Exhibit 99.1
UnionBanCal Corporation Reports Third Quarter Earnings Per Share from
Continuing Operations of $1.08
SAN FRANCISCO--(BUSINESS WIRE)--Oct. 18, 2007--UnionBanCal
Corporation (NYSE:UB):
Third Quarter 2007 Highlights:
- -- Credit quality remains strong
-- Nonperforming assets just 0.10 percent of total assets at
quarter-end
-- Net charge-offs of only $2 million
- -- Strong year-over-year organic loan growth across all major
categories
-- Average total loans up 9.8 percent
-- Average core commercial loans up 6.8 percent
- -- Average noninterest bearing deposits comprised 32.8 percent of
average total deposits
UnionBanCal Corporation (NYSE:UB) today reported third quarter
2007 net income of $127.5 million, or $0.92 per diluted common share,
compared with $1.20 per diluted common share a year earlier. Net
income for third quarter 2007 included a net loss from discontinued
operations of $22.6 million, or $0.16 per diluted common share,
comprised of a previously disclosed $21.6 million Department of
Justice penalty, $1.6 million in professional services expense, and a
$0.6 million income tax benefit, all related to the international
correspondent banking business that was sold in the third quarter of
2005.
Third quarter 2007 income from continuing operations was $150.1
million, or $1.08 per diluted common share, compared with $1.21 per
diluted common share a year earlier. Income from continuing operations
for third quarter 2007 included $7.9 million, or $0.06 per diluted
common share, in incremental tax expense relating to prior periods.
For the first nine months of 2007, income from continuing
operations was $465 million, or $3.34 per diluted common share,
compared with income from continuing operations for the first nine
months of 2006 of $536 million, or $3.71 per diluted common share.
"The operating environment continues to be challenging for our
deposit businesses," said Masaaki Tanaka, President and Chief
Executive Officer. "An ongoing deposit mix shift, coupled with higher
deposit rates, has pressured net interest income and earnings. At the
same time, some of the strengths of the UnionBanCal business model
were highlighted during the third quarter. Since we do not engage in
sub-prime real estate lending and satisfy most of our funding needs
through our deposit businesses, we were negligibly affected by the
turbulence in the residential real estate and credit markets. I'm also
pleased to note that third quarter net charge-offs were only $2
million and our high quality portfolio of residential and commercial
real estate loans had no charge-offs," concluded Mr. Tanaka.
"While challenges to our deposit businesses remain, I am
encouraged by other aspects of the Company's core performance," said
Vice Chairman and Chief Operating Officer Philip Flynn. "Third quarter
loan growth was solid and strongly underwritten in all categories. Our
commercial and residential real estate portfolios are well diversified
and continue to perform well. In addition, fee income results were
better than we expected, and our focus on expense management continued
to produce results," concluded Mr. Flynn.
Summary of Third Quarter Results From Continuing Operations
Third Quarter Total Revenue
For third quarter 2007, total revenue (taxable-equivalent net
interest income plus noninterest income) was $664.6 million, down 2.0
percent compared with third quarter 2006. Net interest income
decreased 6.9 percent, and noninterest income increased 8.5 percent.
Compared with second quarter 2007, total revenue was up 0.5 percent,
with net interest income down 0.5 percent and noninterest income
increasing 2.6 percent.
Third Quarter Net Interest Income (Taxable-equivalent)
Net interest income was $428.8 million in third quarter 2007, down
$31.8 million, or 6.9 percent, from the same quarter a year ago,
primarily due to a deposit mix shift from noninterest bearing and
low-cost deposits into higher-cost deposits, partially offset by
strong loan growth and higher yields on earning assets.
Average earning assets in third quarter 2007 increased $3.0
billion, or 6.6 percent, compared to third quarter 2006, primarily due
to a $3.5 billion, or 9.8 percent, increase in average loans. Average
commercial loans increased $1.0 billion, or 7.7 percent, with average
core commercial loans, which exclude title and escrow loans, up 6.8
percent. Title and escrow loans, which are highly rate-advantaged and
more volatile than other commercial loans, increased $0.2 billion, or
21.5 percent. Average residential mortgage loans increased $1.2
billion, or 10.2 percent; average commercial mortgage loans increased
$0.7 billion, or 12.4 percent; and average construction loans
increased $0.4 billion, or 19.1 percent, year over year. Virtually all
of the increase in average construction loans was in income-producing
properties.
