Exhibit 99.1
UnionBanCal Corporation Reports Second Quarter 2006 Earnings Per Share of $1.26
SAN FRANCISCO--(BUSINESS WIRE)--July 20, 2006--UnionBanCal
Corporation (NYSE:UB)
Second Quarter 2006 Highlights:
-- Strong year-over-year organic loan growth
-- Average total loans up 15 percent
-- Average commercial loans up 22 percent
-- Average residential mortgage loans up 14 percent
-- Return on average stockholders' equity of 16.1 percent
-- Annualized average all-in cost of funds of 1.76 percent
-- Average noninterest bearing deposits comprised 44 percent of
average total deposits
-- Nonperforming assets were 0.07 percent of total assets at
quarter-end
First Half 2006 Highlights:
-- Diluted earnings per share from continuing operations of $2.50
-- Total revenue from continuing operations up 5 percent
-- Net interest margin up 2 basis points to 4.29 percent
UnionBanCal Corporation (NYSE:UB) today reported second quarter
2006 net income of $182.9 million, or $1.26 per diluted common share,
compared with $1.27 per diluted common share a year earlier. Income
from continuing operations was $182.6 million, or $1.26 per diluted
common share, compared with $1.27 per diluted common share a year
earlier.
First half 2006 net income was $355.9 million, or $2.44 per
diluted common share, compared with $2.49 per diluted common share for
first half 2005. Income from continuing operations was $364.1 million,
or $2.50 per diluted common share, compared with $2.47 per diluted
common share for first half 2005.
"Second quarter results were solid and reflect our balanced
business model," stated Takashi Morimura, President and Chief
Executive Officer. "Strong loan growth and continued excellent credit
quality offset mixed deposit results, reflecting deposit pricing
pressures stemming from higher short-term interest rates and
heightened competition. During the quarter, we announced a 15 percent
increase in our common stock dividend and a $500 million extension of
our share repurchase program. These actions underscore our commitment
to enhancing shareholder value through effective capital management,
and reflect both the earnings power of the franchise and the strength
of our balance sheet."
"Loan growth was robust across all categories in second quarter,"
added Chief Operating Officer Philip Flynn. "Commercial loans
increased 22 percent over prior year and almost 5 percent over first
quarter, while residential mortgages grew 14 percent over prior year
and 2.5 percent over first quarter. Credit quality continues to be
excellent. Second quarter net charge-offs were only $10 million and
nonperforming assets declined again, to just 0.07 percent of total
assets at quarter-end.
"Average noninterest bearing deposits were flat in sequential
quarters, while interest bearing deposits increased 3.8 percent,"
continued Flynn. "The current interest rate environment has created
volume and pricing challenges for us and the entire industry. In
response, we are taking steps to defend our customer base and market
share. At the same time, our deposit franchise remains healthy and
profitable, driving one of the industry's lowest average all-in cost
of funds and a very solid net interest margin."
Second Quarter Total Revenue From Continuing Operations
For second quarter 2006, total revenue (taxable-equivalent net
interest income plus noninterest income) was $688 million, an increase
of $25 million, or 3.8 percent, compared with second quarter 2005. Net
interest income increased 2.0 percent, and noninterest income
increased 7.7 percent. Compared with first quarter 2006, total revenue
increased 0.6 percent, with net interest income and noninterest income
each increasing 0.6 percent.
Second Quarter Net Interest Income (Taxable-equivalent) From
Continuing Operations
Net interest income was $469 million in second quarter 2006, up $9
million, or 2.0 percent, from the same quarter a year ago, primarily
due to strong growth in loans.
Average earning assets increased $1.7 billion, or 4.0 percent,
primarily due to a $4.5 billion, or 14.8 percent, increase in average
loans, while average securities declined $2.6 billion, or 23.7
percent. Average commercial loans increased $2.4 billion, or 22.4
percent, and average residential mortgages increased $1.4 billion, or
14.0 percent.
Compared to second quarter 2005, average total deposits increased
$0.3 billion, or 0.8 percent. Average interest bearing deposits
increased $1.6 billion, or 7.6 percent. Average noninterest bearing
deposits decreased $1.3 billion, or 6.7 percent, primarily due to a
$733 million, or 22.5 percent, decrease in average title and escrow
deposits, and a $442 million, or 3.6 percent, decrease in average
other commercial noninterest bearing deposits. Average title and
escrow deposits decreased due to lower residential real estate
activity, and average other commercial noninterest bearing deposits
declined primarily due to changes in customer behavior in response to
rising short-term interest rates. Average consumer noninterest bearing
deposits decreased $90 million, or 2.7 percent.
Average noninterest bearing deposits represented 44.2 percent of
average total deposits in second quarter 2006. The annualized average
all-in cost of funds was 1.76 percent, reflecting the Company's strong
average deposit-to-loan ratio of 113 percent and the high proportion
of noninterest bearing deposits to total deposits.
The average yield on earning assets of $44.4 billion was 5.95
percent, up 80 basis points over second quarter 2005, with the average
loan yield increasing 51 basis points. The average rate on interest
bearing liabilities of $25.8 billion was 2.95 percent, up 142 basis
points compared with second quarter 2005, reflecting both higher
short-term interest rates and heightened competition for deposits.
Average interest bearing deposits were $22.1 billion and the weighted
average rate was 2.60 percent. Average core deposits funded 70.2
percent of average total assets in the second quarter. The net
interest margin in second quarter 2006 was 4.23 percent, compared with
4.32 percent in second quarter 2005.
On a sequential quarter basis, net interest income increased $2.7
million, or 0.6 percent. Average loans increased $1.1 billion, or 3.2
percent. Average commercial loans increased $585 million, or 4.7
percent; average residential mortgages increased $289 million, or 2.5
percent; and average construction loans increased $201 million, or
13.2 percent. Average noninterest bearing deposits increased $26
million, or 0.1 percent, with consumer noninterest bearing deposits
decreasing $22 million and commercial noninterest bearing deposits
increasing $48 million, primarily due to a $138 million increase in
title and escrow deposits. The average yield on earning assets
increased 18 basis points and the average rate on interest bearing
liabilities increased 46 basis points. The net interest margin
decreased 13 basis points to 4.23 percent.
Second Quarter Noninterest Income From Continuing Operations
In second quarter 2006, noninterest income was $219 million, up
$16 million, or 7.7 percent, from the same quarter a year ago. Service
charges on deposit accounts increased $2 million, or 2.6 percent, and
trust and investment management fees increased $7 million, or 16.3
percent, primarily due to an increase in trust assets. Merchant
banking fees decreased $10 million, or 53.7 percent, primarily due to
an unusually high volume of syndications completed in second quarter
2005.
Compared with the preceding quarter, second quarter 2006
noninterest income increased $1.3 million, or 0.6 percent. Service
charges on deposit accounts were flat, while trust and investment
management fees decreased 3.5 percent, primarily due to above-normal
trust fees in first quarter 2006, when the Company implemented a
refinement in accrual methodology.
Second Quarter Noninterest Expense From Continuing Operations
Noninterest expense for second quarter 2006 was $413 million, an
increase of $25 million, or 6.3 percent, over second quarter 2005.
