Exhibit 99.1
UnionBanCal Corporation Reports Record
Income from Continuing Operations for 2005
SAN FRANCISCO--(BUSINESS WIRE)--Jan. 20, 2006--UnionBanCal
Corporation (NYSE:UB)
2005 Highlights:
-- Record income from continuing operations of $730.6 million and
record diluted earnings per share from continuing operations
of $4.94
-- Net interest margin expansion of 14 basis points, to 4.31
percent
-- Record revenue from continuing operations of $2.6 billion
-- Strong year-end capital levels, with tangible equity ratio at
8.31 percent
-- Excellent asset quality metrics, including 59 percent
reduction in nonperforming assets and year-end nonperforming
assets to total assets ratio of 0.12 percent
Fourth Quarter 2005 Highlights:
-- Diluted earnings per share from continuing operations,
excluding loss on securities portfolio rebalancing, of $1.26,
up 7 percent from fourth quarter 2004
-- Net interest margin expansion of 27 basis points compared with
fourth quarter 2004, to 4.42 percent
-- Strong loan and deposit growth compared with fourth quarter
2004
-- Average total loans up 18 percent
-- Average commercial loans up 21 percent
-- Average residential mortgage loans up 21 percent
-- Average commercial mortgage loans up 11 percent
-- Average total deposits up 6 percent
-- Average noninterest bearing deposits up 5 percent
-- Annualized average all-in cost of funds was 1.12 percent for
the quarter
-- Average noninterest bearing deposits were 47.9 percent of
average total deposits
-- Sold international correspondent banking business to Wachovia
Bank, recognizing $147.4 million after-tax gain on sale
-- Rebalanced investment securities portfolio for diversification
purposes, recognizing a $22.9 million after-tax loss on sale,
which is expected to be more than offset by incremental
interest income in 2006 through 2008
UnionBanCal Corporation (NYSE: UB) today reported fourth quarter
2005 net income of $308.5 million, or $2.09 per diluted common share,
and income from continuing operations of $162.2 million, or $1.10 per
diluted common share. Net income from discontinued operations was
$146.3 million, or $0.99 per diluted common share. Results from
discontinued operations were comprised of a net loss from discontinued
operations of $1.1 million and an after-tax gain on the sale of the
international banking business of $147.4 million. Excluding an
after-tax loss on the sale of securities of $22.9 million, or $0.16
per diluted common share, related to the rebalancing of the Company's
securities portfolio, fourth quarter income from continuing operations
was $185.1 million, or $1.26 per diluted common share.
For the full year 2005, the Company reported net income of $862.9
million, or $5.84 per diluted common share, and income from continuing
operations of $730.6 million, or $4.94 per diluted common share. For
the full year 2004, the Company reported net income of $732.5 million,
or $4.87 per diluted common share, and income from continuing
operations of $710.1 million, or $4.72 per diluted common share. For
the full year 2004, the Company reported operating net income of
$677.9 million, or $4.51 per diluted common share, and operating
income from continuing operations of $655.4 million, or $4.36 per
diluted common share. Operating income from continuing operations for
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.
"I am pleased with our fourth quarter and full-year performance,"
stated Takashi Morimura, President and Chief Executive Officer.
"During 2005, the strength of our business model was evident from the
strong core earnings growth and return on equity we reported today.
These results enabled us to return a significant amount of capital to
shareholders in 2005. We increased our common stock dividend by 14
percent in April, declaring $230 million in regular dividends for the
year, and we repurchased $389 million of common stock. Despite this
significant return of capital, we enter the new year with strong
capital levels, as evidenced by a year-end tangible equity ratio of
8.31 percent."
"We continue to execute our strategic initiatives and to generate
strong financial results," added Chief Operating Officer Philip Flynn.
"Adjusting for the impact of the investment securities portfolio
rebalance, our fourth quarter results were in line with the forecast
we provided on October 21. With the rebalancing of our portfolio, we
believe our revenue stream will be enhanced, while reducing our
concentration risk and maintaining the short duration of the
portfolio.
"I am particularly pleased with the loan growth and strong net
interest margin we generated during the fourth quarter. Credit quality
throughout the loan portfolio remains healthy. Looking to 2006, we are
well-positioned to continue to participate in the expansion of the
California economy across all our business lines."
Portfolio Rebalancing
During the fourth quarter of 2005, the Company implemented a
strategic rebalancing of its securities portfolio, selling
approximately $1 billion of agency debentures with the intent of
reinvesting the proceeds primarily into "AAA"-rated non-agency
mortgage-backed securities. The sales were completed during the fourth
quarter of 2005, and the redeployment of proceeds is anticipated to be
completed during the first quarter of 2006. It is expected that the
overall duration of the securities portfolio will be largely
unaffected by the rebalancing.
The rebalancing of the securities portfolio is expected to reduce
the Company's concentration in agency securities from approximately 81
percent of the portfolio at September 30, 2005, to approximately 64
percent by the end of 2006, while at the same time increasing the
Company's concentration in non-agency mortgage-backed securities from
zero to an estimated 10 percent in the same period, bringing the
Company's securities portfolio distribution into closer alignment with
that of peer banks. The pre-tax loss of approximately $36.8 million
recognized in fourth quarter 2005 is expected to be offset by
incremental interest income of an estimated $26 million in 2006, an
estimated $17 million in 2007, and an estimated $8 million in 2008.
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 is
continuing to operate the Business over a transition period which will
extend into the second quarter of 2006, during which time it is
expected that the majority of the Company's international
correspondent bank customers will transfer to Wachovia.
Under the terms of the transaction, the Company earned the base
purchase price of $245 million during fourth quarter 2005, based on
certain negotiated business retention standards. 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 in 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. Commencing in third
quarter 2005, all results of the international correspondent banking
business have been reported as discontinued operations.
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 the
fourth quarter of 2005, the Company recorded an after-tax gain on the
transaction of approximately $147.4 million, or $1.00 per fully
diluted share, and a net loss from discontinued operations of $1.1
million, or $0.01 per fully diluted common share.
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 consolidated balance
sheets (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.
Fourth Quarter Total Revenue From Continuing Operations
For fourth quarter 2005, total revenue (taxable-equivalent net
interest income plus noninterest income) was $665.2 million, an
increase of $23.9 million, or 3.7 percent, compared with total revenue
of $641.3 million in fourth quarter 2004. Net interest income
increased 12.3 percent, and noninterest income decreased 13.6 percent.
Excluding the $36.8 million fourth quarter 2005 loss on the sale of
securities discussed above, total revenue increased $60.7 million, or
9.5 percent, with net interest income increasing 12.3 percent and
noninterest income increasing 3.7 percent. Compared with third quarter
2005, total revenue decreased 1.8 percent, with net interest income
increasing 3.6 percent, and noninterest income decreasing 13.6
percent. Excluding the loss on the sale of securities in fourth
quarter 2005, total revenue in sequential quarters increased 3.6
percent, with net interest income increasing 3.6 percent and
noninterest income increasing 3.8 percent.
Fourth Quarter Net Interest Income (Taxable-equivalent) From
Continuing Operations
Net interest income was $481.8 million in fourth quarter 2005, up
$52.9 million, or 12.3 percent, from the same quarter a year ago,
primarily due to strong growth in loans and deposits.
Average earning assets increased $2.2 billion, or 5.5 percent,
primarily due to a $5.1 billion, or 18.0 percent, increase in average
loans, and a $2.8 billion, or 23.5 percent, decrease in average
securities. Average commercial loans increased $2.1 billion, or 21.5
percent; average residential mortgages increased $2.0 billion, or 21.5
percent; and average commercial mortgages increased $0.5 billion, or
10.7 percent.
Compared to fourth quarter 2004, average noninterest bearing
deposits increased $0.8 billion, or 4.6 percent. Average title and
escrow deposits increased $66.9 million, or 2.2 percent. Average
noninterest bearing deposits represented 47.9 percent of average total
deposits in fourth quarter 2005. The annualized average all-in cost of
funds was 1.12 percent, reflecting the Company's strong average
deposit-to-loan ratio of 121 percent and the high proportion of
noninterest bearing deposits to total deposits.
The average yield on earning assets of $43.5 billion was 5.51
percent, up 79 basis points over fourth quarter last year, with the
average loan yield increasing 63 basis points. The average rate on
interest bearing liabilities of $23.1 billion was 2.05 percent, up 98
basis points, reflecting higher short-term interest rates compared
with fourth quarter 2004. Average interest bearing deposits were $21.0
billion and the weighted average rate was 1.84 percent. The net
interest margin in fourth quarter 2005 was 4.42 percent, compared with
4.15 percent in fourth quarter 2004, an increase of 27 basis points.
On a sequential quarter basis, net interest income increased $16.6
million, or 3.6 percent. Average earning assets increased 0.2 percent,
primarily due to a $1.1 billion, or 3.4 percent, increase in average
loans, and a decrease in average securities of $0.9 billion, or 9.4
percent. Average commercial loans increased $0.5 billion, or 4.7
percent, and average residential mortgages increased $0.4 billion, or
3.5 percent. Average noninterest bearing deposits decreased $124
million, or 0.6 percent, primarily due to a $361 million decrease in
title and escrow deposits. The average yield on earning assets
increased 30 basis points and the average rate on interest bearing
liabilities increased 29 basis points. The net interest margin
increased 15 basis points to 4.42 percent, primarily due to higher
short-term interest rates and higher loan fees as compared with third
quarter.
Fourth Quarter Noninterest Income From Continuing Operations
In fourth quarter 2005, noninterest income was $183.4 million,
down $29.0 million, or 13.6 percent, from the same quarter a year ago.
