charge-offs resulting from implementation of the regulatory guidance.
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. In third quarter 2012, the provision for loan losses was $45 million and the reversal of provision for losses on off-balance sheet commitments was a benefit of $4 million, for a total provision for credit losses of $41 million for third quarter 2012. This compares with a benefit of $15 million for second quarter 2012. The primary drivers of the higher provision were higher charge-offs in the residential mortgage and consumer loan portfolios due to the recently issued regulatory guidance and heightened levels of uncertainty in the macroeconomic outlook.
The allowance for credit losses as a percent of total loans, excluding FDIC covered loans, was 1.43 percent at September 30, 2012, compared with 1.46 percent at June 30, 2012, and 1.77 percent at September 30, 2011. The allowance for credit losses as a percent of nonaccrual loans, excluding FDIC covered loans, was 155 percent at September 30, 2012, compared with 153 percent at June 30, 2012, and 132 percent at September 30, 2011.
Capital
At September 30, 2012, total stockholder’s equity was $12.4 billion, up $875 million, or 8 percent, since December 31, 2011, and tangible common equity was $9.8 billion, up $924 million, or 10 percent, since December 31, 2011. The Company’s tangible common equity ratio was 11.46 percent at September 30, 2012, up 126 basis points from 10.20 percent at December 31, 2011. The Basel I Tier 1 common and Tier 1 risk-based capital ratios were both 13.76 percent at September 30, 2012. Additionally, the Basel I Total risk-based capital ratio was 15.50 percent at September 30, 2012.
Non-GAAP Financial Measures
This press release contains certain references to financial measures identified as excluding privatization transaction impact, foreclosed asset expense, (reversal of) provision for losses on off-balance sheet commitments, productivity initiative costs and gains, low income housing credit (LIHC) investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger costs related to acquisitions, debt termination fees from balance sheet repositioning, or gains from securities associated with debt termination fees from balance sheet repositioning, 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 or credits. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. 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 business results. This press release also includes additional capital ratios (the tangible common equity and Basel I Tier 1 common capital ratios) to facilitate the understanding of the Company’s capital structure and for use in assessing and comparing the quality and composition of UnionBanCal’s capital structure to other financial institutions. 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.
Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $88.2 billion at September 30, 2012. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank operated 402 branches in California, Washington, Oregon, Texas, Illinois, and New York as well as two international offices, on September 30, 2012. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world’s largest financial organizations. Visit www.unionbank.com for more information.
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||||||||
Financial Highlights (Unaudited) | ||||||||||||||||||||||||||
Exhibit 1 | ||||||||||||||||||||||||||
As of and for the Three Months Ended | Percent Change to September 30, 2012 from | |||||||||||||||||||||||||
(Dollars in millions) | September 30, | June 30, | March 31, 2012 | December 31, 2011 | September 30, 2011 | June 30, 2012 | September 30, 2011 | |||||||||||||||||||
Results of operations: | ||||||||||||||||||||||||||
Net interest income | $ | 654 | $ | 659 | $ | 653 | $ | 640 | $ | 606 | (1 | ) | % | 8 | % | |||||||||||
Noninterest income | 189 | 175 | 202 | 151 | 185 | 8 | 2 | |||||||||||||||||||
Total revenue | 843 | 834 | 855 | 791 | 791 | 1 | 7 | |||||||||||||||||||
Noninterest expense | 638 | 599 | 614 | 619 | 603 | 7 | 6 | |||||||||||||||||||
Pre-tax, pre-provision income (1) | 205 | 235 | 241 | 172 | 188 | (13 | ) | 9 | ||||||||||||||||||
(Reversal of) provision for loan losses | 45 | (14 | ) | (1 | ) | 7 | (13 | ) | 421 | 446 | ||||||||||||||||
Income before income taxes and including noncontrolling interests | 160 | 249 | 242 | 165 | 201 | (36 | ) | (20 | ) | |||||||||||||||||
Income tax expense | 42 | 67 | 51 | 40 | 33 | (37 | ) | 27 | ||||||||||||||||||
Net income including noncontrolling interests | 118 | 182 | 191 | 125 | 168 | (35 | ) | (30 | ) | |||||||||||||||||
Deduct: Net loss from noncontrolling interests | 6 | 5 | 4 | 4 | 4 | 20 | 50 | |||||||||||||||||||
Net income attributable to UnionBanCal Corporation (UNBC) | $ | 124 | $ | 187 | $ | 195 | $ | 129 | $ | 172 | (34 | ) | (28 | ) | ||||||||||||
Balance sheet (end of period): | ||||||||||||||||||||||||||
Total assets | $ | 88,185 | $ | 87,939 | $ | 92,323 | $ | 89,676 | $ | 84,013 | - | 5 | ||||||||||||||
Total securities | 22,089 | 22,890 | 25,432 | 24,106 | 20,962 | (3 | ) | 5 | ||||||||||||||||||
Total loans held for investment | 55,410 | 54,291 | 54,322 | 53,540 | 50,998 | 2 | 9 | |||||||||||||||||||
Core deposits (2) | 55,141 | 53,378 | 53,125 | 52,840 | 50,720 | 3 | 9 | |||||||||||||||||||
Total deposits | 65,143 | 63,443 | 65,089 | 64,420 | 60,454 | 3 | 8 | |||||||||||||||||||
Long-term debt | 5,540 | 6,444 | 5,554 | 6,684 | 7,064 | (14 | ) | (22 | ) | |||||||||||||||||
UNBC stockholder's equity | 12,437 | 12,076 | 11,821 | 11,562 | 10,900 | 3 | 14 | |||||||||||||||||||
Balance sheet (period average): | ||||||||||||||||||||||||||
Total assets | $ | 87,881 | $ | 89,479 | $ | 89,449 | $ | 87,079 | $ | 82,197 | (2 | ) | 7 | |||||||||||||
Total securities | 22,496 | 24,223 | 24,265 | 22,721 | 19,145 | (7 | ) | 18 | ||||||||||||||||||
Total loans held for investment | 55,285 | 54,937 | 54,149 | 52,365 | 50,214 | 1 | 10 | |||||||||||||||||||
Earning assets | 79,137 | 80,625 | 80,503 | 78,007 | 73,303 | (2 | ) | 8 | ||||||||||||||||||
Total deposits | 64,420 | 64,499 | 64,425 | 62,848 | 59,580 | - | 8 | |||||||||||||||||||
UNBC stockholder's equity | 12,209 | 11,905 | 11,621 | 11,646 | 10,708 | 3 | 14 | |||||||||||||||||||
Performance ratios: | ||||||||||||||||||||||||||
Return on average assets (3) | 0.56 | % | 0.84 | % | 0.88 | % | 0.59 | % | 0.83 | % | ||||||||||||||||
Return on average UNBC stockholder's equity (3) | 4.03 | 6.32 | 6.75 | 4.39 | 6.36 | |||||||||||||||||||||
Return on average assets excluding the impact of privatization transaction (3) (4) | 0.60 | 0.90 | 0.93 | 0.65 | 0.90 | |||||||||||||||||||||
Return on average stockholder's equity excluding the impact of privatization transaction (3) (4) | 5.21 | 8.18 | 8.76 | 5.97 | 8.65 | |||||||||||||||||||||