Salaries and employee benefits expense increased $15 million, or 6.3
percent, primarily due to annual merit increases and higher
performance-related incentive expense. Higher incentive expense
included $5.4 million in stock option expense, versus none in 2005.
Professional services expense increased $3.9 million, or 29.6 percent,
primarily due to higher compliance-related expense. Foreclosed asset
expense (income) in second quarter 2006 reflected a $7.8 million gain
on the sale of property, compared with a $2.6 million gain in second
quarter 2005. The provision for off-balance sheet commitments was
negative $4 million in second quarter 2006, unchanged from the prior
year.
Excluding the effect of stock option expense, noninterest expense
increased $19.2 million, or 4.9 percent, compared with prior year.
Compared with first quarter 2006, noninterest expense decreased
$1.5 million, or 0.4 percent. Salaries and employee benefits expense
decreased $3.9 million, or 1.5 percent, primarily due to annual
seasonal factors that result in lower payroll taxes and 401(k)
matching contributions in the second quarter. The provision for
off-balance sheet commitments was negative $4 million, compared with
negative $3 million in first quarter 2006.
Income Tax Expense From Continuing Operations
The effective tax rate for second quarter 2006 was 33.5 percent,
compared with an effective tax rate of 34.8 percent for second quarter
2005, due to higher tax credits applied in the current year.
Year-to-Date Results From Continuing Operations
Total revenue was $1.4 billion in the first six months of 2006, an
increase of $67 million, or 5.1 percent, compared with total revenue
of $1.3 billion in the same period of 2005. Net interest income
increased 4.3 percent, and noninterest income increased 6.8 percent.
Net interest income was $935 million in the first half of 2006, a
$39 million, or 4.3 percent, increase from prior year, primarily due
to growth in earning assets. Average loans increased $4.4 billion, or
14.7 percent, compared with the first six months of 2005. Compared
with prior year, the net interest margin increased 2 basis points, to
4.29 percent.
Noninterest income in the first half of 2006 was $437 million, an
increase of $28 million, or 6.8 percent, over the same period in 2005.
Service charges on deposit accounts increased $4 million, or 2.8
percent. Trust and investment management fees increased $15 million,
or 17.9 percent, primarily due to growth in trust assets and a
refinement in accrual methodology implemented in first quarter 2006.
Insurance commissions decreased $4 million, or 9.9 percent, primarily
due to lower contingent commissions.
For the first half of 2006, noninterest expense increased $46
million, or 5.9 percent, over the first half of 2005. Salaries and
employee benefits expense increased $35 million, or 7.6 percent,
primarily due to higher performance-related incentive expense
(including stock option expense of $11.6 million), merit increases,
and higher contract labor expense, reflecting compliance-related
initiatives. Outside services expense increased $12 million, or 24.3
percent, primarily due to higher cost of services related to title and
escrow balances, stemming from a higher earnings credit rate in the
first half of 2006, as well as higher trust administration expenses.
Professional services expense increased $7 million, or 26.9 percent,
primarily due to higher compliance-related expense. The provision for
off-balance sheet commitments was negative $7 million, compared with
negative $1 million in first half 2005.
Credit Quality
Nonperforming assets at June 30, 2006, were $36 million, or 0.07
percent of total assets. This compares with $42 million, or 0.09
percent of total assets, at March 31, 2006, and $69 million, or 0.13
percent of total assets, at June 30, 2005. Nonperforming assets
declined 48 percent between June 30, 2005 and June 30, 2006.
In second quarter 2006, the total provision for credit losses was
negative $5.0 million. The total provision for credit losses was
negative $10.0 million in first quarter 2006 and negative $17.6
million in second quarter 2005. The total provision for credit losses
in second quarter 2006 consisted of a provision for loan losses of
negative $1 million and a provision for off-balance sheet commitments
(classified in noninterest expense) of negative $4 million. In second
quarter 2006, net charge-offs were $10 million, compared with net
charge-offs of $5 million in first quarter 2006, and net recoveries of
$7 million in second quarter 2005.
At June 30, 2006, the allowance for credit losses as a percent of
total loans and as a percent of nonaccrual loans was 1.17 percent and
1130 percent, respectively. These ratios were 1.26 percent and 1003
percent, respectively, at March 31, 2006, and 1.54 percent and 721
percent, respectively, at June 30, 2005.
Balance Sheet and Capital Ratios
At June 30, 2006, the Company had total assets of $50.8 billion.
Total loans were $34.7 billion and total deposits were $40.5 billion,
resulting in a period-end deposit-to-loan ratio of 117 percent. Core
deposits totaled $34.7 billion at quarter-end, representing 68.3
percent of total assets. At period-end, total stockholders' equity was
$4.6 billion, the tangible equity ratio was 8.19 percent, and the
ratio of tangible common equity to risk-weighted assets was 8.58
percent. Book value per share at June 30, 2006, was $32.34, up 9.6
percent from a year earlier. The Company's Tier I and total risk-based
capital ratios at period-end were 8.92 percent and 12.05 percent,
respectively.
Stock Repurchases
During second quarter 2006, the Company repurchased 1.8 million
shares of common stock at a total price of $120.8 million, or an
average of $68.79 per repurchased share. For the first six months of
2006, the Company repurchased 2.9 million shares of common stock at a
total price of $200.8 million, or an average of $68.70 per repurchased
share. At June 30, 2006, the Company had remaining repurchase
authority of $401.6 million.
Common shares outstanding at June 30, 2006, were 142.5 million, a
decrease of 1.7 million shares, or 1.2 percent, from one year earlier.
Discontinued Operations
On September 22, 2005, the Company announced the signing of a
definitive agreement to sell its international correspondent banking
business to Wachovia Bank, N.A. Commencing in third quarter 2005, all
results of the international correspondent banking business have been
reported 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 4) and the
average net assets or liabilities of the discontinued operations are
reflected in the analysis of net interest margin (see Exhibits 6, 7
and 8).
In the second quarter of 2006, the Company recorded net income
from discontinued operations of $0.3 million, which included a $4
million contingent purchase price payment. In the first quarter of
2006, the Company recorded a net loss from discontinued operations of
$8.5 million, or $0.06 per fully diluted common share.
Third Quarter and Full Year 2006 Earnings Per Share Forecast
The Company currently estimates that third quarter 2006 fully
diluted earnings per share from continuing operations will be in the
range of $1.21 to $1.26, including estimated stock option expense of
$0.02 per share and a total provision for credit losses of $5 million.
The Company currently estimates a loss from discontinued operations of
$0.01 per fully diluted share in the third quarter of 2006. Therefore,
net income per diluted common share is expected to be in the range of
$1.20 to $1.25.
For full year 2006, the Company currently estimates that fully
diluted earnings per share from continuing operations will be in the
range of $4.90 to $5.05, including estimated stock option expense of
$0.09 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 $0.07 per diluted
common share. Therefore, net income per diluted common share is
expected to be in the range of $4.83 to $4.98.