Excluding the $36.8 million loss on the sale of securities described
above, fourth quarter noninterest income was $220.2 million, up $7.8
million, or 3.7 percent, from the same quarter a year ago. Service
charges on deposit accounts decreased $2.2 million, or 2.7 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 $5.1 million, or 12.3 percent,
primarily due to an increase in trust assets. Merchant banking fees
decreased $4.5 million, or 35.4 percent, primarily due to a lower
volume of syndications completed compared with fourth quarter 2004,
which contained an unusually high volume of syndications. Securities
gains (losses), net, reflected a $36.8 million loss on the sale of $1
billion of agency debentures associated with the strategic rebalancing
of the Company's securities portfolio. This compares with a loss on
the sale of securities in fourth quarter 2004 of $13.7 million.
Compared with third quarter 2005, fourth quarter 2005 noninterest
income decreased $28.8 million, or 13.6 percent, and, excluding the
loss on the sale of securities, increased $8.0 million, or 3.8
percent. Service charges on deposit accounts decreased $4.8 million,
or 5.6 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 $3.0 million, or 6.8
percent, and insurance commissions increased $1.9 million, or 10.8
percent.
Fourth Quarter Noninterest Expense From Continuing Operations
Noninterest expense for fourth quarter 2005 was $429.2 million, an
increase of $40.4 million, or 10.4 percent, over fourth quarter 2004.
Salaries and employee benefits expense increased $16.2 million, or 7.5
percent, primarily due to annual merit increases and higher
performance-related incentive expense. Net occupancy expense increased
$6.8 million, or 20.0 percent, primarily due to charges associated
with the consolidation of offices in San Francisco. Professional
services expense decreased $5.6 million, or 37.4 percent, primarily
due to lower consulting and legal expenses and a recovery of legal
fees in fourth quarter 2005. Outside services expense increased $18.1
million, or 79.2 percent, primarily due to higher cost of services
related to title and escrow balances, stemming from a higher earnings
credit rate and higher balances in fourth quarter 2005. Intangible
asset amortization expense was $5.0 million, versus $5.7 million in
fourth quarter 2004. The provision for off-balance sheet commitments
in fourth quarter 2005 was $5.0 million, compared with none in fourth
quarter 2004.
Compared with third quarter 2005, noninterest expense increased
$32.5 million, or 8.2 percent. Salaries and employee benefits expense
decreased $3.6 million, or 1.5 percent, primarily due to a decrease in
incentive expense, and an actuarial adjustment for post-employment
liabilities. Net occupancy expense increased $6.7 million, or 19.5
percent, primarily due to charges associated with the consolidation of
offices in San Francisco. Outside services expense increased $12.4
million, or 43.5 percent, primarily due to higher cost of services
related to title and escrow balances, stemming from a higher earnings
credit rate. The provision for off-balance sheet commitments in fourth
quarter 2005 was $5.0 million, compared with none in third quarter
2005.
Income Tax Expense From Continuing Operations
The effective tax rate for fourth quarter 2005 was 33.8 percent,
compared with an effective tax rate of 33.6 percent for fourth quarter
2004 and an effective tax rate of 31.7 percent for third 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.
The effective tax rate for the full year 2005 was 32.8 percent,
compared with 34.9 percent on an operating basis for the full year
2004. The decrease in the effective tax rate in 2005 was due primarily
to a reduction in reserves of $10.0 million for estimated amounts owed
to the Internal Revenue Service with respect to certain leveraged
leasing transactions, a $4.1 million reduction to income tax expense
related to the adjustment of California taxes to reflect tax returns
filed on the worldwide unitary method, and $3.1 million of California
Enterprise Zone credits for which the Company became eligible in 2005.
Full Year Results From Continuing Operations
Total revenue for 2005 was $2.6 billion, up 4.2 percent compared
with total revenue on a reported basis for prior year. Net interest
income increased 13.3 percent, and noninterest income decreased 11.8
percent, primarily due to non-recurring gains in 2004. Total revenue
for 2005 increased 8.6 percent compared with total revenue on an
operating basis for prior year, with net interest income increasing
13.3 percent and noninterest income decreasing 0.8 percent due to the
$36.8 million loss on the sale of securities recorded in fourth
quarter 2005.
Net interest income was $1.8 billion in 2005, a $215.7 million, or
13.3 percent, increase from prior year, reflecting strong growth in
loans and deposits and higher short-term interest rates in 2005 as
compared with 2004. Compared with prior year, the net interest margin
increased 14 basis points, to 4.31 percent.
Noninterest income on a reported basis in 2005 was $804.8 million,
a decrease of $108.0 million, or 11.8 percent, compared with 2004
noninterest income of $912.8 million. Excluding the fourth quarter
2005 loss on the sale of securities of $36.8 million, noninterest
income in 2005 increased $30.3 million, or 3.7 percent, compared with
noninterest income on an operating basis in 2004 of $811.3 million
(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 $11.3
million, or 3.4 percent, primarily due to lower account analysis fees
stemming from a higher earnings credit rate in 2005, partially offset
by higher deposit balances and a change in the overdraft and NSF fee
structure. Trust and investment management fees increased $20.4
million, or 13.3 percent, primarily due to an increase in trust
assets. Card processing fees, net, decreased $9.0 million primarily
due to the May 31, 2004, sale of the Company's merchant card
portfolio.
For 2005, noninterest expense increased $133.7 million, or 9.1
percent, over 2004. Salaries and employee benefits expense increased
$85.6 million, or 10.1 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. Net occupancy expense increased $13.6
million, or 10.6 percent, primarily due to charges associated with the
consolidation of offices in San Francisco. Outside services expense
increased $42.2 million, or 56.3 percent, primarily due to higher cost
of services related to title and escrow balances, stemming from a
higher earnings credit rate and higher balances in 2005. Intangible
asset amortization expense was $19.9 million, compared with $19.5
million in prior year.
Credit Quality
Nonperforming assets at December 31, 2005, were $62 million, or
0.12 percent of total assets. This compares with $38 million, or 0.07
percent of total assets at September 30, 2005, and $150 million, or
0.31 percent of total assets, at December 31, 2004. Nonperforming
assets declined 59 percent between December 31, 2004, and December 31,
2005.
In fourth quarter 2005, the total provision for credit losses was
negative $5.0 million. The total provision for credit losses was
negative $15.0 million in third quarter 2005 and negative $16.7
million in fourth quarter 2004. The total provision for credit losses
in fourth quarter 2005 consisted of a provision for loan losses of
negative $10.0 million and a provision for off-balance sheet
commitments (classified in noninterest expense) of $5.0 million. In
fourth quarter 2005, net charge-offs were $3 million, compared with
net charge-offs of $16 million in third quarter 2005, and net
recoveries of $4 million in fourth quarter 2004.
For the full year 2005, the total provision for credit losses was
negative $46.7 million, compared with negative $45.8 million in 2004.
The total provision for credit losses in 2005 consisted of a provision
for loan losses of negative $50.7 million and a provision for
off-balance sheet commitments (classified in noninterest expense) of
$4.0 million.
At December 31, 2005, the allowance for credit losses as a percent
of total loans and as a percent of nonaccrual loans was 1.32 percent
and 743.6 percent, respectively. These ratios were 1.39 percent and
1272.3 percent, respectively, at September 30, 2005, and 1.65 percent
and 337.7 percent, respectively, at December 31, 2004.
Balance Sheet and Capital Ratios
At December 31, 2005, the Company had total assets of $49.4
billion. Total loans were $33.1 billion and total deposits were $40.1
billion, resulting in a period-end deposit-to-loan ratio of 121.1
percent. At period-end, total stockholders' equity was $4.6 billion,
the tangible equity ratio was 8.31 percent, and the ratio of tangible
common equity to risk-weighted assets was 8.93 percent. Book value per
share at December 31, 2005, was $31.62, up 9.3 percent from a year
earlier. The Company's Tier I and total risk-based capital ratios at
period-end were 9.18 percent and 11.11 percent, respectively.
Stock Repurchases
During fourth quarter 2005, the Company repurchased 886,200 shares
of common stock at a total price of $59.7 million, or $67.42 per
repurchased share. For full year 2005, the Company repurchased 6.4
million shares of common stock at a total cost of $389.1 million, or
$60.51 per repurchased share. At December 31, 2005, the Company was
authorized by its Board of Directors to repurchase an additional $102
million of common stock.
Common shares outstanding at December 31, 2005, were 144.2
million, a decrease of 4.2 million shares, or 2.8 percent, from one
year earlier, primarily reflecting shares repurchased.
First Quarter and Full Year 2006 Earnings Per Share Forecast
The Company currently estimates that first quarter 2006 fully
diluted earnings per share from continuing operations will be in the
range of $1.19 to $1.24, including estimated stock option expense of
$0.03 per share and an estimated total provision for credit losses of
negative $5 million. In addition, the Company expects to record a net
loss from discontinued operations of approximately $0.05 per diluted
common share. Therefore, net income per diluted common share is
expected to be in the range of $1.14 to $1.19.
For full year 2006, the Company currently estimates that fully
diluted earnings per share from continuing operations will be in the
range of $5.30 to $5.50, including estimated stock option expense of
$0.10 per share and an estimated total provision for credit losses of
$20 million. In addition, the Company expects to record a net loss
from discontinued operations of approximately $0.08 per diluted common
share. Therefore, net income per diluted common share is expected to
be in the range of $5.22 to $5.42.
