Exhibit 99.1
UnionBanCal Reports 23.6% Increase in Third Quarter Per Share Operating Income
from Continuing Operations
SAN FRANCISCO--(BUSINESS WIRE)--Oct. 20, 2005--UnionBanCal Corporation
(NYSE:UB) today reported third quarter 2005 net income of $185.3 million, or
$1.26 per diluted common share, and income from continuing operations of $201.2
million, or $1.36 per diluted common share. In the third quarter of 2004, the
Company reported net income of $163.4 million, or $1.09 per diluted common
share, and operating income from continuing operations of $164.8 million, or
$1.10 per diluted common share. Operating income from continuing operations per
diluted common share increased 23.6 percent year over year. Operating income
from continuing operations excludes income and expense associated with the
international correspondent banking business, which the Company is exiting, and
for the third quarter 2004 excludes an $8 million, or $0.06 per diluted common
share, adjustment to state income tax.
For third quarter 2005, net loss from discontinued operations was $(16.0)
million, or $(0.10) per diluted common share. Discontinued operations was
comprised of: net profit from operations of $5.5 million, an after-tax gain on
the sale of Brady Bonds of $2.2 million, after-tax severance expense associated
with the sale of the international business of $15.4 million, and after-tax
compliance expense associated with the international business of $8.3 million.
For third quarter 2005, net income of $1.26 per diluted common share
includes three significant items that were not contemplated in the third quarter
forecast provided by the Company on July 20, 2005: a $10 million, or $0.04 per
diluted common share, negative loan loss provision associated with the sale of
the international business; $9.0 million, or $0.06 per diluted common share, in
income tax credits; and $25 million, or $0.10 per diluted common share in
severance expense associated with the sale of the international business.
Adjusting for these items, earnings per diluted common share were $1.26.
For the first nine months of 2005, the Company reported net income of
$554.4 million, or $3.74 per diluted common share, and operating income from
continuing operations of $568.5 million, or $3.84 per diluted common share. For
the first nine months of 2004, the Company reported operating net income of
$497.4 million, or $3.32 per diluted common share, and operating income from
continuing operations of $477.3 million, or $3.18 per diluted common share.
Operating income from continuing operations per diluted common share increased
20.8 percent year over year. Operating income from continuing operations for the
first nine months of 2004 excluded an after-tax gain of $58 million, or $0.39
per diluted common share, on the sale of the Company's merchant card portfolio;
an after-tax gain of $5 million, or $0.04 per diluted common share, on the sale
of real property; and an $8 million, or $0.06 per diluted common share,
adjustment to state income tax.
"Late in the third quarter we announced the sale of our international
correspondent banking business to Wachovia Bank," stated Takashi Morimura,
President and Chief Executive Officer. "This transaction will benefit both our
clients and our stockholders. Our clients will benefit from Wachovia's excellent
product set, high quality service, and superior scale. Our stockholders will
benefit from enhanced management focus on core businesses and the redeployment
of the transaction proceeds."
"Our results in the third quarter reflect the continued strength of our
core businesses, as well as the economic expansion in our operating footprint,"
added Chief Operating Officer Philip Flynn. "I am pleased with our loan and
deposit growth during the third quarter, and credit quality throughout the loan
portfolio remains healthy."
Discontinued Operations
On September 22, 2005, the Company announced the signing of a definitive
agreement to sell its international correspondent banking business (the
Business) to Wachovia Bank, N.A. The principal legal closing of the transaction
took place on October 6, 2005, with the Company receiving $245 million in cash
from Wachovia. The Company continues to operate the Business, and will continue
to do so over a transition period of several months, during which period it is
expected that the majority of the Company's international correspondent bank
customers will transfer to Wachovia. At principal closing, no loans or other
assets were acquired by Wachovia, and no liabilities were assumed. In
conjunction with the customer conversion process during fourth quarter 2005 and
first quarter 2006, it is expected that certain loans and other assets of the
Business will be acquired by Wachovia and certain related liabilities may be
assumed by Wachovia. Wachovia will pay in cash to the Company an amount equal to
the net book value of assets acquired less any liabilities assumed.
Under the terms of the transaction, the Company has earned the base
purchase price of $245 million, based on certain negotiated business retention
standards, which have been satisfied. The Company may also earn a contingent
payment not to exceed $45 million, based on the results of conversion of the
Business's customer base to Wachovia. Any such contingent payment will be earned
and paid in cash to the Company in the second quarter of 2006.
The Company will continue to operate the Business during the transition
period, and expects its exit from international correspondent banking to be
complete by the second quarter of 2006. As customers are transferred to Wachovia
during the coming months, the Company's international correspondent banking
revenue will decline. International correspondent banking expenses will also
decline, though not necessarily at the same rate as revenue. All results of the
international correspondent banking business will be reported in discontinued
operations, commencing in third quarter 2005.
The Company recorded an after-tax expense of $15.4 million, or $0.10 per
fully diluted share, in the third quarter of 2005, primarily reflecting
severance costs associated with the transaction. In addition, the Company
expects to record an after-tax gain of approximately $151 million, or $1.03 per
fully diluted share, in the fourth quarter of 2005.
The transaction has been accounted for as a discontinued operation and all
prior periods have been restated to reflect this accounting treatment. All of
the assets and liabilities of the discontinued operations have been separately
identified on the balance sheet (see Exhibit 7) and the average net assets or
liabilities of the discontinued operations are reflected in the analysis of net
interest margin (see Exhibits 9 and 10).
Hereafter, in this press release, all financial results references are for
continuing operations only.
Third Quarter Total Revenue From Continuing Operations
For third quarter 2005, total revenue (taxable-equivalent net interest
income plus noninterest income) was $677 million, an increase of $73 million, or
12.0 percent, compared with total revenue of $605 million in third quarter 2004.
Net interest income increased 14.1 percent, and noninterest income increased 7.6
percent. Compared with second quarter 2005, total revenue increased 2.1 percent,
with net interest income increasing 1.2 percent, and noninterest income
increasing 4.2 percent.
Third Quarter Net Interest Income (Taxable-equivalent) From Continuing
Operations
Net interest income was $465 million in third quarter 2005, up $58 million,
or 14.1 percent, from the same quarter a year ago, reflecting strong growth in
loans and deposits.
Average earning assets increased $4.0 billion, or 10.1 percent, primarily
due to a $5.9 billion, or 22.3 percent, increase in average loans, partially
offset by a $1.9 billion, or 16.2 percent, decrease in average securities.
Average residential mortgages increased $2.2 billion, or 25.9 percent; average
commercial loans increased $1.8 billion, or 19.5 percent; and average commercial
mortgages increased $1.3 billion, or 29.9 percent, primarily due to the Jackson
Federal acquisition, which closed October 28, 2004. Excluding the Jackson
Federal acquisition, average loans increased approximately 18 percent.
Compared to third quarter 2004, average noninterest bearing deposits
increased $1.8 billion, or 10.0 percent, almost all of which reflects organic
growth. Average title and escrow deposits increased $496 million. Average
noninterest bearing deposits represented 48.1 percent of average total deposits
in third quarter. The annualized average all-in cost of funds was 0.96 percent,
reflecting the Company's strong average deposit-to-loan ratio of 125.2 percent
and the high proportion of noninterest bearing deposits to total deposits.
The average yield on earning assets of $43.4 billion was 5.21 percent, up
62 basis points over third quarter last year, with the average loan yield
increasing 53 basis points. The average rate on interest bearing liabilities of
$23.2 billion was 1.76 percent, up 89 basis points, reflecting higher short-term
interest rates compared with third quarter 2004. Average interest bearing
deposits were $20.9 billion and the weighted average rate was 1.57 percent. The
net interest margin in third quarter 2005 was 4.27 percent, compared with 4.13
percent in third quarter 2004.
On a sequential quarter basis, net interest income increased $5.5 million,
or 1.2 percent. Average earning assets increased 1.6 percent, primarily due to a
5.1 percent increase in average loans. Average residential mortgages increased
4.6 percent, and average commercial loans increased 8.2 percent. Average
noninterest bearing deposits increased $580 million, or 3.1 percent, primarily
due to a $256 million increase in title and escrow deposits. The average yield
on earning assets increased 6 basis points and the average rate on interest
bearing liabilities increased 23 basis points. The net interest margin declined
5 basis points to 4.27 percent, primarily due to lower net interest recoveries
in third quarter as compared with second quarter.
Third Quarter Noninterest Income From Continuing Operations
In third quarter 2005, noninterest income was $212 million, up $15 million,
or 7.6 percent, from the same quarter a year ago. Service charges on deposit
accounts decreased 1.0 percent, primarily due to lower account analysis fees,
stemming from an increase in the earnings credit rate on deposit balances,
partially offset by a change in the overdraft and NSF fee structure. Trust and
investment management fees increased $4.4 million, or 11.3 percent, primarily
due to the August 1, 2004, acquisition of TruSource (formerly CNA Trust), and an
increase in trust assets. Brokerage commissions and fees decreased $3.2 million,
or 38.0 percent, primarily due to a change in classification of certain fees to
other noninterest income, effective July 1, 2005.
Compared with second quarter 2005, third quarter 2005 noninterest income
increased $8.6 million, or 4.2 percent. Service charges on deposit accounts
increased $5.1 million, or 6.4 percent, primarily due to higher noninterest
bearing demand deposit balances and a change in the overdraft and NSF fee
structure. Merchant banking fees decreased $6.9 million, or 37.9 percent,
primarily due to a lower volume of syndications completed compared with second
quarter, which contained an unusually high volume of syndications. Brokerage
commissions and fees decreased $3.3 million, or 38.5 percent, primarily due to a
change in classification of certain fees to other noninterest income, effective
July 1, 2005. Securities gains (losses), net, increased $13 million, reflecting
a $13 million loss on the sale of U.S. Government Agency securities in second
quarter 2005.