Compared to third quarter 2006, average interest bearing deposits
increased $4.7 billion, or 19.9 percent, while average noninterest
bearing deposits decreased $3.2 billion, or 18.9 percent. The decline
in noninterest bearing deposits was due to a $2.0 billion, or 17.0
percent, decrease in average other commercial noninterest bearing
deposits; a $0.8 billion, or 34.3 percent, decrease in average title
and escrow deposits; and a $0.4 billion, or 13.1 percent, decrease in
average consumer noninterest bearing deposits. Average other
commercial and average consumer noninterest bearing deposits both
declined primarily due to changes in customer behavior in response to
higher short-term interest rates, and average title and escrow
deposits decreased due to reduced residential real estate activity.
Average noninterest bearing deposits represented 32.8 percent of
average total deposits in third quarter 2007. The annualized average
all-in cost of funds was 2.78 percent, reflecting the Company's strong
average core deposit-to-loan ratio of 82.4 percent and the high
proportion of noninterest bearing deposits to total deposits.
The average yield on earning assets of $48.9 billion was 6.19
percent, up 13 basis points over third quarter 2006, with the average
loan yield increasing 8 basis points. The average rate on interest
bearing liabilities of $33.7 billion was 3.91 percent, up 50 basis
points compared with third quarter 2006, reflecting higher short-term
interest rates and an unfavorable shift in deposit mix due to
heightened competition for deposits. The net interest margin in third
quarter 2007 was 3.50 percent, compared with 4.00 percent in third
quarter 2006.
Third quarter 2007 net interest income declined 0.5 percent from
second quarter 2007. Average loans increased $645 million, or 1.7
percent. Average commercial loans decreased $352 million, or 2.4
percent, which was comprised of an increase in core commercial loans
of $191 million, or 1.5 percent, offset by a decrease in title and
escrow loans of $543 million, or 36 percent. Average residential
mortgage loans increased $603 million, or 4.8 percent, and average
commercial mortgage loans increased $174 million, or 2.8 percent.
Average interest bearing deposits increased $0.6 billion, or 2.1
percent, while average noninterest bearing deposits decreased $1.2
billion, or 8.0 percent. The average yield on earning assets increased
8 basis points and the average rate on interest bearing liabilities
increased 8 basis points. The net interest margin decreased 6 basis
points to 3.50 percent.
Third Quarter Noninterest Income
In third quarter 2007, noninterest income was $235.7 million, up
$18.5 million, or 8.5 percent, from the same quarter a year ago.
Service charges on deposit accounts decreased $2.9 million, or 3.6
percent, primarily due to lower account analysis fees. Trust and
investment management fees increased $3.7 million, or 7.8 percent,
primarily due to an increase in trust assets. Trading account gains
increased by $7.5 million, or 52 percent, driven primarily by an
increase in interest rate swap transactions during third quarter 2007.
Gain on private capital investments, net, was $12.2 million, an
increase of $4.5 million compared with the same quarter a year
earlier.
Third quarter 2007 noninterest income increased $5.9 million, or
2.6 percent, compared with second quarter 2007. Trading account
activities increased by $8.0 million, while gain on private capital
investments, net, declined $8.0 million, compared to the preceding
quarter.
Third Quarter Noninterest Expense
Noninterest expense for third quarter 2007 was $408.4 million, a
decrease of $8.6 million, or 2.1 percent, compared with third quarter
2006. Salaries and employee benefits expense decreased $8.0 million,
or 3.3 percent, primarily due to lower pension and workers
compensation expense. Outside services expense decreased $10.5
million, or 32.9 percent, primarily due to lower cost of services
related to title and escrow balances. Professional services expense
increased $6.0 million, or 49.3 percent, primarily due to higher
compliance-related expense. Foreclosed asset expense was negligible
for both quarters. The provision for losses on off-balance sheet
commitments was $4 million in third quarter 2007 compared to zero in
third quarter 2006.
Noninterest expense decreased $3.4 million, or 0.8 percent,
compared with second quarter 2007. Salaries and employee benefits
expense decreased $14.9 million, or 5.9 percent, primarily due to
lower workers compensation expense and other employee benefit expense.
Professional services expense increased $6.2 million, or 51.7 percent,
primarily due to higher compliance-related expense. The provision for
losses on off-balance sheet commitments was $4 million, compared with
zero in the prior quarter.