Use of Non-GAAP Financial Measures
This press release contains certain references to operating
earnings, and other financial measures identified as being stated on
"an operating basis" or qualified by the word "operating" or that
exclude a loss on the sale of securities related to the rebalancing of
the Company's securities portfolio, that include adjustments from
comparable measures calculated and presented in accordance with
accounting principles generally accepted in the United States of
America (GAAP). Operating earnings, as used herein, differ from net
income reported under GAAP in that operating earnings exclude unusual
or non-recurring charges, losses, credits or gains. Similarly, other
financial measures that are identified herein as being stated on "an
operating basis" or qualified by the word "operating" exclude these
unusual or non-recurring charges, losses, credits or gains. This press
release identifies the specific items excluded from the comparable
GAAP financial measure in the calculation of each non-GAAP financial
measure. Because these items and their impact on the Company's
performance are difficult to predict, management believes that
financial presentations excluding the impact of these items provide
useful supplemental information which is important to a proper
understanding of the Company's core business results by investors.
These presentations should not be viewed as a substitute for results
determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP financial measures presented by other
companies. For a detailed reconciliation of data presented on an
operating basis to GAAP financial measures, please refer to Exhibits 5
and 6 accompanying this press release.
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, the
intent, timing and effect of the sale and redeployment of proceeds of
agency debentures, the Company's strategic initiatives, the Company's
participation in the expansion of the California economy, and the
transition and financial impact of the sale of the international
correspondent 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; 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 UFJ, 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; the Company's ability to transition
international correspondent bank customers; and risks associated with
various strategies the Company may pursue, including potential
acquisitions, divestitures and restructurings.
A complete description of the Company, including related risk
factors, is discussed in the Company's public filings with the
Securities and Exchange Commission, which are available by calling
(415) 765-2969 or online at http://www.sec.gov. All forward-looking
statements included in this press release are based on information
available at the time of the release, and the Company assumes no
obligation to update any forward-looking statement.
Conference Call and Webcast
The Company will conduct a conference call to review fourth
quarter results at 8:30 AM Pacific Time (11:30 AM Eastern Time) on
January 20, 2006. Interested parties calling from locations within the
United States should call 888-428-4480 (612-288-0318 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),
January 20, through 11:59 PM Pacific Time, January 27 (2:59 AM Eastern
Time, January 28). The reservation number for this playback is 808873.
Based in San Francisco, UnionBanCal Corporation is a bank holding
company with assets of $49.4 billion at December 31, 2005. Its primary
subsidiary, Union Bank of California, N.A., had 319 banking offices in
California, Oregon and Washington, and 20 international facilities, at
December 31, 2005.
Exhibit 1
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Percent Change
to
On a Reported As of and for December 31,
Earnings the Three Months Ended 2005 from
Basis (1) :
- --------------------------------------------------- -----------------
(Dollars in
thousands,
except per Dec. 31, Sept. 30, Dec. 31, Dec. 31, Sept. 30,
share data) 2004 2005 2005 2004 2005
- ------------------------- ------------ ------------ -------- --------
Results of
operations:
Net interest
income (2) $428,899 $465,193 $481,828 12.34% 3.58%
Noninterest
income 212,389 212,188 183,420 (13.64%) (13.56%)
------------ ------------ ------------
Total revenue 641,288 677,381 665,248 3.74% (1.79%)
Noninterest
expense (3) 388,838 396,696 429,198 10.38% 8.19%
Reversal of
allowance
for loan
losses (16,719) (15,000) (10,000) (40.19%) (33.33%)
------------ ------------ ------------
Income from
continuing
operations
before
income
taxes (2) 269,169 295,685 246,050 (8.59%) (16.79%)
Taxable-
equivalent
adjustment 1,128 1,051 1,228 8.87% 16.84%
Income tax
expense 89,944 93,388 82,657 (8.10%) (11.49%)
------------ ------------ ------------
Income from
continuing
operations 178,097 201,246 162,165 (8.95%) (19.42%)
(Loss)/Income
from
discontinued
operations 2,415 (15,961) 146,324 nm nm
------------ ------------ ------------
Net income $180,512 $185,285 $308,489 70.90% 66.49%
============ ============ ============
Per common
share:
Basic earnings:
From continuing
operations $1.20 $1.39 $1.12 (6.67%) (19.42%)
Net income 1.22 1.28 2.14 75.41% 67.19%
Diluted earnings:
From continuing
operations 1.18 1.36 1.10 (6.78%) (19.12%)
Net income 1.19 1.26 2.09 75.63% 65.87%
Dividends (4) 0.36 0.41 0.41 13.89% 0.00%
Book value
(end of period) 28.93 30.07 31.62 9.30% 5.15%
Common shares
outstanding
(end of
period) 148,359,918 144,584,972 144,207,072 (2.80%) (0.26%)
Weighted
average
common
shares
outstanding
- basic 148,421,593 144,459,465 144,466,374 (2.66%) 0.00%
Weighted
average
common
shares
outstanding
- - diluted 151,513,258 147,613,377 147,385,734 (2.72%) (0.15%)
Balance sheet
(end of period):
Total
assets (9) $48,098,021 $51,298,842 $49,382,746 2.67% (3.74%)
Total loans 29,109,415 32,004,747 33,095,595 13.69% 3.41%
Nonaccrual
loans 142,573 34,980 58,892 (58.69%) 68.36%
Nonperforming
assets 149,855 37,507 61,645 (58.86%) 64.36%
Total
deposits 38,719,506 41,648,355 40,082,239 3.52% (3.76%)
Medium
and long-term
debt 816,113 806,353 801,095 (1.84%) (0.65%)
Junior
subordinated
debt 15,790 15,451 15,338 (2.86%) (0.73%)
Stockholders'
equity 4,292,244 4,346,956 4,559,700 6.23% 4.89%
Balance sheet
(period
average):
Total assets $45,578,404 $48,212,029 $48,406,487 6.20% 0.40%
Total loans 28,190,340 32,177,816 33,260,944 17.99% 3.37%
Earning
assets 41,203,535 43,371,177 43,451,686 5.46% 0.19%
Total
deposits 37,828,870 40,293,528 40,253,861 6.41% (0.10%)
Stockholders'
equity 4,246,844 4,275,122 4,488,396 5.69% 4.99%
Financial ratios:
Return on average
assets (5) :
From continuing
operations 1.55% 1.66% 1.33%
Net income 1.58% 1.52% 2.53%
Return on average
stockholders'
equity (5) :
From continuing
operations 16.68% 18.68% 14.33%
Net income 16.91% 17.19% 27.27%
Efficiency
ratio (6) 60.53% 59.07% 63.77%
Net interest
margin (2) 4.15% 4.27% 4.42%
Dividend
payout ratio 30.00% 29.50% 36.61%
Tangible
equity ratio 7.94% 7.57% 8.31%
Tier 1 risk-
based capital
ratio (7)(9) 9.71% 8.88% 9.18%
Total risk-based
capital
ratio (7)(9) 12.17% 10.86% 11.11%
Leverage
ratio (7)(9) 8.09% 7.96% 8.39%
Allowance for
credit losses
to total
loans (8) 1.65% 1.39% 1.32%
Allowance for
credit
losses to
nonaccrual
loans (8) 337.74% 1272.29% 743.58%
Net loans
charged off
(recovered)
to average
total
loans (5) -0.06% 0.20% 0.03%
Nonperforming assets
to total loans,
foreclosed assets,
and distressed
loans held
for sale 0.51% 0.12% 0.19%
Nonperforming
assets
to total
assets (9) 0.31% 0.07% 0.12%
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) $1.20 $1.39 $1.12
Operating earnings
per common share
(diluted) $1.18 $1.36 $1.10
Operating return
on average
assets (5) 1.55% 1.66% 1.33%
Operating return
on average
stockholders'
equity (5) 16.68% 18.68% 14.33%
Operating
efficiency
ratio (6) 60.53% 59.07% 63.77%
Operating
dividend
payout
ratio 30.00% 29.50% 36.61%
- -----------------------------------------------------------
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent 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 December 31, 2005 was a $5
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 December 31, 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
Exhibit 2
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Percent
Change
to
On a Reported Earnings As of and for the Twelve Dec. 31,
Basis (1) : Months Ended 2005
from
- --------------------------------- ------------------------- ---------
Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands, except per
share data) 2004 2005 2004
- ---------------------------------------------- ------------ --------
Results of operations:
Net interest income (2) $1,627,761 $1,843,466 13.25%
Noninterest income 912,823 804,787 (11.84%)
------------ ------------
Total revenue 2,540,584 2,648,253 4.24%
Noninterest expense (3) 1,473,589 1,607,246 9.07%
Reversal of allowance for loan
losses (45,757) (50,683) 10.77%
------------ ------------
Income from continuing operations
before income taxes (2) 1,112,752 1,091,690 (1.89%)
Taxable-equivalent adjustment 3,745 4,352 16.21%
Income tax expense 398,933 356,698 (10.59%)
------------ ------------
Income from continuing operations 710,074 730,640 2.90%
(Loss)/Income from discontinued
operations 22,460 132,293 489.02%
------------ ------------
Net income $732,534 $862,933 17.80%
============ ============
Per common share:
Basic earnings:
From continuing operations $4.81 $5.04 4.78%
Net income 4.96 5.95 19.96%
Diluted earnings:
From continuing operations 4.72 4.94 4.66%
Net income 4.87 5.84 19.92%
Dividends (4) 1.39 1.59 14.39%
Book value (end of period) 28.93 31.62 9.30%
Common shares outstanding
(end of period) 148,359,918 144,207,072 (2.80%)
Weighted average common shares
outstanding - basic 147,767,238 145,109,058 (1.80%)
Weighted average common shares
outstanding - diluted 150,302,831 147,791,565 (1.67%)
Balance sheet (end of period):
Total assets (8) $48,098,021 $49,382,746 2.67%
Total loans 29,109,415 33,095,595 13.69%
Nonaccrual loans 142,573 58,892 (58.69%)
Nonperforming assets 149,855 61,645 (58.86%)
Total deposits 38,719,506 40,082,239 3.52%
Medium and long-term debt 816,113 801,095 (1.84%)
Junior subordinated debt 15,790 15,338 (2.86%)
Stockholders' equity 4,292,244 4,559,700 6.23%
Balance sheet (period average):
Total assets $43,158,714 $47,610,818 10.32%
Total loans 26,047,852 31,452,606 20.75%
Earning assets 39,033,107 42,796,688 9.64%
Total deposits 36,006,833 39,543,986 9.82%
Stockholders' equity 4,050,202 4,280,085 5.68%
Financial ratios:
Return on average assets:
From continuing operations 1.65% 1.53%
Net income 1.70% 1.81%
Return on average stockholders'
equity:
From continuing operations 17.53% 17.07%
Net income 18.09% 20.16%
Efficiency ratio (5) 57.95% 60.75%
Net interest margin (2) 4.17% 4.31%
Dividend payout ratio 28.90% 31.55%
Tangible equity ratio 7.94% 8.31%
Tier 1 risk-based capital
ratio (6) (8) 9.71% 9.18%
Total risk-based capital
ratio (6) (8) 12.17% 11.11%
Leverage ratio (6) (8) 8.09% 8.39%
Allowance for credit losses to
total loans (7) 1.65% 1.32%
Allowance for credit losses to
nonaccrual loans (7) 337.74% 743.58%
Net loans charged off (recovered)
to average total loans 0.09% -0.01%
Nonperforming assets to total loans,
foreclosed assets, and distressed
loans held for sale 0.51% 0.19%
Nonperforming assets to total
assets (8) 0.31% 0.12%
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) $4.44 $5.04
Operating earnings per common
share (diluted) $4.36 $4.94
Operating return on average
assets 1.52% 1.53%
Operating return on average
stockholders' equity 16.18% 17.07%
Operating efficiency ratio (5) 60.37% 60.75%
Operating dividend payout ratio 31.31% 31.55%
- ------------------------------------------------------------
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent 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 December 31, 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) 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.