Third Quarter Noninterest Expense From Continuing Operations
Noninterest expense for third quarter 2005 was $397 million, an increase of
$37 million, or 10.3 percent, over third quarter 2004. Salaries and employee
benefits expense increased $27 million, or 12.7 percent, primarily due to higher
employee count associated with recent acquisitions, annual merit increases,
higher performance-related incentive expense, higher health insurance expense,
and higher pension expense. Outside services expense increased $9.0 million, or
45.8 percent, primarily due to higher vendor billings related to title and
escrow balances, stemming from the higher earnings credit rate and higher
balances in third quarter 2005. Intangible asset amortization expense was $5.0
million, versus $5.1 million in third quarter 2004. There was no provision for
off-balance sheet commitments in third quarter 2005.
Compared with second quarter 2005, noninterest expense increased $8.3
million, or 2.1 percent. Salaries and employee benefits expense increased $2.1
million, or 0.9 percent, primarily due to higher performance-related incentive
expense. There was no provision for off-balance sheet commitments in third
quarter 2005, compared with a reversal of $4.0 million in second quarter 2005.
Income Tax Expense From Continuing Operations
The effective tax rate for third quarter 2005 was 31.7 percent, compared
with an effective tax rate on operating earnings of 35.4 percent for third
quarter 2004 and an effective tax rate of 34.8 percent for second quarter 2005.
Third quarter 2005 income tax expense included a $5.9 million credit primarily
related to the adjustment of California taxes to reflect tax returns filed on
the worldwide unitary method, and $3.1 million in California Enterprise Zone
credits.
Year-To-Date Results From Continuing Operations
Total revenue was $2.0 billion in the first nine months of 2005, an
increase of $185 million, or 10.3 percent, compared with total revenue on an
operating basis of $1.8 billion in the same period of 2004. Net interest income
increased 13.6 percent, and noninterest income on an operating basis increased
3.8 percent.
Net interest income was $1.4 billion in the first nine months of 2005, a
$163 million, or 13.6 percent, increase from prior year, reflecting strong
growth in loans and deposits. Compared with prior year, net interest margin
increased 10 basis points, to 4.27 percent.
Noninterest income in the first nine months of 2005 was $621 million, an
increase of $22 million, or 3.8 percent, over noninterest income on an operating
basis of $599 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 $9
million, or 3.6 percent, primarily due to lower account analysis fees stemming
from the higher earnings credit rate in the first nine months of 2005. Trust and
investment management fees increased $15 million, or 13.7 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 32.7
percent, primarily due to a higher number of syndications completed in the first
nine months of 2005. Card processing fees, net, decreased $10 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 second quarter 2005.
For the first nine months of 2005, noninterest expense increased $93
million, or 8.6 percent, over the first nine months of 2004. Salaries and
employee benefits expense increased $69 million, or 11.0 percent, primarily due
to higher employee count associated with recent acquisitions, merit increases,
higher performance-related incentive expense, higher health insurance expense
and higher pension expense. Outside services expense increased $24 million, or
46.3 percent, primarily due to higher vendor billings related to title and
escrow balances, stemming from the higher earnings credit rate and higher
balances in the first nine months of 2005. Intangible asset amortization expense
was $15 million, compared with $14 million in prior year.
Credit Quality
Nonperforming assets at September 30, 2005, were $38 million, or 0.07
percent of total assets. This compares with $69 million, or 0.13 percent of
total assets at June 30, 2005, and $190 million, or 0.40 percent of total
assets, at September 30, 2004. Nonperforming assets declined 80 percent between
September 30, 2004, and September 30, 2005.
In third quarter 2005, the total provision for credit losses was negative
$15.0 million, of which negative $10 million was attributable to the
international banking business. The total provision for credit losses was
negative $13.6 million in second quarter 2005 and negative $10.9 million in
third quarter 2004. The total provision for credit losses in third quarter 2005
consisted of a provision for loan losses of negative $15.0 million and a
provision for off-balance sheet commitments (classified in noninterest expense)
of zero. In third quarter 2005, net charge-offs were $16 million, compared with
net loan recoveries of $8 million in second quarter 2005, and net charge-offs of
$7 million in third quarter 2004.
At September 30, 2005, the allowance for credit losses as a percent of
total loans and as a percent of nonaccrual loans was 1.39 percent and 1272.3
percent, respectively. These ratios were 1.54 percent and 721.1 percent,
respectively, at June 30, 2005, and 1.79 percent and 269.3 percent,
respectively, at September 30, 2004.
Balance Sheet and Capital Ratios
At September 30, 2005, the Company had total assets of $51.3 billion. Total
loans were $32.0 billion and total deposits were $41.6 billion, resulting in a
period-end deposit-to-loan ratio of 130.1 percent. At period-end, total
stockholders' equity was $4.3 billion, the tangible equity ratio was 7.57
percent, and the ratio of tangible common equity to risk-weighted assets was
8.63 percent. Book value per share at September 30, 2005, was $30.07, up 7.2
percent from a year earlier. The Company's Tier I and total risk-based capital
ratios at period-end were 8.89 percent and 10.87 percent, respectively.
Stock Repurchases
During third quarter 2005, the Company did not repurchase any common stock.
For the first nine 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 September 30, 2005, the Company was authorized by its Board of Directors to
repurchase an additional $162 million of common stock.
Common shares outstanding at September 30, 2005, were 144.6 million, a
decrease of 2.6 million shares, or 1.8 percent, from one year earlier, primarily
reflecting shares repurchased, net of shares issued in acquisitions.
Fourth Quarter Earnings Per Share Forecast
The Company currently estimates that fourth quarter 2005 fully diluted
earnings per share from continuing operations will be in the range of $1.22 to
$1.27, including an estimated total provision for credit losses of negative $5
million. In addition, the Company expects to record a gain on the sale of the
international business of approximately $1.03 per diluted common share, and net
income from discontinued operations of approximately $0.01 per diluted common
share. Net income is, therefore, expected to total $2.26 to $2.31 per diluted
common share.
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 and the financial impact of the sale of the
International Banking business.
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; increased energy costs due to
hurricanes; 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 UFJ 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 third quarter results
at 8:30 AM Pacific Time (11:30 AM Eastern Time) on October 21, 2005. Interested
parties calling from locations within the United States should call 800-230-1092
(612-332-0107 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 website within 24 hours after the conclusion of
the call, and will remain on the website for a period of one year.
A recorded playback of the conference call will be available by calling
800-475-6701, (320-365-3844 from outside the United States) from approximately
12:00 PM Pacific Time (3:00 PM Eastern Time), October 21, through 11:59 PM
Pacific Time, October 28 (2:59 AM Eastern Time, October 29). The reservation
number for this playback is 798081.
Based in San Francisco, UnionBanCal Corporation is a bank holding company
with assets of $51.3 billion at September 30, 2005. Its primary subsidiary,
Union Bank of California, N.A., had 319 banking offices in California, Oregon
and Washington, and 20 international facilities, at September 30, 2005.
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 1
Percent
Change to
On a Reported As of and for the Sept. 30,
Earnings Basis (1): Three Months Ended 2005 from
- ------------------ --------------------------------- ----------------
Sept. June Sept. Sept. June
30, 30, 30, 30, 30,
(Dollars in
thousands, except
per share data) 2004 2005 2005 2004 2005
- ------------------ --------------------------------- -----------------
Results of
operations:
Net interest
income (2) $407,590 $459,728 $465,193 14.13% 1.19%
Noninterest income 197,120 203,554 212,188 7.64% 4.24%
------------------------------------
Total revenue 604,710 663,282 677,381 12.02% 2.13%
Noninterest
expense (3) 359,576 388,400 396,696 10.32% 2.14%
Reversal of
allowance for
loan losses (10,939) (13,564) (15,000) 37.12% 10.59%
------------------------------------
Income from
continuing
operations before
income taxes (2) 256,073 288,446 295,685 15.47% 2.51%
Taxable-equivalent
adjustment 1,012 1,018 1,051 3.85% 3.24%
Income tax expense 98,121 99,950 93,388 (4.82%) (6.57%)
------------------------------------
Income from
continuing
operations $156,940 $187,478 $201,246 28.23% 7.34%
(Loss)/Income from
discontinued
operations 6,498 (296) (15,961) nm nm
------------------------------------
Net income $163,438 $187,182 $185,285 13.37% (1.01%)
====================================
Per common share:
Basic earnings:
From continuing
operations $1.06 $1.30 $1.39 31.13% 6.92%
Net income 1.11 1.29 1.28 15.32% (0.78%)
Diluted earnings:
From continuing
operations 1.04 1.27 1.36 30.77% 7.09%
Net income 1.09 1.27 1.26 15.60% (0.79%)
Dividends (4) 0.36 0.41 0.41 13.89% 0.00%
Book value (end of
period) 28.04 29.51 30.07 7.24% 1.90%
Common shares
outstanding (end
of period) 147,163,392 144,205,458 144,584,972 (1.75%) 0.26%
Weighted average
common shares
outstanding -
basic 147,554,853 144,547,697 144,459,465 (2.10%) (0.06%)
Weighted average
common shares
outstanding -
diluted 150,379,127 147,222,390 147,613,377 (1.84%) 0.27%
Balance sheet (end
of period):
Total assets (9) $46,990,605 $51,178,058 $51,298,842 9.17% 0.24%
Total loans 26,902,191 30,862,374 32,004,747 18.97% 3.70%
Nonaccrual loans 178,840 66,063 34,980 (80.44%)(47.05%)
Nonperforming
assets 189,447 68,945 37,507 (80.20%)(45.60%)
Total deposits 37,203,790 41,255,737 41,648,355 11.95% 0.95%
Junior
subordinated debt 15,904 15,564 15,451 (2.85%) (0.73%)
Medium and long-
term debt 820,460 821,664 806,353 (1.72%) (1.86%)
Stockholders'
equity 4,126,159 4,254,991 4,346,956 5.35% 2.16%
Balance sheet
(period average):
Total assets $43,472,704 $47,482,810 $48,212,029 10.90% 1.54%
Total loans 26,301,914 30,610,512 32,177,816 22.34% 5.12%
Earning assets 39,402,003 42,668,069 43,371,177 10.07% 1.65%
Total deposits 35,937,713 39,398,023 40,293,528 12.12% 2.27%
Stockholders'
equity 4,067,953 4,145,150 4,275,122 5.09% 3.14%
Financial ratios:
Return on average
assets (5) :
From continuing
operations 1.44% 1.58% 1.66%
Net income 1.50% 1.58% 1.52%
Return on average
stockholders'
equity (5) :
From continuing
operations 15.35% 18.14% 18.68%
Net income 15.98% 18.11% 17.19%
Efficiency ratio
(6) 59.46% 59.55% 59.07%
Net interest
margin (2) 4.13% 4.32% 4.27%
Dividend payout
ratio 33.96% 31.54% 29.50%
Tangible equity
ratio 8.03% 7.41% 7.57%
Tier 1 risk-based
capital ratio (7)
(9) 9.99% 8.88% 8.89%
Total risk-based
capital ratio (7)
(9) 12.52% 11.01% 10.87%
Leverage ratio (7)
(9) 8.27% 7.77% 7.96%
Allowance for
credit losses to
total loans (8) 1.79% 1.54% 1.39%
Allowance for
credit losses to
nonaccrual loans
(8) 269.31% 721.05% 1272.29%
Net loans charged
off (recovered)
to average total
loans (5) 0.11% (0.10%) 0.20%
Nonperforming
assets to total
loans, foreclosed
assets,
and distressed
loans held for
sale 0.70% 0.22% 0.12%
Nonperforming
assets to total
assets (9) 0.40% 0.13% 0.07%
On an Operating Earnings from Continuing
Operations Basis (1) :
- -------------------------------------------------------------
Selected financial data on continuing operations on an operating
earnings basis (see bottom of exhibit 5 for non-recurring items):
Operating earnings per common share (basic) $1.12 $1.30 $1.39
Operating earnings per common share (diluted) $1.10 $1.27 $1.36
Operating return on average assets (4) 1.51% 1.58% 1.66%
Operating return on average stockholders' equity
(4) 16.11% 18.14% 18.68%
Operating efficiency ratio (5) 59.46% 59.55% 59.07%
Operating dividend payout ratio 32.14% 31.54% 29.50%
- --------------------------------------------------------------------
(1) In September 2005, UnionBanCal Corporation committed to a plan for
disposal of most of its international banking business. All periods
presented have been restated to reflect discontinued operations.
