Exhibit 99.1
UnionBanCal Reports 13% Increase in Second Quarter Operating EPS
SAN FRANCISCO--(BUSINESS WIRE)--July 20, 2005--UnionBanCal
Corporation (NYSE:UB) today reported second quarter 2005 net income of
$187 million, or $1.27 per diluted common share. The Company reported
net income of $231 million, or $1.54 per diluted common share, in the
second quarter of 2004, including non-recurring after-tax gains of $58
million, or $0.38 per diluted common share, on the sale of its
merchant card portfolio and $5 million, or $0.04 per diluted common
share, on the sale of real property. On an operating earnings basis
(which excludes the non-recurring gains in second quarter 2004),
second quarter 2005 earnings increased 11.0 percent and earnings per
diluted common share increased 13.4 percent.
For the first half of 2005, net income was $369 million, up 13.2
percent from operating earnings of $326 million in the first half of
2004. First half earnings per diluted common share were $2.49, up 14.8
percent over operating earnings per diluted common share of $2.17 in
the same period last year. Operating earnings for first half 2004
excluded the previously referenced non-recurring gains recorded in
second quarter 2004.
"I am pleased with the financial performance of our Company during
the second quarter," stated Takashi Morimura, President and Chief
Executive Officer. "The Company produced organic loan growth of
approximately 15 percent and organic noninterest bearing deposit
growth of approximately 5 percent over second quarter last year. The
ongoing strength of our deposit-generating businesses is best
reflected in our ratio of average noninterest bearing deposits to
average total deposits of 47.5 percent and our average annualized
all-in cost of funds of 0.90 percent, for second quarter 2005. Credit
quality improved further, with our third consecutive quarter of net
recoveries and a 63 percent decline in nonperforming assets from a
year earlier. Once again, the combination of net recoveries and
improvement in overall credit quality resulted in a negative provision
for credit losses for the quarter.
"We continued to return excess capital to our shareholders by
repurchasing $89 million of our common shares in the open market
during second quarter, and by increasing our common stock dividend
rate 14 percent, to $0.41 per quarter," concluded Morimura.
Chief Operating Officer Philip Flynn added, "I am particularly
pleased with the continued strong growth in all major components of
our loan portfolio. Net interest income improved significantly in the
second quarter, reflecting good growth in loan and deposit volumes, as
well as the inherent asset-sensitivity of our balance sheet and our
effective management of deposit pricing."
Second Quarter Total Revenue
For second quarter 2005, total revenue (taxable-equivalent net
interest income plus noninterest income) was $686 million, an increase
of $56 million, or 8.9 percent, compared with total revenue on an
operating basis of $630 million in second quarter 2004 (which excluded
$102 million in non-recurring gains). Net interest income increased
16.0 percent, and noninterest income on an operating basis decreased
3.5 percent. Compared with first quarter 2005, total revenue increased
3.3 percent, with net interest income increasing 5.2 percent, and
noninterest income flat.
Second Quarter Net Interest Income (Taxable-equivalent)
Net interest income was $465 million in second quarter 2005, up
$64 million, or 16.0 percent, from the same quarter a year ago. Strong
growth in earning assets and deposits, the positive effects of the
rising short-term interest rate environment, and higher interest
recoveries accounted for the growth.
Average earning assets increased $4.1 billion, or 10.2 percent,
primarily due to a $5.4 billion, or 20.1 percent, increase in average
loans, partially offset by a $0.7 billion, or 6.2 percent, decrease in
average securities. Average residential mortgages increased $2.6
billion, or 33.1 percent; average commercial loans increased $1.3
billion, or 14.0 percent; and average commercial mortgages increased
$1.1 billion, or 25.8 percent, primarily due to the Jackson Federal
acquisition, which closed October 28, 2004. Excluding the Jackson
Federal acquisition, average loans increased approximately 15.5
percent.
Compared to second quarter 2004, average noninterest bearing
deposits increased $1.0 billion, or 5.6 percent. Excluding the Jackson
Federal acquisition, average noninterest bearing deposits increased
approximately 5.1 percent. Average title and escrow deposits declined
$187 million. Average noninterest bearing deposits represented 47.5
percent of average total deposits in second quarter. The annualized
average all-in cost of funds was 0.90 percent, reflecting the
Company's strong average deposit-to-loan ratio of 126.4 percent and
the high proportion of noninterest bearing deposits to total deposits.
The average yield on earning assets of $44.5 billion was 5.07
percent, up 67 basis points over second quarter last year, with the
average loan yield increasing 70 basis points. The average rate on
interest bearing liabilities of $24.7 billion was 1.60 percent, up 82
basis points, reflecting higher short-term interest rates compared
with second quarter 2004. Average interest bearing deposits were $21.4
billion and the weighted average rate was 1.37 percent. Interest
recoveries were approximately $7 million higher than prior year. The
net interest margin in second quarter 2005 was 4.18 percent, compared
with 3.98 percent in second quarter 2004.
On a sequential quarter basis, net interest income increased $23
million, or 5.2 percent. Average earning assets increased $1.0
billion, or 2.4 percent, primarily due to an increase in average loans
of $0.9 billion. Average residential mortgages increased $460 million,
or 4.7 percent, and average commercial loans increased $243 million,
or 2.4 percent. Average noninterest bearing deposits increased $639
million, or 3.4 percent, primarily due to a $490 million increase in
title and escrow deposits. The average yield on earning assets
increased 22 basis points and the average rate on interest bearing
liabilities increased 24 basis points, reflecting rising short-term
interest rates. The net interest margin improved 9 basis points to
4.18 percent.
Second Quarter Noninterest Income
In second quarter 2005, noninterest income was $221 million, down
$8 million, or 3.5 percent, from noninterest income on an operating
basis of $229 million for the same quarter a year ago (which excluded
a $93 million gain on the sale of the Company's merchant card
portfolio, and a $9 million gain on the sale of real property).
Service charges on deposit accounts decreased $9 million, or 10.3
percent, primarily due to lower account analysis fees, stemming from
an increase in the earnings credit rate on deposit balances. Trust and
investment management fees increased $5 million, or 13.1 percent,
primarily due to the August 1, 2004, acquisition of TruSource
(formerly CNA Trust), and an increase in trust assets. Merchant
banking fees increased $10 million, primarily due to a higher volume
of syndications completed. Card processing fees, net, decreased $9
million, primarily due to the May 31, 2004, sale of the Company's
merchant card portfolio. Securities gains (losses), net, reflected a
$13 million loss on the sale of $475 million of U.S. Government Agency
securities in second quarter 2005, with the proceeds deployed into
higher-yielding earning assets.
Compared with first quarter 2005, second quarter 2005 noninterest
income was flat. Service charges on deposit accounts were essentially
unchanged, with a decrease in account analysis fees, stemming from an
increase in the earnings credit rate on deposit balances, offset by
two more processing days in the quarter. Insurance commissions
decreased $2.7 million, or 12.2 percent, reflecting normal seasonal
factors.
Second Quarter Noninterest Expense
Noninterest expense for second quarter 2005 was $409 million, an
increase of $33 million, or 8.7 percent, over second quarter 2004.
Salaries and employee benefits expense increased $24 million, or 11.1
percent, primarily due to higher employee count associated with
acquisitions, annual merit increases, higher performance-related
incentive expense, higher restricted stock expense, and higher pension
expense. Outside services expense increased $10 million, or 57.0
percent, primarily due to higher vendor billings related to title and
escrow balances, stemming from the higher earnings credit rate in
second quarter 2005. Professional services expense increased $10
million, or 101.0 percent, primarily due to higher compliance-related
expense. Intangible asset amortization expense was $5 million, an
increase of $0.5 million compared with prior year. The provision for
off-balance sheet commitments was negative $4.0 million in second
quarter 2005. The Company began recording separate provisions for
on-balance sheet and off-balance sheet credit obligations in first
quarter 2005. The provision for off-balance sheet commitments is
required to be classified in noninterest expense.
Compared with first quarter 2005, noninterest expense increased $2
million, or 0.4 percent.
Income Tax Expense
The effective tax rate for second quarter 2005 was 34.8 percent,
compared with an effective tax rate of 35.9 percent on an operating
basis for second quarter 2004 and an effective tax rate of 31.1
percent for first quarter 2005. First quarter 2005 income tax expense
included a credit adjustment of $10 million, or 7 cents per common
share, to reflect a reduction in reserves for estimated amounts owed
to the Internal Revenue Service with respect to the tax treatment of
certain leasing transactions. Excluding this credit adjustment, the
effective tax rate for first quarter 2005 was 34.9 percent.
Year-To-Date Results
Total revenue was $1.4 billion in the first six months of 2005, an
increase of $108 million, or 8.7 percent, compared with total revenue
on an operating basis of $1.3 billion in the same period of 2004
(which excluded $102 million in non-recurring gains). Net interest
income increased 13.1 percent, and noninterest income on an operating
basis increased 0.8 percent.
Net interest income was $907 million in the first half of 2005, a
$105 million, or 13.1 percent, increase from prior year, primarily due
to the positive effects of the higher interest rate environment in
2005, and higher volumes of earning assets and noninterest bearing
deposits. Compared with prior year, net interest margin increased 7
basis points, to 4.14 percent.