(6) Estimated as of December 31, 2005. The regulatory capital and
leverage ratios were not restated and therefore include discontinued
operations.
(7) 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.
(8) End of period total assets and assets used in calculating these
ratios include those of discontinued operations.
Exhibit 3
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited) (1)
(Taxable-Equivalent Basis)
On a Reported Earnings Basis
- ----------------------------------------------------------------------
For the Three Months Ended For the Twelve Months
Ended
----------------------------- -----------------------
Amounts in
thousands,
except per Dec. 31, Sept. 30, Dec. 31, Dec. 31,
share data) 2004 2005 2005 2004 2005
- ---------------- --------- --------- --------- ----------- -----------
Interest Income
Loans $376,398 $461,892 $497,046 $1,368,438 $1,802,853
Securities 106,033 98,056 95,436 427,598 397,775
Interest
bearing
deposits in
banks 1,471 303 1,244 3,417 2,676
Federal funds
sold and
securities
purchased
under resale
agreements 2,686 6,777 6,129 9,189 20,535
Trading
account
assets 1,050 1,115 1,422 3,778 4,494
--------- --------- --------- ----------- -----------
Total
interest
income 487,638 568,143 601,277 1,812,420 2,228,333
--------- --------- --------- ----------- -----------
Interest Expense
Domestic
deposits 44,686 78,983 91,484 144,879 289,285
Foreign
deposits 857 3,813 5,819 1,808 14,066
Federal funds
purchased and
securities
sold under
repurchase
agreements 3,114 294 1,042 6,654 10,372
Commercial
paper 3,016 9,394 9,911 6,899 31,672
Medium and
long-term
debt 5,572 8,520 9,695 16,773 32,206
Trust notes 227 239 238 2,780 953
Other borrowed
funds 1,267 1,707 1,260 4,866 6,313
--------- --------- --------- ----------- -----------
Total
interest
expense 58,739 102,950 119,449 184,659 384,867
--------- --------- --------- ----------- -----------
Net Interest
Income 428,899 465,193 481,828 1,627,761 1,843,466
Reversal of
allowance for
loan losses
(2) (16,719) (15,000) (10,000) (45,757) (50,683)
--------- --------- --------- ----------- -----------
Net interest
income after
reversal of
allowance
for loan
losses 445,618 480,193 491,828 1,673,518 1,894,149
--------- --------- --------- ----------- -----------
Noninterest Income
Service
charges on
deposit
accounts 82,233 84,822 80,030 335,207 323,865
Trust and
investment
management
fees 41,384 43,500 46,465 153,083 173,518
Insurance
commissions 20,024 17,819 19,739 77,874 78,915
Merchant
banking fees 12,783 11,257 8,261 39,646 43,898
Foreign
exchange
gains, net 7,795 8,849 8,332 32,004 33,902
Brokerage
commissions
and fees 8,216 5,290 7,171 33,063 30,038
Card processing
fees, net 5,246 6,597 6,437 34,147 25,105
Securities
losses, net (13,697) (320) (36,750) (12,085) (50,039)
Other 48,405 34,374 43,735 219,884 145,585
--------- --------- --------- ----------- -----------
Total
noninterest
income 212,389 212,188 183,420 912,823 804,787
--------- --------- --------- ----------- -----------
Noninterest Expense
Salaries and
employee
benefits 216,254 236,124 232,496 848,717 934,354
Net occupancy 34,203 34,336 41,048 127,720 141,299
Outside
services 22,848 28,533 40,942 74,978 117,190
Equipment 18,482 15,828 18,042 67,839 68,206
Software 14,555 14,378 15,427 51,877 58,511
Professional
services 14,961 11,240 9,369 48,371 45,500
Communications 10,283 10,808 10,959 42,011 41,909
Foreclosed
asset expense
(income) 685 (3,435) (29) 1,211 (5,635)
Provision for
losses on off-
balance sheet
commitments (2) - - 5,000 - 4,000
Other 56,567 48,884 55,944 210,865 201,912
--------- --------- --------- ----------- -----------
Total
noninterest
expense 388,838 396,696 429,198 1,473,589 1,607,246
--------- --------- --------- ----------- -----------
Income from
continuing
operations
before income
taxes 269,169 295,685 246,050 1,112,752 1,091,690
Taxable-
equivalent
adjustment 1,128 1,051 1,228 3,745 4,352
Income tax
expense 89,944 93,388 82,657 398,933 356,698
--------- --------- --------- ----------- -----------
Income from
Continuing
Operations 178,097 201,246 162,165 710,074 730,640
--------- --------- --------- ----------- -----------
Income (loss)
from
discontinued
operations
before income
taxes 3,666 (25,612) 227,967 36,339 205,582
Income tax
expense
(benefit) 1,251 (9,651) 81,643 13,879 73,289
--------- --------- --------- ----------- -----------
Income (loss)
from
Discontinued
Operations 2,415 (15,961) 146,324 22,460 132,293
--------- --------- --------- ----------- -----------
Net Income $180,512 $185,285 $308,489 $732,534 $862,933
========= ========= ========= =========== ===========
Income from
continuing
operations per
common share -
basic $1.20 $1.39 $1.12 $4.81 $5.04
========= ========= ========= =========== ===========
Net Income per
common share -
basic $1.22 $1.28 $2.14 $4.96 $5.95
========= ========= ========= =========== ===========
Income from
continuing
operations per
common share -
diluted $1.18 $1.36 $1.10 $4.72 $4.94
========= ========= ========= =========== ===========
Net income per
common share -
diluted $1.19 $1.26 $2.09 $4.87 $5.84
========= ========= ========= =========== ===========
Weighted average
common shares
outstanding -
basic 148,422 144,459 144,466 147,767 145,109
========= ========= ========= =========== ===========
Weighted average
common shares
outstanding -
diluted 151,513 147,613 147,386 150,303 147,792
========= ========= ========= =========== ===========
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent 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.