Average balances used to calculate our financial ratios are based on
continuing operations data only, unless otherwise indicated.
(2) Taxable-equivalent basis.
(3) Included in noninterest expense at June 30, 2005 was a $4 million
provision for off-balance sheet commitments.
(4) Dividends per share reflect dividends declared on UnionBanCal
Corporation's common stock outstanding as of the declaration date.
(5) Annualized.
(6) The efficiency ratio is noninterest expense, excluding foreclosed
asset expense (income) and the (reversal of) provision for losses on
off-balance sheet commitments, as a percentage of net interest income
(taxable-equivalent basis) and noninterest income and is calculated
for continuing operations only.
(7) Estimated as of September 30, 2005. The regulatory capital and
leverage ratios were not restated and therefore include discontinued
operations.
(8) The allowance for credit losses ratios include the allowance for
loan losses and losses on off-balance sheet commitments. These ratios
relate to continuing operations only.
(9) End of period total assets and assets used in calculating these
ratios include those of discontinued operations.
nm = not meaningful
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 2
Percent
Change
to
On a Reported Earnings As of and for the Nine Sept. 30,
Basis (1) : Months Ended 2005 from
- --------------------------------- ------------------------- ---------
Sept. 30, Sept. 30, Sept. 30,
(Dollars in thousands, except per
share data) 2004 2005 2004
- ---------------------------------------------- ------------ --------
Results of operations:
Net interest income (2) $1,198,862 $1,361,638 13.58%
Noninterest income 700,434 621,367 (11.29%)
------------ ------------
Total revenue 1,899,296 1,983,005 4.41%
Noninterest expense (3) 1,084,751 1,178,048 8.60%
Reversal of allowance for loan
losses (29,038) (40,683) 40.10%
------------ ------------
Income from continuing operations
before income taxes (2) 843,583 845,640 0.24%
Taxable-equivalent adjustment 2,617 3,124 19.37%
Income tax expense 308,989 274,041 (11.31%)
------------ ------------
Income from continuing operations $531,977 $568,475 6.86%
(Loss)/Income from discontinued
operations 20,045 (14,031) nm
------------ ------------
Net income $552,022 $554,444 0.44%
============ ============
Per common share:
Basic earnings:
From continuing operations $3.61 $3.91 8.31%
Net income 3.74 3.82 2.14%
Diluted earnings:
From continuing operations 3.55 3.84 8.17%
Net income 3.68 3.74 1.63%
Dividends (4) 1.03 1.18 14.56%
Book value (end of period) 28.04 30.07 7.24%
Common shares outstanding (end of
period) 147,163,392 144,584,972 (1.75%)
Weighted average common shares
outstanding - basic 147,547,527 145,325,640 (1.51%)
Weighted average common shares
outstanding - diluted 150,026,647 148,062,139 (1.31%)
Balance sheet (end of period):
Total assets (9) $46,990,605 $51,298,842 9.17%
Total loans 26,902,191 32,004,747 18.97%
Nonaccrual loans 178,840 34,980 (80.44%)
Nonperforming assets 189,447 37,507 (80.20%)
Total deposits 37,203,790 41,648,355 11.95%
Junior subordinated debt 15,904 15,451 (2.85%)
Trust preferred securities 820,460 806,353 (1.72%)
Stockholders' equity 4,126,159 4,346,956 5.35%
Balance sheet (period average):
Total assets $42,325,380 $47,342,684 11.85%
Total loans 25,328,476 30,843,202 21.77%
Earning assets 38,352,522 42,575,954 11.01%
Total deposits 35,395,054 39,304,760 11.05%
Stockholders' equity 3,984,194 4,209,884 5.66%
Financial ratios:
Return on average assets (5) :
From continuing operations 1.68% 1.61%
Net income 1.74% 1.57%
Return on average stockholders'
equity (5) :
From continuing operations 17.84% 18.05%
Net income 18.51% 17.61%
Efficiency ratio (6) 57.09% 59.74%
Net interest margin (2) 4.17% 4.27%
Dividend payout ratio 28.53% 30.18%
Tangible equity ratio 8.03% 7.57%
Tier 1 risk-based capital ratio
(7) (9) 9.99% 8.89%
Total risk-based capital ratio
(7) (9) 12.52% 10.87%
Leverage ratio (7) (9) 8.27% 7.96%
Allowance for credit losses to
total loans (8) 1.79% 1.39%
Allowance for credit losses to
nonaccrual loans (8) 269.31% 1272.29%
Net loans charged off (recovered)
to average total loans (5) 0.15% (0.02%)
Nonperforming assets to total
loans, foreclosed assets,
and distressed loans held
for sale 0.70% 0.12%
Nonperforming assets to total
assets (9) 0.40% 0.07%
On an Operating Earnings from Continuing Operations Basis (1) :
- ------------------------------------------------------------------
Selected financial data on continuing operations on an operating
earnings basis (see bottom of exhibit 6 for non-recurring items):
Operating earnings per common share (basic) $3.23 $3.91
Operating earnings per common share (diluted) $3.18 $3.84
Operating return on average assets (4) 1.51% 1.61%
Operating return on average stockholders' equity (4) 16.00% 18.05%
Operating efficiency ratio (5) 60.31% 59.74%
Operating dividend payout ratio 31.89% 30.18%
- -------------------------------------------------------------------
(1) In September 2005, UnionBanCal Corporation committed to a plan for
disposal of most of its international banking business. All periods
presented have been restated to reflect discontinued operations.
Average balances used to calculate our financial ratios are based on
continuing operations data only, unless otherwise indicated.
(2) Taxable-equivalent basis.
(3) Included in noninterest expense at September 30, 2005 was a $1
million reversal of losses on off-balance sheet commitments.
(4) Dividends per share reflect dividends declared on UnionBanCal
Corporation's common stock outstanding as of the declaration date.
(5) Annualized.
(6) The efficiency ratio is noninterest expense, excluding foreclosed
asset expense (income) and the (reversal of) provision for losses on
off-balance sheet commitments, as a percentage of net interest income
(taxable-equivalent basis) and noninterest income and is calculated
for continuing operations only.
(7) Estimated as of September 30, 2005. The regulatory capital and
leverage ratios were not restated and therefore include discontinued
operations.
(8) The allowance for credit losses ratios include the allowance for
loan losses and losses on off-balance sheet commitments. These ratios
relate to continuing operations only.
(9) End of period total assets and assets used in calculating these
ratios include those of discontinued operations.