Noninterest income in the first half of 2005 was $444 million, an
increase of $3 million, or 0.8 percent, over noninterest income on an
operating basis of $441 million for the same period in 2004 (which
excluded a $93 million gain on the sale of the Company's merchant card
portfolio, and a $9 million gain on the sale of real property).
Service charges on deposit accounts decreased $10 million, or 5.8
percent, primarily due to lower account analysis fees stemming from
the higher earnings credit rate in the first half of 2005. Trust and
investment management fees increased $11 million, or 15.1 percent,
primarily due to the August 1, 2004, acquisition of TruSource
(formerly CNA Trust), and increased trust assets. Merchant banking
fees increased $9 million, or 60.6 percent, primarily due to a higher
number of syndications completed in the first six months of 2005. Card
processing fees, net, decreased $12 million primarily due to the May
31, 2004, sale of the Company's merchant card portfolio. Securities
gains (losses), net, reflected a $13 million loss on the sale of U.S.
Government Agency securities in 2005. Net gains on private equity
investments increased $6 million in the first half of 2005.
For the first half of 2005, noninterest expense increased $67
million, or 9.0 percent, over the first half of 2004. Salaries and
employee benefits expense increased $44 million, or 10.1 percent,
primarily due to higher employee count associated with acquisitions,
merit increases, higher performance-related incentive expense and
higher pension expense. Outside services expense increased $15
million, or 45.3 percent, primarily due to higher vendor billings
related to title and escrow balances, stemming from the higher
earnings credit rate in the first half of 2005. Professional services
expense increased $13 million, or 59.3 percent, primarily due to
higher compliance-related expense. Intangible asset amortization
expense was $10 million, reflecting a $1.3 million increase compared
with prior year, due to acquisitions.
Credit Quality
Nonperforming assets at June 30, 2005, were $69 million, or 0.13
percent of total assets. This compares with $107 million, or 0.22
percent of total assets at March 31, 2005, and $184 million, or 0.40
percent of total assets, at June 30, 2004. Nonperforming assets
declined 63 percent between June 30, 2004, and June 30, 2005.
In second quarter 2005, the total provision for credit losses was
negative $15 million, compared with negative $5 million in first
quarter 2005, and negative $10 million in second quarter 2004. The
total provision for credit losses in second quarter 2005 consisted of
a provision for loan losses of negative $11 million and a provision
for off-balance sheet commitments of negative $4 million, which is
classified in noninterest expense. For the third consecutive quarter,
the Company realized net loan recoveries. In second quarter 2005, net
loan recoveries were $2 million, compared with net loan recoveries of
$5 million in first quarter 2005. In second quarter 2004, net
charge-offs were $10 million.
At June 30, 2005, the allowance for credit losses as a percent of
total loans and as a percent of nonaccrual loans was 1.47 percent and
721.1 percent, respectively. These ratios were 1.56 percent and 480.5
percent, respectively, at March 31, 2005, and 1.82 percent and 281.6
percent, respectively, at June 30, 2004.
Balance Sheet and Capital Ratios
At June 30, 2005, the Company had total assets of $51.2 billion.
Total loans were $32.5 billion and total deposits were $42.7 billion,
resulting in a period-end deposit-to-loan ratio of 131.5 percent. At
period-end, total stockholders' equity was $4.3 billion, the tangible
equity ratio was 7.41 percent, and the ratio of tangible common equity
to risk-weighted assets was 8.74 percent. Book value per share at June
30, 2005, was $29.51, up 9.4 percent from a year earlier. The
Company's Tier I and total risk-based capital ratios at period-end
were 8.88 percent and 11.01 percent, respectively.
Stock Repurchases
During second quarter 2005, the Company repurchased approximately
1.4 million shares of common stock at a total cost of $89 million, or
$62.78 per repurchased share. For the first six months of 2005, the
Company repurchased 5.5 million shares of common stock at a total cost
of $329 million, or $59.41 per repurchased share. At June 30, 2005,
the Company was authorized by its Board of Directors to repurchase an
additional $162 million of common stock.
Common shares outstanding at June 30, 2005, were 144.2 million, a
decrease of 3.6 million shares, or 2.5 percent, from one year earlier,
primarily reflecting shares repurchased, net of shares issued in
acquisitions.
Third Quarter and Full Year 2005 Earnings Per Share Forecast
The Company currently estimates that fully diluted earnings per
share will be in the range of $1.23 to $1.28 for third quarter 2005,
and $5.00 to $5.10 for full year 2005. These estimates assume a total
provision for credit losses of approximately negative $10 million in
third quarter 2005, and a total provision for credit losses of
approximately negative $35 million for full year 2005.
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," "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 guidance.
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, including the continuing financial
difficulties of the California state government; 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, Ltd.,
which is a wholly-owned subsidiary of Mitsubishi Tokyo Financial
Group, Inc.; competition in the banking and financial services
industries; adverse effects of current and future banking laws, rules
and regulations and their enforcement, or governmental fiscal or
monetary policies; declines or disruptions in the stock or bond
markets which may adversely affect the Company or the Company's
borrowers or other customers; changes in accounting practices or
requirements; 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 second
quarter results at 8:30 AM Pacific Time (11:30 AM Eastern Time) on
July 21, 2005. Interested parties calling from locations within the
United States should call 877-260-8899 (612-332-0228 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.uboc.com. Simply follow the links to the Investor Relations
section of the website. The webcast replay will be available on the
Web site 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 p.m. Pacific Time (3:00 p.m. Eastern Time),
July 21, through 11:59 p.m. Pacific Time, July 28 (2:59 a.m. Eastern
Time, July 29). The reservation number for this playback is 786168.
Based in San Francisco, UnionBanCal Corporation is a bank holding
company with assets of $51.2 billion at June 30, 2005. Its primary
subsidiary, Union Bank of California, N.A., had 318 banking offices in
California, Oregon and Washington, and 21 international facilities, at
June 30, 2005.
Exhibit 1
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
On a Reported Earnings Basis:
- ----------------------------
As of and for the Percent Change to
(Dollars in Three Months Ended June 30, 2005 from
thousands, ------------------------------- ------------------
except per June 30, March 31, June 30, June 30, March 31,
share data) 2004 2005 2005 2004 2005
- -------------- -------- --------- --------- --------- --------
Results of
operations:
Net interest
income (1) $400,661 $441,854 $464,874 16.03% 5.21%
Noninterest
income 331,010 222,761 221,350 (33.13%) (0.63%)
------------ ------------ ------------
Total revenue 731,671 664,615 686,224 (6.21%) 3.25%
Noninterest
expense (2) 376,402 407,467 409,190 8.71% 0.42%
Reversal of
allowance
for loan
losses (10,000) (8,000) (11,000) 10.00% 37.50%
------------ ------------ ------------
Income before
income taxes (1) 365,269 265,148 288,034 (21.14%) 8.63%
Taxable-
equivalent
adjustment 803 1,055 1,018 26.77% (3.51%)
Income tax
expense 133,369 82,116 99,834 (25.14%) 21.58%
------------ ------------ ------------
Net income $231,097 $181,977 $187,182 (19.00%) 2.86%
============ ============ ============
Per common
share:
Net income-
basic $1.56 $1.24 $1.29 (17.31%) 4.03%
Net income-
diluted 1.54 1.21 1.27 (17.53%) 4.96%
Dividends (3) 0.36 0.36 0.41 13.89% 13.89%
Book value
(end of
period) 26.98 28.41 29.51 9.38% 3.87%
Common shares
outstanding
(end of
period) 147,845,160 144,575,615 144,205,458 (2.46%) (0.26%)
Weighted
average
common shares
outstanding -
basic 147,687,350 146,997,649 144,547,697 (2.13%) (1.67%)
Weighted
average
common shares
outstanding -
diluted 150,183,938 149,915,503 147,222,390 (1.97%) (1.80%)
Balance sheet
(end of
period):
Total assets $46,295,831 $49,432,871 $51,178,058 10.55% 3.53%
Total loans 27,594,271 31,365,540 32,498,221 17.77% 3.61%
Nonaccrual
loans 178,062 101,904 66,063 (62.90%) (35.17%)
Nonperforming
assets 183,913 107,136 68,945 (62.51%) (35.65%)
Total
deposits 39,367,911 41,711,266 42,730,027 8.54% 2.44%
Junior
subordinated
debt 16,017 15,677 15,564 (2.83%) (0.72%)
Medium and
long-term
debt 800,988 803,233 821,664 2.58% 2.29%
Stockholders'
equity 3,988,676 4,107,223 4,254,991 6.68% 3.60%
Balance sheet
(period
average):
Total assets $44,611,351 $48,277,725 $49,465,234 10.88% 2.46%
Total loans 26,838,622 31,302,779 32,223,991 20.07% 2.94%
Earning
assets 40,351,016 43,461,399 44,482,833 10.24% 2.35%
Total
deposits 37,810,048 39,668,832 40,723,333 7.71% 2.66%
Stockholders'
equity 3,933,788 4,208,650 4,145,150 5.37% (1.51%)
Financial
ratios:
Return on
average
assets (4) 2.08% 1.53% 1.52%
Return on
average
stock-
holders'
equity (4) 23.63% 17.54% 18.11%
Efficiency
ratio (5) 51.44% 60.80% 60.59%
Net interest
margin (1) 3.98% 4.09% 4.18%
Dividend
payout ratio 23.08% 29.03% 31.78%
Tangible
equity ratio 7.88% 7.36% 7.41%
Tier 1 risk-
based
capital
ratio (6) 10.46% 9.06% 8.88%
Total risk-
based
capital
ratio (6) 13.07% 11.41% 11.01%
Leverage
ratio (6) 8.36% 7.79% 7.77%
Allowance for
credit losses
to total
loans (7) 1.82% 1.56% 1.47%
Allowance for
credit losses
to nonaccrual
loans (7) 281.60% 480.46% 721.05%
Net loans
charged off
(recovered)
to average
total loans
(4) 0.15% (0.07%) (0.02%)
Nonperforming
assets to
total loans,
foreclosed
assets, and
distressed
loans held
for sale 0.67% 0.34% 0.21%
Nonperforming
assets to
total assets 0.40% 0.22% 0.13%
On an Operating Earnings Basis:
- -------------------------------
Selected financial data on an operating earnings basis
(see bottom of exhibit 5 for non-recurring items):
Operating
earnings per
common share
(basic) $1.14 $1.24 $1.29
Operating
earnings per
common share
(diluted) $1.12 $1.21 $1.27
Operating
return on
average
assets (3) 1.52% 1.53% 1.52%
Operating
return on
average
stockholders'
equity (3) 17.24% 17.54% 18.11%
Operating
efficiency
ratio (4) 59.73% 60.80% 60.59%
Operating
dividend
payout ratio 31.58% 29.03% 31.78%
- ----------------------------------------
(1) Taxable-equivalent basis.