Exhibit 4
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited) (1)
(Taxable-Equivalent Basis)
On an Operating Earnings Basis (2)
- ----------------------------------------------------------------------
For the Three Months Ended For the Twelve Months
Ended
----------------------------- -----------------------
(Amounts in
thousands,
except per Dec. 31, Sept.30, Dec. 31, Dec. 31,
share data) 2004 2005 2005 2004 2005
--------- --------- --------- ----------- -----------
Interest Income
Loans $376,398 $461,892 $497,046 $1,368,438 $1,802,853
Securities 106,033 98,056 95,436 427,598 397,775
Interest
bearing
deposits in
banks 1,471 303 1,244 3,417 2,676
Federal funds
sold and
securities
purchased
under resale
agreements 2,686 6,777 6,129 9,189 20,535
Trading
account
assets 1,050 1,115 1,422 3,778 4,494
--------- --------- --------- ----------- -----------
Total
interest
income 487,638 568,143 601,277 1,812,420 2,228,333
--------- --------- --------- ----------- -----------
Interest Expense
Domestic
deposits 44,686 78,983 91,484 144,879 289,285
Foreign
deposits 857 3,813 5,819 1,808 14,066
Federal funds
purchased and
securities
sold under
repurchase
agreements 3,114 294 1,042 6,654 10,372
Commercial
paper 3,016 9,394 9,911 6,899 31,672
Medium and
long-term
debt 5,572 8,520 9,695 16,773 32,206
Trust notes 227 239 238 2,780 953
Other borrowed
funds 1,267 1,707 1,260 4,866 6,313
--------- --------- --------- ----------- -----------
Total
interest
expense 58,739 102,950 119,449 184,659 384,867
--------- --------- --------- ----------- -----------
Net Interest
Income 428,899 465,193 481,828 1,627,761 1,843,466
Reversal of
allowance for
loan losses
(3) (16,719) (15,000) (10,000) (45,757) (50,683)
--------- --------- --------- ----------- -----------
Net interest
income after
reversal of
allowance
for loan
losses 445,618 480,193 491,828 1,673,518 1,894,149
--------- --------- --------- ----------- -----------
Noninterest Income
Service charges
on deposit
accounts 82,233 84,822 80,030 335,207 323,865
Trust and
investment
management
fees 41,384 43,500 46,465 153,083 173,518
Insurance
commissions 20,024 17,819 19,739 77,874 78,915
Merchant
banking fees 12,783 11,257 8,261 39,646 43,898
Foreign
exchange
gains, net 7,795 8,849 8,332 32,004 33,902
Brokerage
commissions
and fees 8,216 5,290 7,171 33,063 30,038
Card
processing
fees, net 5,246 6,597 6,437 34,147 25,105
Securities
losses, net (13,697) (320) (36,750) (12,085) (50,039)
Other 48,405 34,374 43,735 118,349 145,585
--------- --------- --------- ----------- -----------
Total
noninterest
income 212,389 212,188 183,420 811,288 804,787
--------- --------- --------- ----------- -----------
Noninterest Expense
Salaries and
employee
benefits 216,254 236,124 232,496 848,717 934,354
Net occupancy 34,203 34,336 41,048 127,720 141,299
Outside
services 22,848 28,533 40,942 74,978 117,190
Equipment 18,482 15,828 18,042 67,839 68,206
Software 14,555 14,378 15,427 51,877 58,511
Professional
services 14,961 11,240 9,369 48,371 45,500
Communications 10,283 10,808 10,959 42,011 41,909
Foreclosed
asset expense
(income) 685 (3,435) (29) 1,211 (5,635)
Provision for
losses on off-
balance sheet
commitments
(3) - - 5,000 - 4,000
Other 56,567 48,884 55,944 210,865 201,912
--------- --------- --------- ----------- -----------
Total
noninterest
expense 388,838 396,696 429,198 1,473,589 1,607,246
--------- --------- --------- ----------- -----------
Income from
continuing
operations
before income
taxes 269,169 295,685 246,050 1,011,217 1,091,690
Taxable-
equivalent
adjustment 1,128 1,051 1,228 3,745 4,352
Income tax
expense 89,944 93,388 82,657 352,066 356,698
--------- --------- --------- ----------- -----------
Income from
Continuing
Operations 178,097 201,246 162,165 655,406 730,640
--------- --------- --------- ----------- -----------
Income (loss)
from
discontinued
operations
before income
taxes 3,666 (25,612) 227,967 36,339 205,582
Income tax
expense
(benefit) 1,251 (9,651) 81,643 13,879 73,289
--------- --------- --------- ----------- -----------
Income (loss)
from
Discontinued
Operations 2,415 (15,961) 146,324 22,460 132,293
--------- --------- --------- ----------- -----------
Net Income $180,512 $185,285 $308,489 $677,866 $862,933
========= ========= ========= =========== ===========
Income from
continuing
operations per
common share -
basic $1.20 $1.39 $1.12 $4.44 $5.04
========= ========= ========= =========== ===========
Net Income per
common share -
basic $1.22 $1.28 $2.14 $4.59 $5.95
========= ========= ========= =========== ===========
Income from
continuing
operations per
common share -
diluted $1.18 $1.36 $1.10 $4.36 $4.94
========= ========= ========= =========== ===========
Net income per
common share -
diluted $1.19 $1.26 $2.09 $4.51 $5.84
========= ========= ========= =========== ===========
Weighted average
common shares
outstanding -
basic 148,422 144,459 144,466 147,767 145,109
========= ========= ========= =========== ===========
Weighted average
common shares
outstanding -
diluted 151,513 147,613 147,386 150,303 147,792
========= ========= ========= =========== ===========
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent banking business.
All periods presented have been restated to reflect the discontinued
operations. See exhibits 5 and 6 for reconciliation of 'reported
earnings'
(2) to 'operating earnings' from continuing operations. Beginning in
the quarter ending March 31, 2005, the net change in
(3) 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 from Continuing
Operations
- ----------------------------------------------------------------------
For the Three Months Ended
December 31, 2004
-----------------------------
(Amounts in thousands, Reported Non- Operating
except per share data) recurring
Items
- ----------------------------------------------------------------------
Net Interest Income $428,899 $- $428,899
Reversal of allowance for
loan losses (16,719) - (16,719)
--------- --------- ---------
Net interest income after reversal of
allowance for loan losses 445,618 - 445,618
--------- --------- ---------
Noninterest Income
All other (no adjustments) 212,389 - 212,389
--------- --------- ---------
Total noninterest income 212,389 - 212,389
--------- --------- ---------
Noninterest Expense
All other (no adjustments) 388,838 - 388,838
--------- --------- ---------
Total noninterest expense 388,838 - 388,838
--------- --------- ---------
Income from continuing operations
before income taxes 269,169 - 269,169
Taxable-equivalent
adjustment 1,128 - 1,128
Income tax expense 89,944 - 89,944
--------- --------- ---------
Income/Operating Earnings from
Continuing Operations $178,097 $- $178,097
========= ========= =========
Income/Operating earnings from
continuing operations per common share
- basic $1.20 $- $1.20
========= ========= =========
Income/Operating earnings from
continuing operations per common share
- diluted $1.18 $- $1.18
========= ========= =========
Weighted average common shares
outstanding - basic 148,422 148,422
========= =========
Weighted average common shares
outstanding - diluted 151,513 151,513
========= =========
Reported Income from Continuing
Operations $178,097
------------------------------
Non-recurring Items
------------------------------
Operating Earnings from Continuing
Operations $178,097
==============================
For the Three Months Ended
September 30, 2005
-----------------------------
(Amounts in thousands, except per Reported Non- Operating
share data) recurring
Items
- -----------------------------------------------------------------
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 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
------------------------------
Operating Earnings from Continuing
Operations $201,246
==============================
For the Three Months Ended
December 31, 2005
-----------------------------
(Amounts in thousands, except per Reported Non- Operating
share data) recurring
Items
- -------------------------------------------------------------------
Net Interest Income $481,828 $- $481,828
Reversal of allowance for
loan losses (10,000) - (10,000)
--------- --------- ---------
Net interest income after reversal
of allowance for loan losses 491,828 - 491,828
--------- --------- ---------
Noninterest Income
All other (no adjustments) 183,420 - 183,420
--------- --------- ---------
Total noninterest income 183,420 - 183,420
--------- --------- ---------
Noninterest Expense
All other (no adjustments) 429,198 - 429,198
--------- --------- ---------
Total noninterest expense 429,198 - 429,198
--------- --------- ---------
Income from continuing operations
before income taxes 246,050 - 246,050
Taxable-equivalent
adjustment 1,228 - 1,228
Income tax expense 82,657 - 82,657
--------- --------- ---------
Income/Operating Earnings from
Continuing Operations $162,165 $- $162,165
========= ========= =========
Income/Operating earnings from
continuing operations per common
share - basic $1.12 $- $1.12
========= ========= =========
Income/Operating earnings from
continuing operations per common
share - diluted $1.10 $- $1.10
========= ========= =========
Weighted average common shares
outstanding - basic 144,466 144,466
========= =========
Weighted average common shares
outstanding - diluted 147,386 147,386
========= =========
Reported Income from Continuing
Operations $162,165
-----------------------------
Non-recurring Items
-----------------------------
Operating Earnings from Continuing