Efficiency ratio (5) | 75.61 | 71.83 | 71.86 | 78.27 | 76.21 | |||||||||||||||||||||
Adjusted efficiency ratio (4) (5) | 68.37 | 66.18 | 68.76 | 69.12 | 66.12 | |||||||||||||||||||||
Net interest margin (3) (6) | 3.32 | 3.29 | 3.27 | 3.29 | 3.31 | |||||||||||||||||||||
Capital ratios: | ||||||||||||||||||||||||||
Tier 1 risk-based capital ratio (7) | 13.76 | % | 13.78 | % | 13.73 | % | 13.82 | % | 13.09 | % | ||||||||||||||||
Total risk-based capital ratio (7) | 15.50 | 15.54 | 15.77 | 15.98 | 15.41 | |||||||||||||||||||||
Leverage ratio (7) | 12.03 | 11.58 | 11.35 | 11.44 | 10.96 | |||||||||||||||||||||
Tier 1 common capital ratio (7) (8) | 13.76 | 13.78 | 13.73 | 13.82 | 13.09 | |||||||||||||||||||||
Tangible common equity ratio (9) | 11.46 | 11.04 | 10.20 | 10.20 | 10.10 | |||||||||||||||||||||
Refer to Exhibit 14 for footnote explanations. | ||||||||||||||||||||||||||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||
Financial Highlights (Unaudited) | ||||||||||||||
Exhibit 2 | ||||||||||||||
As of and for the Nine Months Ended | Percent Change to September 30, 2012 from | |||||||||||||
(Dollars in millions) | September 30, | September 30, 2011 | September 30, 2011 | |||||||||||
Results of operations: | ||||||||||||||
Net interest income | $ | 1,966 | $ | 1,838 | 7 | % | ||||||||
Noninterest income | 566 | 665 | (15 | ) | ||||||||||
Total revenue | 2,532 | 2,503 | 1 | |||||||||||
Noninterest expense | 1,851 | 1,796 | 3 | |||||||||||
Pre-tax, pre-provision income (1) | 681 | 707 | (4 | ) | ||||||||||
(Reversal of) provision for loan losses | 30 | (209 | ) | 114 | ||||||||||
Income before income taxes and including noncontrolling interests | 651 | 916 | (29 | ) | ||||||||||
Income tax expense | 160 | 278 | (42 | ) | ||||||||||
Net income including noncontrolling interests | 491 | 638 | (23 | ) | ||||||||||
Deduct: Net loss from noncontrolling interests | 15 | 11 | 36 | |||||||||||
Net income attributable to UNBC | $ | 506 | $ | 649 | (22 | ) | ||||||||
Balance sheet (end of period): | ||||||||||||||
Total assets | $ | 88,185 | $ | 84,013 | 5 | |||||||||
Total securities | 22,089 | 20,962 | 5 | |||||||||||
Total loans held for investment | 55,410 | 50,998 | 9 | |||||||||||
Core deposits (2) | 55,141 | 50,720 | 9 | |||||||||||
Total deposits | 65,143 | 60,454 | 8 | |||||||||||
Long-term debt | 5,540 | 7,064 | (22 | ) | ||||||||||
UNBC stockholder's equity | 12,437 | 10,900 | 14 | |||||||||||
Balance sheet (period average): | ||||||||||||||
Total assets | $ | 88,933 | $ | 80,870 | 10 | |||||||||
Total securities | 23,657 | 20,421 | 16 | |||||||||||
Total loans held for investment | 54,792 | 49,121 | 12 | |||||||||||
Earning assets | 80,085 | 72,128 | 11 | |||||||||||
Total deposits | 64,448 | 59,129 | 9 | |||||||||||
UNBC stockholder's equity | 11,913 | 10,417 | 14 | |||||||||||
Performance ratios: | ||||||||||||||
Return on average assets (3) | 0.76 | % | 1.07 | % | ||||||||||
Return on average UNBC stockholder's equity (3) | 5.67 | 8.33 | ||||||||||||
Return on average assets excluding the impact of privatization transaction (3) (4) | 0.81 | 1.14 | ||||||||||||
Return on average stockholders' equity excluding the impact of privatization transaction (3) (4) | 7.34 | 11.11 | ||||||||||||
Efficiency ratio (5) | 73.10 | 71.75 | ||||||||||||
Adjusted efficiency ratio (4) (5) | 67.77 | 65.42 | ||||||||||||
Net interest margin (3) (6) | 3.29 | 3.41 | ||||||||||||
Capital ratios: | ||||||||||||||
Tier 1 risk-based capital ratio (7) | 13.76 | % | 13.09 | % | ||||||||||
Total risk-based capital ratio (7) | 15.50 | 15.41 | ||||||||||||
Leverage ratio (7) | 12.03 | 10.96 | ||||||||||||
Tier 1 common capital ratio (7) (8) | 13.76 | 13.09 | ||||||||||||
Tangible common equity ratio (9) | 11.46 | 10.10 | ||||||||||||
Refer to Exhibit 14 for footnote explanations. | ||||||||||||||
UnionBanCal Corporation and Subsidiaries | |||||||||||||||||||||||||
Credit Quality (Unaudited) | |||||||||||||||||||||||||
Exhibit 3 | |||||||||||||||||||||||||
As of and for the Three Months Ended | Percent Change to September 30, 2012 from | ||||||||||||||||||||||||
(Dollars in millions) | September 30, | June 30, 2012 | March 31, 2012 | December 31, 2011 | September 30, 2011 | June 30, 2012 | September 30, 2011 | ||||||||||||||||||
Credit Data: | |||||||||||||||||||||||||
(Reversal of) provision for loan losses, excluding FDIC covered loans | $ | 43 | $ | (13 | ) | $ | 1 | $ | 7 | $ | (13 | ) | 431 | % | 431 | ||||||||||
(Reversal of) provision for FDIC covered loan losses not subject to FDIC indemnification | 2 | (1 | ) | (2 | ) | - | - | 300 | 100 | ||||||||||||||||
(Reversal of) provision for losses on off-balance sheet commitments | (4 | ) | (1 | ) | (2 | ) | 2 | - | (300 | ) | (100 | ) | |||||||||||||
Total (reversal of) provision for credit losses | $ | 41 | $ | (15 | ) | $ | (3 | ) | $ | 9 | $ | (13 | ) | 373 | 415 | ||||||||||
Net loans charged off | $ | 42 | $ | 31 | $ | 53 | $ | 28 | $ | 44 | 35 | (5 | ) | ||||||||||||
Nonperforming assets | 637 | 658 | 706 | 782 | 870 | (3 | ) | (27 | ) | ||||||||||||||||
Criticized loans held for investment, excluding FDIC covered loans (10) | 1,520 | 1,443 | 1,620 | 2,007 | 2,088 | 5 | (27 | ) | |||||||||||||||||
- | - | ||||||||||||||||||||||||
Credit Ratios: | |||||||||||||||||||||||||
Allowance for loan losses to: | |||||||||||||||||||||||||
Total loans held for investment | 1.21 | % | 1.21 | % | 1.30 | % | 1.43 | % | 1.51 | % | |||||||||||||||
Nonaccrual loans | 125.12 | 118.63 | 121.35 | 119.58 | 105.97 | ||||||||||||||||||||
Allowance for credit losses to (11) : | |||||||||||||||||||||||||
Total loans held for investment | 1.43 | 1.45 | 1.54 | 1.68 | 1.76 | ||||||||||||||||||||
Nonaccrual loans | 148.80 | 142.20 | 144.01 | 140.46 | 124.09 | ||||||||||||||||||||
Net loans charged off to average total loans held for investment (3) | 0.30 | 0.22 | 0.40 | 0.21 | 0.35 | ||||||||||||||||||||
Nonperforming assets to total loans held for investment and Other Real Estate Owned (OREO) | 1.15 | 1.21 | 1.30 | 1.46 | 1.70 | ||||||||||||||||||||
Nonperforming assets to total assets | 0.72 | 0.75 | 0.76 | 0.87 | 1.04 | ||||||||||||||||||||
Nonaccrual loans to total loans held for investment | 0.96 | 1.02 | 1.07 | 1.19 | 1.42 | ||||||||||||||||||||
Excluding FDIC covered assets (12): | |||||||||||||||||||||||||
Allowance for loan losses to: | |||||||||||||||||||||||||
Total loans held for investment | 1.20 | % | 1.22 | % | 1.30 | % | 1.42 | % | 1.51 | % | |||||||||||||||
Nonaccrual loans | 130.29 | 127.22 | 129.95 | 126.26 | 112.28 | ||||||||||||||||||||
Allowance for credit losses to (11) : | |||||||||||||||||||||||||
Total loans held for investment | 1.43 | 1.46 | 1.54 | 1.67 | 1.77 | ||||||||||||||||||||
Nonaccrual loans | 155.39 | 152.64 | 154.55 | 148.80 | 131.92 | ||||||||||||||||||||