Non-GAAP Financial Measures
This press release contains certain references to financial
measures that exclude stock option expense, which are adjustments from
comparable measures calculated and presented in accordance with
accounting principles generally accepted in the United States of
America (GAAP). These financial measures, as used herein, differ from
financial measures reported under GAAP in that they exclude unusual or
non-recurring charges, losses, credits or gains. This press release
identifies the specific items excluded from the comparable GAAP
financial measure in the calculation of each non-GAAP financial
measure. Because these items and their impact on the Company's
performance are difficult to predict, management believes that
financial presentations excluding the impact of these items provide
useful supplemental information which is important to a proper
understanding of the Company's core business results by investors.
These presentations should not be viewed as a substitute for results
determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP financial measures presented by other
companies.
Forward-Looking Statements
The following appears in accordance with the Private Securities
Litigation Reform Act. This press release includes forward-looking
statements that involve risks and uncertainties. Forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts. Often, they include the words
"believe," "expect," "target," "anticipate," "intend," "plan,"
"estimate," "potential," "project," or words of similar meaning, or
future or conditional verbs such as "will," "would," "should,"
"could," or "may." They may also consist of annualized amounts based
on historical interim period results. Forward-looking statements in
this press release include those related to earnings forecasts, the
Company's competitive positioning, the Company's earnings power, the
Company's ability to enhance shareholder value through effective
capital management, and the Company's ability to defend its customer
base and market share.
There are numerous risks and uncertainties that could and will
cause actual results to differ materially from those discussed in the
Company's forward-looking statements. Many of these factors are beyond
the Company's ability to control or predict and could have a material
adverse effect on the Company's stock price, financial condition, and
results of operations or prospects. Such risks and uncertainties
include, but are not limited to, adverse economic and fiscal
conditions in California; increased energy costs; global political and
general economic conditions related to the war on terrorism and other
hostilities; fluctuations in interest rates; the controlling interest
in UnionBanCal Corporation of The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
which is a wholly-owned subsidiary of Mitsubishi UFJ Financial Group,
Inc.; competition in the banking and financial services industries;
deposit pricing pressures; 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; 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 second
quarter results at 8:30 AM Pacific Time (11:30 AM Eastern Time) on
July 21, 2006. Interested parties calling from locations within the
United States should call 800-762-6067 (480-629-9566 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. You may access the Investor Relations section of
the website via the "About Union Bank" link from the homepage. The
webcast replay will be available on the website within 24 hours after
the conclusion of the call, and will remain on the website for a
period of one year.
A recorded playback of the conference call will be available by
calling 800-475-6701, (320-365-3844 from outside the United States)
from approximately 12:00 PM Pacific Time (3:00 PM Eastern Time), July
21, through 11:59 PM Pacific Time, July 28 (2:59 AM Eastern Time, July
29). The reservation number for this playback is 835025.
Based in San Francisco, UnionBanCal Corporation is a bank holding
company with assets of $50.8 billion at June 30, 2006. Its primary
subsidiary, Union Bank of California, N.A., had 321 banking offices in
California, Oregon and Washington, and 2 international offices at June
30, 2006.
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited) (1)
Exhibit 1
Percent Change
to
As of and for the Three Months Ended June 30, 2006
from
-------------------------------------- -----------------
June 30, March 31, June 30 , June 30, March 31,
(Dollars in
thousands,
except per
share data) 2005 2006 2006 2005 2006
- -------------------------- ------------ ------------ -------- --------
Results of
operations:
Net interest
income (2) $459,728 $466,341 $469,000 2.02% 0.57%
Noninterest
income 203,554 217,910 219,228 7.70% 0.60%
------------ ------------ ------------
Total revenue 663,282 684,251 688,228 3.76% 0.58%
Noninterest
expense 388,400 414,544 413,030 6.34% (0.37%)
Reversal of
allowance
for loan
losses (13,564) (7,000) (1,000) (92.63%) (85.71%)
------------ ------------ ------------
Income from
continuing
operations
before
income
taxes (2) 288,446 276,707 276,198 (4.25%) (0.18%)
Taxable-
equivalent
adjustment 1,018 1,248 1,358 33.40% 8.81%
Income tax
expense 99,950 94,004 92,203 (7.75%) (1.92%)
------------ ------------ ------------
Income from
continuing
operations $187,478 $181,455 $182,637 (2.58%) 0.65%
(Loss)/Income
from
discontinued
operations (296) (8,510) 274 nm nm
------------ ------------ ------------
Net income $187,182 $172,945 $182,911 (2.28%) 5.76%
============ ============ ============
Per common share:
Basic earnings:
From continuing
operations $1.30 $1.26 $1.27 (2.31%) 0.79%
Net income 1.29 1.20 1.28 (0.78%) 6.67%
Diluted earnings:
From continuing
operations 1.27 1.24 1.26 (0.79%) 1.61%
Net income 1.27 1.18 1.26 (0.79%) 6.78%
Dividends (3) 0.41 0.41 0.47 14.63% 14.63%
Book value
(end of period) 29.51 31.94 32.34 9.59% 1.25%
Common shares
outstanding
(end of
period) 144,205,458 143,402,332 142,533,794 (1.16%) (0.61%)
Weighted
average
common
shares
outstanding
- basic 144,547,697 143,878,106 143,258,333 (0.89%) (0.43%)
Weighted
average
common
shares
outstanding
- diluted 147,222,390 146,026,188 145,184,483 (1.38%) (0.58%)
Balance sheet
(end of
period):
Total assets
(4) $51,178,058 $48,800,945 $50,800,136 (0.74%) 4.10%
Total loans 30,861,235 33,528,868 34,747,833 12.59% 3.64%
Nonperforming
assets 68,945 42,392 36,351 (47.28%) (14.25%)
Total
deposits 41,255,737 39,155,904 40,544,251 (1.72%) 3.55%
Stockholders'
equity 4,254,991 4,579,878 4,608,908 8.32% 0.63%
Balance sheet
(period
average):
Total assets $47,482,810 $48,016,643 $49,329,374 3.89% 2.73%
Total loans 30,610,512 34,052,067 35,146,976 14.82% 3.22%
Earning assets 42,668,069 43,084,349 44,358,594 3.96% 2.96%
Total
deposits 39,398,023 38,856,033 39,692,052 0.75% 2.15%