(2) Included in noninterest expense at March 31, 2005 and June 30,
2005 was a $3 million provision for and a $4 million reversal of
losses on off-balance sheet commitments, respectively.
(3) Dividends per share reflect dividends declared on UnionBanCal
Corporation's common stock outstanding as of the declaration date.
(4) Annualized.
(5) 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.
(6) Estimated as of June 30, 2005.
(7) The allowance for credit losses ratios include the allowance
for loan losses and losses on off-balance sheet commitments.
nm = not meaningful
Exhibit 2
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Percent
Change to
On a Reported Earnings Basis: As of and for the Six June 30,
Months Ended 2005 from
- --------------------------------- --------------------------- --------
(Dollars in thousands, except per June 30, June 30, June 30,
share data) 2004 2005 2004
- --------------------------------- ------------ ------------ --------
Results of operations:
Net interest income (1) $ 801,884 $ 906,728 13.07%
Noninterest income 542,215 444,111 (18.09%)
------------- -------------
Total revenue 1,344,099 1,350,839 0.50%
Noninterest expense (2) 749,508 816,657 8.96%
Reversal of allowance for loan
losses (15,000) (19,000) 26.67%
------------- -------------
Income before income taxes (1) 609,591 553,182 (9.25%)
Taxable-equivalent adjustment 1,605 2,073 29.16%
Income tax expense 219,402 181,950 (17.07%)
------------- -------------
Net income $ 388,584 $ 369,159 (5.00%)
============= =============
Per common share:
Net income-basic $ 2.63 $ 2.53 (3.80%)
Net income-diluted 2.59 2.49 (3.86%)
Dividends (3) 0.67 0.77 14.93%
Book value (end of period) 26.98 29.51 9.38%
Common shares outstanding (end of
period) 147,845,160 144,205,458 (2.46%)
Weighted average common shares
outstanding - basic 147,543,824 145,765,905 (1.21%)
Weighted average common shares
outstanding - diluted 149,991,567 148,412,390 (1.05%)
Balance sheet (end of period):
Total assets $ 46,295,831 $ 51,178,058 10.55%
Total loans 27,594,271 32,498,221 17.77%
Nonaccrual loans 178,062 66,063 (62.90%)
Nonperforming assets 183,913 68,945 (62.51%)
Total deposits 39,367,911 42,730,027 8.54%
Junior subordinated debt 16,017 15,564 (2.83%)
Trust preferred securities 800,988 821,664 2.58%
Stockholders' equity 3,988,676 4,254,991 6.68%
Balance sheet (period average):
Total assets $ 43,831,266 $ 48,874,761 11.51%
Total loans 26,490,239 31,765,930 19.92%
Earning assets 39,613,622 43,974,939 11.01%
Total deposits 36,874,787 40,198,996 9.01%
Stockholders' equity 3,941,855 4,176,724 5.96%
Financial ratios:
Return on average assets (4) 1.78% 1.52%
Return on average stockholders'
equity (4) 19.82% 17.82%
Efficiency ratio (5) 55.72% 60.69%
Net interest margin (1) 4.07% 4.14%
Dividend payout ratio 25.48% 30.43%
Tangible equity ratio 7.88% 7.41%
Tier 1 risk-based capital ratio (6) 10.46% 8.88%
Total risk-based capital ratio (6) 13.07% 11.01%
Leverage ratio (6) 8.36% 7.77%
Allowance for credit losses to
total loans (7) 1.82% 1.47%
Allowance for credit losses to
nonaccrual loans (7) 281.60% 721.05%
Net loans charged off to average
total loans (4) 0.17% (0.04%)
Nonperforming assets to total
loans, foreclosed assets, and
distressed loans held for sale 0.67% 0.21%
Nonperforming assets to total
assets 0.40% 0.13%
On an Operating Earnings Basis :
- ---------------------------------
Selected financial data on an operating earnings basis
(see bottom of exhibit 6 for non-recurring items):
Operating earnings per common
share (basic) $ 2.21 $ 2.53
Operating earnings per common
share (diluted) $ 2.17 $ 2.49
Operating return on average
assets (3) 1.50% 1.52%
Operating return on average
stockholders' equity (3) 16.64% 17.82%
Operating efficiency ratio (4) 60.28% 60.69%
Operating dividend payout ratio 30.32% 30.43%
- ---------------------------------- ------------- -------------
(1) Taxable-equivalent basis.
(2) Included in noninterest expense at June 30, 2005 was a $1
million reversal of losses on off-balance sheet commitments.
(3) Dividends per share reflect dividends declared on UnionBanCal
Corporation's common stock outstanding as of the declaration date.
(4) Annualized.
(5) 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.
(6) Estimated as of June 30, 2005.
(7) The allowance for credit losses ratios include the allowance
for loan losses and losses on off-balance sheet commitments.
nm = not meaningful
Exhibit 3
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(Taxable-Equivalent Basis)
On a Reported Earnings Basis
----------------------------
For the Three Months Ended For the Six Months Ended
--------------------------- ------------------------
(Amounts in
thousands,
except per June 30, March 31, June 30, June 30,
share data) 2004 2005 2005 2004 2005
- -------------- ----------- --------- --------- --------- ----------
Interest Income
Loans $328,647 $416,259 $452,142 $664,258 $868,401
Securities 108,570 101,264 103,019 214,898 204,283
Interest
bearing
deposits in
banks 1,121 2,102 1,892 2,029 3,994
Federal funds
sold and
securities
purchased
under resale
agreements 2,928 2,373 5,256 4,887 7,629
Trading account
assets 883 908 1,049 1,478 1,957
--------- --------- --------- --------- ----------
Total
interest
income 442,149 522,906 563,358 887,550 1,086,264
--------- --------- --------- --------- ----------
Interest Expense
Domestic
deposits 32,123 54,562 64,792 65,733 119,354
Foreign
deposits 2,761 6,176 8,154 4,893 14,330
Federal funds
purchased and
securities
sold under
repurchase
agreements 552 7,455 8,217 1,233 15,672
Commercial
paper 1,051 4,560 7,807 2,186 12,367
Medium and
long-term
debt 3,693 6,532 7,459 6,832 13,991
Trust notes 130 238 238 2,311 476
Other borrowed
funds 1,178 1,529 1,817 2,478 3,346
--------- --------- --------- --------- ----------
Total
interest
expense 41,488 81,052 98,484 85,666 179,536
--------- --------- --------- --------- ----------
Net Interest
Income 400,661 441,854 464,874 801,884 906,728
Reversal of
allowance for
loan
losses (1) (10,000) (8,000) (11,000) (15,000) (19,000)
--------- --------- --------- --------- ----------
Net interest
income
after
reversal of
allowance
for loan
losses 410,661 449,854 475,874 816,884 925,728
--------- --------- --------- --------- ----------
Noninterest Income
Service charges
on deposit
accounts 90,031 80,455 80,757 171,127 161,212
Trust and
investment
management
fees 36,788 41,963 41,590 72,610 83,553
Insurance
commissions 18,652 22,017 19,340 40,387 41,357
International
commissions
and fees 18,102 17,674 18,326 35,647 36,000
Merchant
banking fees 7,714 6,266 18,114 15,181 24,380
Foreign
exchange
gains, net 8,294 8,940 9,296 16,638 18,236
Brokerage
commissions
and fees 8,023 8,972 8,605 16,320 17,577
Card
processing
fees, net 15,456 5,607 6,464 24,248 12,071
Securities
gains
(losses), net (4) 344 (13,313) 1,618 (12,969)
Other 127,954 30,523 32,171 148,439 62,694
--------- --------- --------- --------- ----------
Total
noninterest
income 331,010 222,761 221,350 542,215 444,111
--------- --------- --------- --------- ----------
Noninterest
Expense
Salaries and
employee
benefits 217,597 239,480 241,653 437,020 481,133
Net occupancy 32,173 33,525 34,681 63,755 68,206
Outside
services 17,406 21,896 27,320 33,865 49,216
Equipment 16,883 17,733 17,292 34,154 35,025
Professional
services 10,290 13,710 20,682 21,593 34,392
Software 12,908 14,628 15,617 25,903 30,245
Communications 11,810 11,536 11,067 23,968 22,603
Foreclosed
asset
expense
(income) 17 406 (2,577) 536 (2,171)
(Reversal of)
provision for
losses on
off-balance
sheet
commitments (1) -- 3,000 (4,000) -- (1,000)
Other 57,318 51,553 47,455 108,714 99,008
--------- --------- --------- --------- ----------
Total
noninterest
expense 376,402 407,467 409,190 749,508 816,657
--------- --------- --------- --------- ----------
Income before
income taxes 365,269 265,148 288,034 609,591 553,182
Taxable-
equivalent
adjustment 803 1,055 1,018 1,605 2,073
Income tax
expense 133,369 82,116 99,834 219,402 181,950
--------- --------- --------- --------- ----------
Net Income $231,097 $181,977 $187,182 $388,584 $369,159
========= ========= ========= ========= ==========
Net income per
common share --
basic $1.56 $1.24 $1.29 $2.63 $2.53
========= ========= ========= ========= ==========
Net income per
common share --
diluted $1.54 $1.21 $1.27 $2.59 $2.49
========= ========= ========= ========= ==========
Weighted average
common shares
outstanding --
basic 147,687 146,998 144,548 147,544 145,766
========= ========= ========= ========= ==========
Weighted average
common shares
outstanding --
diluted 150,184 149,916 147,222 149,992 148,412
========= ========= ========= ========= ==========
- ---------------------------------------
(1) Beginning in the quarter ending March 31, 2005, the net change
in the allowance for losses on off-balance sheet commitments was
recognized separately from the change in the allowance for loan
losses. Prior periods have not been restated.