Net loans charged off to average total loans held for investment (3) | 0.29 | 0.21 | 0.41 | 0.21 | 0.36 | ||||||||||||||||||||
Nonperforming assets to total loans held for investment and OREO | 0.96 | 1.01 | 1.04 | 1.17 | 1.38 | ||||||||||||||||||||
Nonperforming assets to total assets | 0.60 | 0.62 | 0.61 | 0.70 | 0.83 | ||||||||||||||||||||
Nonaccrual loans to total loans held for investment | 0.92 | 0.96 | 1.00 | 1.12 | 1.34 | ||||||||||||||||||||
As of and for the | Percent Change to | ||||||||||||||||||||||||
(Dollars in millions) | September 30, | September 30, | September 30, |
| |||||||||||||||||||||
Credit Data: | |||||||||||||||||||||||||
(Reversal of) provision for loan losses, excluding FDIC covered loans | $ | 31 | $ | (207 | ) |
| 115 | % | |||||||||||||||||
(Reversal of) provision for FDIC covered loan losses not subject to FDIC indemnification | (1 | ) | (2 | ) |
| 50 | |||||||||||||||||||
(Reversal of) provision for losses on off-balance sheet commitments | (7 | ) | (31 | ) |
| 77 | |||||||||||||||||||
Total (reversal of) provision for credit losses | $ | 23 | $ | (240 | ) |
| 110 | ||||||||||||||||||
Net loans charged off | $ | 126 | $ | 208 |
|
| (39 | ) | |||||||||||||||||
Nonperforming assets | 637 | 870 |
|
| (27 | ) | |||||||||||||||||||
Credit Ratios: | |||||||||||||||||||||||||
Net loans charged off to average total loans held for investment (3) | 0.31 | % | 0.57 | % | |||||||||||||||||||||
Nonperforming assets to total assets | 0.72 | 1.04 | |||||||||||||||||||||||
Excluding FDIC covered assets (12): | |||||||||||||||||||||||||
Net loans charged off to average total loans held for investment (3) | 0.30 | % | 0.58 | % | |||||||||||||||||||||
Nonperforming assets to total assets | 0.60 | 0.83 | |||||||||||||||||||||||
Refer to Exhibit 14 for footnote explanations. | |||||||||||||||||||||||||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Consolidated Statements of Income (Unaudited) | ||||||||||||||||||||
Exhibit 4 | ||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||
(Dollars in millions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Interest Income | ||||||||||||||||||||
Loans | $ | 621 | $ | 621 | $ | 606 | $ | 603 | $ | 576 | ||||||||||
Securities | 129 | 134 | 142 | 134 | 123 | |||||||||||||||
Other | 1 | - | 2 | 2 | 3 | |||||||||||||||
Total interest income | 751 | 755 | 750 | 739 | 702 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 56 | 57 | 58 | 57 | 53 | |||||||||||||||
Commercial paper and other short-term borrowings | 2 | 3 | 3 | 1 | 2 | |||||||||||||||
Long-term debt | 39 | 36 | 36 | 41 | 41 | |||||||||||||||
Total interest expense | 97 | 96 | 97 | 99 | 96 | |||||||||||||||
Net Interest Income | 654 | 659 | 653 | 640 | 606 | |||||||||||||||
(Reversal of) provision for loan losses | 45 | (14 | ) | (1 | ) | 7 | (13 | ) | ||||||||||||
Net interest income after (reversal of) provision for loan losses | 609 | 673 | 654 | 633 | 619 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Service charges on deposit accounts | 51 | 52 | 55 | 53 | 51 | |||||||||||||||
Securities gains, net | 41 | 28 | 19 | - | 1 | |||||||||||||||
Trust and investment management fees | 29 | 27 | 30 | 31 | 33 | |||||||||||||||
Trading account activities | 26 | 25 | 31 | 38 | 27 | |||||||||||||||
Merchant banking fees | 24 | 19 | 23 | 22 | 27 | |||||||||||||||
Brokerage commissions and fees | 11 | 11 | 10 | 10 | 12 | |||||||||||||||
Card processing fees, net | 8 | 8 | 8 | 9 | 17 | |||||||||||||||
Other | (1 | ) | 5 | 26 | (12 | ) | 17 | |||||||||||||
Total noninterest income | 189 | 175 | 202 | 151 | 185 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Salaries and employee benefits | 356 | 351 | 364 | 347 | 348 | |||||||||||||||
Net occupancy and equipment | 65 | 64 | 68 | 71 | 64 | |||||||||||||||
Professional and outside services | 54 | 47 | 46 | 55 | 55 | |||||||||||||||
Intangible asset amortization | 20 | 21 | 21 | 32 | 25 | |||||||||||||||
Regulatory assessments | 14 | 16 | 18 | 15 | 14 | |||||||||||||||
(Reversal of) provision for losses on | ||||||||||||||||||||
off-balance sheet commitments | (4 | ) | (1 | ) | (2 | ) | 2 | - | ||||||||||||
Other | 133 | 101 | 99 | 97 | 97 | |||||||||||||||
Total noninterest expense | 638 | 599 | 614 | 619 | 603 | |||||||||||||||
Income before income taxes and including noncontrolling interests | 160 | 249 | 242 | 165 | 201 | |||||||||||||||
Income tax expense | 42 | 67 | 51 | 40 | 33 | |||||||||||||||
Net Income including Noncontrolling Interests | 118 | 182 | 191 | 125 | 168 | |||||||||||||||
Deduct: Net loss from noncontrolling interests | 6 | 5 | 4 | 4 | 4 | |||||||||||||||
Net Income attributable to UNBC | $ | 124 | $ | 187 | $ | 195 | $ | 129 | $ | 172 | ||||||||||
UnionBanCal Corporation and Subsidiaries | ||||
Consolidated Statements of Income (Unaudited) | ||||
Exhibit 5 | ||||
For the Nine Months Ended | ||||
(Dollars in millions) | September 30, | September 30, 2011 | ||
Interest Income | ||||
Loans | $ 1,848 | $ 1,700 | ||
Securities | 405 | 404 | ||
Other | 3 | 6 | ||
Total interest income | 2,256 | 2,110 | ||
Interest Expense | ||||
Deposits | 171 | 159 | ||
Commercial paper and other short-term borrowings | 8 | 5 | ||
Long-term debt | 111 | 108 | ||
Total interest expense | 290 | 272 | ||
Net Interest Income | 1,966 | 1,838 | ||
(Reversal of) provision for loan losses | 30 | (209) | ||
Net interest income after (reversal of) provision for loan losses | 1,936 | 2,047 | ||
Noninterest Income | ||||
Service charges on deposit accounts | 158 | 153 | ||
Securities gains, net | 88 | 58 | ||
Trust and investment management fees | 86 | 101 | ||
Trading account activities | 82 | 88 | ||
Merchant banking fees | 66 | 75 | ||
Brokerage commissions and fees | 32 | 37 | ||
Card processing fees, net | 24 | 50 | ||
Other | 30 | 103 | ||
Total noninterest income | 566 | 665 | ||
Noninterest Expense | ||||
Salaries and employee benefits | 1,071 | 1,038 | ||
Net occupancy and equipment | 197 | 196 | ||
Professional and outside services | 147 | 154 | ||
Intangible asset amortization | 62 | 74 | ||
Regulatory assessments | 48 | 54 | ||
(Reversal of) provision for losses on off-balance sheet commitments | (7) | (31) | ||
Other | 333 | 311 | ||
Total noninterest expense | 1,851 | 1,796 | ||
Income before income taxes and including noncontrolling interests | 651 | 916 | ||
Income tax expense | 160 | 278 | ||
Net Income including Noncontrolling Interests | 491 | 638 | ||
Deduct: Net loss from noncontrolling interests | 15 | 11 | ||
Net Income attributable to UNBC | $ 506 | $ 649 | ||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||||
Exhibit 6 | ||||||||||||||||||||
(Dollars in millions except for per share amount) | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | September 30, 2011 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 1,237 | $ | 1,396 | $ | 1,371 | $ | 1,419 | $ | 1,277 | ||||||||||