Operations $162,165
=============================
Exhibit 6
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Reconciliations
(Taxable-Equivalent Basis)
Reported Earnings Reconciliation to Operating Earnings from Continuing
Operations
- ----------------------------------------------------------------------
For the Twelve Months Ended
December 31, 2004
---------------------------------
(Amounts in thousands, Reported Non- Operating
except per share data) recurring
Items
- ----------------------------------------------------------------------
Net Interest Income $1,627,761 $- $1,627,761
Reversal of allowance for loan
losses (45,757) - (45,757)
----------- --------- -----------
Net interest income after
reversal of allowance for loan
losses 1,673,518 - 1,673,518
----------- --------- -----------
Noninterest Income
Other (1)(2) 219,884 (101,535) 118,349
All other (no adjustments) 692,939 - 692,939
----------- --------- -----------
Total noninterest income 912,823 (101,535) 811,288
----------- --------- -----------
Noninterest Expense
All other (no adjustments) 1,473,589 - 1,473,589
----------- --------- -----------
Total noninterest expense 1,473,589 - 1,473,589
----------- --------- -----------
Income from continuing operations
before income taxes 1,112,752 (101,535) 1,011,217
Taxable-equivalent adjustment 3,745 - 3,745
Income tax expense (3)(4) 398,933 (46,867) 352,066
----------- --------- -----------
Income/Operating Earnings from
Continuing Operations $710,074 $(54,668) $655,406
=========== ========= ===========
Income/Operating earnings from
continuing operations per common
share - basic $4.81 $(0.37) $4.44
=========== ========= ===========
Income/Operating earnings from
continuing operations per common
share - diluted $4.72 $(0.36) $4.36
=========== ========= ===========
Weighted average common shares
outstanding - basic 147,767 147,767
=========== ===========
Weighted average common shares
outstanding - diluted 150,303 150,303
=========== ===========
Reported Income from Continuing
Operations $710,074
----------------------------------
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 $655,406
==================================
For the Twelve Months Ended
December 31, 2005
---------------------------------
(Amounts in thousands, Reported Non- Operating
except per share data) recurring
Items
- ----------------------------------------------------------------------
Net Interest Income $1,843,466 $- $1,843,466
Reversal of allowance for loan
losses (50,683) - (50,683)
----------- --------- -----------
Net interest income after
reversal of allowance for loan
losses 1,894,149 - 1,894,149
----------- --------- -----------
Noninterest Income
Other (1)(2) 145,585 - 145,585
All other (no adjustments) 659,202 - 659,202
----------- --------- -----------
Total noninterest income 804,787 - 804,787
----------- --------- -----------
Noninterest Expense
All other (no adjustments) 1,607,246 - 1,607,246
----------- --------- -----------
Total noninterest expense 1,607,246 - 1,607,246
----------- --------- -----------
Income from continuing operations
before income taxes 1,091,690 - 1,091,690
Taxable-equivalent adjustment 4,352 - 4,352
Income tax expense (3)(4) 356,698 - 356,698
----------- --------- -----------
Income/Operating Earnings from
Continuing Operations $730,640 $- $730,640
=========== ========= ===========
Income/Operating earnings from
continuing operations per common
share - basic $5.04 $- $5.04
=========== ========= ===========
Income/Operating earnings from
continuing operations per common
share - diluted $4.94 $- $4.94
=========== ========= ===========
Weighted average common shares
outstanding - basic 145,109 145,109
=========== ===========
Weighted average common shares
outstanding - diluted 147,792 147,792
=========== ===========
Reported Income from Continuing
Operations $730,640
---------------------------------
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 $730,640
=================================
Exhibit 7
UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheet
(Unaudited)
December 31,
-------------------------
(Dollars in thousands) 2004 2005
- -------------------------------------------- ------------ ------------
Assets
Cash and due from banks $1,977,422 $2,402,212
Interest bearing deposits in banks 277,482 771,164
Federal funds sold and securities purchased
under resale agreements 944,950 796,500
------------ ------------
Total cash and cash equivalents 3,199,854 3,969,876
Trading account assets 235,840 312,655
Securities available for sale:
Securities pledged as collateral 144,240 96,994
Held in portfolio 10,994,981 8,072,286
Loans (net of allowance for loan losses:
2004, $399,156; 2005, $351,532) 28,710,259 32,744,063
Due from customers on acceptances 23,841 19,252
Premises and equipment, net 526,543 536,074
Intangible assets 61,737 42,616
Goodwill 450,961 454,015
Other assets 1,731,355 2,080,321
Assets of discontinued operations to be
disposed or sold (1) 2,018,410 1,054,594
------------ ------------
Total assets $48,098,021 $49,382,746
============ ============
Liabilities
Domestic deposits:
Noninterest bearing $19,100,128 $19,489,377
Interest bearing 19,402,379 19,789,496
Foreign deposits:
Interest bearing 216,999 803,366
------------ ------------
Total deposits 38,719,506 40,082,239
Federal funds purchased and securities sold
under repurchase agreements 587,249 651,529
Commercial paper 824,887 680,027
Other borrowed funds 172,549 134,485
Acceptances outstanding 23,841 19,252
Other liabilities 1,112,743 1,433,222
Medium and long-term debt 816,113 801,095
Junior subordinated debt payable to
subsidiary grantor trust 15,790 15,338
Liabilities of discontinued operations to be
extinguished or assumed (1) 1,533,099 1,005,859
------------ ------------
Total liabilities 43,805,777 44,823,046
------------ ------------
Commitments and contingencies
Stockholders' Equity
Preferred stock:
Authorized 5,000,000 shares, no shares
issued or outstandingat December 31,
2004 or 2005 - -
Common stock, par value $1 per share in 2004
and in 2005:
Authorized 300,000,000 shares, issued
152,191,818 shares in 2004 and
154,469,215 shares in 2005 152,192 154,469
Additional paid-in capital 881,928 994,956
Treasury stock - 3,831,900 shares in 2004
and 10,262,143 shares in 2005 (223,361) (612,732)
Retained earnings 3,526,312 4,141,400
Accumulated other comprehensive loss (44,827) (118,393)
------------ ------------
Total stockholders' equity 4,292,244 4,559,700
------------ ------------
Total liabilities and
stockholders' equity $48,098,021 $49,382,746
============ ============
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent banking business.
All prior periods presented have been restated to reflect the
discontinued operations.
Exhibit 8
UnionBanCal Corporation and Subsidiaries
Loans (Unaudited)
Percent Change to
Three Months Ended December 31, 2005
from
-------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Sept. 30,
(Dollars in millions) 2004 2005 2005 2004 2005
- ----------------------- -------- -------- -------- --------- --------
Loans (period average)
Commercial,
financial and
industrial $9,676 $11,225 $11,754 21.48% 4.71%
Construction 1,132 1,299 1,414 24.91% 8.85%
Mortgage -
Commercial 5,107 5,589 5,653 10.69% 1.15%
Mortgage -
Residential 9,173 10,763 11,143 21.48% 3.53%
Consumer 2,313 2,478 2,490 7.65% 0.48%
Lease financing 607 593 576 (5.11%) (2.87%)
Loans originated in
foreign branches 180 228 227 26.11% (0.44%)
-------- -------- --------
Total loans held to
maturity $28,188 $32,175 $33,257 17.98% 3.36%
Total loans held
for sale 2 3 4 100.00% 33.33%
-------- -------- --------
Total loans $28,190 $32,178 $33,261 17.99% 3.37%
======== ======== ========
Nonperforming assets
(period end)
Nonaccrual loans:
Commercial,
financial and
industrial $59 $25 $50 (15.25%) 100.00%
Construction 3 - - (100.00%) 0.00%
Mortgage -
Commercial 26 10 9 (65.38%) (10.00%)
Lease 55 - - (100.00%) 0.00%
-------- -------- --------
Total nonaccrual
loans 143 35 59 (58.74%) 68.57%
Foreclosed assets 7 3 3 (57.14%) 0.00%
-------- -------- --------
Total nonperforming
assets $150 $38 $62 (58.67%) 63.16%
======== ======== ========
Loans 90 days or
more past due and
still accruing $4 $5 $5 25.00% 0.00%
======== ======== ========
Analysis of Allowance
for Credit Losses (1)
Beginning balance $482 $395 $364
Reversal of
provision for
credit losses (17) (15) (10)
Foreign translation
adjustment and
other
net additions
(deductions) (2) (70) - -
Loans charged off:
Commercial,
financial and
industrial (17) (9) (4)
Consumer (2) (1) (1)
Mortgage - - (1)
Lease financing - (19) -
-------- -------- --------
Total loans
charged off (19) (29) (6)
-------- -------- --------
Loans recovered:
Commercial,
financial and
industrial 21 13 3
Consumer 1 - -
Lease financing 1 - -
-------- -------- --------
Total loans
recovered 23 13 3
-------- -------- --------
Net loans
(charged off)
recovered 4 (16) (3)
-------- -------- --------
Ending balance of
allowance for loan
losses $399 $364 $351
Allowance for off-
balance sheet
commitment losses
(2) 83 82 87
-------- -------- --------
Allowance for
credit losses $482 $446 $438
======== ======== ========
- -----------------------
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent 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 September 30, 2005
and December 31, 2005, the allowance related to off-balance sheet
commitments was $82 million and $87 million, respectively.