nm = not meaningful
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited) (1)
(Taxable-Equivalent Basis)
On a Reported Earnings Basis
Exhibit 3
- ----------------------------------------------------------------------
For the Three Months For the Nine Months
Ended Ended
----------------------------- ----------------------
Sept. 30, June 30, Sept. 30, Sept. 30,
(Amounts in
thousands,
except per share
data) 2004 2005 2005 2004 2005
- ----------------- --------- --------- --------- ---------- -----------
Interest Income
Loans $341,934 $438,791 $461,892 $992,040 $1,305,807
Securities 106,672 103,019 98,056 321,565 302,339
Interest
bearing
deposits in
banks 1,656 396 303 1,946 1,432
Federal funds
sold and
securities
purchased
under resale
agreements 1,616 5,256 6,777 6,503 14,406
Trading
account
assets 1,250 1,049 1,115 2,728 3,072
--------- --------- --------- ---------- -----------
Total
interest
income 453,128 548,511 568,143 1,324,782 1,627,056
--------- --------- --------- ---------- -----------
Interest Expense
Domestic
deposits 34,725 64,504 78,983 100,193 197,801
Foreign
deposits 370 2,920 3,813 951 8,247
Federal funds
purchased and
securities
sold under
repurchase
agreements 3,013 4,038 294 3,540 9,330
Commercial
paper 1,697 7,807 9,394 3,883 21,761
Medium and
long-term
debt 4,369 7,459 8,520 11,201 22,511
Trust notes 242 238 239 2,553 715
Other borrowed
funds 1,122 1,817 1,707 3,599 5,053
--------- --------- --------- ---------- -----------
Total
interest
expense 45,538 88,783 102,950 125,920 265,418
--------- --------- --------- ---------- -----------
Net Interest
Income 407,590 459,728 465,193 1,198,862 1,361,638
Reversal of
allowance for
loan losses
(2) (10,939) (13,564) (15,000) (29,038) (40,683)
--------- --------- --------- ---------- -----------
Net interest
income after
reversal of
allowance
for loan
losses 418,529 473,292 480,193 1,227,900 1,402,321
--------- --------- --------- ---------- -----------
Noninterest
Income
Service
charges on
deposit
accounts 85,667 79,746 84,822 252,974 243,835
Trust and
investment
management
fees 39,089 41,590 43,500 111,699 127,053
Insurance
commissions 17,463 19,340 17,819 57,850 59,176
Merchant
banking fees 11,682 18,114 11,257 26,863 35,637
Foreign
exchange
gains, net 8,268 8,551 8,849 24,209 25,570
Brokerage
commissions
and fees 8,527 8,605 5,290 24,847 22,867
Card
processing
fees, net 4,653 6,464 6,597 28,901 18,668
Securities
gains
(losses), net (6) (13,313) (320) 1,612 (13,289)
Other 21,777 34,457 34,374 171,479 101,850
--------- --------- --------- ---------- -----------
Total
noninterest
income 197,120 203,554 212,188 700,434 621,367
--------- --------- --------- ---------- -----------
Noninterest
Expense
Salaries and
employee
benefits 209,554 233,976 236,124 632,463 701,858
Net occupancy 32,029 33,553 34,336 93,517 100,251
Outside
services 19,572 26,468 28,533 52,130 76,248
Equipment 15,949 16,937 15,832 49,370 50,176
Software 12,790 14,727 14,374 37,309 43,072
Professional
services 11,976 13,150 11,240 33,410 36,131
Communications 10,234 9,762 10,808 31,728 30,950
Foreclosed
asset expense
(income) (10) (2,577) (3,435) 526 (5,606)
Reversal of
allowance for
losses on off-
balance sheet
commitments
(2) - (4,000) - - (1,000)
Other 47,482 46,404 48,884 154,298 145,968
--------- --------- --------- ---------- -----------
Total
noninterest
expense 359,576 388,400 396,696 1,084,751 1,178,048
--------- --------- --------- ---------- -----------
Income from
continuing
operations
before income
taxes 256,073 288,446 295,685 843,583 845,640
Taxable-
equivalent
adjustment 1,012 1,018 1,051 2,617 3,124
Income tax
expense 98,121 99,950 93,388 308,989 274,041
--------- --------- --------- ---------- -----------
Income from
Continuing
Operations 156,940 187,478 201,246 531,977 568,475
--------- --------- --------- ---------- -----------
Income (Loss)
from
discontinued
operations 10,592 (412) (25,612) 32,673 (22,385)
Income tax
expense
(benefit) 4,094 (116) (9,651) 12,628 (8,354)
--------- --------- --------- ---------- -----------
Net Income $163,438 $187,182 $185,285 $552,022 $554,444
========= ========= ========= ========== ===========
Income from
continuing
operations per
common share -
basic $1.06 $1.30 $1.39 $3.61 $3.91
Net Income per
common share -
basic $1.11 $1.29 $1.28 $3.74 $3.82
========= ========= ========= ========== ===========
Income from
continuing
operations per
common share -
diluted $1.04 $1.27 $1.36 $3.55 $3.84
Net income per
common share -
diluted $1.09 $1.27 $1.26 $3.68 $3.74
========= ========= ========= ========== ===========
Weighted average
common shares
outstanding -
basic 147,555 144,548 144,459 147,548 145,326
========= ========= ========= ========== ===========
Weighted average
common shares
outstanding -
diluted 150,379 147,222 147,613 150,027 148,062
========= ========= ========= ========== ===========
(1) In September 2005, UNBC committed to a plan for disposal of most
of its International Banking business. All periods presented have been
restated to reflect the discontinued operations.
(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.
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited) (1)
(Taxable-Equivalent Basis)
On an Operating Earnings Basis (2)
Exhibit 4
For the Three Months For the Nine Months
Ended Ended
----------------------------- ----------------------
Sept. 30, June 30, Sept. 30, September 30,
(Amounts in
thousands,
except per share
data) 2004 2005 2005 2004 2005
--------- --------- --------- ---------- -----------
Interest Income
Loans $341,934 $438,791 $461,892 $992,040 $1,305,807
Securities 106,672 103,019 98,056 321,565 302,339
Interest
bearing
deposits in
banks 1,656 396 303 1,946 1,432
Federal funds
sold and
securities
purchased
under resale
agreements 1,616 5,256 6,777 6,503 14,406
Trading
account
assets 1,250 1,049 1,115 2,728 3,072
--------- --------- --------- ---------- -----------
Total
interest
income 453,128 548,511 568,143 1,324,782 1,627,056
--------- --------- --------- ---------- -----------
Interest Expense
Domestic
deposits 34,725 64,504 78,983 100,193 197,801
Foreign
deposits 370 2,920 3,813 951 8,247
Federal funds
purchased and
securities
sold under
repurchase
agreements 3,013 4,038 294 3,540 9,330
Commercial
paper 1,697 7,807 9,394 3,883 21,761
Medium and
long-term
debt 4,369 7,459 8,520 11,201 22,511
Trust notes 242 238 239 2,553 715
Other borrowed
funds 1,122 1,817 1,707 3,599 5,053
--------- --------- --------- ---------- -----------
Total
interest
expense 45,538 88,783 102,950 125,920 265,418
--------- --------- --------- ---------- -----------
Net Interest
Income 407,590 459,728 465,193 1,198,862 1,361,638
Reversal of
allowance for
loan losses
(3) (10,939) (13,564) (15,000) (29,038) (40,683)
--------- --------- --------- ---------- -----------
Net interest
income after
reversal of
allowance
for loan
losses 418,529 473,292 480,193 1,227,900 1,402,321
--------- --------- --------- ---------- -----------
Noninterest
Income
Service
charges on
deposit
accounts 85,667 79,746 84,822 252,974 243,835
Trust and
investment
management
fees 39,089 41,590 43,500 111,699 127,053
Insurance
commissions 17,463 19,340 17,819 57,850 59,176
Merchant
banking fees 11,682 18,114 11,257 26,863 35,637
Foreign
exchange
gains, net 8,268 8,551 8,849 24,209 25,570
Brokerage
commissions
and fees 8,527 8,605 5,290 24,847 22,867
Card
processing
fees, net 4,653 6,464 6,597 28,901 18,668
Securities
gains
(losses), net (6) (13,313) (320) 1,612 (13,289)
Other 21,777 34,457 34,374 69,944 101,850
--------- --------- --------- ---------- -----------
Total
noninterest
income 197,120 203,554 212,188 598,899 621,367
--------- --------- --------- ---------- -----------
Noninterest
Expense
Salaries and
employee
benefits 209,554 233,976 236,124 632,463 701,858
Net occupancy 32,029 33,553 34,336 93,517 100,251
Outside
services 19,572 26,468 28,533 52,130 76,248
Equipment 15,949 16,937 15,832 49,370 50,176
Software 12,790 14,727 14,374 37,309 43,072
Professional
services 11,976 13,150 11,240 33,410 36,131
Communications 10,234 9,762 10,808 31,728 30,950
Foreclosed
asset expense
(income) (10) (2,577) (3,435) 526 (5,606)
Reversal of
allowance for
losses on off-
balance sheet
commitments
(3) - (4,000) - - (1,000)
Other 47,482 46,404 48,884 154,298 145,968
--------- --------- --------- ---------- -----------
Total
noninterest
expense 359,576 388,400 396,696 1,084,751 1,178,048
--------- --------- --------- ---------- -----------
Income from
continuing
operations
before income
taxes 256,073 288,446 295,685 742,048 845,640
Taxable-
equivalent
adjustment 1,012 1,018 1,051 2,617 3,124
Income tax
expense 90,278 99,950 93,388 262,122 274,041
--------- --------- --------- ---------- -----------
Income from
Continuing
Operations 164,783 187,478 201,246 477,309 568,475
--------- --------- --------- ---------- -----------
Income (Loss)
from
discontinued
operations 10,592 (412) (25,612) 32,673 (22,385)
Income tax
expense
(benefit) 4,094 (116) (9,651) 12,628 (8,354)
--------- --------- --------- ---------- -----------
Net Income $171,281 $187,182 $185,285 $497,354 $554,444
========= ========= ========= ========== ===========
Income from
continuing
operations per
common share -
basic $1.12 $1.30 $1.39 $3.23 $3.91
Net Income per
common share -
basic $1.16 $1.29 $1.28 $3.37 $3.82
========= ========= ========= ========== ===========
Income from
continuing
operations per
common share -
diluted $1.10 $1.27 $1.36 $3.18 $3.84
Net income per
common share -
diluted $1.14 $1.27 $1.26 $3.32 $3.74
========= ========= ========= ========== ===========
Weighted average
common shares
outstanding -
basic 147,555 144,548 144,459 147,548 145,326
========= ========= ========= ========== ===========
Weighted average
common shares
outstanding -
diluted 150,379 147,222 147,613 150,027 148,062
========= ========= ========= ========== ===========
(1)In September 2005, UNBC committed to a plan for disposal of most of
its International Banking business. All periods presented have been
restated to reflect the discontinued operations.
(2)See exhibits 5 and 6 for reconciliation of 'reported earnings' to
'operating earnings' from continuing operations.
(3)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.