Stockholders'
equity 4,145,150 4,538,679 4,539,476 9.51% 0.02%
Financial
ratios (5):
Return on
average
assets (6) :
From continuing
operations 1.58% 1.53% 1.49%
Net income 1.58% 1.46% 1.49%
Return on
average
stockholders'
equity (6) :
From continuing
operations 18.14% 16.21% 16.14%
Net income 18.11% 15.45% 16.16%
Efficiency
ratio (7) 59.55% 62.10% 61.73%
Net interest
margin (2) 4.32% 4.36% 4.23%
Dividend
payout ratio 31.54% 32.54% 37.01%
Tangible
equity ratio 7.41% 8.46% 8.19%
Tier 1 risk-
based capital
ratio (4)(8) 8.88% 9.09% 8.92%
Total risk-
based capital
ratio (4)(8) 11.01% 10.94% 12.05%
Leverage
ratio (4)(8) 7.77% 8.80% 8.74%
Allowances for
credit losses
to total
loans (9) 1.54% 1.26% 1.17%
Allowances
for credit
losses to
nonaccrual
loans (9) 721.05% 1003.48% 1130.05%
Net loans
charged off
(recovered)
to average
total
loans (6) (0.10%) 0.06% 0.12%
Nonperforming
assets to
total loans
and foreclosed
assets 0.22% 0.13% 0.10%
Nonperforming
assets to
total assets (4) 0.13% 0.09% 0.07%
- -------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited) (1)
Exhibit 2
Percent
Change
to
As of and for the Six June 30,
Months Ended 2006
from
------------------------- --------
(Dollars in thousands, except per June 30, June 30, June 30,
share data) 2005 2006 2005
- ----------------------------------- ------------ ------------ --------
Results of operations:
Net interest income (2) $896,445 $935,341 4.34%
Noninterest income 409,179 437,138 6.83%
------------ ------------
Total revenue 1,305,624 1,372,479 5.12%
Noninterest expense 781,352 827,574 5.92%
Reversal of allowance for loan
losses (25,683) (8,000) (68.85%)
------------ ------------
Income from continuing operations
before income taxes (2) 549,955 552,905 0.54%
Taxable-equivalent adjustment 2,073 2,606 25.71%
Income tax expense 180,653 186,207 3.07%
------------ ------------
Income from continuing operations $367,229 $364,092 (0.85%)
(Loss)/Income from discontinued
operations 1,930 (8,236) nm
------------ ------------
Net income $369,159 $355,856 (3.60%)
============ ============
Per common share:
Basic earnings:
From continuing operations $2.52 $2.54 0.79%
Net income 2.53 2.48 (1.98%)
Diluted earnings:
From continuing operations 2.47 2.50 1.21%
Net income 2.49 2.44 (2.01%)
Dividends (3) 0.77 0.88 14.29%
Book value (end of period) 29.51 32.34 9.59%
Common shares outstanding (end of
period) 144,205,458 142,533,794 (1.16%)
Weighted average common shares
outstanding - basic 145,765,905 143,566,507 (1.51%)
Weighted average common shares
outstanding - diluted 148,412,390 145,555,369 (1.93%)
Balance sheet (end of period):
Total assets (4) $51,178,058 $50,800,136 (0.74%)
Total loans 30,861,235 34,747,833 12.59%
Nonperforming assets 68,945 36,351 (47.28%)
Total deposits 41,255,737 40,544,251 (1.72%)
Stockholders' equity 4,254,991 4,608,908 8.32%
Balance sheet (period average):
Total assets $46,900,808 $48,676,618 3.79%
Total loans 30,164,834 34,602,546 14.71%
Earning assets 42,167,574 43,724,990 3.69%
Total deposits 38,802,180 39,276,352 1.22%
Stockholders' equity 4,176,724 4,539,080 8.68%
Financial ratios (5):
Return on average assets (6) :
From continuing operations 1.58% 1.51%
Net income 1.59% 1.47%
Return on average stockholders'
equity (6) :
From continuing operations 17.73% 16.18%
Net income 17.82% 15.81%
Efficiency ratio (7) 60.09% 61.91%
Net interest margin (2) 4.27% 4.29%
Dividend payout ratio 30.56% 34.65%
Tangible equity ratio 7.41% 8.19%
Tier 1 risk-based capital ratio (4)(8) 8.88% 8.92%
Total risk-based capital ratio (4)(8) 11.01% 12.05%
Leverage ratio (4) (8) 7.77% 8.74%
Allowance for credit losses to
total loans (9) 1.54% 1.17%
Allowance for credit losses to
nonaccrual loans (9) 721.05% 1130.05%
Net loans charged off (recovered)
to average total loans (6) (0.14%) 0.09%
Nonperforming assets to total loans
and foreclosed assets 0.22% 0.10%
Nonperforming assets to total
assets (4) 0.13% 0.07%
- -----------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)(1)
(Taxable-Equivalent Basis)
Exhibit 3
For the Three Months For the Six Months
Ended Ended
----------------------------- ----------------------
(Dollars in
thousands,
except per June 30, March 31, June 30, June 30,
share data) 2005 2006 2006 2005 2006
- ----------------- --------- --------- --------- ---------- -----------
Interest Income (2)
Loans $438,791 $512,988 $548,017 $843,915 $1,061,005
Securities 103,019 97,351 104,008 204,283 201,359
Interest
bearing
deposits in
banks 396 736 423 1,129 1,159
Federal funds
sold and
securities
purchased
under resale
agreements 5,256 3,845 4,725 7,629 8,570
Trading account
assets 1,049 1,530 1,685 1,957 3,215
--------- --------- --------- ---------- -----------
Total interest
income 548,511 616,450 658,858 1,058,913 1,275,308
--------- --------- --------- ---------- -----------
Interest Expense
Deposits 67,424 115,309 143,677 123,252 258,986
Federal funds
purchased and
securities
sold under
repurchase
agreements 4,038 8,802 8,455 9,036 17,257
Commercial
paper 7,807 12,448 19,137 12,367 31,585
Medium and
long-term
debt 7,459 10,397 16,875 13,991 27,272
Trust notes 238 238 238 476 476
Other borrowed
funds 1,817 2,915 1,476 3,346 4,391
--------- --------- --------- ---------- -----------
Total
interest
expense 88,783 150,109 189,858 162,468 339,967
--------- --------- --------- ---------- -----------
Net Interest
Income (2) 459,728 466,341 469,000 896,445 935,341
Reversal of
allowance for
loan losses (13,564) (7,000) (1,000) (25,683) (8,000)
--------- --------- --------- ---------- -----------
Net interest
income after
reversal of
allowance
for loan
losses 473,292 473,341 470,000 922,128 943,341
--------- --------- --------- ---------- -----------
Noninterest Income
Service charges
on deposit
accounts 79,746 81,635 81,837 159,013 163,472
Trust and
investment
management
fees 41,590 50,115 48,380 83,553 98,495
Insurance
commissions 19,340 19,518 17,752 41,357 37,270
Brokerage
commissions
and fees 8,605 7,795 10,330 17,577 18,125
Merchant
banking fees 18,114 8,229 8,396 24,380 16,625
Foreign
exchange
gains, net 8,551 7,818 8,307 16,721 16,125
Card processing
fees, net 6,464 6,697 7,206 12,071 13,903
Securities gains
(losses), net (13,313) (214) 1,993 (12,969) 1,779
Other 34,457 36,317 35,027 67,476 71,344
--------- --------- --------- ---------- -----------
Total
noninterest
income 203,554 217,910 219,228 409,179 437,138
--------- --------- --------- ---------- -----------
Noninterest Expense
Salaries and
employee
benefits 233,976 252,495 248,637 465,734 501,132
Net occupancy 33,553 32,837 34,519 65,915 67,356
Outside
services 26,468 28,609 30,704 47,715 59,313
Equipment 16,933 17,922 16,846 34,336 34,768
Software 14,731 16,344 15,323 28,706 31,667
Professional
services 13,150 14,547 17,038 24,891 31,585