Exhibit 9
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
For the Three Months Ended
-----------------------------------------
December 31, 2004
-----------------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (1)(2)
- --------------------------- ------------------- ----------- ------
Assets
Loans: (3)
Domestic $28,009,985 $374,241 5.32%
Foreign (4) 180,355 2,157 4.76
Securities - taxable 11,814,576 104,657 3.54
Securities - tax-exempt 69,231 1,376 7.95
Interest bearing deposits in banks 327,783 1,471 1.79
Federal funds sold and securities
purchased under resale agreements 522,166 2,686 2.05
Trading account assets 279,439 1,050 1.49
------------ -----------
Total earning assets 41,203,535 487,638 4.72
-----------
Allowance for loan losses (5) (494,614)
Cash and due from banks 2,254,283
Premises and equipment, net 505,089
Other assets 2,110,111
------------
Total assets $45,578,404
============
Liabilities
Domestic deposits:
Interest bearing $12,231,641 22,807 0.74
Savings and consumer time 4,874,691 12,092 0.99
Large time 2,026,050 9,787 1.92
Foreign deposits (4) 278,870 857 1.22
------------ -----------
Total interest bearing deposits 19,411,252 45,543 0.93
------------ -----------
Federal funds purchased and
securities sold under repurchase
agreements 775,182 3,376 1.73
Net funding allocated from
(to) discontinued operations (6) (60,351) (262) 1.73
Commercial paper 778,724 3,016 1.54
Other borrowed funds 126,550 1,267 3.98
Medium and long-term debt 810,665 5,572 2.73
Trust notes 15,845 227 5.73
------------ -----------
Total borrowed funds 2,446,615 13,196 2.15
------------ -----------
Total interest bearing
liabilities 21,857,867 58,739 1.07
-----------
Noninterest bearing deposits 18,417,618
Other liabilities (5) 1,056,075
------------
Total liabilities 41,331,560
Stockholders' Equity
Common equity 4,246,844
------------
Total stockholders' equity 4,246,844
------------
Total liabilities and
stockholders'equity $45,578,404
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 428,899 4.15%
Less: taxable-equivalent adjustment 1,128
-----------
Net interest income $427,771
===========
- ----------------------------------------------------------------------
Average Assets and Liabilities of
Discontinued Operations for Period
Ended: December 31, 2004
------------------
Assets $1,920,421
Liabilities $1,860,070
Net Asset (Liabilities) $ 60,351
- ----------------------------------------------------------------------
For the Three Months Ended
-----------------------------------------
September 30, 2005
-----------------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (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
Discontinued Operations for Period
Ended: September 30, 2005
------------------
Assets $1,978,255
Liabilities $1,384,523
Net Asset (Liabilities) $ 593,732
- ----------------------------------------------------------------------
For the Three Months Ended
-----------------------------------------
December 31, 2005
-----------------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate
(1) (1)(2)
- --------------------------- ------------------- ----------- ------
Assets
Loans: (3)
Domestic $33,034,251 $494,273 5.95%
Foreign (4) 226,693 2,773 4.85
Securities - taxable 9,027,589 94,135 4.17
Securities - tax-exempt 65,582 1,301 7.93
Interest bearing deposits in banks 157,604 1,244 3.13
Federal funds sold and securities
purchased under resale agreements 595,208 6,129 4.09
Trading account assets 344,759 1,422 1.64
------------ -----------
Total earning assets 43,451,686 601,277 5.51
-----------
Allowance for loan losses (5) (362,676)
Cash and due from banks 2,268,566
Premises and equipment, net 520,586
Other assets 2,528,325
------------
Total assets $48,406,487
============
Liabilities
Domestic deposits:
Interest bearing $13,523,357 57,469 1.69
Savings and consumer time 4,550,219 17,407 1.52
Large time 2,197,863 16,608 3.00
Foreign deposits (4) 718,324 5,819 3.21
------------ -----------
Total interest bearing deposits 20,989,763 97,303 1.84
------------ -----------
Federal funds purchased and
securities sold under repurchase
agreements 533,068 5,025 3.74
Net funding allocated from
(to) discontinued operations (6) (422,508) (3,983) 3.74
Commercial paper 1,108,434 9,911 3.55
Other borrowed funds 121,401 1,260 4.12
Medium and long-term debt 804,346 9,695 4.78
Trust notes 15,393 238 6.19
------------ -----------
Total borrowed funds 2,160,134 22,146 4.07
------------ -----------
Total interest bearing
liabilities 23,149,897 119,449 2.05
-----------
Noninterest bearing deposits 19,264,098
Other liabilities (5) 1,504,096
------------
Total liabilities 43,918,091
Stockholders' Equity
Common equity 4,488,396
------------
Total stockholders' equity 4,488,396
------------
Total liabilities and
stockholders' equity $48,406,487
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 481,828 4.42%
Less: taxable-equivalent adjustment 1,228
-----------
Net interest income $480,600
===========
- ----------------------------------------------------------------------
Average Assets and Liabilities of
Discontinued Operations for Period
Ended: December 31, 2005
-----------------
Assets $1,668,335
Liabilities $1,245,827
Net Asset (Liabilities) $ 422,508
- ----------------------------------------------------------------------
- -------------------------------
(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, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent banking
business. All periods presented have been restated to reflect the
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.
Exhibit 10
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
- ----------------------------------------------------------------------
For the Twelve Months Ended
December 31, 2004
---------------------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (1) Rate (1)
- ---------------------- -------------- --------------- ----------
Assets
Loans: (2)
Domestic $25,916,631 $1,362,229 5.26 %
Foreign (3) 131,221 6,209 4.73
Securities - taxable 11,701,866 422,047 3.61
Securities - tax-
exempt 68,399 5,551 8.12
Interest bearing
deposits in banks 201,716 3,417 1.69
Federal funds sold and
securities
purchased under
resale agreements 719,714 9,189 1.28
Trading account assets 293,560 3,778 1.29
-------------- ----------------
Total earning assets 39,033,107 1,812,420 4.64
----------------
Allowance for loan
losses (4) (513,165)
Cash and due from
banks 2,171,838
Premises and
equipment, net 507,503
Other assets 1,959,431
--------------
Total assets $43,158,714
==============
Liabilities
Domestic deposits:
Interest bearing $11,712,648 74,006 0.63
Savings and consumer
time 4,405,572 38,374 0.87
Large time 2,145,306 32,499 1.51
Foreign deposits (3) 261,102 1,808 0.69
-------------- ----------------
Total interest
bearing deposits 18,524,628 146,687 0.79
-------------- ----------------
Federal funds
purchased and
securities
sold under repurchase
agreements 596,997 7,470 1.25
Net funding allocated
from (to) discontinued
operations (5) (108,425) (816) 0.75
Commercial paper 620,053 6,899 1.11
Other borrowed funds 162,424 4,866 3.00
Medium and long-term
debt 807,070 16,773 2.08
Trust notes 62,480 2,780 4.45
-------------- ----------------
Total borrowed funds 2,140,599 37,972 1.77
-------------- ----------------
Total interest
bearing liabilities 20,665,227 184,659 0.89
----------------
Noninterest bearing
deposits 17,482,205
Other liabilities (4) 961,080
--------------
Total liabilities 39,108,512
Stockholders' Equity
Common equity 4,050,202
--------------
Total stockholders'
equity 4,050,202
--------------
Total liabilities
and stockholders'
equity $43,158,714
==============
Reported Net Interest
Income/Margin
Net interest
income/margin
(taxable-equivalent
basis) 1,627,761 4.17 %
Less: taxable-
equivalent adjustment 3,745
----------------
Net interest income $1,624,016
================
- ----------------------------------------------------------------------
Average Assets and Liabilities of
Discontinued Operations for Period
Ended: December 31, 2004
Assets $2,067,591
Liabilities $1,959,166
Net Asset
(Liabilities) $108,425
For the Twelve Months Ended
December 31, 2005
-----------------------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (1) Rate (1)
- -------------------------------------- -------------- ------------
Assets
Loans: (2)
Domestic $31,238,894 $1,792,513 5.74 %
Foreign (3) 213,712 10,340 4.84
Securities - taxable 10,262,274 392,452 3.82
Securities - tax-
exempt 66,178 5,323 8.04
Interest bearing
deposits in banks 112,247 2,676 2.38
Federal funds sold and
securities
purchased under
resale agreements 610,735 20,535 3.36
Trading account assets 292,648 4,494 1.54
---------------- -------------
Total earning assets 42,796,688 2,228,333 5.21
-------------
Allowance for loan
losses (4) (389,398)
Cash and due from
banks 2,247,905
Premises and
equipment, net 520,084
Other assets 2,435,539
----------------
Total assets $47,610,818
================
Liabilities
Domestic deposits:
Interest bearing $12,843,905 159,221 1.24
Savings and consumer
time 4,667,868 60,248 1.29
Large time 2,617,185 69,816 2.67
Foreign deposits (3) 503,870 14,066 2.79
---------------- -------------
Total interest
bearing deposits 20,632,828 303,351 1.47
---------------- -------------
Federal funds
purchased and
securities
sold under repurchase
agreements 898,107 25,854 2.88
Net funding allocated
from (to) discontinued
operations (5) (507,397) (15,482) 3.05
Commercial paper 1,086,088 31,672 2.92
Other borrowed funds 168,220 6,313 3.75
Medium and long-term
debt 807,592 32,206 3.99
Trust notes 15,562 953 6.12
---------------- -------------
Total borrowed funds 2,468,172 81,516 3.30
---------------- -------------
Total interest
bearing liabilities 23,101,000 384,867 1.67
-------------
Noninterest bearing
deposits 18,911,158
Other liabilities (4) 1,318,575
----------------
Total liabilities 43,330,733
Stockholders' Equity
Common equity 4,280,085
----------------
Total stockholders'
equity 4,280,085
----------------
Total liabilities
and stockholders'
equity $47,610,818
================
Reported Net Interest
Income/Margin
Net interest
income/margin
(taxable-equivalent
basis) 1,843,466 4.31 %
Less: taxable-
equivalent adjustment 4,352
-------------
Net interest income $1,839,114
=============
- ----------------------------------------------------------------------
Average Assets and Liabilities of
Discontinued Operations for
Period Ended: December 31, 2005
Assets $1,897,622
Liabilities $1,390,225
Net Asset
(Liabilities) $507,397
- ----------------------------------------------------------------------
(1) Yields and interest income are presented on a taxable-equivalent
basis using the federal statutory tax rate of 35 percent.
(2) 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.
(3) Foreign loans and deposits are those loans and deposits originated
in foreign branches.
(4) 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.
(5) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent banking business.
All periods presented have been restated to reflect the 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.