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Reconciliations
(Taxable-Equivalent Basis)
Reported Earnings Reconciliation to Operating Earnings from Continuing
Operations
Exhibit 5
For the Three Months Ended
September 30, 2004
--------------------------------
Non-
recurring
(Amounts in thousands, Reported Items Operating
except per share data)
- ---------------------------------------------------------- -----------
Net Interest Income $407,590 $- $407,590
Reversal of allowance for loan
losses (10,939) - (10,939)
---------- ---------- ----------
Net interest income after
reversal of allowance for loan
losses 418,529 - 418,529
---------- ---------- ----------
Noninterest Income
All other (no adjustments) 197,120 - 197,120
---------- ---------- ----------
Total noninterest income 197,120 - 197,120
---------- ---------- ----------
Noninterest Expense
All other (no adjustments) 359,576 - 359,576
---------- ---------- ----------
Total noninterest expense 359,576 - 359,576
---------- ---------- ----------
Income from continuing operations
before income taxes 256,073 - 256,073
Taxable-equivalent adjustment 1,012 - 1,012
Income tax expense (1) 98,121 (7,843) 90,278
---------- ---------- ----------
Income/Operating Earnings from
Continuing Operations $156,940 $7,843 $164,783
========== ========== ==========
Income/Operating earnings from
continuing operations per common
share - basic $1.06 $0.06 $1.12
========== ========== ==========
Income/Operating earnings from
continuing operations per common
share - diluted $1.04 $0.06 $1.10
========== ========== ==========
Weighted average common shares
outstanding - basic 147,555 147,555
========== ==========
Weighted average common shares
outstanding - diluted 150,379 150,379
========== ==========
Reported Income from Continuing
Operations $156,940
---------------------------------
Non-recurring Items
(1) Adjustment to CA state income
tax (3rd quarter 2004) 7,843
---------------------------------
Operating Earnings from Continuing
Operations $164,783
=================================
For the Three Months Ended
June 30, 2005
-----------------------------
Non-
recurring
(Amounts in thousands, Reported Items Operating
except per share data)
- ------------------------------------------------------ ----------
Net Interest Income $459,728 $- $459,728
Reversal of allowance for loan
losses (13,564) - (13,564)
--------- --------- ---------
Net interest income after
reversal of allowance for
loan losses 473,292 - 473,292
--------- --------- ---------
Noninterest Income
All other (no adjustments) 203,554 - 203,554
--------- --------- ---------
Total noninterest income 203,554 - 203,554
--------- --------- ---------
Noninterest Expense
All other (no adjustments) 388,400 - 388,400
--------- --------- ---------
Total noninterest expense 388,400 - 388,400
--------- --------- ---------
Income from continuing
operations before income taxes 288,446 - 288,446
Taxable-equivalent adjustment 1,018 - 1,018
Income tax expense (1) 99,950 - 99,950
--------- --------- ---------
Income/Operating Earnings from
Continuing Operations $187,478 $- $187,478
========= ========= =========
Income/Operating earnings from
continuing operations per common
share - basic $1.30 $- $1.30
========= ========= =========
Income/Operating earnings from
continuing operations 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 Income from Continuing
Operations $187,478
------------------------------
Non-recurring Items
(1) Adjustment to CA state
income tax (3rd quarter 2004) -
------------------------------
Operating Earnings from Continuing
Operations $187,478
==============================
For the Three Months Ended
September 30, 2005
-----------------------------
Non-
recurring
(Amounts in thousands, Reported Items Operating
except per share data)
- -------------------------------------------------- --------- ---------
Net Interest Income $465,193 $- $465,193
Reversal of allowance for loan losses (15,000) - (15,000)
--------- --------- ---------
Net interest income after reversal of
allowance for loan losses 480,193 - 480,193
--------- --------- ---------
Noninterest Income
All other (no adjustments) 212,188 - 212,188
--------- --------- ---------
Total noninterest income 212,188 - 212,188
--------- --------- ---------
Noninterest Expense
All other (no adjustments) 396,696 - 396,696
--------- --------- ---------
Total noninterest expense 396,696 - 396,696
--------- --------- ---------
Income from continuing operations
before income taxes 295,685 - 295,685
Taxable-equivalent adjustment 1,051 - 1,051
Income tax expense (1) 93,388 - 93,388
--------- --------- ---------
Income/Operating Earnings from Continuing
Operations $201,246 $- $201,246
========= ========= =========
Income/Operating earnings from continuing
operations per common share - basic $1.39 $- $1.39
========= ========= =========
Income/Operating earnings from continuing
operations per common share - diluted $1.36 $- $1.36
========= ========= =========
Weighted average common shares
outstanding - basic 144,459 144,459
========= =========
Weighted average common shares
outstanding - diluted 147,613 147,613
========= =========
Reported Income from Continuing
Operations $201,246
--------- --------- ---------
Non-recurring Items
(1) Adjustment to CA state income
tax (3rd quarter 2004) -
--------- --------- ---------
Operating Earnings from Continuing
Operations $201,246
========= ========= =========
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Reconciliations
(Taxable-Equivalent Basis)
Reported Earnings Reconciliation to Operating Earnings from Continuing
Operations
Exhibit 6
- ----------------------------------------------------------------------
For the Nine Months Ended
---------------------------------
Sept. 30, 2004
---------------------------------
Non-
recurring
(Amounts in thousands, except per Reported Items Operating
share data)
- --------------------------------- ------------ --------- -----------
Net Interest Income $1,198,862 $- $1,198,862
Reversal of allowance for loan
losses (29,038) - (29,038)
----------- --------- -----------
Net interest income after
reversal of allowance for loan
losses 1,227,900 - 1,227,900
----------- --------- -----------
Noninterest Income
Other (1)(2) 171,479 (101,535) 69,944
All other (no adjustments) 528,955 - 528,955
----------- --------- -----------
Total noninterest income 700,434 (101,535) 598,899
----------- --------- -----------
Noninterest Expense
All other (no adjustments) 1,084,751 - 1,084,751
----------- --------- -----------
Total noninterest expense 1,084,751 - 1,084,751
----------- --------- -----------
Income from continuing operations
before income taxes 843,583 (101,535) 742,048
Taxable-equivalent adjustment 2,617 - 2,617
Income tax expense (3)(4) 308,989 (46,867) 262,122
----------- --------- -----------
Income/Operating Earnings from
Continuing Operations $531,977 $(54,668) $477,309
=========== ========= ===========
Income/Operating earnings from
continuing operations per common
share - basic $3.61 $(0.38) $3.23
=========== ========= ===========
Income/Operating earnings from
continuing operations per common
share - diluted $3.55 $(0.37) $3.18
=========== ========= ===========
Weighted average common shares
outstanding - basic 147,548 147,548
=========== ===========
Weighted average common shares
outstanding - diluted 150,027 150,027
=========== ===========
Reported Income from Continuing
Operations $531,977
----------- --------- -----------
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
(4) Adjustment to CA state income
tax (3rd quarter 2004) 7,843
----------- --------- -----------
Operating Earnings from Continuing
Operations $477,309
=========== ========= ===========
For the Nine Months Ended
--------------------------------
Sept. 30, 2005
--------------------------------
Non-
recurring
(Amounts in thousands, except per Reported Items Operating
share data)
- ------------------------------------------------- -------- -----------
Net Interest Income $1,361,638 $- $1,361,638
Reversal of allowance for loan
losses (40,683) - (40,683)
----------- -------- -----------
Net interest income after reversal
of allowance for loan losses 1,402,321 - 1,402,321
----------- -------- -----------
Noninterest Income
Other (1)(2) 101,850 - 101,850
All other (no adjustments) 519,517 - 519,517
----------- -------- -----------
Total noninterest income 621,367 - 621,367
----------- -------- -----------
Noninterest Expense
All other (no adjustments) 1,178,048 - 1,178,048
----------- -------- -----------
Total noninterest expense 1,178,048 - 1,178,048
----------- -------- -----------
Income from continuing operations
before income taxes 845,640 - 845,640
Taxable-equivalent adjustment 3,124 - 3,124
Income tax expense (3)(4) 274,041 - 274,041
----------- -------- -----------
Income/Operating Earnings from
Continuing Operations $568,475 $- $568,475
=========== ======== ===========
Income/Operating earnings from
continuing operations per common
share - basic $3.91 $- $3.91
=========== ======== ===========
Income/Operating earnings from
continuing operations per common
share - diluted $3.84 $- $3.84
=========== ======== ===========
Weighted average common shares
outstanding - basic 145,326 145,326
=========== ===========
Weighted average common shares
outstanding - diluted 148,062 148,062
=========== ===========
Reported Income from Continuing
Operations $568,475
----------- -------- -----------
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) -
(4) Adjustment to CA state
income tax (3rd quarter 2004) -
----------- -------- -----------
Operating Earnings from Continuing
Operations $568,475
=========== ======== ===========
UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets
Exhibit 7
(Unaudited) (Unaudited)
Sept. 30, Dec. 31, Sept. 30,
(Dollars in thousands) 2004 2004 2005
- ------------------------------- ------------ ------------ ------------
Assets
Cash and due from banks $2,036,226 $1,977,033 $2,163,149
Interest bearing deposits in
banks 348,471 277,482 471,340
Federal funds sold and
securities purchased under
resale agreements 1,045,275 944,950 1,454,193
------------ ------------ ------------
Total cash and cash
equivalents 3,429,972 3,199,465 4,088,682
Trading account assets 288,601 235,840 371,551
Securities available for sale:
Securities pledged as
collateral 124,896 144,240 158,878
Held in portfolio 11,863,216 10,994,981 9,647,093
Loans (net of allowance for
loan losses: September 30, 2004,
$481,642; December 31, 2004,
$399,156; Sept. 30, 2005,
$363,671)(1) 26,420,549 28,710,259 31,641,076
Due from customers on
acceptances 16,295 23,841 47,167
Premises and equipment, net 497,899 526,543 509,922
Intangible assets 60,977 61,737 46,781
Goodwill 320,835 450,961 452,617
Other assets 1,768,710 1,731,354 2,318,507
Assets of discontinued
operations to be disposed or
sold (2) 2,198,655 2,018,800 2,016,568
------------ ------------ ------------
Total assets $46,990,605 $48,098,021 $51,298,842
============ ============ ============
Liabilities
Domestic deposits:
Noninterest bearing $18,903,588 $19,100,128 $20,541,706
Interest bearing 17,838,599 19,402,379 20,475,166
Foreign deposits:
Noninterest bearing - - -
Interest bearing 461,603 216,999 631,483
------------ ------------ ------------
Total deposits 37,203,790 38,719,506 41,648,355
Federal funds purchased and
securities sold under
repurchase agreements 648,864 587,249 357,725
Commercial paper 615,816 824,887 859,515
Other borrowed funds 150,503 172,549 114,324
Acceptances outstanding 16,295 23,841 47,167
Other liabilities (1) 1,173,988 1,112,743 1,616,174
Medium and long-term debt 820,460 816,113 806,353
Junior subordinated debt
payable to subsidiary grantor
trust 15,904 15,790 15,451
Liabilities of discontinued
operations to be extinguished
or assumed (2) 2,218,826 1,533,099 1,486,822
------------ ------------ ------------
Total liabilities 42,864,446 43,805,777 46,951,886
------------ ------------ ------------
Commitments and contingencies
Stockholders' Equity
Preferred stock:
Authorized 5,000,000 shares, no
shares issued or outstanding
as of September 30, 2004,
December 31, 2004, and
September 30, 2005 - - -
Common stock, par value $1 per
share at September 30, 2004,
December 31, 2004 and
September 30, 2005:
Authorized 300,000,000 shares,
issued 149,529,292 shares as
of September 30, 2004,
152,191,818 shares as of
December 31, 2004, and
153,960,915 shares as of
September 30, 2005 149,529 152,192 153,961
Additional paid-in capital 728,791 881,928 967,242
Treasury stock - 2,365,900
shares as of Sept. 30, 2004,
3,831,900 shares as of Dec. 31,
2004 and 9,375,943 shares as
of September 30, 2005 (131,464) (223,361) (552,786)
Retained earnings 3,400,117 3,526,312 3,901,625
Accumulated other comprehensive
loss (20,814) (44,827) (123,086)
------------ ------------ ------------
Total stockholders' equity 4,126,159 4,292,244 4,346,956
------------ ------------ ------------
Total liabilities and
stockholders' equity $46,990,605 $48,098,021 $51,298,842
============ ============ ============
(1) On December 31, 2004, UnionBanCal Corporation transferred the
allowance related to losses on off-balance sheet commitments of $83
million from the allowance for loan losses to other liabilities. At
September 30, 2005, the allowance related to losses on off-balance
sheet commitments was $82 million. Periods prior to December 31, 2004
have not been restated.