Exhibit 4
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(Taxable-Equivalent Basis)
On an Operating Earnings Basis (1)
----------------------------------
For the Three Months Ended For the Six Months Ended
---------------------------- ------------------------
(Amounts in
thousands,
except per June 30, March 31, June 30, June 30,
share data) 2004 2005 2005 2004 2005
--------- --------- --------- --------- ----------
Interest Income
Loans $328,647 $416,259 $452,142 $664,258 $868,401
Securities 108,570 101,264 103,019 214,898 204,283
Interest
bearing
deposits in
banks 1,121 2,102 1,892 2,029 3,994
Federal funds
sold and
securities
purchased
under resale
agreements 2,928 2,373 5,256 4,887 7,629
Trading
account
assets 883 908 1,049 1,478 1,957
--------- --------- --------- --------- -----------
Total
interest
income 442,149 522,906 563,358 887,550 1,086,264
--------- --------- --------- --------- -----------
Interest Expense
Domestic
deposits 32,123 54,562 64,792 65,733 119,354
Foreign
deposits 2,761 6,176 8,154 4,893 14,330
Federal funds
purchased and
securities
sold under
repurchase
agreements 552 7,455 8,217 1,233 15,672
Commercial
paper 1,051 4,560 7,807 2,186 12,367
Medium and
long-term
debt 3,693 6,532 7,459 6,832 13,991
Trust notes 130 238 238 2,311 476
Other borrowed
funds 1,178 1,529 1,817 2,478 3,346
--------- --------- --------- --------- -----------
Total
interest
expense 41,488 81,052 98,484 85,666 179,536
--------- --------- --------- --------- -----------
Net Interest
Income 400,661 441,854 464,874 801,884 906,728
Reversal of
allowance for
loan
losses (2) (10,000) (8,000) (11,000) (15,000) (19,000)
--------- --------- --------- --------- -----------
Net
interest
income
after
reversal of
allowance
for loan
losses 410,661 449,854 475,874 816,884 925,728
--------- --------- --------- --------- -----------
Noninterest
Income
Service
charges on
deposit
accounts 90,031 80,455 80,757 171,127 161,212
Trust and
investment
management
fees 36,788 41,963 41,590 72,610 83,553
Insurance
commissions 18,652 22,017 19,340 40,387 41,357
International
commissions
and fees 18,102 17,674 18,326 35,647 36,000
Merchant
banking fees 7,714 6,266 18,114 15,181 24,380
Foreign
exchange
gains, net 8,294 8,940 9,296 16,638 18,236
Brokerage
commissions
and fees 8,023 8,972 8,605 16,320 17,577
Card
processing
fees, net 15,456 5,607 6,464 24,248 12,071
Securities
gains
(losses), net (4) 344 (13,313) 1,618 (12,969)
Other 26,419 30,523 32,171 46,904 62,694
--------- --------- --------- --------- -----------
Total
noninterest
income 229,475 222,761 221,350 440,680 444,111
--------- --------- --------- --------- -----------
Noninterest
Expense
Salaries and
employee
benefits 217,597 239,480 241,653 437,020 481,133
Net occupancy 32,173 33,525 34,681 63,755 68,206
Outside
services 17,406 21,896 27,320 33,865 49,216
Equipment 16,883 17,733 17,292 34,154 35,025
Professional
services 10,290 13,710 20,682 21,593 34,392
Software 12,908 14,628 15,617 25,903 30,245
Communications 11,810 11,536 11,067 23,968 22,603
Foreclosed
asset expense
(income) 17 406 (2,577) 536 (2,171)
(Reversal of)
provision for
losses on
off-balance
sheet
commitments
(2) -- 3,000 (4,000) -- (1,000)
Other 57,318 51,553 47,455 108,714 99,008
--------- --------- --------- --------- -----------
Total
noninterest
expense 376,402 407,467 409,190 749,508 816,657
--------- --------- --------- --------- -----------
Income before
income taxes 263,734 265,148 288,034 508,056 553,182
Taxable-
equivalent
adjustment 803 1,055 1,018 1,605 2,073
Income tax
expense 94,345 82,116 99,834 180,378 181,950
--------- --------- --------- --------- -----------
Net Income $168,586 $181,977 $187,182 $326,073 $369,159
========= ========= ========= ========= ===========
Net income per
common share --
basic $1.14 $1.24 $1.29 $2.21 $2.53
========= ========= ========= ========= ===========
Net income per
common share --
diluted $1.12 $1.21 $1.27 $2.17 $2.49
========= ========= ========= ========= ===========
Weighted average
common shares
outstanding
-- basic 147,687 146,998 144,548 147,544 145,766
========= ========= ========= ========= ===========
Weighted average
common shares
outstanding --
diluted 150,184 149,916 147,222 149,992 148,412
========= ========= ========= ========= ===========
- ---------------------------------------
(1) See exhibits 5 and 6 for reconciliation of 'reported earnings' to
'operating earnings'.
(2) Beginning in the quarter ending March 31, 2005, the net change in
the allowance for losses on off-balance sheet commitments was
recognized separately from the change in the allowance for loan
losses. Prior periods have not been restated.