Interest bearing deposits in banks (includes $8 at September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2012 and $7 at September 30, 2011 related to consolidated variable interest entities (VIEs)) | 1,703 | 1,479 | 3,260 | 2,764 | 2,757 | |||||||||||||||
Federal funds sold and securities purchased under resale agreements | 32 | 46 | 8 | 12 | 28 | |||||||||||||||
Total cash and cash equivalents | 2,972 | 2,921 | 4,639 | 4,195 | 4,062 | |||||||||||||||
Trading account assets (includes $3 at September 30, 2012, $34 at June 30, 2012, $3 at March 31, 2012, $14 at December 31, 2011 and $6 at September 30, 2011 of assets pledged as collateral) | 1,236 | 1,237 | 1,177 | 1,135 | 1,120 | |||||||||||||||
Securities available for sale | 20,907 | 20,545 | 23,366 | 22,833 | 19,633 | |||||||||||||||
Securities held to maturity (Fair value: September 30, 2012, $1,224 June 30, 2012, $2,536; March 31, 2012, $2,278; December 31, 2011, $1,429; and September 30, 2011, $1,474) | 1,182 | 2,345 | 2,066 | 1,273 | 1,329 | |||||||||||||||
Loans held for investment: | ||||||||||||||||||||
Loans, excluding FDIC covered loans | 54,886 | 53,593 | 53,473 | 52,591 | 49,904 | |||||||||||||||
FDIC covered loans | 524 | 698 | 849 | 949 | 1,094 | |||||||||||||||
Total loans held for investment | 55,410 | 54,291 | 54,322 | 53,540 | 50,998 | |||||||||||||||
Allowance for loan losses | (668 | ) | (656 | ) | (704 | ) | (764 | ) | (768 | ) | ||||||||||
Loans held for investment, net | 54,742 | 53,635 | 53,618 | 52,776 | 50,230 | |||||||||||||||
Premises and equipment, net | 637 | 649 | 663 | 684 | 673 | |||||||||||||||
Intangible assets, net | 298 | 318 | 341 | 360 | 383 | |||||||||||||||
Goodwill | 2,457 | 2,457 | 2,456 | 2,457 | 2,447 | |||||||||||||||
FDIC indemnification asset | 401 | 449 | 521 | 598 | 616 | |||||||||||||||
Other assets (includes $337 at September 30, 2012, $331 at June 30, 2012, $278 at March 31, 2012, $286 at December 31, 2011 and $290 at September 30, 2011 related to consolidated VIEs) | 3,353 | 3,383 | 3,476 | 3,365 | 3,520 | |||||||||||||||
Total assets | $ | 88,185 | $ | 87,939 | $ | 92,323 | $ | 89,676 | $ | 84,013 | ||||||||||
Liabilities | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest bearing | $ | 21,490 | $ | 20,777 | $ | 20,488 | $ | 20,598 | $ | 19,630 | ||||||||||
Interest bearing | 43,653 | 42,666 | 44,601 | 43,822 | 40,824 | |||||||||||||||
Total deposits | 65,143 | 63,443 | 65,089 | 64,420 | 60,454 | |||||||||||||||
Commercial paper and other short-term borrowings | 2,091 | 3,035 | 6,680 | 3,683 | 2,455 | |||||||||||||||
Long-term debt (includes $8 at September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011 related to consolidated VIEs) | 5,540 | 6,444 | 5,554 | 6,684 | 7,064 | |||||||||||||||
Trading account liabilities | 952 | 976 | 922 | 1,040 | 946 | |||||||||||||||
Other liabilities (includes $1 at September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011 and $3 at September 30, 2011 related to consolidated VIEs) | 1,763 | 1,712 | 1,996 | 2,019 | 1,925 | |||||||||||||||
Total liabilities | 75,489 | 75,610 | 80,241 | 77,846 | 72,844 | |||||||||||||||
Equity | ||||||||||||||||||||
UNBC Stockholder's Equity: | ||||||||||||||||||||
Common stock, par value $1 per share: | ||||||||||||||||||||
Authorized 300,000,000 shares; 136,330,830 shares issued and outstanding as of September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011, and 136,330,829 shares issued and outstanding as of September 30, 2011 | 136 | 136 | 136 | 136 | 136 | |||||||||||||||
Additional paid-in capital | 5,989 | 5,985 | 5,992 | 5,989 | 5,203 | |||||||||||||||
Retained earnings | 6,752 | 6,628 | 6,441 | 6,246 | 6,117 | |||||||||||||||
Accumulated other comprehensive loss | (440 | ) | (673 | ) | (748 | ) | (809 | ) | (556 | ) | ||||||||||
Total UNBC stockholder's equity | 12,437 | 12,076 | 11,821 | 11,562 | 10,900 | |||||||||||||||
Noncontrolling interests | 259 | 253 | 261 | 268 | 269 | |||||||||||||||
Total equity | 12,696 | 12,329 | 12,082 | 11,830 | 11,169 | |||||||||||||||
Total liabilities and equity | $ | 88,185 | $ | 87,939 | $ | 92,323 | $ | 89,676 | $ | 84,013 | ||||||||||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Net Interest Income (Unaudited) | ||||||||||||||||||||
Exhibit 7 | ||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||
September 30, 2012 | June 30, 2012 | |||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||
(Dollars in millions) | Balance | Expense (6) | Rate (3)(6) | Balance | Expense (6) | Rate (3)(6) | ||||||||||||||
Assets | ||||||||||||||||||||
Loans held for investment: (13) | ||||||||||||||||||||
Commercial and industrial | $ | 20,389 | $ | 192 | 3.75 | % | $ | 20,155 | $ | 194 | 3.86 | % | ||||||||
Commercial mortgage | 8,064 | 81 | 4.02 | 8,276 | 82 | 3.97 | ||||||||||||||
Construction | 650 | 6 | 3.76 | 709 | 8 | 4.67 | ||||||||||||||
Lease financing | 982 | 10 | 4.10 | 1,015 | 11 | 4.33 | ||||||||||||||
Residential mortgage | 21,022 | 218 | 4.17 | 20,357 | 220 | 4.31 | ||||||||||||||
Home equity and other consumer loans | 3,557 | 34 | 3.74 | 3,634 | 35 | 3.87 | ||||||||||||||
Total loans, excluding FDIC covered loans | 54,664 | 541 | 3.96 | 54,146 | 550 | 4.07 | ||||||||||||||
FDIC covered loans | 621 | 80 | 51.23 | 791 | 73 | 37.42 | ||||||||||||||
Total loans held for investment | 55,285 | 621 | 4.49 | 54,937 | 623 | 4.55 | ||||||||||||||
Securities | 22,496 | 132 | 2.34 | 24,223 | 135 | 2.22 | ||||||||||||||
Interest bearing deposits in banks | 941 | - | 0.24 | 1,093 | - | 0.26 | ||||||||||||||
Federal funds sold and securities purchased under resale agreements | 62 | - | 0.19 | 64 | - | 0.22 | ||||||||||||||
Trading account assets | 228 | 1 | 0.53 | 175 | - | 0.57 | ||||||||||||||
Other earning assets | 125 | - | 0.15 | 133 | - | 0.21 | ||||||||||||||
Total earning assets | 79,137 | 754 | 3.81 | 80,625 | 758 | 3.77 | ||||||||||||||
Allowance for loan losses | (657 | ) | (709 | ) | ||||||||||||||||
Cash and due from banks | 1,258 | 1,313 | ||||||||||||||||||
Premises and equipment, net | 646 | 659 | ||||||||||||||||||
Other assets | 7,497 | 7,591 | ||||||||||||||||||
Total assets | $ | 87,881 | $ | 89,479 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||
Transaction and money market accounts | $ | 26,517 | 15 | 0.23 | $ | 25,646 | 14 | 0.22 | ||||||||||||
Savings | 5,222 | 2 | 0.16 | 5,311 | 2 | 0.16 | ||||||||||||||
Time | 11,361 | 39 | 1.39 | 13,119 | 41 | 1.26 | ||||||||||||||
Total interest bearing deposits | 43,100 | 56 | 0.53 | 44,076 | 57 | 0.52 | ||||||||||||||
Commercial paper and other short-term borrowings (14) | 2,541 | 2 | 0.25 | 4,691 | 3 | 0.26 | ||||||||||||||
Long-term debt | 5,963 | 39 | 2.57 | 5,679 | 36 | 2.54 | ||||||||||||||