(2) In September 2005, UnionBanCal Corporation committed to a plan for
disposal of most of its International Banking business. All prior
periods presented have been restated to reflect the discontinued
operations.
UnionBanCal Corporation and Subsidiaries
Loans (Unaudited)
Exhibit 8
Percent Change to
Three Months Ended Sept. 30, 2005
from
-------------------------- -------------------
Sept. 30, June 30, Sept. 30, Sept. 30, June 30,
(Dollars in millions) 2004 2005 2005 2004 2005
- -------------------------------- -------- -------- --------- ---------
Loans (period average)
(1)
Commercial, financial
and industrial $9,396 $10,378 $11,225 19.47% 8.16%
Construction 1,080 1,244 1,299 20.28% 4.42%
Mortgage - Commercial 4,301 5,451 5,589 29.95% 2.53%
Mortgage - Residential 8,550 10,290 10,763 25.88% 4.60%
Consumer 2,221 2,434 2,478 11.57% 1.81%
Lease financing 607 594 593 (2.31%) (0.17%)
Loans originated in
foreign branches 144 203 228 58.33% 12.32%
-------- -------- --------
Total loans held to
maturity $26,299 $30,594 $32,175 22.34% 5.17%
Total loans held for
sale 3 17 3 0.00% (82.35%)
-------- -------- --------
Total loans $26,302 $30,611 $32,178 22.34% 5.12%
======== ======== ========
Nonperforming assets
(period end) (1)
Nonaccrual loans:
Commercial, financial
and industrial $91 $36 $25 (72.53%) (30.56%)
Construction 6 1 - (100.00%) (100.00%)
Mortgage - Commercial 28 11 10 (64.29%) (9.09%)
Lease 54 18 - (100.00%) (100.00%)
-------- -------- --------
Total nonaccrual
loans 179 66 35 (80.45%) (46.97%)
Foreclosed assets 11 3 3 (72.73%) 0.00%
-------- -------- --------
Total
nonperforming
assets $190 $69 $38 (80.00%) (44.93%)
======== ======== ========
Loans 90 days or more
past due and
still accruing $9 $4 $5 (44.44%) 25.00%
======== ======== ========
Analysis of Allowance
for Credit Losses (1)
Beginning balance $500 $401 $395
Reversal of allowance
for loan losses (11) (14) (15)
Foreign translation
adjustment and other
net additions
(deductions) (2) - - -
Loans charged off:
Commercial, financial
and industrial (14) (4) (9)
Consumer (2) (1) (1)
Lease financing - - (19)
-------- -------- --------
Total loans charged off (16) (5) (29)
-------- -------- --------
Loans recovered:
Commercial, financial
and industrial 8 12 13
Mortgage - Commercial - - -
Consumer 1 1 -
-------- -------- --------
Total loans recovered 9 13 13
-------- -------- --------
Net loans (charged-off)
recovered (7) 8 (16)
-------- -------- --------
Ending balance of
allowance for loan
losses $482 $395 $364
Allowance for off-
balance sheet
commitment losses (2) - 82 82
-------- -------- --------
Allowance for credit
losses $482 $477 $446
======== ======== ========
(1) In September 2005, UnionBanCal Corporation committed to a plan for
disposal of most of its International Banking business. All prior
periods presented have been restated to reflect the discontinued
operations.
(2) 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 and
September 30, 2005, the allowance related to off-balance sheet
commitments was $82 million and $82 million, respectively. Periods
prior to December 31, 2004 have not been restated.
nm = not meaningful
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 9
For the Three Months Ended
September 30, 2004
--------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (1) Rate (1)
(2)
- ---------------------------- ------------ ----------- --------
Assets
Loans: (3)
Domestic $26,158,230 $340,348 5.19 %
Foreign (4) 143,684 1,586 4.39
Securities - taxable 11,907,592 105,256 3.54
Securities - tax-exempt 68,884 1,416 8.22
Interest bearing deposits in banks 364,505 1,656 1.81
Federal funds sold and securities
purchased under resale agreements 431,138 1,616 1.49
Trading account assets 327,970 1,250 1.52
------------ -----------
Total earning assets 39,402,003 453,128 4.59
-----------
Allowance for loan losses (5) (499,440)
Cash and due from banks 2,154,048
Premises and equipment, net 500,123
Other assets 1,915,970
------------
Total assets $43,472,704
============
Liabilities
Domestic deposits:
Interest bearing $11,775,553 18,536 0.63
Savings and consumer time 4,382,668 9,027 0.82
Large time 1,932,610 7,162 1.47
Foreign deposits (4) 218,131 370 0.67
------------ -----------
Total interest bearing deposits 18,308,962 35,095 0.76
------------ -----------
Federal funds purchased and securities
sold under repurchase agreements 867,988 2,861 1.31
Net funding allocated from (to)
discontinued operations (6) 46,149 152 1.31
Commercial paper 639,345 1,697 1.06
Other borrowed funds 161,290 1,122 2.77
Medium and long-term debt 792,083 4,369 2.19
Trust notes 15,959 242 6.07
------------ -----------
Total borrowed funds 2,522,814 10,443 1.65
------------ -----------
Total interest bearing liabilities 20,831,776 45,538 0.87
-----------
Noninterest bearing deposits 17,628,751
Other liabilities (5) 944,224
------------
Total liabilities 39,404,751
Stockholders' Equity
Common equity 4,067,953
------------
Total stockholders' equity 4,067,953
------------
Total liabilities and stockholders'
equity $43,472,704
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 407,590 4.13 %
Less: taxable-equivalent adjustment 1,012
-----------
Net interest income $406,578
===========
- ----------------------------------------------------------------------
Average Assets and Liabilities September
of Discontinued Operations 30, 2004
for Period Ended:
-----------
Assets $2,239,965
Liabilities $2,286,114
Net Asset (Liabilities) $(46,149)
- ----------------------------------------------------------------------
June 30, 2005
--------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (1) Rate (1)
(2)
- ---------------------------- ---------------- ----------- --------
Assets
Loans: (3)
Domestic $30,407,432 $436,336 5.75 %
Foreign (4) 203,080 2,455 4.85
Securities - taxable 10,959,220 101,672 3.71
Securities - tax-exempt 66,207 1,347 8.14
Interest bearing deposits in
banks 74,200 396 2.14
Federal funds sold and securities
purchased under resale
agreements 696,177 5,256 3.03
Trading account assets 261,753 1,049 1.61
------------ -----------
Total earning assets 42,668,069 548,511 5.15
-----------
Allowance for loan losses (5) (399,243)
Cash and due from banks 2,307,361
Premises and equipment, net 521,362
Other assets 2,385,261
------------
Total assets $47,482,810
============
Liabilities
Domestic deposits:
Interest bearing $12,444,947 32,017 1.03
Savings and consumer time 4,703,221 14,129 1.20
Large time 2,975,965 18,358 2.47
Foreign deposits (4) 465,850 2,920 2.51
------------ -----------
Total interest bearing deposits 20,589,983 67,424 1.31
------------ -----------
Federal funds purchased and
securities
sold under repurchase agreements 1,160,373 8,217 2.84
Net funding allocated from (to)
discontinued operations (6) (590,255) (4,179) 2.84
Commercial paper 1,158,629 7,807 2.70
Other borrowed funds 197,694 1,817 3.69
Medium and long-term debt 799,514 7,459 3.74
Trust notes 15,619 238 6.10
------------ -----------
Total borrowed funds 2,741,574 21,359 3.12
------------ -----------
Total interest bearing
liabilities 23,331,557 88,783 1.53
-----------
Noninterest bearing deposits 18,808,040
Other liabilities (5) 1,198,063
------------
Total liabilities 43,337,660
Stockholders' Equity
Common equity 4,145,150
------------
Total stockholders' equity 4,145,150
------------
Total liabilities and
stockholders'
equity $47,482,810
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 459,728 4.32 %
Less: taxable-equivalent
adjustment 1,018
-----------
Net interest income $458,710
===========
- ----------------------------------------------------------------------
Average Assets and Liabilities of June 30, 2005
Discontinued Operations for Period
Ended:
-------------
Assets $1,981,576
Liabilities $1,391,321
Net Asset (Liabilities) $590,255
- ----------------------------------------------------------------------
September 30, 2005
--------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (1) Rate (1)
(2)
- ---------------------------- ------------- ----------- --------
Assets
Loans: (3)
Domestic $31,949,929 $459,280 5.72 %
Foreign (4) 227,887 2,612 4.55
Securities - taxable 9,971,085 96,706 3.88
Securities - tax-exempt 65,800 1,350 8.21
Interest bearing deposits in banks 57,042 303 2.11
Federal funds sold and securities
purchased under resale agreements 770,116 6,777 3.49
Trading account assets 329,318 1,115 1.34
------------ -----------
Total earning assets 43,371,177 568,143 5.21
-----------
Allowance for loan losses (5) (392,651)
Cash and due from banks 2,232,281
Premises and equipment, net 514,156
Other assets 2,487,066
------------
Total assets $48,212,029
============
Liabilities
Domestic deposits:
Interest bearing $13,157,103 44,318 1.34
Savings and consumer time 4,642,782 15,668 1.34
Large time 2,588,559 18,997 2.91
Foreign deposits (4) 517,298 3,813 2.92
------------ -----------
Total interest bearing deposits 20,905,742 82,796 1.57
------------ -----------
Federal funds purchased and
securities
sold under repurchase agreements 630,272 5,158 3.25
Net funding allocated from (to)
discontinued operations (6) (593,732) (4,864) 3.25
Commercial paper 1,207,822 9,394 3.09
Other borrowed funds 173,853 1,707 3.89
Medium and long-term debt 817,602 8,520 4.13
Trust notes 15,506 239 6.15
------------ -----------
Total borrowed funds 2,251,323 20,154 3.55
------------ -----------
Total interest bearing liabilities 23,157,065 102,950 1.76
-----------
Noninterest bearing deposits 19,387,786
Other liabilities (5) 1,392,056
------------
Total liabilities 43,936,907
Stockholders' Equity
Common equity 4,275,122
------------
Total stockholders' equity 4,275,122
------------
Total liabilities and
stockholders'
equity $48,212,029
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 465,193 4.27 %
Less: taxable-equivalent adjustment 1,051
-----------
Net interest income $464,142
===========
- ----------------------------------------------------------------------
Average Assets and Liabilities of September 30,
Discontinued Operations for Period 2005
Ended:
-------------
Assets $1,978,255
Liabilities $1,384,523
Net Asset (Liabilities) $593,732
- ----------------------------------------------------------------------
(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 starting in the quarter ended March 31,