Income Tax Expense
Third quarter 2007 income tax expense included an $11.6 million
adjustment to income taxes for 2006. The adjustment, which increased
income tax expense for the third quarter 2007, was due primarily to
the difference between the estimate of California state tax expense
for last year and the taxes reported in the Company's 2006 tax return,
which was filed on the worldwide unitary basis. The state of
California requires the Company to file franchise tax returns as a
member of either a worldwide or a water's edge unitary group that
includes the majority stockholder, The Bank of Tokyo-Mitsubishi-UFJ,
Ltd. (BTMU), and other affiliates of the Mitsubishi-UFJ Financial
Group (MUFG). Changes between MUFG's estimated and actual income for
the fiscal year ended March 31, 2007, as reported in Form 20-F, filed
with the SEC on September 21, 2007, affected the Company's California
taxes for the 2006 year.
In addition, during the third quarter the accrual of California
tax expense for 2007 was increased by approximately $3.9 million,
primarily as a result of increased income reported by MUFG for its
most recent reporting period as well as estimates of MUFG's income for
the year ending March 31, 2008.
Partially offsetting the two items summarized above was a $7.6
million state tax benefit recognized in third quarter 2007 as a result
of the settlement of an audit of Company tax returns for the tax year
2002.
Income tax expense on continuing operations for the third quarter
was $87.7 million. The effective tax rate for the third quarter 2007
was 36.9 percent, compared with an effective tax rate of 33.6 percent
for the third quarter 2006. The effective tax rate for the third
quarter 2007, excluding adjustments for state taxes as described
above, was 33.6 percent.
The effective tax rate for the first nine months of 2007 was 34.0
percent, compared to 33.8 percent for the same period in 2006.
Year-to-Date Results From Continuing Operations
Total revenue for the first nine months of 2007 was $1.98 billion,
a decrease of $72 million, or 3.5 percent, compared with total revenue
of $2.05 billion in the same period of 2006. Net interest income
decreased $105 million, or 7.6 percent, and noninterest income
increased $34 million, or 5.2 percent.
Net interest income was $1.3 billion in the first nine months of
2007, a 7.6 percent decrease from prior year, primarily due to a
deposit mix shift from noninterest bearing and low-cost deposits into
higher-cost deposits, partially offset by strong loan growth and
higher yields on earning assets. Average loans increased $3.8 billion,
or 10.9 percent, while average total deposits increased $2.4 billion,
or 6.0 percent. Average interest bearing deposits increased $5.1
billion, or 22.8 percent, while average noninterest bearing deposits
decreased by $2.7 billion, or 15.7 percent. The net interest margin
was 3.55 percent, down 64 basis points.
Noninterest income in the first nine months of 2007 was $688
million, an increase of $33.7 million, or 5.2 percent, over the same
period in 2006. Service charges on deposit accounts decreased $14.2
million, or 5.9 percent, primarily due to lower account analysis fees.
Trust and investment fees increased by $5.4 million, or 3.7 percent,
due to higher trust account balances. Gain on private capital
investments, net, was $41.5 million, an increase of $27.3 million
compared to the same period last year.
For the first nine months of 2007, noninterest expense decreased
$2.2 million, or 0.2 percent, compared with the first nine months of
2006. Outside services expense decreased $31.1 million, or 34.1
percent, primarily due to lower cost of services related to title and
escrow balances. Professional services expense increased $3.5 million,
or 7.9 percent, due to higher compliance-related costs. Foreclosed
asset expense was $0.1 million, compared with income of $15.3 million
last year, due to gains on the sale of other real estate owned
recorded in 2006. The provision for off-balance sheet commitments was
$5 million in the first nine months of 2007, compared with negative $7
million in the first nine months of 2006.
Credit Quality
Nonperforming assets at September 30, 2007, were $53 million, or
0.10 percent of total assets. This compares with $30 million, or 0.06
percent of total assets, at June 30, 2007, and $48 million, or 0.09
percent of total assets, at September 30, 2006.
In third quarter 2007, the total provision for credit losses was
$20 million, compared with a total provision for credit losses of $5
million in second quarter 2007, and zero in third quarter 2006. The
total provision for credit losses is comprised of the provision for
loan losses and the provision for losses on off balance sheet
commitments, which is classified in noninterest expense. The increase
in total provision expense in third quarter 2007 was primarily due to
loan grade migration in certain sectors of the real estate portfolio
and strong loan growth at the end of the quarter. In third quarter
2007, net charge-offs were $2 million, unchanged from second quarter
2007 and third quarter 2006.