Total borrowed funds | 8,504 | 41 | 1.88 | 10,370 | 39 | 1.51 | ||||||||||||||
Total interest bearing liabilities | 51,604 | 97 | 0.75 | 54,446 | 96 | 0.71 | ||||||||||||||
Noninterest bearing deposits | 21,320 | 20,423 | ||||||||||||||||||
Other liabilities | 2,494 | 2,445 | ||||||||||||||||||
Total liabilities | 75,418 | 77,314 | ||||||||||||||||||
Equity | ||||||||||||||||||||
UNBC Stockholder's equity | 12,209 | 11,905 | ||||||||||||||||||
Noncontrolling interests | 254 | 260 | ||||||||||||||||||
Total equity | 12,463 | 12,165 | ||||||||||||||||||
Total liabilities and equity | $ | 87,881 | $ | 89,479 | ||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 657 | 3.06 | % | 662 | 3.06 | % | ||||||||||||||
Impact of noninterest bearing deposits | 0.22 | 0.19 | ||||||||||||||||||
Impact of other noninterest bearing sources | 0.04 | 0.04 | ||||||||||||||||||
Net interest margin | 3.32 | 3.29 | ||||||||||||||||||
Less: taxable-equivalent adjustment | 3 | 3 | ||||||||||||||||||
Net interest income | $ | 654 | $ | 659 | ||||||||||||||||
Refer to Exhibit 14 for footnote explanations. | ||||||||||||||||||||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Net Interest Income (Unaudited) | ||||||||||||||||||||
Exhibit 8 | ||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||
September 30, 2012 | September 30, 2011 | |||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||
(Dollars in millions) | Balance | Expense (6) | Rate (3)(6) | Balance | Expense (6) | Rate (3)(6) | ||||||||||||||
Assets | ||||||||||||||||||||
Loans held for investment: (13) | ||||||||||||||||||||
Commercial and industrial | $ | 20,389 | $ | 192 | 3.75 | % | $ | 16,947 | $ | 160 | 3.76 | % | ||||||||
Commercial mortgage | 8,064 | 81 | 4.02 | 7,838 | 82 | 4.22 | ||||||||||||||
Construction | 650 | 6 | 3.76 | 992 | 12 | 5.04 | ||||||||||||||
Lease financing | 982 | 10 | 4.10 | 697 | 8 | 4.28 | ||||||||||||||
Residential mortgage | 21,022 | 218 | 4.17 | 18,818 | 221 | 4.70 | ||||||||||||||
Home equity and other consumer loans | 3,557 | 34 | 3.74 | 3,751 | 40 | 4.25 | ||||||||||||||
Total loans, excluding FDIC covered loans | 54,664 | 541 | 3.96 | 49,043 | 523 | 4.26 | ||||||||||||||
FDIC covered loans | 621 | 80 | 51.23 | 1,171 | 55 | 18.60 | ||||||||||||||
Total loans held for investment | 55,285 | 621 | 4.49 | 50,214 | 578 | 4.60 | ||||||||||||||
Securities | 22,496 | 132 | 2.34 | 19,145 | 123 | 2.56 | ||||||||||||||
Interest bearing deposits in banks | 941 | - | 0.24 | 3,610 | 3 | 0.25 | ||||||||||||||
Federal funds sold and securities purchased under resale agreements | 62 | - | 0.19 | 61 | - | 0.03 | ||||||||||||||
Trading account assets | 228 | 1 | 0.53 | 166 | - | 0.68 | ||||||||||||||
Other earning assets | 125 | - | 0.15 | 107 | - | 0.54 | ||||||||||||||
Total earning assets | 79,137 | 754 | 3.81 | 73,303 | 704 | 3.83 | ||||||||||||||
Allowance for loan losses | (657 | ) | (785 | ) | ||||||||||||||||
Cash and due from banks | 1,258 | 1,254 | ||||||||||||||||||
Premises and equipment, net | 646 | 676 | ||||||||||||||||||
Other assets | 7,497 | 7,749 | ||||||||||||||||||
Total assets | $ | 87,881 | $ | 82,197 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||
Transaction and money market accounts | $ | 26,517 | 15 | 0.23 | $ | 23,836 | 14 | 0.23 | ||||||||||||
Savings | 5,222 | 2 | 0.16 | 5,476 | 3 | 0.21 | ||||||||||||||
Time | 11,361 | 39 | 1.39 | 11,634 | 36 | 1.28 | ||||||||||||||
Total interest bearing deposits | 43,100 | 56 | 0.53 | 40,946 | 53 | 0.53 | ||||||||||||||
Commercial paper and other short-term borrowings (14) | 2,541 | 2 | 0.25 | 2,371 | 2 | 0.20 | ||||||||||||||
Long-term debt | 5,963 | 39 | 2.57 | 7,066 | 41 | 2.31 | ||||||||||||||
Total borrowed funds | 8,504 | 41 | 1.88 | 9,437 | 43 | 1.78 | ||||||||||||||
Total interest bearing liabilities | 51,604 | 97 | 0.75 | 50,383 | 96 | 0.76 | ||||||||||||||
Noninterest bearing deposits | 21,320 | 18,634 | ||||||||||||||||||
Other liabilities | 2,494 | 2,203 | ||||||||||||||||||
Total liabilities | 75,418 | 71,220 | ||||||||||||||||||
Equity | ||||||||||||||||||||
UNBC Stockholder's equity | 12,209 | 10,708 | ||||||||||||||||||
Noncontrolling interests | 254 | 269 | ||||||||||||||||||
Total equity | 12,463 | 10,977 | ||||||||||||||||||
Total liabilities and equity | $ | 87,881 | $ | 82,197 | ||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 657 | 3.06 | % | 608 | 3.07 | % | ||||||||||||||
Impact of noninterest bearing deposits | 0.22 | 0.20 | ||||||||||||||||||
Impact of other noninterest bearing sources | 0.04 | 0.04 | ||||||||||||||||||
Net interest margin | 3.32 | 3.31 | ||||||||||||||||||
Less: taxable-equivalent adjustment | 3 | 2 | ||||||||||||||||||
Net interest income | $ | 654 | $ | 606 | ||||||||||||||||
Refer to Exhibit 14 for footnote explanations. | ||||||||||||||||||||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Net Interest Income (Unaudited) | ||||||||||||||||||||
Exhibit 9 | ||||||||||||||||||||
For the Nine Months Ended | ||||||||||||||||||||
September 30, 2012 | September 30, 2011 | |||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||
(Dollars in millions) | Balance | Expense (6) | Rate (3)(6) | Balance | Expense (6) | Rate (3)(6) | ||||||||||||||
Assets | ||||||||||||||||||||
Loans held for investment: (13) | ||||||||||||||||||||
Commercial and industrial | $ | 20,066 | $ | 573 | 3.81 | % | $ | 16,035 | $ | 476 | 3.97 | % | ||||||||
Commercial mortgage | 8,204 | 248 | 4.03 | 7,780 | 251 | 4.31 | ||||||||||||||
Construction | 720 | 22 | 4.12 | 1,148 | 35 | 4.11 | ||||||||||||||
Lease financing | 1,006 | 32 | 4.23 | 748 | 24 | 4.20 | ||||||||||||||
Residential mortgage | 20,396 | 654 | 4.28 | 18,316 | 662 | 4.82 | ||||||||||||||
Home equity and other consumer loans | 3,627 | 105 | 3.85 | 3,785 | 120 | 4.26 | ||||||||||||||
Total loans, excluding FDIC covered loans | 54,019 | 1,634 | 4.04 | 47,812 | 1,568 | 4.38 | ||||||||||||||
FDIC covered loans | 773 | 219 | 37.88 | 1,309 | 138 | 14.03 | ||||||||||||||
Total loans held for investment | 54,792 | 1,853 | 4.51 | 49,121 | 1,706 | 4.64 | ||||||||||||||
Securities | 23,657 | 409 | 2.30 | 20,421 | 405 | 2.64 | ||||||||||||||
Interest bearing deposits in banks | 1,254 | 2 | 0.25 | 2,300 | 5 | 0.25 | ||||||||||||||
Federal funds sold and securities purchased under resale agreements | 62 | - | 0.21 | 76 | - | 0.11 | ||||||||||||||
Trading account assets | 185 | 1 | 0.57 | 151 | 1 | 0.84 | ||||||||||||||
Other earning assets | 135 | - | 0.15 | 59 | - | 1.03 | ||||||||||||||
Total earning assets | 80,085 | 2,265 | 3.77 | 72,128 | 2,117 | 3.92 | ||||||||||||||
Allowance for loan losses | (710 | ) | (985 | ) | ||||||||||||||||
Cash and due from banks | 1,299 | 1,236 | ||||||||||||||||||
Premises and equipment, net | 659 | 693 | ||||||||||||||||||