2005. Prior periods have not been restated.
(6)In September 2005, UnionBanCal Corporation committed to a plan for
disposal of most of its international banking business. All periods
presented have been restated to reflect discontinued operations. Net
funding allocated from (to) discontinued operations represents the
shortage (excess) of assets over liabilities of discontinued
operations. The expense (earnings) on funds allocated from (to)
discontinued operations are calculated by taking the net balance of
discontinued operations for each quarter and applying an earnings rate
or a cost of funds equivalent to the corresponding quarter's fed funds
purchased rate.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 10
For the Nine Months Ended
----------------------------
September 30, 2004
--------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (1) Rate (1)
(2)
- --------------------------- ------------ ----------- --------
Assets
Loans: (3)
Domestic $25,213,753 $987,987 5.23 %
Foreign (4) 114,723 4,053 4.72
Securities - taxable 11,664,022 317,390 3.63
Securities - tax-exempt 68,120 4,175 8.17
Interest bearing deposits in banks 159,386 1,946 1.63
Federal funds sold and
securities
purchased under resale agreements 786,045 6,503 1.11
Trading account assets 346,473 2,728 1.05
------------ -----------
Total earning assets 38,352,522 1,324,782 4.61
-----------
Allowance for loan
losses(5) (519,393)
Cash and due from banks 2,144,157
Premises and equipment, net 508,314
Other assets 1,839,780
------------
Total assets $42,325,380
============
Liabilities
Domestic deposits:
Interest bearing $11,538,769 51,199 0.59
Savings and consumer time 4,248,057 26,282 0.83
Large time 2,185,349 22,712 1.39
Foreign deposits (4) 254,754 951 0.50
------------ -----------
Total interest bearing deposits 18,226,929 101,144 0.74
------------ -----------
Federal funds purchased and
securities
sold under repurchase agreements 537,169 4,094 1.02
Net funding allocated from (to)
discontinued operations (6) (124,459) (554) 0.59
Commercial paper 566,776 3,883 0.92
Other borrowed funds 174,470 3,599 2.76
Medium and long-term debt 805,863 11,201 1.86
Trust notes 78,139 2,553 4.36
------------ -----------
Total borrowed funds 2,037,958 24,776 1.62
------------ -----------
Total interest bearing liabilities 20,264,887 125,920 0.83
-----------
Noninterest bearing
deposits 17,168,125
Other liabilities (5) 908,174
------------
Total liabilities 38,341,186
Stockholders' Equity
Common equity 3,984,194
------------
Total stockholders' equity 3,984,194
------------
Total liabilities and stockholders'
equity $42,325,380
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent
basis) 1,198,862 4.17 %
Less: taxable-equivalent adjustment 2,617
-----------
Net interest income $1,196,245
===========
Average Assets and Liabilities of September
Discontinued Operations for Period 30, 2004
Ended:
-----------
Assets $2,137,241
Liabilities $2,012,782
Net Asset (Liabilities) $124,459
For the Nine Months Ended
----------------------------
September 30, 2005
--------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (1) Rate (1)
(2)
- --------------------------- ----------------------------------
Assets
Loans: (3)
Domestic $30,633,865 $1,298,240 5.66 %
Foreign (4) 209,337 7,567 4.83
Securities - taxable 10,678,358 298,317 3.72
Securities - tax-exempt 66,379 4,022 8.08
Interest bearing deposits in banks 96,961 1,432 1.97
Federal funds sold and
securities
purchased under resale agreements 615,967 14,406 3.13
Trading account assets 275,087 3,072 1.49
-------------------------
Total earning assets 42,575,954 1,627,056 5.10
------------
Allowance for loan
losses(5) (398,404)
Cash and due from banks 2,240,948
Premises and equipment, net 519,915
Other assets 2,404,271
-------------
Total assets $47,342,684
=============
Liabilities
Domestic deposits:
Interest bearing $12,614,932 101,752 1.08
Savings and consumer time 4,707,515 42,841 1.22
Large time 2,758,495 53,208 2.58
Foreign deposits (4) 431,599 8,247 2.55
-------------------------
Total interest bearing deposits 20,512,541 206,048 1.34
-------------------------
Federal funds purchased and
securities
sold under repurchase agreements 1,021,123 20,829 2.73
Net funding allocated from (to)
discontinued operations (6) (535,998) (11,499) 2.87
Commercial paper 1,078,558 21,761 2.70
Other borrowed funds 183,997 5,053 3.67
Medium and long-term debt 808,686 22,511 3.72
Trust notes 15,618 715 6.10
-------------------------
Total borrowed funds 2,571,984 59,370 3.09
-------------------------
Total interest bearing liabilities 23,084,525 265,418 1.54
------------
Noninterest bearing
deposits 18,792,219
Other liabilities (5) 1,256,056
-------------
Total liabilities 43,132,800
Stockholders' Equity
Common equity 4,209,884
-------------
Total stockholders' equity 4,209,884
-------------
Total liabilities and stockholders'
equity $47,342,684
=============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent
basis) 1,361,638 4.27 %
Less: taxable-equivalent adjustment 3,124
------------
Net interest income $1,358,514
============
Average Assets and Liabilities of September
Discontinued Operations for Period 30, 2005
Ended:
-----------
Assets $1,974,884
Liabilities $1,438,886
Net Asset (Liabilities) $535,998
(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 starting in the quarter ended March 31,
2005. Prior periods have not been restated.
(6)In September 2005, UnionBanCal Corporation committed to a plan for
disposal of most of its international banking business. All periods
presented have been restated to reflect discontinued operations. Net
funding allocated from (to) discontinued operations represents the
shortage (excess) of assets over liabilities of discontinued
operations. The expense (earnings) on funds allocated from (to)
discontinued operations are calculated by taking the net balance of
discontinued operations for each quarter and applying an earnings rate
or a cost of funds equivalent to the corresponding quarter's fed funds
purchased rate. The year-to-date expense (earnings) amount is the sum
of the quarterly amounts.