Communications 9,762 10,552 10,061 20,142 20,613
Foreclosed
asset income (2,577) (7,367) (7,782) (2,171) (15,149)
Reversal of
allowance for
losses on
off-balance
sheet
commitments (4,000) (3,000) (4,000) (1,000) (7,000)
Other 46,404 51,605 51,684 97,084 103,289
--------- --------- --------- ---------- -----------
Total
noninterest
expense 388,400 414,544 413,030 781,352 827,574
--------- --------- --------- ---------- -----------
Income from
continuing
operations
before income
taxes (2) 288,446 276,707 276,198 549,955 552,905
Taxable-
equivalent
adjustment 1,018 1,248 1,358 2,073 2,606
Income tax
expense 99,950 94,004 92,203 180,653 186,207
--------- --------- --------- ---------- -----------
Income from
Continuing
Operations 187,478 181,455 182,637 367,229 364,092
--------- --------- --------- ---------- -----------
Income (loss)
from
discontinued
operations
before income
taxes (412) (13,603) 431 3,227 (13,172)
Income tax
expense
(benefit) (116) (5,093) 157 1,297 (4,936)
--------- --------- --------- ---------- -----------
Income (Loss)
from
Discontinued
Operations (296) (8,510) 274 1,930 (8,236)
--------- --------- --------- ---------- -----------
Net Income $187,182 $172,945 $182,911 $369,159 $355,856
========= ========= ========= ========== ===========
Income from
continuing
operations per
common share -
basic $1.30 $1.26 $1.27 $2.52 $2.54
Net income per
common share -
basic $1.29 $1.20 $1.28 $2.53 $2.48
========= ========= ========= ========== ===========
Income from
continuing
operations per
common share -
diluted $1.27 $1.24 $1.26 $2.47 $2.50
Net income per
common share -
diluted $1.27 $1.18 $1.26 $2.49 $2.44
========= ========= ========= ========== ===========
Weighted average
common shares
outstanding -
basic 144,548 143,878 143,258 145,766 143,567
========= ========= ========= ========== ===========
Weighted average
common shares
outstanding -
diluted 147,222 146,026 145,184 148,412 145,555
========= ========= ========= ========== ===========
- -----------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets (1)
Exhibit 4
(Unaudited) (Unaudited)
June 30, December 31, June 30,
(Dollars in thousands) 2005 2005 2006
- ------------------------------- ------------ ------------ ------------
Assets
Cash and due from banks $2,268,654 $2,402,212 $2,192,483
Interest bearing deposits in
banks 96,051 771,164 31,691
Federal funds sold and
securities purchased under
resale agreements 2,782,105 796,500 1,252,514
------------ ------------ ------------
Total cash and cash
equivalents 5,146,810 3,969,876 3,476,688
Trading account assets 320,533 312,655 405,728
Securities available for sale:
Securities pledged as
collateral 443,717 96,994 83,229
Held in portfolio 9,899,802 8,072,286 8,573,909
Loans (net of allowance for
loan losses: June 30, 2005,
$394,972; December 31, 2005,
$351,532; June 30, 2006,
$328,338) 30,466,263 32,744,063 34,419,495
Due from customers on
acceptances 25,981 19,252 21,850
Premises and equipment, net 517,073 536,074 498,555
Intangible assets 51,766 42,616 35,759
Goodwill 450,669 454,015 453,489
Other assets 1,899,573 2,113,577 2,787,288
Assets of discontinued
operations to be disposed or
sold 1,955,871 1,054,594 44,146
------------ ------------ ------------
Total assets $51,178,058 $49,416,002 $50,800,136
============ ============ ============
Liabilities
Noninterest bearing $20,584,028 $19,489,377 $18,154,751
Interest bearing 20,671,709 20,592,862 22,389,500
------------ ------------ ------------
Total deposits 41,255,737 40,082,239 40,544,251
Federal funds purchased and
securities sold under
repurchase agreements 611,233 651,529 281,593
Commercial paper 1,102,042 680,027 1,645,107
Other borrowed funds 132,368 134,485 320,837
Acceptances outstanding 25,981 19,252 21,850
Other liabilities 1,415,463 1,466,478 1,876,307
Medium and long-term debt 821,664 801,095 1,473,924
Junior subordinated debt
payable to subsidiary grantor
trust 15,564 15,338 15,111
Liabilities of discontinued
operations to be extinguished
or assumed 1,543,015 1,005,859 12,248
------------ ------------ ------------
Total liabilities 46,923,067 44,856,302 46,191,228
------------ ------------ ------------
Commitments and contingencies
Stockholders' Equity
Preferred stock:
Authorized 5,000,000 shares;
no shares issued or
outstanding as of June 30,
2005, December 31, 2005 and
June 30, 2006 - - -
Common stock, par value $1 per
share at June 30, 2005,
December 31, 2005 and June
30, 2006:
Authorized 300,000,000
shares; issued 153,581,401
shares as of June 30, 2005,
154,469,215 shares as of
December 31, 2005 and
155,719,517 shares as of
June 30, 2006 153,581 154,469 155,720
Additional paid-in capital 948,611 994,956 1,074,253
Treasury stock - 9,375,943
shares as of June 30, 2005,
10,262,143 shares as of
December 31, 2005 and
13,185,723 shares as of June
30, 2006 (552,786) (612,732) (813,571)
Retained earnings 3,774,097 4,141,400 4,364,354
Accumulated other comprehensive
loss (68,512) (118,393) (171,848)
------------ ------------ ------------
Total stockholders'
equity 4,254,991 4,559,700 4,608,908
------------ ------------ ------------
Total liabilities and
stockholders' equity $51,178,058 $49,416,002 $50,800,136
============ ============ ============
- -------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Loans (Unaudited) (1)
Exhibit 5
Percent Change to
Three Months Ended June 30, 2006
from
-------------------------- ------------------
June 30, March 31, June 30, June 30, March 31,
(Dollars in millions) 2005 2006 2006 2005 2006
- ------------------------ -------- -------- -------- --------- --------
Loans (period average)
Commercial, financial
and industrial $10,581 $12,370 $12,955 22.44% 4.73%
Construction 1,244 1,523 1,724 38.59% 13.20%
Mortgage - Commercial 5,451 5,652 5,662 3.87% 0.18%
Mortgage - Residential 10,290 11,444 11,733 14.02% 2.53%
Consumer 2,434 2,489 2,505 2.92% 0.64%
Lease financing 594 569 564 (5.05%) (0.88%)
-------- -------- --------
Total loans held
to maturity $30,594 $34,047 $35,143 14.87% 3.22%
Total loans held
for sale 17 5 4 (76.47%) (20.00%)
-------- -------- --------
Total loans $30,611 $34,052 $35,147 14.82% 3.22%
======== ======== ========
Nonperforming assets
(period end)
Nonaccrual loans:
Commercial,
financial and
industrial $36 $19 $4 (88.89%) (78.95%)
Construction 1 - - (100.00%) nm
Mortgage - Commercial 11 8 17 54.55% 112.50%
Lease 18 15 15 (16.67%) 0.00%
-------- -------- --------
Total nonaccrual
loans 66 42 36 (45.45%) (14.29%)
Foreclosed assets 3 - - (100.00%) nm
-------- -------- --------
Total nonperforming
assets $69 $42 $36 (47.83%) (14.29%)
======== ======== ========
Loans 90 days or more
past due and still
accruing $4 $5 $3 (25.00%) (40.00%)
======== ======== ========
Analysis of Allowances
for Credit Losses
Beginning balance $402 $352 $340