Other assets | 7,600 | 7,798 | ||||||||||||||||||
Total assets | $ | 88,933 | $ | 80,870 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||
Transaction and money market accounts | $ | 25,926 | 43 | 0.22 | $ | 24,325 | 43 | 0.24 | ||||||||||||
Savings | 5,271 | 6 | 0.16 | 5,042 | 9 | 0.25 | ||||||||||||||
Time | 12,636 | 122 | 1.29 | 11,847 | 107 | 1.21 | ||||||||||||||
Total interest bearing deposits | 43,833 | 171 | 0.52 | 41,214 | 159 | 0.52 | ||||||||||||||
Commercial paper and other short-term borrowings (14) | 3,851 | 8 | 0.27 | 2,640 | 5 | 0.23 | ||||||||||||||
Long-term debt | 5,907 | 111 | 2.50 | 6,443 | 108 | 2.24 | ||||||||||||||
Total borrowed funds | 9,758 | 119 | 1.62 | 9,083 | 113 | 1.65 | ||||||||||||||
Total interest bearing liabilities | 53,591 | 290 | 0.72 | 50,297 | 272 | 0.72 | ||||||||||||||
Noninterest bearing deposits | 20,615 | 17,915 | ||||||||||||||||||
Other liabilities | 2,554 | 1,971 | ||||||||||||||||||
Total liabilities | 76,760 | 70,183 | ||||||||||||||||||
Equity | ||||||||||||||||||||
UNBC Stockholder's equity | 11,913 | 10,417 | ||||||||||||||||||
Noncontrolling interests | 260 | 270 | ||||||||||||||||||
Total equity | 12,173 | 10,687 | ||||||||||||||||||
Total liabilities and equity | $ | 88,933 | $ | 80,870 | ||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 1,975 | 3.05 | % | 1,845 | 3.20 | % | ||||||||||||||
Impact of noninterest bearing deposits | 0.20 | 0.19 | ||||||||||||||||||
Impact of other noninterest bearing sources | 0.04 | 0.02 | ||||||||||||||||||
Net interest margin | 3.29 | 3.41 | ||||||||||||||||||
Less: taxable-equivalent adjustment | 9 | 7 | ||||||||||||||||||
Net interest income | $ | 1,966 | $ | 1,838 | ||||||||||||||||
Refer to Exhibit 14 for footnote explanations. | ||||||||||||||||||||
UnionBanCal Corporation and Subsidiaries | |||||||||||||||
Loans and Nonperforming Assets (Unaudited) | |||||||||||||||
Exhibit 10 | |||||||||||||||
(Dollars in millions) | September 30, | June 30, 2012 | March 31, 2012 | December 31, 2011 | September 30, 2011 | ||||||||||
Loans held for investment (period end) | |||||||||||||||
Loans held for investment: | |||||||||||||||
Commercial and industrial | $ | 20,124 | $ | 19,465 | $ | 19,429 | $ | 19,226 | $ | 17,545 | |||||
Commercial mortgage | 8,293 | 8,188 | 8,510 | 8,175 | 7,927 | ||||||||||
Construction | 678 | 613 | 776 | 870 | 966 | ||||||||||
Lease financing | 962 | 994 | 1,023 | 965 | 693 | ||||||||||
Total commercial portfolio | 30,057 | 29,260 | 29,738 | 29,236 | 27,131 | ||||||||||
19,625 | |||||||||||||||
Residential mortgage | 21,335 | 20,729 | 20,081 | 19,625 | 19,043 | ||||||||||
Home equity and other consumer loans | 3,494 | 3,604 | 3,654 | 3,730 | 3,730 | ||||||||||
Total consumer portfolio | 24,829 | 24,333 | 23,735 | 23,355 | 22,773 | ||||||||||
Total loans held for investment, excluding FDIC covered loans | 54,886 | 53,593 | 53,473 | 52,591 | 49,904 | ||||||||||
FDIC covered loans | 524 | 698 | 849 | 949 | 1,094 | ||||||||||
Total loans held for investment | $ | 55,410 | $ | 54,291 | $ | 54,322 | $ | 53,540 | $ | 50,998 | |||||
Nonperforming Assets (period end) | |||||||||||||||
Nonaccrual loans: | |||||||||||||||
Commercial and industrial | $ | 36 | $ | 75 | $ | 71 | $ | 127 | $ | 163 | |||||
Commercial mortgage | 91 | 101 | 120 | 139 | 206 | ||||||||||
Construction | - | - | 16 | 16 | 16 | ||||||||||
Total commercial portfolio | 127 | 176 | 207 | 282 | 385 | ||||||||||
Residential mortgage | 325 | 293 | 301 | 285 | 259 | ||||||||||
Home equity and other consumer loans | 52 | 44 | 26 | 24 | 25 | ||||||||||
Total consumer portfolio | 377 | 337 | 327 | 309 | 284 | ||||||||||
Total nonaccrual loans, excluding FDIC covered loans | 504 | 513 | 534 | 591 | 669 | ||||||||||
FDIC covered loans | 30 | 40 | 46 | 47 | 56 | ||||||||||
Total nonaccrual loans | 534 | 553 | 580 | 638 | 725 | ||||||||||
OREO | 22 | 26 | 24 | 27 | 21 | ||||||||||
FDIC covered OREO | 81 | 79 | 102 | 117 | 124 | ||||||||||
Total nonperforming assets | $ | 637 | $ | 658 | $ | 706 | $ | 782 | $ | 870 | |||||
Total nonperforming assets, excluding FDIC covered assets | $ | 526 | $ | 539 | $ | 558 | $ | 618 | $ | 690 | |||||
Loans 90 days or more past due and still accruing (15) | $ | 1 | $ | 1 | $ | 2 | $ | 1 | $ | 3 | |||||
Refer to Exhibit 14 for footnote explanations. | |||||||||||||||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||||||||
Allowance for Credit Losses (Unaudited) | ||||||||||||||||||||
Exhibit 11 | ||||||||||||||||||||
As of and for the Three Months Ended | ||||||||||||||||||||
(Dollars in millions) | September 30, | June 30, 2012 | March 31, 2012 | December 31, 2011 | September 30, 2011 | |||||||||||||||
Analysis of Allowance for Credit Losses | ||||||||||||||||||||
Balance, beginning of period | $ | 656 | $ | 704 | $ | 764 | $ | 768 | $ | 826 | ||||||||||
(Reversal of) provision for loan losses, excluding FDIC covered loans | 43 | (13 | ) | 1 | 7 | (13 | ) | |||||||||||||
(Reversal of) provision for FDIC covered loan losses not subject to FDIC indemnification | 2 | (1 | ) | (2 | ) | - | - | |||||||||||||
Increase (decrease) in allowance covered by FDIC indemnification | 8 | (3 | ) | (6 | ) | - | - | |||||||||||||
Other (16) | 1 | - | - | 17 | (1 | ) | ||||||||||||||
Loans charged off: | ||||||||||||||||||||
Commercial and industrial | (12 | ) | (10 | ) | (34 | ) | (7 | ) | (20 | ) | ||||||||||
Commercial mortgage | (1 | ) | (5 | ) | (6 | ) | (14 | ) | (10 | ) | ||||||||||
Construction | - | (11 | ) | - | - | - | ||||||||||||||
Lease financing | - | - | - | (14 | ) | (5 | ) | |||||||||||||
Total commercial portfolio | (13 | ) | (26 | ) | (40 | ) | (35 | ) | (35 | ) | ||||||||||
Residential mortgage | (22 | ) | (9 | ) | (12 | ) | (9 | ) | (12 | ) | ||||||||||
Home equity and other consumer loans | (19 | ) | (7 | ) | (11 | ) | (10 | ) | (8 | ) | ||||||||||
Total consumer portfolio | (41 | ) | (16 | ) | (23 | ) | (19 | ) | (20 | ) | ||||||||||
FDIC covered loans | (3 | ) | (2 | ) | - | - | (2 | ) | ||||||||||||
Total loans charged off | (57 | ) | (44 | ) | (63 | ) | (54 | ) | (57 | ) | ||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||
Commercial and industrial | 7 | 8 | 4 | 8 | 5 | |||||||||||||||
Commercial mortgage | 5 | - | 3 | 15 | 1 | |||||||||||||||
Construction | 1 | 5 | 1 | 2 | 4 | |||||||||||||||
Total commercial portfolio | 13 | 13 | 8 | 25 | 10 | |||||||||||||||
Residential mortgage | - | - | - | - | 1 | |||||||||||||||
Home equity and other consumer loans | 1 | - | 1 | - | 1 | |||||||||||||||
Total consumer portfolio | 1 | - | 1 | - | 2 | |||||||||||||||
FDIC covered loans | 1 | - | 1 | 1 | 1 | |||||||||||||||
Total recoveries of loans previously charged off | 15 | 13 | 10 | 26 | 13 | |||||||||||||||
Net loans charged off | (42 | ) | (31 | ) | (53 | ) | (28 | ) | (44 | ) | ||||||||||