Exhibit 11
UnionBanCal Corporation and Subsidiaries
On a Reported Earnings Basis (reference to exhibit 3) (1)
- ----------------------------------------------------------------------
Noninterest Income (Unaudited)
Percentage
Change to
For the Three Months Ended December 31,
2005 From
----------------------------- ----------------
(Dollars in Dec. 31, Sept. 30, Dec.31, Dec. 31, Sept. 30,
thousands) 2004 2005 2005 2004 2005
--------------------- --------- --------- --------- ------- --------
Service charges on
deposit accounts $82,233 $84,822 $80,030 (2.68)% (5.65)%
Trust and investment
management fees 41,384 43,500 46,465 12.28 6.82
Insurance commissions 20,024 17,819 19,739 (1.42) 10.78
Foreign exchange
gains, net 7,795 8,849 8,332 6.89 (5.84)
Merchant banking fees 12,783 11,257 8,261 (35.38) (26.61)
Brokerage commissions
and fees 8,216 5,290 7,171 (12.72) 35.56
Card processing fees,
net 5,246 6,597 6,437 22.70 (2.43)
Securities losses,
net (13,697) (320) (36,750) nm nm
Gain on private
capital investments,
net 18,480 5,692 8,299 nm 45.80
Other 29,925 28,682 35,436 18.42 23.55
--------- --------- ---------
Total noninterest
income $212,389 $212,188 $183,420 (13.64)% (13.56)%
========= ========= =========
Noninterest Expense (Unaudited)
Percentage
Change to
For the Three Months Ended December 31,
2005 From
----------------------------- ----------------
(Dollars in Dec. 31, Sept. 30, Dec.31, Dec. 31, Sept. 30,
thousands) 2004 2005 2005 2004 2005
-------------------- --------- --------- --------- ------- --------
Salaries and other
compensation $176,106 $190,293 $191,797 8.91 % 0.79 %
Employee benefits 40,148 45,831 40,699 1.37 (11.20)
--------- --------- ---------
Salaries and
employee benefits 216,254 236,124 232,496 7.51 (1.54)
Net occupancy 34,203 34,336 41,048 20.01 19.55
Outside services 22,848 28,533 40,942 79.19 43.49
Equipment 18,482 15,828 18,042 (2.38) 13.99
Software 14,555 14,378 15,427 5.99 7.30
Advertising and
public relations 10,810 9,114 11,145 3.10 22.28
Communications 10,283 10,808 10,959 6.57 1.40
Professional
services 14,961 11,240 9,369 (37.38) (16.65)
Data processing 8,112 7,406 7,985 (1.57) 7.82
Intangible asset
amortization 5,689 4,985 4,965 (12.73) (0.40)
Foreclosed asset
expense (income) 685 (3,435) (29) nm (99.16)
Provision for losses
on off-balance sheet
commitments (2) - - 5,000 nm nm
Other 31,956 27,379 31,849 (0.33) 16.33
--------- --------- ---------
Total noninterest
expense $388,838 $396,696 $429,198 10.38 % 8.19 %
========= ========= =========
nm = not meaningful
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent 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.
Exhibit 12
UnionBanCal Corporation and Subsidiaries
On an Operating Earnings Basis (reference to exhibit 4) (1)(2)
Noninterest Income (Unaudited)
Percentage Change
to
December 31, 2005
For the Three Months Ended From
----------------------------- -----------------
December September December December September
31, 30, 31, 31, 30,
(Dollars in thousands) 2004 2005 2005 2004 2005
- --------------------- --------- --------- --------- -------- --------
Service charges on
deposit accounts $82,233 $84,822 $80,030 (2.68)% (5.65)%
Trust and investment
management fees 41,384 43,500 46,465 12.28 6.82
Insurance commissions 20,024 17,819 19,739 (1.42) 10.78
Foreign exchange
gains, net 7,795 8,849 8,332 6.89 (5.84)
Merchant banking fees 12,783 11,257 8,261 (35.38) (26.61)
Brokerage commissions
and fees 8,216 5,290 7,171 (12.72) 35.56
Card processing fees,
net 5,246 6,597 6,437 22.70 (2.43)
Securities losses,
net (13,697) (320) (36,750) nm nm
Gain on private
capital investments,
net 18,480 5,692 8,299 nm 45.80
Other 29,925 28,682 35,436 18.42 23.55
--------- --------- ---------
Total noninterest
income $212,389 $212,188 $183,420 (13.64)% (13.56)%
========= ========= =========
Noninterest Expense (Unaudited)
Percentage Change
to
December 31, 2005
For the Three Months Ended From
----------------------------- -----------------
December September December December September
31, 30, 31, 31, 30,
(Dollars in thousands) 2004 2005 2005 2004 2005
- --------------------- --------- --------- --------- -------- --------
Salaries and other
compensation $176,106 $190,293 $191,797 8.91% 0.79%
Employee benefits 40,148 45,831 40,699 1.37 (11.20)
--------- --------- ---------
Salaries and
employee benefits 216,254 236,124 232,496 7.51 (1.54)
Net occupancy 34,203 34,336 41,048 20.01 19.55
Outside services 22,848 28,533 40,942 79.19 43.49
Equipment 18,482 15,828 18,042 (2.38) 13.99
Software 14,555 14,378 15,427 5.99 7.30
Advertising and
public relations 10,810 9,114 11,145 3.10 22.28
Communications 10,283 10,808 10,959 6.57 1.40
Professional services 14,961 11,240 9,369 (37.38) (16.65)
Data processing 8,112 7,406 7,985 (1.57) 7.82
Intangible asset
amortization 5,689 4,985 4,965 (12.73) (0.40)
Foreclosed asset
expense (income) 685 (3,435) (29) nm (99.16)
Provision for losses
on off-balance sheet
commitments (3) - - 5,000 nm nm
Other 31,956 27,379 31,849 (0.33) 16.33
--------- --------- ---------
Total noninterest
expense $388,838 $396,696 $429,198 10.38% 8.19%
========= ========= =========
- -------------------------------------
nm = not meaningful
(1) See exhibit 5 for reconciliation of 'reported earnings' to
'operating earnings'.
(2) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent 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.
Exhibit 13
UnionBanCal Corporation and Subsidiaries
On a Reported Earnings Basis (reference to exhibit 3)(1)
--------------------------------------------------------
Noninterest Income (Unaudited)
Percentage
Change to
For the Twelve Months Dec. 31,
Ended 2005 From
-------------------- --------
Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands) 2004 2005 2004
---------------------------------- -------- -------- --------
Service charges on deposit accounts $335,207 $323,865 (3.38)%
Trust and investment management fees 153,083 173,518 13.35
Insurance commissions 77,874 78,915 1.34
Merchant banking fees 39,646 43,898 10.72
Foreign exchange gains, net 32,004 33,902 5.93
Brokerage commissions and fees 33,063 30,038 (9.15)
Card processing fees, net 34,147 25,105 (26.48)
Securities losses, net (12,085) (50,039) nm
Gain on sale of merchant card
portfolio 93,000 - nm
Gain on private capital investments,
net 26,278 27,187 3.46
Other 100,606 118,398 17.68
----------- ----------
Total noninterest income $912,823 $804,787 (11.84)%
=========== ==========
Noninterest Expense (Unaudited)
Percentage
Change to
For the Twelve Months Dec. 31,
Ended 2005 From
-------------------- --------
Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands) 2004 2005 2004
---------------------------------- -------- -------- --------
Salaries and other compensation $685,753 $748,046 9.08 %
Employee benefits 162,964 186,308 14.32
----------- -----------
Salaries and employee benefits 848,717 934,354 10.09
Net occupancy 127,720 141,299 10.63
Outside services 74,978 117,190 56.30
Equipment 67,839 68,206 0.54
Software 51,877 58,511 12.79
Professional services 48,371 45,500 (5.94)
Communications 42,011 41,909 (0.24)
Advertising and public relations 37,965 36,803 (3.06)
Data processing 32,528 32,687 0.49
Intangible asset amortization 19,471 19,921 2.31
Foreclosed asset expense (income) 1,211 (5,635) nm
Provision for losses on off-balance
sheet commitments (2) - 4,000 nm
Other 120,901 112,501 (6.95)
----------- -----------
Total noninterest expense $1,473,589 $1,607,246 9.07 %
=========== ===========
--------------------
nm = not meaningful
(1) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its international correspondent 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.
Exhibit 14
UnionBanCal Corporation and Subsidiaries
On an Operating Earnings Basis (reference to exhibit 4)(1)(2)
-------------------------------------------------------------
Noninterest Income (Unaudited)
Percentage
Change to
For the Twelve Months Dec. 31,
Ended 2005 From
-------------------- --------
Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands) 2004 2005 2004
---------------------------------- -------- -------- --------
Service charges on deposit accounts $335,207 $323,865 (3.38)%
Trust and investment management fees 153,083 173,518 13.35
Insurance commissions 77,874 78,915 1.34
Merchant banking fees 39,646 43,898 10.72
Foreign exchange gains, net 32,004 33,902 5.93
Brokerage commissions and fees 33,063 30,038 (9.15)
Card processing fees, net 34,147 25,105 (26.48)
Securities losses, net (12,085) (50,039) nm
Gain on private capital investments,
net 26,278 27,187 3.46
Other 92,071 118,398 28.59
----------- ----------
Total noninterest income $811,288 $804,787 (0.80)%
=========== ==========
Noninterest Expense (Unaudited)
Percentage
Change to
For the Twelve Months Dec. 31,
Ended 2005 From
-------------------- --------
Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands) 2004 2005 2004
---------------------------------- -------- -------- --------
Salaries and other compensation $685,753 $748,046 9.08 %
Employee benefits 162,964 186,308 14.32
----------- -----------
Salaries and employee benefits 848,717 934,354 10.09
Net occupancy 127,720 141,299 10.63
Outside services 74,978 117,190 56.30
Equipment 67,839 68,206 0.54
Software 51,877 58,511 12.79
Professional services 48,371 45,500 (5.94)
Communications 42,011 41,909 (0.24)
Advertising and public relations 37,965 36,803 (3.06)
Data processing 32,528 32,687 0.49
Intangible asset amortization 19,471 19,921 2.31
Foreclosed asset expense (income) 1,211 (5,635) nm
Provision for losses on off-balance
sheet commitments (3) - 4,000 nm
Other 120,901 112,501 (6.95)
----------- -----------
Total noninterest expense $1,473,589 $1,607,246 9.07 %
=========== ===========
------------------------------------
nm = not meaningful
(1) See exhibit 6 for reconciliation of 'reported earnings' to
'operating earnings'.
(2) In September 2005, Union Bank of California, N.A. committed to a
plan for disposal of its correspondent 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.
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)