Reversal of allowance
for loan losses (14) (7) (1)
Loans charged off:
Commercial,
financial and
industrial (4) (11) (18)
Consumer (1) (1) (1)
-------- -------- --------
Total loans
charged off (5) (12) (19)
-------- -------- --------
Loans recovered:
Commercial,
financial and
industrial 12 2 9
Consumer - 1 -
Lease financing - 4 -
-------- -------- --------
Total loans
recovered 12 7 9
-------- -------- --------
Net loans
(charged off)
recovered 7 (5) (10)
-------- -------- --------
Ending balance of
allowance for loan
losses $395 $340 $329
Allowance for off-
balance sheet
commitment losses 81 83 79
-------- -------- --------
$-
Allowances for credit
losses $476 $423 $408
======== ======== ========
- ------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited) (1)
Exhibit 6
For the Three Months Ended
--------------------------------
June 30, 2005
-------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ------------------------------------- ------------ --------- ---------
Assets
Loans (11) $30,610,512 $438,791 5.74 %
Securities - taxable 10,959,220 101,672 3.71
Securities - tax-exempt 66,207 1,347 8.14
Interest bearing deposits in banks 74,200 396 2.14
Federal funds sold and securities
purchased under resale agreements 696,177 5,256 3.03
Trading account assets 261,753 1,049 1.61
------------ ---------
Total earning assets 42,668,069 548,511 5.15
---------
Allowance for loan losses (399,243)
Cash and due from banks 2,307,361
Premises and equipment, net 521,362
Other assets 2,385,261
------------
Total assets $47,482,810
============
Liabilities
Deposits:
Interest bearing $12,444,947 32,017 1.03
Savings and consumer time 4,703,221 14,129 1.20
Large time 3,441,815 21,278 2.48
------------ ---------
Total interest bearing deposits 20,589,983 67,424 1.31
------------ ---------
Federal funds purchased and
securities sold under repurchase
agreements 1,160,373 8,217 2.84
Net funding allocated from (to)
discontinued operations (12) (590,255) (4,179) 2.84
Commercial paper 1,158,629 7,807 2.70
Other borrowed funds 197,694 1,817 3.69
Medium and long-term debt 799,514 7,459 3.74
Trust notes 15,619 238 6.10
------------ ---------
Total borrowed funds 2,741,574 21,359 3.12
------------ ---------
Total interest bearing liabilities 23,331,557 88,783 1.53
---------
Noninterest bearing deposits 18,808,040
Other liabilities 1,198,063
------------
Total liabilities 43,337,660
Stockholders' Equity
Common equity 4,145,150
------------
Total stockholders' equity 4,145,150
------------
Total liabilities and stockholders'
equity $47,482,810
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 459,728 4.32 %
Less: taxable-equivalent adjustment 1,018
---------
Net interest income $458,710
=========
For the Three Months Ended
------------------------------
June 30, 2006
-------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- --------------------------------------------------- --------- --------
Assets
Loans (11) $35,146,976 $548,017 6.25 %
Securities - taxable 8,349,759 102,733 4.92
Securities - tax-exempt 63,222 1,275 8.06
Interest bearing deposits in banks 34,462 423 4.92
Federal funds sold and securities
purchased under resale agreements 379,412 4,725 4.99
Trading account assets 384,763 1,685 1.76
------------ ---------
Total earning assets 44,358,594 658,858 5.95
---------
Allowance for loan losses (334,556)
Cash and due from banks 2,107,846
Premises and equipment, net 506,607
Other assets 2,690,883
------------
Total assets $49,329,374
============
Liabilities
Deposits:
Interest bearing $12,614,869 65,457 2.08
Savings and consumer time 4,470,764 21,502 1.93
Large time 5,062,473 56,718 4.49
------------ ---------
Total interest bearing deposits 22,148,106 143,677 2.60
------------ ---------
Federal funds purchased and securities
sold under repurchase agreements 748,050 8,902 4.77
Net funding allocated from (to)
discontinued operations (12) (36,123) (447) 4.97
Commercial paper 1,650,266 19,137 4.65
Other borrowed funds 108,095 1,476 5.47
Medium and long-term debt 1,179,432 16,875 5.74
Trust notes 15,167 238 6.28
------------ ---------
Total borrowed funds 3,664,887 46,181 5.05
------------ ---------
Total interest bearing liabilities 25,812,993 189,858 2.95
---------
Noninterest bearing deposits 17,543,946
Other liabilities 1,432,959
------------
Total liabilities 44,789,898
Stockholders' Equity
Common equity 4,539,476
------------
Total stockholders' equity 4,539,476
------------
Total liabilities and stockholders'
equity $49,329,374
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 469,000 4.23 %
Less: taxable-equivalent adjustment 1,358
---------
Net interest income $467,642
=========
Average Assets and Liabilities of Discontinued
Operations for Period Ended:
June 30, June 30,
2005 2006
----------- --------
Assets $1,981,576 $79,188
Liabilities $1,391,321 $43,065
Net Asset $590,255 $36,123
- --------------------------------------------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited) (1)
Exhibit 7
For the Three Months Ended
--------------------------------
March 31, 2006
------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ---------------------------- ------------ --------- ---------
Assets
Loans: (11) $34,052,067 $512,988 6.09 %
Securities - taxable 8,233,854 96,053 4.67
Securities - tax-exempt 65,204 1,298 7.96
Interest bearing deposits in banks 59,847 736 4.99
Federal funds sold and securities
purchased under resale agreements 345,342 3,845 4.52
Trading account assets 328,035 1,530 1.89
------------ ---------
Total earning assets 43,084,349 616,450 5.77
---------
Allowance for loan losses (348,626)
Cash and due from banks 2,119,926
Premises and equipment, net 527,001
Other assets 2,633,993
------------
Total assets $48,016,643
============
Liabilities
Deposits:
Interest bearing $13,261,888 62,358 1.91
Savings and consumer time 4,467,627 18,487 1.68
Large time 3,608,597 34,464 3.87
------------ ---------
Total interest bearing deposits 21,338,112 115,309 2.19
------------ ---------
Federal funds purchased and securities
sold under repurchase agreements 874,055 9,410 4.37
Net funding allocated from
(to) discontinued operations (12) (57,088) (608) 4.32
Commercial paper 1,242,465 12,448 4.06
Other borrowed funds 268,262 2,915 4.41
Medium and long-term debt 800,014 10,397 5.27
Trust notes 15,280 238 6.24
------------ ---------
Total borrowed funds 3,142,988 34,800 4.49
------------ ---------
Total interest bearing liabilities 24,481,100 150,109 2.49
---------
Noninterest bearing deposits 17,517,921
Other liabilities 1,478,943
------------
Total liabilities 43,477,964
Stockholders' Equity
Common equity 4,538,679
------------
Total stockholders' equity 4,538,679
------------
Total liabilities and stockholders'
equity $48,016,643