Ending balance of allowance for loan losses | 668 | 656 | 704 | 764 | 768 | |||||||||||||||
Allowance for losses on off-balance sheet commitments | 126 | 130 | 131 | 133 | 131 | |||||||||||||||
Total allowance for credit losses | $ | 794 | $ | 786 | $ | 835 | $ | 897 | $ | 899 | ||||||||||
Components of allowance for loan losses: | ||||||||||||||||||||
Allowance for loan losses, excluding allowance on FDIC covered loans | $ | 656 | $ | 652 | $ | 694 | $ | 747 | $ | 751 | ||||||||||
Allowance for loan losses on FDIC covered loans | 12 | 4 | 10 | 17 | 17 | |||||||||||||||
Total allowance for loan losses | $ | 668 | $ | 656 | $ | 704 | $ | 764 | $ | 768 | ||||||||||
Refer to Exhibit 14 for footnote explanations. | ||||||||||||||||||||
UnionBanCal Corporation and Subsidiaries | ||||||||||||||
Securities Available for Sale (Unaudited) | ||||||||||||||
Exhibit 12 | ||||||||||||||
September 30, 2012 | June 30, 2012 | Fair Value Amount Change from | Fair Value % Change from | |||||||||||
(Dollars in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | June 30, 2012 | June 30, 2012 | ||||||||
U.S. government sponsored agencies | $ 2,599 | $ 2,629 | $ 5,393 | $ 5,459 | $ (2,830) | (52) | % | |||||||
Residential mortgage-backed securities: | ||||||||||||||
U.S. government and government sponsored agencies | 11,687 | 11,970 | 11,125 | 11,337 | 633 | 6 | ||||||||
Privately issued | 505 | 498 | 653 | 623 | (125) | (20) | ||||||||
Commercial mortgage-backed securities | 2,251 | 2,361 | 1,503 | 1,554 | 807 | 52 | ||||||||
Collateralized loan obligations | 1,652 | 1,590 | - | - | 1,590 | 100 | ||||||||
Other debt securities | 1,804 | 1,755 | 1,480 | 1,486 | 269 | 18 | ||||||||
Equity securities | 104 | 104 | 86 | 86 | 18 | 21 | ||||||||
Total securities available for sale | $ 20,602 | $ 20,907 | $ 20,240 | $ 20,545 | $ 362 | 2 | % | |||||||
UnionBanCal Corporation and Subsidiaries | |||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measures (Unaudited) | |||||||||||||||||||||||||||||
Exhibit 13 | |||||||||||||||||||||||||||||
The following table presents a reconciliation between certain Generally Accepted Accounting Principles (GAAP) amounts and specific non-GAAP measures as used to compute selected non-GAAP financial ratios. | |||||||||||||||||||||||||||||
As of and for the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||
(Dollars in millions) | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | September 30, 2011 | September 30, 2012 | September 30, 2011 | ||||||||||||||||||||||
Net income attributable to UNBC | $ | 124 | $ | 187 | $ | 195 | $ | 129 | $ | 172 | $ | 506 | $ | 649 | |||||||||||||||
Net adjustments related to privatization transaction, net of tax | 5 | 7 | 6 | 10 | 10 | 18 | 18 | ||||||||||||||||||||||
Net income attributable to UNBC, excluding impact of privatization transaction | $ | 129 | $ | 194 | $ | 201 | $ | 139 | $ | 182 | $ | 524 | $ | 667 | |||||||||||||||
Average total assets | $ | 87,881 | $ | 89,479 | $ | 89,449 | $ | 87,079 | $ | 82,197 | $ | 88,933 | $ | 80,870 | |||||||||||||||
Net adjustments related to privatization transaction | 2,359 | 2,377 | 2,394 | 2,419 | 2,442 | 2,376 | 2,458 | ||||||||||||||||||||||
Average total assets, excluding impact of privatization transaction | $ | 85,522 | $ | 87,102 | $ | 87,055 | $ | 84,660 | $ | 79,755 | $ | 86,557 | $ | 78,412 | |||||||||||||||
Return on average assets (3) | 0.56 | % | 0.84 | % | 0.88 | % | 0.59 | % | 0.83 | % | 0.76 | % | 1.07 | % | |||||||||||||||
Return on average assets, excluding impact of privatization transaction (3) (4) | 0.60 | 0.90 | 0.93 | 0.65 | 0.90 | 0.81 | 1.14 | ||||||||||||||||||||||
Average UNBC stockholder's equity | $ | 12,209 | $ | 11,905 | $ | 11,621 | $ | 11,646 | $ | 10,708 | $ | 11,913 | $ | 10,417 | |||||||||||||||
Net adjustments related to privatization transaction | 2,366 | 2,371 | 2,375 | 2,380 | 2,385 | 2,370 | 2,390 | ||||||||||||||||||||||
Average UNBC stockholder's equity, excluding impact of privatization transaction | $ | 9,843 | $ | 9,534 | $ | 9,246 | $ | 9,266 | $ | 8,323 | $ | 9,543 | $ | 8,027 | |||||||||||||||
Return on average UNBC stockholder's equity (3) | 4.03 | % | 6.32 | % | 6.75 | % | 4.39 | % | 6.36 | % | 5.67 | % | 8.33 | % | |||||||||||||||
| |||||||||||||||||||||||||||||
Return on average UNBC stockholder's equity, excluding impact of privatization transaction (3) (4) | 5.21 | 8.18 | 8.76 | 5.97 | 8.65 | 7.34 | 11.11 | ||||||||||||||||||||||
Noninterest expense | $ | 638 | $ | 599 | $ | 614 | $ | 619 | $ | 603 | $ | 1,851 | $ | 1,796 | |||||||||||||||
Less: Foreclosed asset expense | - | 1 | 1 | 3 | 4 | 2 | 8 | ||||||||||||||||||||||
Less: (Reversal of) provision for losses on off-balance sheet commitments | (4 | ) | (1 | ) | (2 | ) | 2 | - | (7 | ) | (31 | ) | |||||||||||||||||
Less: Productivity initiative costs | 10 | 2 | 6 | 14 | 33 | 18 | 42 | ||||||||||||||||||||||
Less: Low income housing credit (LIHC) investment amortization expense | 15 | 18 | 13 | 23 | 15 | 46 | 47 | ||||||||||||||||||||||
Less: Expenses of the LIHC consolidated VIEs | 10 | 8 | 7 | 6 | 6 | 25 | 18 | ||||||||||||||||||||||
Less: Merger costs related to acquisitions | 6 | 3 | 1 | - | 1 | 10 | 24 | ||||||||||||||||||||||
Less: Net adjustments related to privatization transaction | 21 | 21 | 22 | 32 | 26 | 64 | 77 | ||||||||||||||||||||||
Less: Debt termination fees from balance sheet repositioning | 30 | - | - | - | - | 30 | - | ||||||||||||||||||||||
Net noninterest expense, excluding impact of privatization transaction (a) | $ | 550 | $ | 547 | $ | 566 | $ | 539 | $ | 518 | $ | 1,663 | $ | 1,611 | |||||||||||||||
Total revenue | $ | 843 | $ | 834 | $ | 855 | $ | 791 | $ | 791 | $ | 2,532 | $ | 2,503 | |||||||||||||||
Add: Net interest income taxable-equivalent adjustment | 3 | 3 | 3 | 2 | 2 | 9 | 7 | ||||||||||||||||||||||
Less: Productivity initiative gains | - | - | 23 | - | - | 23 | - | ||||||||||||||||||||||
Less: Accretion related to privatization-related fair value adjustments | 12 | 10 | 11 | 15 | 10 | 33 | 47 | ||||||||||||||||||||||
| |||||||||||||||||||||||||||||
Less: Gains from securities associated with debt termination fees from balance sheet repositioning | 30 | - | - | - | - | 30 | - | ||||||||||||||||||||||
Total revenue, excluding impact of privatization transaction (b) | $ | 804 | $ | 827 | $ | 824 | $ | 778 | $ | 783 | $ | 2,455 | $ | 2,463 | |||||||||||||||
Adjusted efficiency ratio, excluding impact of privatization transaction (a)/(b) (4) (5) | 68.37 | 66.18 | 68.76 | 69.12 | 66.12 | 67.77 | 65.42 | ||||||||||||||||||||||
Total UNBC stockholder's equity | $ | 12,437 | $ | 12,076 | $ | 11,821 | $ | 11,562 | $ | 10,900 | |||||||||||||||||||
Less: Goodwill | 2,457 | 2,457 | 2,456 | 2,457 | 2,447 | ||||||||||||||||||||||||