Exhibit 5
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Reconciliations
(Taxable-Equivalent Basis)
Reported Earnings Reconciliation to Operating Earnings
------------------------------------------------------
For the Three Months Ended
-----------------------------------
June 30, 2004
-----------------------------------
Non-
(Amounts in thousands, except per Reported recurring Operating
share data) Items
- ---------------------------------- ------------- ---------- ----------
Net Interest Income $400,661 $ - $400,661
Reversal of allowance for loan
losses (10,000) - (10,000)
-------- --------- --------
Net interest income after
reversal of allowance for loan
losses 410,661 - 410,661
-------- --------- --------
Noninterest Income
Other (1)(2) 127,954 (101,535) 26,419
All other (no adjustments) 203,056 - 203,056
-------- --------- --------
Total noninterest income 331,010 (101,535) 229,475
-------- --------- --------
Noninterest Expense
All other (no adjustments) 376,402 - 376,402
-------- --------- --------
Total noninterest expense 376,402 - 376,402
-------- --------- --------
Income before income taxes 365,269 (101,535) 263,734
Taxable-equivalent adjustment 803 - 803
Income tax expense (3) 133,369 (39,024) 94,345
-------- --------- --------
Net Income/Operating Earnings $231,097 $ (62,511) $168,586
======== ========= ========
Net income/Operating earnings per
common share - basic $ 1.56 $ (0.42) $ 1.14
======== ========= ========
Net income/Operating earnings per
common share - diluted $ 1.54 $ (0.42) $ 1.12
======== ========= ========
Weighted average common shares
outstanding - basic 147,687 147,687
======== ========
Weighted average common shares
outstanding - diluted 150,184 150,184
======== ========
Reported Net Income $231,097
-----------------------------
Non-recurring Items
(1) Gain on sale of real property
(2nd quarter 2004) (8,535)
(2) Gain on sale of Merchant Card
Portfolio (2nd quarter 2004) (93,000)
(3) Tax impact of items listed
above (1)(2) 39,024
-----------------------------
Net Operating Earnings $168,586
=============================
For the Three Months Ended
-----------------------------------
March 31, 2005
-----------------------------------
Non-
(Amounts in thousands, except per Reported recurring Operating
share data) Items
- ---------------------------------- ------------- ---------- ----------
Net Interest Income $441,854 $ - $441,854
Reversal of allowance for loan
losses (8,000) - (8,000)
-------- --------- --------
Net interest income after
reversal of allowance for loan
losses 449,854 - 449,854
-------- --------- --------
Noninterest Income
Other (1)(2) 30,523 - 30,523
All other (no adjustments) 192,238 - 192,238
-------- --------- --------
Total noninterest income 222,761 - 222,761
-------- --------- --------
Noninterest Expense
All other (no adjustments) 407,467 - 407,467
-------- --------- --------
Total noninterest expense 407,467 - 407,467
-------- --------- --------
Income before income taxes 265,148 - 265,148
Taxable-equivalent adjustment 1,055 - 1,055
Income tax expense (3) 82,116 - 82,116
-------- --------- --------
Net Income/Operating Earnings $181,977 $ - $181,977
======== ========= ========
Net income/Operating earnings per
common share - basic $ 1.24 $ - $ 1.24
======== ========= ========
Net income/Operating earnings per
common share - diluted $ 1.21 $ - $ 1.21
======== ========= ========
Weighted average common shares
outstanding - basic 146,998 146,998
======== ========
Weighted average common shares
outstanding - diluted 149,916 149,916
======== ========
Reported Net Income $181,977
-----------------------------
Non-recurring Items
(1) Gain on sale of real property
(2nd quarter 2004) -
(2) Gain on sale of Merchant Card
Portfolio (2nd quarter 2004) -
(3) Tax impact of items listed
above (1)(2) -
-----------------------------
Net Operating Earnings $181,977
=============================
For the Three Months Ended
-----------------------------------
June 30, 2005
-----------------------------------
Non-
(Amounts in thousands, except per Reported recurring Operating
share data) Items
- ---------------------------------- ------------- ---------- ----------
Net Interest Income $464,874 $ - $464,874
Reversal of allowance for loan
losses (11,000) - (11,000)
-------- --------- --------
Net interest income after
reversal of allowance for loan
losses 475,874 - 475,874
-------- --------- --------
Noninterest Income
Other (1)(2) 32,171 - 32,171
All other (no adjustments) 189,179 - 189,179
-------- --------- --------
Total noninterest income 221,350 - 221,350
-------- --------- --------
Noninterest Expense
All other (no adjustments) 409,190 - 409,190
-------- --------- --------
Total noninterest expense 409,190 - 409,190
-------- --------- --------
Income before income taxes 288,034 - 288,034
Taxable-equivalent adjustment 1,018 - 1,018
Income tax expense (3) 99,834 - 99,834
-------- --------- --------
Net Income/Operating Earnings $187,182 $ - $187,182
======== ========= ========
Net income/Operating earnings per
common share - basic $ 1.29 $ - $ 1.29
======== ========= ========
Net income/Operating earnings per
common share - diluted $ 1.27 $ - $ 1.27
======== ========= ========
Weighted average common shares
outstanding - basic 144,548 144,548
======== ========
Weighted average common shares
outstanding - diluted 147,222 147,222
======== ========
Reported Net Income $187,182
-----------------------------
Non-recurring Items
(1) Gain on sale of real property
(2nd quarter 2004) -
(2) Gain on sale of Merchant Card
Portfolio (2nd quarter 2004) -
(3) Tax impact of items listed
above (1)(2) -
-----------------------------
Net Operating Earnings $187,182
=============================
Exhibit 6
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Reconciliations
(Taxable-Equivalent Basis)
Reported Earnings Reconciliation to Operating Earnings
------------------------------------------------------
For the Six Months Ended
--------------------------------
June 30, 2004
--------------------------------
Non-
(Amounts in thousands, except per Reported recurring Operating
share data) Items
- ------------------------------------- ---------- ---------- ---------
Net Interest Income $801,884 $ - $801,884
Reversal of allowance for loan
losses (15,000) - (15,000)
-------- --------- --------
Net interest income after reversal
of allowance for loan losses 816,884 - 816,884
-------- --------- --------
Noninterest Income
Other (1)(2) 148,439 (101,535) 46,904
All other (no adjustments) 393,776 - 393,776
-------- --------- --------
Total noninterest income 542,215 (101,535) 440,680
-------- --------- --------
Noninterest Expense
All other (no adjustments) 749,508 - 749,508
-------- --------- --------
Total noninterest expense 749,508 - 749,508
-------- --------- --------
Income before income taxes 609,591 (101,535) 508,056
Taxable-equivalent adjustment 1,605 - 1,605
Income tax expense (3) 219,402 (39,024) 180,378
-------- --------- --------
Net Income/Operating Earnings $388,584 $ (62,511) $326,073
======== ========= ========
Net income/Operating earnings per
common share - basic $ 2.63 $ (0.42) $ 2.21
======== ========= ========
Net income/Operating earnings per
common share - diluted $ 2.59 $ (0.42) $ 2.17
======== ========= ========
Weighted average common shares
outstanding - basic 147,544 147,544
======== ========
Weighted average common shares
outstanding - diluted 149,992 149,992
======== ========
Reported Net Income $388,584
-----------------------------
Non-recurring Items
(1) Gain on sale of real property
(2nd quarter 2004) (8,535)
(2) Gain on sale of Merchant Card
Portfolio (2nd quarter 2004) (93,000)
(3) Tax impact of items listed
above (1)(2) 39,024
------------------------------
Net Operating Earnings $326,073
==============================
For the Six Months Ended
--------------------------------
June 30, 2005
--------------------------------
Non-
(Amounts in thousands, except per Reported recurring Operating
share data) Items
- ------------------------------------- ---------- ---------- ---------
Net Interest Income $906,728 $ - $906,728
Reversal of allowance for loan
losses (19,000) - (19,000)
-------- --------- --------
Net interest income after reversal
of allowance for loan losses 925,728 - 925,728
-------- --------- --------
Noninterest Income
Other (1)(2) 62,694 - 62,694
All other (no adjustments) 381,417 - 381,417
-------- --------- --------
Total noninterest income 444,111 - 444,111
-------- --------- --------
Noninterest Expense
All other (no adjustments) 816,657 - 816,657
-------- --------- --------
Total noninterest expense 816,657 - 816,657
-------- --------- --------
Income before income taxes 553,182 - 553,182
Taxable-equivalent adjustment 2,073 - 2,073
Income tax expense (3) 181,950 - 181,950
-------- --------- --------
Net Income/Operating Earnings $369,159 $ - $369,159
======== ========= ========
Net income/Operating earnings per
common share - basic $ 2.53 $ - $ 2.53
======== ========= ========
Net income/Operating earnings per
common share - diluted $ 2.49 $ - $ 2.49
======== ========= ========
Weighted average common shares
outstanding - basic 145,766 145,766
======== ========
Weighted average common shares
outstanding - diluted 148,412 148,412
======== ========
Reported Net Income $ 369,159
-----------------------------
Non-recurring Items
(1) Gain on sale of real property
(2nd quarter 2004) -
(2) Gain on sale of Merchant Card
Portfolio (2nd quarter 2004) -
(3) Tax impact of items listed
above (1)(2) -
-----------------------------
Net Operating Earnings $ 369,159
==============================
Exhibit 7
UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited) (Unaudited)
June 30, December 31, June 30,
(Dollars in thousands) 2004 2004 2005
- ------------------------------- ----------- ----------- -----------
Assets
Cash and due from banks $ 2,287,708 $ 2,111,185 $ 2,339,527
Interest bearing deposits in
banks 630,451 491,905 279,555
Federal funds sold and
securities purchased under
resale agreements 1,156,650 944,950 2,782,105
----------- ----------- -----------
Total cash and cash
equivalents 4,074,809 3,548,040 5,401,187
Trading account assets 307,334 236,331 321,134
Securities available for sale:
Securities pledged as
collateral 77,532 144,240 443,717
Held in portfolio 12,151,635 11,000,754 9,905,235
Loans (net of allowance for
loan losses: June 30, 2004,
$501,419; December 31, 2004,
$407,156; June 30, 2005,
$394,972)(1) 27,092,852 30,309,800 32,103,249
Due from customers on
acceptances 52,867 55,914 54,189
Premises and equipment, net 502,204 530,431 520,505
Intangible assets 56,696 61,737 51,766
Goodwill 315,356 450,961 450,669
Other assets 1,664,546 1,759,813 1,926,407
----------- ----------- -----------
Total assets $46,295,831 $48,098,021 $51,178,058
=========== =========== ===========
Liabilities
Domestic deposits:
Noninterest bearing $19,255,245 $19,205,596 $20,730,332
Interest bearing 17,982,340 19,480,868 20,333,740
Foreign deposits:
Noninterest bearing 733,394 435,999 383,171
Interest bearing 1,396,932 1,053,373 1,282,784
----------- ----------- -----------
Total deposits 39,367,911 40,175,836 42,730,027
Federal funds purchased and
securities sold under
repurchase agreements 294,597 587,249 611,233
Commercial paper 552,038 824,887 1,102,042
Other borrowed funds 180,426 172,549 132,368
Acceptances outstanding 52,867 55,914 54,189
Other liabilities (1) 1,042,311 1,157,439 1,455,980
Medium and long-term debt 800,988 816,113 821,664
Junior subordinated debt
payable to subsidiary grantor
trust 16,017 15,790 15,564
----------- ----------- -----------
Total liabilities 42,307,155 43,805,777 46,923,067
----------- ----------- -----------
Commitments and contingencies
Stockholders' Equity
Preferred stock:
Authorized 5,000,000 shares,
no shares issued or
outstanding as of
June 30, 2004, December 31,
2004, and June 30, 2005 - - -
Common stock, par value $1 per
share at June 30, 2004,
December 31, 2004 and June
30, 2005:
Authorized 300,000,000
shares, issued 149,126,860
shares as of June 30, 2004,
152,191,818 shares as of
December 31, 2004, and
153,581,401 shares as of
June 30, 2005 149,127 152,192 153,581
Additional paid-in capital 712,255 881,928 948,611
Treasury stock - 1,281,700
shares as of June 30, 2004,
3,831,900 shares as of
December 31, 2004 and
9,375,943 shares as of
June 30, 2005 (68,557) (223,361) (552,786)
Retained earnings 3,289,676 3,526,312 3,774,097
Accumulated other comprehensive
loss (93,825) (44,827) (68,512)
----------- ----------- -----------
Total stockholders' equity 3,988,676 4,292,244 4,254,991
----------- ----------- -----------
Total liabilities and
stockholders' equity $46,295,831 $48,098,021 $51,178,058
=========== =========== ===========
- ------------------------------
(1) On December 31, 2004, UnionBanCal Corporation transferred the
allowance related to off-balance sheet commitments of $83 million
from allowance for loan losses to other liabilities. At June 30,
2005, the allowance related to off-balance sheet commitments was
$82 million. Periods prior to December 31, 2004 have not been
restated.