============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 466,341 4.36 %
Less: taxable-equivalent adjustment 1,248
---------
Net interest income $465,093
=========
For the Three Months Ended
-------------------------------
June 30, 2006
-------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ----------------------------- ------------- --------- --------
Assets
Loans: (11) $35,146,976 $548,017 6.25 %
Securities - taxable 8,349,759 102,733 4.92
Securities - tax-exempt 63,222 1,275 8.06
Interest bearing deposits in banks 34,462 423 4.92
Federal funds sold and securities
purchased under resale agreements 379,412 4,725 4.99
Trading account assets 384,763 1,685 1.76
------------- ---------
Total earning assets 44,358,594 658,858 5.95
---------
Allowance for loan losses (334,556)
Cash and due from banks 2,107,846
Premises and equipment, net 506,607
Other assets 2,690,883
-------------
Total assets $49,329,374
=============
Liabilities
Deposits:
Interest bearing $12,614,869 65,457 2.08
Savings and consumer time 4,470,764 21,502 1.93
Large time 5,062,473 56,718 4.49
------------- ---------
Total interest bearing deposits 22,148,106 143,677 2.60
------------- ---------
Federal funds purchased and securities
sold under repurchase agreements 748,050 8,902 4.77
Net funding allocated from
(to) discontinued operations (12) (36,123) (447) 4.97
Commercial paper 1,650,266 19,137 4.65
Other borrowed funds 108,095 1,476 5.47
Medium and long-term debt 1,179,432 16,875 5.74
Trust notes 15,167 238 6.28
------------- ---------
Total borrowed funds 3,664,887 46,181 5.05
------------- ---------
Total interest bearing liabilities 25,812,993 189,858 2.95
---------
Noninterest bearing deposits 17,543,946
Other liabilities 1,432,959
-------------
Total liabilities 44,789,898
Stockholders' Equity
Common equity 4,539,476
-------------
Total stockholders' equity 4,539,476
-------------
Total liabilities and stockholders'
equity $49,329,374
=============
Reported Net Interest Income/Margin
Net interest income/margin
(taxable-equivalent basis) 469,000 4.23 %
Less: taxable-equivalent adjustment 1,358
---------
Net interest income $467,642
=========
Average Assets and Liabilities of Discontinued
Operations for Period Ended:
March 31, June 30,
2006 2006
--------- --------
Assets $618,653 $79,188
Liabilities $561,565 $43,065
Net Asset $57,088 $36,123
- -----------------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited) (1)
Exhibit 8
For the Six Months Ended
----------------------------------------
June 30, 2005
---------------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (10) Rate (6)
(10)
- -------------------------- ---------------- ------------ ---------
Assets
Loans: (11) $30,164,834 $843,915 5.63 %
Securities - taxable 11,037,856 201,611 3.65
Securities - tax-exempt 66,673 2,672 8.02
Interest bearing deposits in
banks 117,253 1,129 1.94
Federal funds sold and
securities purchased
under resale agreements 537,615 7,629 2.86
Trading account assets 243,343 1,957 1.62
---------------- ------------
Total earning assets 42,167,574 1,058,913 5.05
------------
Allowance for loan losses (401,328)
Cash and due from banks 2,245,353
Premises and equipment, net 522,843
Other assets 2,366,366
----------------
Total assets $46,900,808
================
Liabilities
Deposits:
Interest bearing $12,339,352 57,434 0.94
Savings and consumer time 4,740,418 27,173 1.16
Large time 3,232,911 38,645 2.41
---------------- ------------
Total interest bearing
deposits 20,312,681 123,252 1.22
---------------- ------------
Federal funds purchased and securities
sold under repurchase
agreements 1,219,788 15,672 2.59
Net funding allocated from (to)
discontinued operations (12) (506,651) (6,636) 2.64
Commercial paper 1,012,855 12,367 2.46
Other borrowed funds 189,154 3,346 3.57
Medium and long-term debt 804,154 13,991 3.51
Trust notes 15,676 476 6.08
---------------- ------------
Total borrowed funds 2,734,976 39,216 2.89
---------------- ------------
Total interest bearing
liabilities 23,047,657 162,468 1.42
------------
Noninterest bearing
deposits 18,489,499
Other liabilities 1,186,928
----------------
Total liabilities 42,724,084
Stockholders' Equity
Common equity 4,176,724
----------------
Total stockholders' equity 4,176,724
----------------
Total liabilities and
stockholders' equity $46,900,808
================
Reported Net Interest
Income/Margin
Net interest income/margin
(taxable-equivalent basis) 896,445 4.27 %
Less: taxable-equivalent
adjustment 2,073
------------
Net interest income $894,372
============
For the Six Months Ended
---------------------------------------
June 30, 2006
---------------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense (10) Rate (6)
(10)
- -------------------------- ----------------- ------------ ---------
Assets
Loans: (11) $34,602,546 $1,061,005 6.17 %
Securities - taxable 8,292,126 198,787 4.79
Securities - tax-exempt 64,207 2,572 8.01
Interest bearing deposits in
banks 47,084 1,159 4.96
Federal funds sold and
securities purchased
under resale agreements 362,471 8,570 4.77
Trading account assets 356,556 3,215 1.82
----------------- ------------
Total earning assets 43,724,990 1,275,308 5.86
------------
Allowance for loan losses (341,568)
Cash and due from banks 2,113,853
Premises and equipment, net 516,748
Other assets 2,662,595
-----------------
Total assets $48,676,618
=================
Liabilities
Deposits:
Interest bearing $12,936,591 127,815 1.99
Savings and consumer time 4,469,204 39,990 1.80
Large time 4,339,551 91,181 4.24
----------------- ------------
Total interest bearing
deposits 21,745,346 258,986 2.40
----------------- ------------
Federal funds purchased and
securities sold under
repurchase agreements 810,704 18,312 4.55
Net funding allocated from (to)
discontinued operations (12) (46,548) (1,055) 4.57
Commercial paper 1,447,492 31,585 4.40
Other borrowed funds 187,736 4,391 4.72
Medium and long-term debt 990,771 27,272 5.55
Trust notes 15,223 476 6.26
----------------- ------------
Total borrowed funds 3,405,378 80,981 4.80
----------------- ------------
Total interest bearing
liabilities 25,150,724 339,967 2.73
------------
Noninterest bearing
deposits 17,531,006
Other liabilities 1,455,808
-----------------
Total liabilities 44,137,538
Stockholders' Equity
Common equity 4,539,080
-----------------
Total stockholders' equity 4,539,080
-----------------
Total liabilities and
stockholders'
equity $48,676,618
=================
Reported Net Interest
Income/Margin
Net interest income/margin
(taxable-equivalent basis) 935,341 4.29 %
Less: taxable-equivalent
adjustment 2,606
------------
Net interest income $932,735
============
Average Assets and Liabilities of Discontinued
Operations for Period Ended:
June 30, June 30,
2005 2006
----------- ---------
Assets $1,973,171 $347,431