UnionBanCal Corporation and Subsidiaries
On a Reported Earnings Basis (reference to exhibit 3) (1)
Exhibit 11
- ----------------------------------------------------------------------
Noninterest Income (Unaudited)
Percentage Change
to
For the Three Months Ended September 30, 2005
From
----------------------------- --------------------
Sept. 30, June 30, Sept.30, Sept.30, June 30,
(Dollars in
thousands) 2004 2005 2005 2004 2005
- ------------------ --------- --------- --------- ---------- -------
Service charges on
deposit accounts $85,667 $79,746 $84,822 (0.99) % 6.37 %
Trust and
investment
management fees 39,089 41,590 43,500 11.28 4.59
Insurance
commissions 17,463 19,340 17,819 2.04 (7.86)
Merchant banking
fees 11,682 18,114 11,257 (3.64) (37.85)
Foreign exchange
gains, net 8,268 8,551 8,849 7.03 3.49
Card processing
fees, net 4,653 6,464 6,597 41.78 2.06
Brokerage
commissions and
fees 8,527 8,605 5,290 (37.96) (38.52)
Securities losses,
net (6) (13,313) (320) nm (97.60)
Gain on private
capital
investments, net 467 5,261 5,692 nm 8.19
Other 21,310 29,196 28,682 34.59 (1.76)
--------- --------- ---------
Total
noninterest
income $197,120 $203,554 $212,188 7.64 % 4.24 %
========= ========= =========
Noninterest Expense (Unaudited)
Percentage Change
to
September 30, 2005
For the Three Months Ended From
------------------------------- ------------------
Sept. 30, June 30, Sept.30, Sept.30, June 30,
(Dollars in
thousands) 2004 2005 2005 2004 2005
----------------- --------- --------- --------- -------- --------
Salaries and
other
compensation $175,619 $186,998 $190,293 8.36 % 1.76 %
Employee benefits 33,935 46,978 45,831 35.06 (2.44)
--------- --------- ---------
Salaries and
employee
benefits 209,554 233,976 236,124 12.68 0.92
Net occupancy 32,029 33,553 34,336 7.20 2.33
Outside services 19,572 26,468 28,533 45.78 7.80
Equipment 15,949 16,937 15,832 (0.73) (6.52)
Software 12,790 14,727 14,374 12.38 (2.40)
Professional
services 11,976 13,150 11,240 (6.15) (14.52)
Communications 10,234 9,762 10,808 5.61 10.72
Advertising and
public relations 7,843 8,903 9,114 16.21 2.37
Data processing 8,146 8,427 7,406 (9.08) (12.12)
Intangible asset
amortization 5,077 4,985 4,985 (1.81) 0.00
Foreclosed asset
expense (income) (10) (2,577) (3,435) nm 33.29
Reversal of
allowance for
losses on off-
balance sheet
commitments (2) - (4,000) - 0.00 (100.00)
Other 26,416 24,089 27,379 3.65 13.66
--------- --------- ---------
Total
noninterest
expense $359,576 $388,400 $396,696 10.32 % 2.14 %
========= ========= =========
(1)In September 2005, UNBC committed to a plan for disposal of most of
its International Banking business. All periods presented have been
restated to reflect the discontinued operations.
(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
UnionBanCal Corporation and Subsidiaries
On an Operating Earnings Basis (reference to exhibit 4) (1)
Exhibit 12
Noninterest Income (Unaudited)
Percentage Change
to
For the Three Months Ended September 30, 2005
From
----------------------------- ------------------
September June 30, September SeptemberJune 30,
30, 30, 30,
(Dollars in
thousands) 2004 2005 2005 2004 2005
------------------- --------- --------- --------- -------- --------
Service charges on
deposit accounts $85,667 $79,746 $84,822 (0.99)% 6.37 %
Trust and
investment
management fees 39,089 41,590 43,500 11.28 4.59
Insurance
commissions 17,463 19,340 17,819 2.04 (7.86)
Merchant banking
fees 11,682 18,114 11,257 (3.64) (37.85)
Foreign exchange
gains, net 8,268 8,551 8,849 7.03 3.49
Card processing
fees, net 4,653 6,464 6,597 41.78 2.06
Brokerage
commissions and
fees 8,527 8,605 5,290 (37.96) (38.52)
Securities gains
(losses), net (6) (13,313) (320) nm (97.60)
Gain on private
capital
investments, net 467 5,261 5,692 nm 8.19
Other 21,310 29,196 28,682 34.59 (1.76)
--------- --------- ---------
Total noninterest
income $197,120 $203,554 $212,188 7.64 % 4.24 %
========= ========= =========
Noninterest Expense (Unaudited)
Percentage Change
to
For the Three Months Ended September 30, 2005
From
----------------------------- ------------------
September June 30, September SeptemberJune 30,
30, 30, 30,
(Dollars in
thousands) 2004 2005 2005 2004 2005
------------------- --------- --------- --------- -------- --------
Salaries and other
compensation $175,619 $186,998 $190,293 8.36 % 1.76 %
Employee benefits 33,935 46,978 45,831 35.06 (2.44)
--------- --------- ---------
Salaries and
employee
benefits 209,554 233,976 236,124 12.68 0.92
Net occupancy 32,029 33,553 34,336 7.20 2.33
Outside services 19,572 26,468 28,533 45.78 7.80
Equipment 15,949 16,937 15,832 (0.73) (6.52)
Software 12,790 14,727 14,374 12.38 (2.40)
Professional
services 11,976 13,150 11,240 (6.15) (14.52)
Communications 10,234 9,762 10,808 5.61 10.72
Advertising and
public relations 7,843 8,903 9,114 16.21 2.37
Data processing 8,146 8,427 7,406 (9.08) (12.12)
Intangible asset
amortization 5,077 4,985 4,985 (1.81) 0.00
Foreclosed asset
expense (income) (10) (2,577) (3,435) nm 33.29
Reversal of
allowance for
losses on off-
balance sheet
commitments (3) - (4,000) - 0.00 (100.00)
Other 26,416 24,089 27,379 3.65 13.66
--------- --------- ---------
Total noninterest
expense $359,576 $388,400 $396,696 10.32 % 2.14 %
========= ========= =========
(1)See exhibit 5 for reconciliation of 'reported earnings' to
'operating earnings'.
(2)In September 2005, UNBC committed to a plan for disposal of most of
its International Banking business. All periods presented have been
restated to reflect the discontinued operations.
(3)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
UnionBanCal Corporation and Subsidiaries
On a Reported Earnings Basis (reference to exhibit 3) (1)
Exhibit 13
Noninterest Income (Unaudited)
Percentage
Change to
For the Nine Months Ended September
30, 2005
From
------------------------- ----------
Sept.30, Sept. 30, Sept. 30,
(Dollars in thousands) 2004 2005 2004
- --------------------------------- ----------- ----------- ---------
Service charges on deposit
accounts $252,974 $243,835 (3.61)%
Trust and investment management
fees 111,699 127,053 13.75
Insurance commissions 57,850 59,176 2.29
Merchant banking fees 26,863 35,637 32.66
Foreign exchange gains, net 24,209 25,570 5.62
Brokerage commissions and fees 24,847 22,867 (7.97)
Card processing fees, net 28,901 18,668 (35.41)
Securities gains (losses), net 1,612 (13,289) nm
Gain on sale of merchant card
portfolio 93,000 - nm
Gain on private capital
investments, net 7,798 18,888 142.22
Other 70,681 82,962 17.38
----------- -----------
Total noninterest income $700,434 $621,367 (11.29)%
=========== ===========
Noninterest Expense (Unaudited)
Percentage
Change to
For the Nine Months Ended September
30, 2005
From
------------------------- ----------
Sept.30, Sept. 30, Sept. 30,
(Dollars in thousands) 2004 2005 2004
- --------------------------------- ----------- ----------- ---------
Salaries and other compensation $509,646 $556,249 9.14 %
Employee benefits 122,817 145,609 18.56
----------- -----------
Salaries and employee
benefits 632,463 701,858 10.97
Net occupancy 93,517 100,251 7.20
Outside services 52,130 76,248 46.27
Equipment 49,370 50,176 1.63
Software 37,309 43,072 15.45
Professional services 33,410 36,131 8.14
Communications 31,728 30,950 (2.45)
Advertising and public relations 27,154 25,657 (5.51)
Data processing 24,416 24,703 1.18
Intangible asset amortization 13,783 14,956 8.51
Foreclosed asset expense (income) 526 (5,606) nm
Reversal of allowance for losses
on off-balance sheet commitments
(2) - (1,000) nm
Other 88,945 80,652 (9.32)
----------- -----------
Total noninterest expense $1,084,751 $1,178,048 8.60 %
=========== ===========
(1)In September 2005, UNBC committed to a plan for disposal of most of
its International Banking business. All periods presented have been
restated to reflect the discontinued operations.
(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
UnionBanCal Corporation and Subsidiaries
On an Operating Earnings Basis (reference to exhibit 4) (1) (2)
Exhibit 14
Noninterest Income (Unaudited)
Percentage
Change to
For the Nine Months Ended September
30, 2005
From
------------------------- ----------
Sept. 30, Sept. 30, Sept. 30,
(Dollars in thousands) 2004 2005 2004
-------------------------- ------------ ----------- ---------
Service charges on deposit
accounts $252,974 $243,835 (3.61)%
Trust and investment
management fees 111,699 127,053 13.75
Insurance commissions 57,850 59,176 2.29
Merchant banking fees 26,863 35,637 32.66
Foreign exchange gains,
net 24,209 25,570 5.62
Brokerage commissions and
fees 24,847 22,867 (7.97)
Card processing fees, net 28,901 18,668 (35.41)
Securities gains (losses),
net 1,612 (13,289) nm
Gain on private capital
investments, net 7,798 18,888 142.22
Other 62,146 82,962 33.50
------------ -----------
Total noninterest
income $598,899 $621,367 3.75 %
============ ===========
Noninterest Expense (Unaudited)
Percentage
Change to
For the Nine Months Ended September
30, 2005
From
------------------------- ----------
Sept. 30, Sept. 30, Sept. 30,
(Dollars in thousands) 2004 2005 2004
-------------------------- ------------ ----------- ---------
Salaries and other
compensation $509,646 $556,249 9.14 %
Employee benefits 122,817 145,609 18.56
------------ -----------
Salaries and employee
benefits 632,463 701,858 10.97
Net occupancy 93,517 100,251 7.20
Outside services 52,130 76,248 46.27
Equipment 49,370 50,176 1.63
Software 37,309 43,072 15.45
Professional services 33,410 36,131 8.14
Communications 31,728 30,950 (2.45)
Advertising and public
relations 27,154 25,657 (5.51)
Data processing 24,416 24,703 1.18
Intangible asset
amortization 13,783 14,956 8.51
Foreclosed asset expense
(income) 526 (5,606) nm
Reversal of allowance for
losses on off-balance sheet
commitments (3) - (1,000) nm
Other 88,945 80,652 (9.32)
------------ -----------
Total noninterest
expense $1,084,751 $1,178,048 8.60 %
============ ===========
(1) See exhibit 6 for reconciliation of 'reported earnings' to
'operating earnings'.
(2)In September 2005, UNBC committed to a plan for disposal of most of
its International Banking business. All periods presented have been
restated to reflect the discontinued operations.
(3)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)
Michelle R. Crandall, 415-765-2780 (Investor Relations)
Stephen L. Johnson, 415-765-3252 (Public Relations)