Exhibit 8
UnionBanCal Corporation and Subsidiaries
Loans (Unaudited)
Percent Change to
Three Months Ended June 30, 2005 from
-------------------------- -----------------
June March June June March
30, 31, 30, 30, 31,
(Dollars in millions) 2004 2005 2005 2004 2005
- ------------------------- ------- ------- ------- --------- -------
Loans (period average)
Commercial, financial
and industrial $ 9,107 $10,140 $10,383 14.01% 2.40%
Construction 1,060 1,114 1,244 17.36% 11.67%
Mortgage - Commercial 4,333 5,420 5,451 25.80% 0.57%
Mortgage - Residential 7,730 9,830 10,290 33.12% 4.68%
Consumer 2,117 2,372 2,434 14.97% 2.61%
Lease financing 617 603 594 (3.73%) (1.49%)
Loans originated in
foreign branches 1,871 1,781 1,811 (3.21%) 1.68%
------- ------- -------
Total loans held to
maturity $26,835 $31,260 $32,207 20.02% 3.03%
Total loans held for
sale 4 43 17 nm (60.47%)
------- ------- -------
Total loans $26,839 $31,303 $32,224 20.06% 2.94%
======= ======= =======
Nonperforming assets
(period end)
Nonaccrual loans:
Commercial, financial
and industrial $ 111 $ 36 $ 36 (67.57%) 0.00%
Construction 5 1 1 (80.00%) 0.00%
Mortgage - Commercial 23 10 11 (52.17%) 10.00%
Lease 37 55 18 (51.35%) (67.27%)
Foreign 2 - - (100.00%) -
------- ------- -------
Total
nonaccrual
loans 178 102 66 (62.92%) (35.29%)
Foreclosed assets 6 5 3 (50.00%) (40.00%)
------- ------- -------
Total
nonperforming
assets $ 184 $ 107 $ 69 (62.50%) (35.51%)
======= ======= =======
Loans 90 days or more
past due and still
accruing $ 10 $ 4 $ 4 (60.00%) 0.00%
======= ======= =======
Analysis of Allowance for
Credit Losses
Beginning balance $ 521 $ 407 $ 404
Reversal of allowance
for loan losses (10) (8) (11)
Foreign translation
adjustment and other
net additions
(deductions) (1) - - -
Loans charged off:
Commercial, financial
and industrial (21) (13) (10)
Construction - - -
Real estate - (1) -
Consumer (1) (1) (1)
Lease financing (2) - -
Loans originated in
foreign branches - - -
------- ------- -------
Total loans charged off (24) (15) (11)
------- ------- -------
Loans recovered:
Commercial, financial
and industrial 12 20 12
Mortgage - Commercial 2 - -
Consumer - - 1
Lease financing - - -
------- ------- -------
Total loans recovered 14 20 13
------- ------- -------
Net loans
(charged-off)
recovered (10) 5 2
------- ------- -------
Ending balance of
allowance for loan
losses $ 501 $ 404 $ 395
Allowance for off-
balance sheet
commitment losses (1) - 86 82
------- ------- -------
Allowance for credit
losses $ 501 $ 490 $ 477
======= ======= =======
- ------------------------
(1) On December 31, 2004, UnionBanCal Corporation transferred the
allowance related to off-balance sheet commitments of $83 million
from allowance for loan losses to other liabilities. At March 31,
2005 and June 30, 2005, the allowance related to off-balance sheet
commitments was $86 million and $82 million, respectively. Periods
prior to December 31, 2004 have not been restated.
nm = not meaningful
Exhibit 9
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
For the Three Months Ended
-------------------------------
June 30, 2004
-------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (1)(2)
- ----------------------------- ------------ ------------------
Assets
Loans: (3)
Domestic $24,967,825 $319,829 5.14 %
Foreign (4) 1,870,797 8,818 1.90
Securities - taxable 11,696,096 107,146 3.66
Securities - tax-exempt 69,654 1,424 8.18
Interest bearing deposits in banks 280,892 1,121 1.61
Federal funds sold and securities
purchased under resale agreements 1,143,901 2,928 1.03
Trading account assets 321,851 883 1.10
----------- --------
Total earning assets 40,351,016 442,149 4.40
--------
Allowance for loan losses (5) (525,435)
Cash and due from banks 2,233,586
Premises and equipment, net 514,122
Other assets 2,038,062
-----------
Total assets $44,611,351
===========
Liabilities
Domestic deposits:
Interest bearing $11,498,694 16,198 0.57
Savings and consumer time 4,225,435 8,540 0.81
Large time 2,298,403 7,385 1.29
Foreign deposits (4) 1,476,095 2,761 0.75
----------- --------
Total interest bearing deposits 19,498,627 34,884 0.72
----------- --------
Federal funds purchased and securities
sold under repurchase agreements 344,416 552 0.64
Commercial paper 517,333 1,051 0.82
Other borrowed funds 176,449 1,178 2.69
Medium and long-term debt 819,595 3,693 1.81
Trust notes 16,119 130 3.23
----------- --------
Total borrowed funds 1,873,912 6,604 1.42
----------- --------
Total interest bearing liabilities 21,372,539 41,488 0.78
--------
Noninterest bearing deposits 18,311,421
Other liabilities (5) 993,603
-----------
Total liabilities 40,677,563
Stockholders' Equity
Common equity 3,933,788
-----------
Total stockholders' equity 3,933,788
-----------
Total liabilities and stockholders'
equity $44,611,351
===========
Net interest income/margin
(taxable-equivalent basis) 400,661 3.98 %
Less: taxable-equivalent adjustment 803
--------
Net interest income $399,858
========
For the Three Months Ended
-------------------------------
March 31, 2005
-------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (1)(2)
- --------------------------------- ------------ ------------------
Assets
Loans: (3)
Domestic $29,521,537 $402,626 5.51 %
Foreign (4) 1,781,242 13,633 3.10
Securities - taxable 11,123,106 99,939 3.59
Securities - tax-exempt 67,144 1,325 7.89
Interest bearing deposits in banks 359,399 2,102 2.37
Federal funds sold and securities
purchased under resale agreements 377,291 2,373 2.55
Trading account assets 231,680 908 1.59
----------- --------
Total earning assets 43,461,399 522,906 4.85
--------
Allowance for loan losses (5) (411,439)
Cash and due from banks 2,294,369
Premises and equipment, net 528,132
Other assets 2,405,264
-----------
Total assets $48,277,725
===========
Liabilities
Domestic deposits:
Interest bearing $12,255,221 25,468 0.84
Savings and consumer time 4,778,965 13,047 1.11
Large time 2,765,524 16,047 2.35
Foreign deposits (4) 1,174,814 6,176 2.13
----------- --------
Total interest bearing deposits 20,974,524 60,738 1.17
----------- --------
Federal funds purchased and securities
sold under repurchase agreements 1,279,862 7,455 2.36
Commercial paper 865,460 4,560 2.14
Other borrowed funds 180,541 1,529 3.44
Medium and long-term debt 808,846 6,532 3.27
Trust notes 15,733 238 6.06
----------- --------
Total borrowed funds 3,150,442 20,314 2.61
----------- --------
Total interest bearing liabilities 24,124,966 81,052 1.36
--------
Noninterest bearing deposits 18,694,308
Other liabilities (5) 1,249,801
-----------
Total liabilities 44,069,075
Stockholders' Equity
Common equity 4,208,650
-----------
Total stockholders' equity 4,208,650
-----------
Total liabilities and stockholders'
equity $48,277,725
===========
Net interest income/margin
(taxable-equivalent basis) 441,854 4.09 %
Less: taxable-equivalent adjustment 1,055
--------
Net interest income $440,799
========
For the Three Months Ended
------------------------------
June 30, 2005
------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (1)(2)
- ---------------------------------- ------------ ------------------
Assets
Loans: (3)
Domestic $30,412,677 $436,339 5.75 %
Foreign (4) 1,811,314 15,803 3.50
Securities - taxable 10,964,803 101,672 3.71
Securities - tax-exempt 66,207 1,347 8.14
Interest bearing deposits in banks 275,472 1,892 2.75
Federal funds sold and securities
purchased under resale agreements 696,177 5,256 3.03
Trading account assets 256,183 1,049 1.64
----------- --------
Total earning assets 44,482,833 563,358 5.07
--------
Allowance for loan losses (5) (402,207)
Cash and due from banks 2,404,587
Premises and equipment, net 524,941
Other assets 2,455,080
-----------
Total assets $49,465,234
===========
Liabilities
Domestic deposits:
Interest bearing $12,462,267 32,055 1.03
Savings and consumer time 4,704,180 14,132 1.20
Large time 3,029,992 18,605 2.46
Foreign deposits (4) 1,193,958 8,154 2.74
----------- --------
Total interest bearing deposits 21,390,397 72,946 1.37
----------- --------
Federal funds purchased and securities
sold under repurchase agreements 1,160,373 8,217 2.84
Commercial paper 1,158,630 7,807 2.70
Other borrowed funds 197,918 1,817 3.68
Medium and long-term debt 799,514 7,459 3.74
Trust notes 15,619 238 6.10
----------- --------
Total borrowed funds 3,332,054 25,538 3.07
----------- --------
Total interest bearing liabilities 24,722,451 98,484 1.60
--------
Noninterest bearing deposits 19,332,936
Other liabilities (5) 1,264,697
-----------
Total liabilities 45,320,084
Stockholders' Equity
Common equity 4,145,150
-----------
Total stockholders' equity 4,145,150
-----------
Total liabilities and stockholders'
equity $49,465,234
===========
Net interest income/margin
(taxable-equivalent basis) 464,874 4.18 %
Less: taxable-equivalent adjustment 1,018
--------
Net interest income $463,856
========
- -----------------------------
(1) Yields and interest income are presented on a
taxable-equivalent basis using the federal statutory tax rate of
35 percent.