Less: Intangible assets | 298 | 318 | 341 | 360 | 383 | ||||||||||||||||||||||||
Less: Deferred tax liabilities related to goodwill and intangible assets | (117 | ) | (115 | ) | (123 | ) | (130 | ) | (140 | ) | |||||||||||||||||||
Tangible common equity (c) | $ | 9,799 | $ | 9,416 | $ | 9,147 | $ | 8,875 | $ | 8,210 | |||||||||||||||||||
Tier 1 capital, determined in accordance with regulatory requirements | |||||||||||||||||||||||||||||
Tier 1 common equity (d) | $ | 10,207 | $ | 10,049 | $ | 9,853 | $ | 9,641 | $ | 8,724 | |||||||||||||||||||
Total assets | $ | 88,185 | $ | 87,939 | $ | 92,323 | $ | 89,676 | $ | 84,013 | |||||||||||||||||||
Less: Goodwill | 2,457 | 2,457 | 2,456 | 2,457 | 2,447 | ||||||||||||||||||||||||
Less: Intangible assets | 298 | 318 | 341 | 360 | 383 | ||||||||||||||||||||||||
Less: Deferred tax liabilities related to goodwill and intangible assets | (117 | ) | (115 | ) | (123 | ) | (130 | ) | (140 | ) | |||||||||||||||||||
Tangible assets (e) | $ | 85,547 | $ | 85,279 | $ | 89,649 | $ | 86,989 | $ | 81,323 | |||||||||||||||||||
Risk-weighted assets, determined in accordance with regulatory requirements (f) (7) | $ | 74,156 | $ | 72,905 | $ | 71,752 | $ | 69,738 | $ | 66,628 | |||||||||||||||||||
Tangible common equity ratio (c)/(e) (9) | 11.46 | % | 11.04 | % | 10.20 | % | 10.20 | % | 10.10 | % | |||||||||||||||||||
Tier 1 common capital ratio (d)/(f) (7) (8) | 13.76 | 13.78 | 13.73 | 13.82 | 13.09 | ||||||||||||||||||||||||
Refer to Exhibit 14 for footnote explanations. | |||||||||||||||||||||||||||||
UnionBanCal Corporation and Subsidiaries | |||
Footnotes | |||
Exhibit 14 | |||
(1) | Pre-tax, pre-provision income is total revenue less noninterest expense. Management believes that this is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover loan losses through a credit cycle. | ||
(2) | Core deposits exclude brokered deposits, foreign time deposits and domestic time deposits greater than $250,000. | ||
(3) | Annualized. | ||
(4) | These ratios exclude the impact of the privatization transaction. Management believes that these ratios, which exclude the push-down accounting effects of the privatization transaction, provide useful supplemental information regarding UnionBanCal's business results. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. | ||
(5) | The efficiency ratio is total noninterest expense as a percentage of total revenue (net interest income and noninterest income). The adjusted efficiency ratio, a non-GAAP financial measure, is net noninterest expense (noninterest expense excluding privatization-related expenses and fair value amortization/accretion, foreclosed asset expense, (reversal of) provision for losses on off-balance sheet commitments, low income housing credit (LIHC) investment amortization expense, expenses of the LIHC consolidated VIEs, merger costs related to acquisitions, certain costs related to productivity initiatives and debt termination fees from balance sheet repositioning) as a percentage of total revenue (net interest income (taxable-equivalent basis) and noninterest income), excluding impact of privatization, gains from productivity initiatives related to the sale of certain business units in 2012 and gains from securities associated with debt termination fees from balance sheet repositioning. Management discloses the adjusted efficiency ratio as a measure of the efficiency of our operations, focusing on those costs most relevant to our business activities. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. | ||
(6) | Yields, interest income and net interest margin are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent. | ||
(7) | Estimated as of September 30, 2012. | ||
(8) | The Tier 1 common capital ratio is the ratio of Tier 1 capital, less qualifying trust preferred securities, if any, to risk-weighted assets. The Tier 1 common capital ratio, a non-GAAP financial measure, facilitates the understanding of UnionBanCal's capital structure and is used to assess and compare the quality and composition of UnionBanCal's capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. | ||
(9) | The tangible common equity ratio, a non-GAAP financial measure, is calculated as tangible common equity divided by tangible assets. The methodology for determining tangible common equity may differ among companies. The tangible common equity ratio facilitates the understanding of UnionBanCal's capital structure and is used to assess and compare the quality and composition of UnionBanCal's capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. | ||
(10) | Criticized loans held for investment, excluding FDIC covered loans reflect loans in the commercial portfolio segment that are monitored for credit quality based on internal ratings. Amounts exclude small business loans, which are monitored by business credit score and delinquency status. | ||
(11) | The allowance for credit losses ratios include the allowances for loan losses and losses on off-balance sheet commitments. | ||
(12) | These ratios exclude the impact of the FDIC covered loans, the related allowance for loan losses and FDIC covered OREO, which are covered under loss share agreements between Union Bank, N.A. and the Federal Deposit Insurance Corporation. Such agreements are related to the April 2010 acquisitions of certain assets and assumption of certain liabilities of Frontier Bank and Tamalpais Bank. Management believes the exclusion of FDIC covered loans and FDIC covered OREO in certain asset quality ratios that include nonperforming loans, nonperforming assets, total loans held for investment and the allowance for loan losses or credit losses in the numerator or denominator provides a better perspective into underlying asset quality trends. | ||
(13) | Average balances on loans outstanding include all nonperforming loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield. | ||
(14) | Includes interest bearing trading liabilities. | ||
(15) | Excludes loans totaling $88 million, $124 million, $144 million, $165 million, and $198 million that are 90 days or more past due and still accruing at September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011, and September 30, 2011 respectively, which consist of FDIC covered loans accounted for in accordance with the accounting standards for purchased credit impaired loans. | ||
(16) | "Other" includes a $16 million allowance for loan losses transfer attributed to an internal reorganization on October 1, 2011 in which The Bank of Tokyo-Mitsubishi UFJ transferred its trust company, The Bank of Tokyo-Mitsubishi UFJ Trust Company (BTMUT) to UnionBanCal. | ||
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CONTACT:
UnionBanCal Corporation
Thomas Taggart, 415-765-2249
Corporate Communications
Michelle Crandall, 415-765-2780
Investor Relations