Liabilities $1,466,520 $300,883
Net Asset $506,651 $46,548
- --------------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Noninterest income (Unaudited)(1)
Exhibit 9
Percentage Change to
For the Three Months Ended June 30, 2006 From
----------------------------- -----------------------
June 30, March 31, June 30, June 30, March 31,
(Dollars in
thousands) 2005 2006 2006 2005 2006
------------- --------- --------- --------- -----------------------
Service
charges on
deposit
accounts $79,746 $81,635 $81,837 2.62 % 0.25 %
Trust and
investment
management
fees 41,590 50,115 48,380 16.33 (3.46)
Insurance
commissions 19,340 19,518 17,752 (8.21) (9.05)
Brokerage
commissions
and fees 8,605 7,795 10,330 20.05 32.52
Merchant
banking fees 18,114 8,229 8,396 (53.65) 2.03
Foreign
exchange
gains, net 8,551 7,818 8,307 (2.85) 6.25
Card
processing
fees, net 6,464 6,697 7,206 11.48 7.60
Securities
gains
(losses), net (13,313) (214) 1,993 nm nm
Gain on
private
capital
investments,
net 5,261 2,827 3,702 (29.63) 30.95
Other 29,196 33,490 31,325 7.29 (6.46)
--------- --------- ---------
Total
noninterest
income $203,554 $217,910 $219,228 7.70 % 0.60 %
========= ========= =========
Noninterest expense (Unaudited) (1)
Percentage Change to
For the Three Months Ended June 30, 2006 From
------------------------------ -----------------------
June 30, March 31, June 30, June 30, March
31,
(Dollars in
thousands) 2005 2006 2006 2005 2006
-------------- ---------- --------- --------- -----------------------
Salaries and
other
compensation $186,998 $194,259 $201,689 7.86 % 3.82 %
Employee
benefits 46,978 58,236 46,948 (0.06) (19.38)
---------- --------- ---------
Salaries and
employee
benefits 233,976 252,495 248,637 6.27 (1.53)
Net occupancy 33,553 32,837 34,519 2.88 5.12
Outside
services 26,468 28,609 30,704 16.00 7.32
Professional
services 13,150 14,547 17,038 29.57 17.12
Equipment 16,933 17,922 16,846 (0.51) (6.00)
Software 14,731 16,344 15,323 4.02 (6.25)
Advertising
and public
relations 8,903 10,231 11,270 26.59 10.16
Communications 9,762 10,552 10,061 3.06 (4.65)
Data
processing 8,427 7,398 7,845 (6.91) 6.04
Intangible
asset
amortization 4,985 3,430 3,427 (31.25) (0.09)
Foreclosed
asset income (2,577) (7,367) (7,782) nm nm
Reversal of
allowance for
losses on
off-balance
sheet
commitments (4,000) (3,000) (4,000) 0.00 33.33
Other 24,089 30,546 29,142 20.98 (4.60)
---------- --------- ---------
Total
noninterest
expense $388,400 $414,544 $413,030 6.34 % (0.37)%
========== ========= =========
- ---------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Noninterest income (Unaudited) (1)
Exhibit 10
Percentage
Change to
For the Six Months June 30,
Ended 2006 From
--------------------- -----------
June 30, June 30, June 30,
(Dollars in thousands) 2005 2006 2005
----------------------------------- ----------- --------- ----------
Service charges on deposit accounts $159,013 $163,472 2.80 %
Trust and investment management
fees 83,553 98,495 17.88
Insurance commissions 41,357 37,270 (9.88)
Brokerage commissions and fees 17,577 18,125 3.12
Merchant banking fees 24,380 16,625 (31.81)
Foreign exchange gains, net 16,721 16,125 (3.56)
Card processing fees, net 12,071 13,903 15.18
Securities gains (losses), net (12,969) 1,779 nm
Gain on private capital
investments, net 13,196 6,529 (50.52)
Other 54,280 64,815 19.41
----------- ---------
Total noninterest income $409,179 $437,138 6.83 %
=========== =========
Noninterest expense (Unaudited) (1)
Percentage
Change to
For the Six Months June 30, 2006
Ended From
--------------------- --------------
June 30, June 30, June 30,
(Dollars in thousands) 2005 2006 2005
-------------------------------- ---------- ---------- --------------
Salaries and other compensation $365,955 $395,948 8.20 %
Employee benefits 99,779 105,184 5.42
---------- ----------
Salaries and employee benefits 465,734 501,132 7.60
Net occupancy 65,915 67,356 2.19
Outside services 47,715 59,313 24.31
Equipment 34,336 34,768 1.26
Software 28,706 31,667 10.31
Professional services 24,891 31,585 26.89
Advertising and public relations 16,543 21,501 29.97
Communications 20,142 20,613 2.34
Data processing 17,296 15,243 (11.87)
Intangible asset amortization 9,971 6,857 (31.23)
Foreclosed asset income (2,171) (15,149) nm
Reversal of allowance for losses
on
off-balance sheet commitments (1,000) (7,000) nm
Other 53,274 59,688 12.04
---------- ----------
Total noninterest expense $781,352 $827,574 5.92 %
========== ==========
- ---------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Footnotes
- ---------------------------------------------------------------------
(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.
(2) Taxable-equivalent basis.
(3) Dividends per share reflect dividends declared on UnionBanCal
Corporation's common stock outstanding as of the declaration date.
(4) End of period total assets and assets used in calculating these
ratios include those of discontinued operations.
(5) Average balances used to calculate our financial ratios are based
on continuing operations data only, unless otherwise indicated.
(6) Annualized.
(7) The efficiency ratio is noninterest expense, excluding foreclosed
asset expense (income) and the (reversal of) provision for losses on
off-balance sheet commitments, as a percentage of net interest income
(taxable-equivalent basis) and noninterest income and is a percentage
of net interest income (taxable-equivalent basis) and noninterest
income and is calculated for continuing operations only.calculated for
continuing operations only.
(8) Estimated as of June 30, 2006. The regulatory capital and leverage
ratios were not restated and therefore include discontinued
operations.
(9) The allowance for credit losses ratios include the allowances for
loan losses and losses on off-balance sheet commitments. These ratios
relate to continuing operations only.
(10) Yields and interest income are presented on a taxable-equivalent
basis using the federal statutory tax rate of 35 percent.
(11) Average balances on loans outstanding include all nonperforming
loans. The amortized portion of net loan origination fees (costs) is
included in interest income on loans, representing an adjustment to
the yield.
(12) Net funding allocated from (to) discontinued operations
represents the shortage (excess) of assets over liabilities of
discontinued operations. The expense (earning) on funds allocated from
(to) discontinued operations is calculated by taking the net balance
and applying an earnings rate or a cost of funds equivalent to the
corresponding period's fed funds purchased rate.
nm = not meaningful
CONTACT: UnionBanCal Corporation
John A. Rice, Jr., 415-765-2998 (Investor Relations)
Stephen L. Johnson, 415-765-3252 (Public Relations)
Michelle R. Crandall, 415-765-2780 (Investor Relations)