(2) Annualized.
(3) 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.
(4) Foreign loans and deposits are those loans and deposits
originated in foreign branches.
(5) The average allowance related to off-balance sheet commitments
was included in other liabilities for the quarters ended March 31,
2005 and June 30, 2005. Periods prior to December 31, 2004 have
not been restated.
Exhibit 10
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
For the Six Months Ended
--------------------------------
June 30, 2004
------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (1)(2)
- ------------------------------------ ------------ --------- ---------
Assets
Loans: (3)
Domestic $24,750,113 $647,762 5.26 %
Foreign (4) 1,740,126 16,496 1.91
Securities - taxable 11,546,375 212,139 3.67
Securities - tax-exempt 67,733 2,759 8.15
Interest bearing deposits in banks 244,373 2,029 1.67
Federal funds sold and securities
purchased under resale agreements 965,448 4,887 1.02
Trading account assets 299,454 1,478 0.99
----------- --------
Total earning assets 39,613,622 887,550 4.50
--------
Allowance for loan losses (5) (529,803)
Cash and due from banks 2,254,820
Premises and equipment, net 517,042
Other assets 1,975,585
-----------
Total assets $43,831,266
===========
Liabilities
Domestic deposits:
Interest bearing $11,444,746 32,755 0.58
Savings and consumer time 4,181,065 17,258 0.83
Large time 2,365,502 15,720 1.34
Foreign deposits (4) 1,351,457 4,893 0.73
----------- --------
Total interest bearing deposits 19,342,770 70,626 0.73
----------- --------
Federal funds purchased and
securities
sold under repurchase agreements 369,941 1,233 0.67
Commercial paper 530,093 2,186 0.83
Other borrowed funds 182,139 2,478 2.74
Medium and long-term debt 812,829 6,832 1.69
Trust notes 109,571 2,311 4.22
----------- --------
Total borrowed funds 2,004,573 15,040 1.51
----------- --------
Total interest bearing
liabilities 21,347,343 85,666 0.81
--------
Noninterest bearing deposits 17,532,017
Other liabilities (5) 1,010,051
-----------
Total liabilities 39,889,411
Stockholders' Equity
Common equity 3,941,855
-----------
Total stockholders' equity 3,941,855
-----------
Total liabilities and
stockholders' equity $43,831,266
===========
Net interest income/margin
(taxable-equivalent basis) 801,884 4.07 %
Less: taxable-equivalent adjustment 1,605
--------
Net interest income $800,279
========
For the Six Months Ended
-------------------------------
June 30, 2005
-------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (1)(2)
- ------------------------------------------------- ----------- --------
Assets
Loans: (3)
Domestic $29,969,569 $ 838,966 5.63 %
Foreign (4) 1,796,361 29,436 3.30
Securities - taxable 11,043,518 201,611 3.65
Securities - tax-exempt 66,673 2,672 8.02
Interest bearing deposits in banks 317,204 3,994 2.54
Federal funds sold and securities
purchased under resale agreements 537,615 7,629 2.86
Trading account assets 243,999 1,957 1.62
----------- ----------
Total earning assets 43,974,939 1,086,265 4.96
----------
Allowance for loan losses (5) (406,798)
Cash and due from banks 2,349,782
Premises and equipment, net 526,528
Other assets 2,430,310
-----------
Total assets $48,874,761
===========
Liabilities
Domestic deposits:
Interest bearing $12,359,316 57,523 0.94
Savings and consumer time 4,741,366 27,180 1.16
Large time 2,898,489 34,652 2.41
Foreign deposits (4) 1,184,439 14,330 2.44
----------- ----------
Total interest bearing deposits 21,183,610 133,685 1.27
----------- ----------
Federal funds purchased and
securities
sold under repurchase agreements 1,219,788 15,672 2.59
Commercial paper 1,012,855 12,367 2.46
Other borrowed funds 189,278 3,346 3.56
Medium and long-term debt 804,154 13,991 3.51
Trust notes 15,676 476 6.08
----------- ----------
Total borrowed funds 3,241,751 45,852 2.85
----------- ----------
Total interest bearing liabilities 24,425,361 179,537 1.48
----------
Noninterest bearing deposits 19,015,386
Other liabilities (5) 1,257,290
-----------
Total liabilities 44,698,037
Stockholders' Equity
Common equity 4,176,724
-----------
Total stockholders' equity 4,176,724
-----------
Total liabilities and
stockholders'
equity $48,874,761
===========
Net interest income/margin
(taxable-equivalent basis) 906,728 4.14 %
Less: taxable-equivalent adjustment 2,073
----------
Net interest income $ 904,655
==========
- -------------------------------------
(1) Yields and interest income are presented on a
taxable-equivalent basis using the federal statutory tax rate of
35 percent.
(2) Annualized.
(3) 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.
(4) Foreign loans and deposits are those loans and deposits
originated in foreign branches.
(5) The average allowance related to off-balance sheet commitments
was included in other liabilities for the quarters ended March 31,
2005 and June 30, 2005. Periods prior to December 31, 2004 have
not been restated.
Exhibit 11
UnionBanCal Corporation and Subsidiaries
On a Reported Earnings Basis (reference to exhibit 3)
-----------------------------------------------------
Noninterest Income (Unaudited)
Percentage Change to
For the Three Months Ended June 30, 2005 From
------------------------------- -------------------
June March June June March
(Dollars in 30, 31, 30, 30, 31,
thousands) 2004 2005 2005 2004 2005
--------------- --------- --------- --------- ---------- -------
Service charges
on deposit
accounts $90,031 $80,455 $80,757 (10.30) % 0.38 %
Trust and
investment
management
fees 36,788 41,963 41,590 13.05 (0.89)
Insurance
commissions 18,652 22,017 19,340 3.69 (12.16)
International
commissions
and fees 18,102 17,674 18,326 1.24 3.69
Merchant
banking fees 7,714 6,266 18,114 nm nm
Foreign
exchange
gains, net 8,294 8,940 9,296 12.08 3.98
Brokerage
commissions
and fees 8,023 8,972 8,605 7.25 (4.09)
Card processing
fees, net 15,456 5,607 6,464 (58.18) 15.28
Securities
gains
(losses), net (4) 344 (13,313) nm nm
Gain on sale of
merchant card
portfolio 93,000 -- -- nm --
Gain on private
capital
investments,
net 4,017 7,935 5,261 30.97 (33.70)
Other 30,937 22,588 26,910 (13.02) 19.13
--------- --------- ---------
Total
noninterest
income $331,010 $222,761 $221,350 (33.13) % (0.63)%
========= ========= =========
Noninterest Expense (Unaudited)
Percentage Change to
For the Three Months Ended June 30, 2005 From
------------------------------- -------------------
June March June June March
(Dollars in 30, 31, 30, 30, 31,
thousands) 2004 2005 2005 2004 2005
--------------- --------- --------- --------- ---------- -------
Salaries and
other
compensation $174,894 $185,194 $193,256 10.50 % 4.35 %
Employee
benefits 42,703 54,286 48,397 13.33 (10.85)
--------- --------- ---------
Salaries and
employee
benefits 217,597 239,480 241,653 11.06 0.91
Net occupancy 32,173 33,525 34,681 7.80 3.45
Outside
services 17,406 21,896 27,320 56.96 24.77
Professional
services 10,290 13,710 20,682 100.99 50.85
Equipment 16,883 17,733 17,292 2.42 (2.49)
Software 12,908 14,628 15,617 20.99 6.76
Communications 11,810 11,536 11,067 (6.29) (4.07)
Advertising and
public
relations 10,814 7,750 9,022 (16.57) 16.41
Data processing 8,409 9,090 8,663 3.02 (4.70)
Intangible
asset
amortization 4,485 4,985 4,985 11.15 0.00
Foreclosed
asset expense
(income) 17 406 (2,577) nm nm
(Reversal of)
provision for
losses on off-
balance sheet
commitments (1) -- 3,000 (4,000) nm nm
Other 33,610 29,728 24,785 (26.26) (16.63)
--------- --------- ---------
Total
noninterest
expense $376,402 $407,467 $409,190 8.71 % 0.42 %
========= ========= =========
- ---------------------------------------
(1) Beginning in the quarter ending March 31, 2005, the net change in
the allowance for losses on off-balance sheet commitments was
recognized separately from the change in the allowance for loan
losses. Prior periods have not been restated.
nm = not meaningful
Exhibit 12
UnionBanCal Corporation and Subsidiaries
On an Operating Earnings Basis (reference to exhibit 4) (1)
----------------------------------------------------------
Noninterest Income (Unaudited)
Percentage Change to
For the Three Months Ended June 30, 2005 From
---------------------------- --------------------
June March June June March
(Dollars in 30, 31, 30, 30, 31,
thousands) 2004 2005 2005 2004 2005
--------------------- --------- --------- -------- ------- -------
Service charges on
deposit accounts $90,031 $80,455 $80,757 (10.30)% 0.38 %
Trust and investment
management fees 36,788 41,963 41,590 13.05 (0.89)
Insurance commissions 18,652 22,017 19,340 3.69 (12.16)
International
commissions and fees 18,102 17,674 18,326 1.24 3.69
Merchant banking fees 7,714 6,266 18,114 nm nm
Foreign exchange
gains, net 8,294 8,940 9,296 12.08 3.98
Brokerage
commissions and fees 8,023 8,972 8,605 7.25 (4.09)
Card processing
fees, net 15,456 5,607 6,464 (58.18) 15.28
Securities gains
(losses), net (4) 344 (13,313) nm nm
Gain on private
capital
investments, net 4,017 7,935 5,261 30.97 (33.70)
Other 22,402 22,588 26,910 20.12 19.13
--------- --------- ---------
Total noninterest
income $229,475 $222,761 $221,350 (3.54)% (0.63)%
========= ========= =========
Noninterest Expense (Unaudited)
Percentage Change to
For the Three Months Ended June 30, 2005 From
June March June June March
(Dollars in 30, 31, 30, 30, 31,
thousands) 2004 2005 2005 2004 2005
--------------------- --------- --------- --------- ------- -------
Salaries and other
compensation $174,894 $185,194 $193,256 10.50 % 4.35 %
Employee benefits 42,703 54,286 48,397 13.33 (10.85)
--------- --------- ---------
Salaries and
employee
benefits 217,597 239,480 241,653 11.06 0.91
Net occupancy 32,173 33,525 34,681 7.80 3.45
Outside services 17,406 21,896 27,320 56.96 24.77
Professional services 10,290 13,710 20,682 100.99 50.85
Equipment 16,883 17,733 17,292 2.42 (2.49)
Software 12,908 14,628 15,617 20.99 6.76
Communications 11,810 11,536 11,067 (6.29) (4.07)
Advertising and
public relations 10,814 7,750 9,022 (16.57) 16.41
Data processing 8,409 9,090 8,663 3.02 (4.70)
Intangible asset
amortization 4,485 4,985 4,985 11.15 0.00
Foreclosed asset
expense (income) 17 406 (2,577) nm nm
(Reversal of)
provision for losses
on off-balance sheet
commitments (1) -- 3,000 (4,000) nm nm
Other 33,610 29,728 24,785 (26.26) (16.63)
--------- --------- ---------
Total noninterest
expense $376,402 $407,467 $409,190 8.71 % 0.42 %
========= ========= =========
- ---------------------------------------
(1) See exhibit 5 for reconciliation of 'reported earnings' to
'operating earnings'.
(2) Beginning in the quarter ending March 31, 2005, the net change in
the allowance for losses on off-balance sheet commitments was
recognized separately from the change in the allowance for loan
losses. Prior periods have not been restated.
nm = not meaningful
Exhibit 13
UnionBanCal Corporation and Subsidiaries
On a Reported Earnings Basis (reference to exhibit 3)
------------------------------------------------
Noninterest Income (Unaudited)
Percentage
Change to
For the Six Months June 30,
Ended 2005 From
--------------------------------
June 30, June 30, June 30,
(Dollars in thousands) 2004 2005 2004
------------------------------------ ---------- --------- ---------
Service charges on deposit
accounts $171,127 $161,212 (5.79)%
Trust and investment
management fees 72,610 83,553 15.07
Insurance commissions 40,387 41,357 2.40
International commissions
and fees 35,647 36,000 0.99
Merchant banking fees 15,181 24,380 60.60
Foreign exchange gains, net 16,638 18,236 9.60
Brokerage commissions and fees 16,320 17,577 7.70
Card processing fees, net 24,248 12,071 (50.22)
Securities gains (losses), net 1,618 (12,969) nm
Gain on sale of merchant card
portfolio 93,000 -- nm
Gain on private capital
investments, net 7,331 13,196 80.00
Other 48,108 49,498 2.89
---------- ---------
Total noninterest income $542,215 $444,111 (18.09)%
========== =========
Noninterest Expense (Unaudited)
Percentage
Change to
For the Six Months June 30,
Ended 2005 From
--------------------------------
June 30, June 30, June 30,
(Dollars in thousands) 2004 2005 2004
------------------------------------ ---------- --------- ---------
Salaries and other compensation $345,324 $378,450 9.59 %
Employee benefits 91,696 102,683 11.98
---------- ---------
Salaries and employee benefits 437,020 481,133 10.09
Net occupancy 63,755 68,206 6.98
Outside services 33,865 49,216 45.33
Equipment 34,154 35,025 2.55
Professional services 21,593 34,392 59.27
Software 25,903 30,245 16.76
Communications 23,968 22,603 (5.70)
Data processing 16,826 17,752 5.50
Advertising and public relations 19,541 16,773 (14.17)
Intangible asset amortization 8,705 9,971 14.54
Foreclosed asset expense (income) 536 (2,171) nm
Reversal of losses on off-balance nm
sheet commitments (1) -- (1,000)
Other 63,642 54,512 (14.35)
---------- ---------
Total noninterest expense $749,508 $816,657 8.96 %
========== =========
- -------------------------------------
(1) Beginning in the quarter ending March 31, 2005, the net change in
the allowance for losses on off-balance sheet commitments was
recognized separately from the change in the allowance for loan
losses. Prior periods have not been restated.
nm = not meaningful
Exhibit 14
UnionBanCal Corporation and Subsidiaries
On an Operating Earnings Basis (reference to exhibit 4) (1)
-----------------------------------------------------------
Noninterest Income (Unaudited)
Percentage
Change to
For the Six Months June 30,
Ended 2005 From
--------------------------------
June 30, June 30, June 30,
(Dollars in thousands) 2004 2005 2004
------------------------------------ ---------- --------- ---------
Service charges on deposit
accounts $171,127 $161,212 (5.79)%
Trust and investment management
fees 72,610 83,553 15.07
Insurance commissions 40,387 41,357 2.40
International commissions and
fees 35,647 36,000 0.99
Merchant banking fees 15,181 24,380 60.60
Foreign exchange gains, net 16,638 18,236 9.60
Brokerage commissions and fees 16,320 17,577 7.70
Card processing fees, net 24,248 12,071 (50.22)
Securities gains (losses), net 1,618 (12,969) nm
Gain on private capital
investments, net 7,331 13,196 80.00
Other 39,573 49,498 25.08
---------- ---------
Total noninterest income $440,680 $444,111 0.78 %
========== =========
Noninterest Expense (Unaudited)
Percentage
Change to
For the Six Months June 30,
Ended 2005 From
--------------------------------
June 30, June 30, June 30,
(Dollars in thousands) 2004 2005 2004
------------------------------------ ---------- --------- ---------
Salaries and other compensation $345,324 $378,450 9.59 %
Employee benefits 91,696 102,683 11.98
---------- ---------
Salaries and employee benefits 437,020 481,133 10.09
Net occupancy 63,755 68,206 6.98
Outside services 33,865 49,216 45.33
Equipment 34,154 35,025 2.55
Professional services 21,593 34,392 59.27
Software 25,903 30,245 16.76
Communications 23,968 22,603 (5.70)
Data processing 16,826 17,752 5.50
Advertising and public relations 19,541 16,773 (14.17)
Intangible asset amortization 8,705 9,971 14.54
Foreclosed asset expense (income) 536 (2,171) nm
Reversal of losses on off-balance
sheet commitments (2) -- (1,000) nm
Other 63,642 54,512 (14.35)
---------- ---------
Total noninterest expense $749,508 $816,657 8.96 %
========== =========
- ---------------------------------------
(1) See exhibit 6 for reconciliation of 'reported earnings' to
'operating earnings'.
(2) Beginning in the quarter ending March 31, 2005, the net change in
the allowance for losses on off-balance sheet commitments was
recognized separately from the change in the allowance for loan
losses. Prior periods have not been restated.
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)