At September 30, 2007, the allowance for credit losses as a
percent of total loans and as a percent of nonaccrual loans was 1.10
percent and 853 percent, respectively. These ratios were 1.11 percent
and 1,457 percent, respectively, at June 30, 2007, and 1.14 percent
and 850 percent, respectively, at September 30, 2006.
Balance Sheet and Capital Ratios
At September 30, 2007, the Company had total assets of $54.3
billion. Total loans were $39.7 billion and total deposits were $42.3
billion, resulting in a period-end deposit-to-loan ratio of 107
percent. At period-end, total stockholders' equity was $4.7 billion
and the tangible common equity ratio was 7.79 percent. The Company's
Tier I and total risk-based capital ratios at period-end were 8.40
percent and 11.28 percent, respectively.
Stock Repurchases
During third quarter 2007, the Company repurchased approximately
3,000 shares of common stock at a total price of $0.2 million, or an
average of $58.26 per repurchased share. During the first nine months
of 2007, the Company repurchased 1.4 million shares of common stock at
a total price of $88 million, or an average of $62.73 per repurchased
share. At September 30, 2007, the Company had remaining repurchase
authority of $562 million.
Common shares outstanding at September 30, 2007, were 138.5
million, a decrease of 1.8 million shares, or 1.3 percent, from one
year earlier.
Fourth Quarter 2007 Forecast
The Company currently estimates that fourth quarter 2007 fully
diluted earnings per share will be in the range of $1.07 to $1.12,
including a total provision for credit losses of approximately $15
million.
Non-GAAP Financial Measures
This press release contains certain references to financial
measures identified as being stated on an "adjusted basis" or that
adjust for or exclude certain tax items, 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," "continue," "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, provision for credit losses, taxes, trends in deposit
pricing, deposit mix, and net interest margin and their impact on the
Company and its future performance, the Company's loan portfolio,
competitive positioning and earnings power.
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.; the effects of filing taxes on the worldwide unitary basis;
competition in the banking and financial services industries; deposit
pricing pressures; the levels of commercial and residential real
estate activity in our market; adverse effects of current and future
banking laws, rules and regulations and their enforcement, including
the previously disclosed agreements with regulatory and governmental
authorities related to the Company's Bank Secrecy Act/Anti-Money
Laundering compliance program; effects of governmental fiscal or
monetary policies; legal or regulatory proceedings or investigations;
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 third quarter
2007 results at 8:30 AM Pacific Time (11:30 AM Eastern Time) on
October 19, 2007. Interested parties calling from locations within the
United States should call 888-400-7916 (703-925-2612 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.unionbank.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),
October 19, through 11:59 PM Pacific Time, October 26 (2:59 AM Eastern
Time, October 27). The reservation number for this playback is 889677.
Based in San Francisco, UnionBanCal Corporation is a bank holding
company with assets of $54.3 billion at September 30, 2007. Its
primary subsidiary, Union Bank of California, N.A., had 323 banking
offices in California, Oregon and Washington, and 2 international
offices at September 30, 2007.
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 1
Percent Change
to
As of and for the Three Months Ended Sept. 30, 2007
from
-------------------------------------- ----------------
Sept. 30, June 30, Sept. 30, Sept. June 30,
30,
(Dollars in
thousands,
except per
share data) 2006 2007 2007 2006 2007
- --------------------------- ------------ ------------ ----------------
Results of
operations:
Net interest
income (1) $460,596 $431,124 $428,834 (6.90%) (0.53%)
Noninterest
income 217,255 229,845 235,732 8.50% 2.56%
------------ ------------ ------------
Total revenue 677,851 660,969 664,566 (1.96%) 0.54%
Noninterest
expense 417,021 411,865 408,420 (2.06%) (0.84%)
Provision for
loan losses - 5,000 16,000 nm nm
------------ ------------ ------------
Income from
continuing
operations
before income
taxes (1) 260,830 244,104 240,146 (7.93%) (1.62%)
Taxable-
equivalent
adjustment 1,872 2,251 2,389 27.62% 6.13%
Income tax
expense 87,048 76,499 87,662 0.71% 14.59%
------------ ------------ ------------
Income from
continuing
operations $171,910 $165,354 $150,095 (12.69%) (9.23%)
Loss from
discontinued
operations (1,204) - (22,636) nm nm
------------ ------------ ------------
Net income $170,706 $165,354 $127,459 (25.33%)(22.92%)
============ ============ ============
Per common
share:
Basic
earnings:
From
continuing
operations $1.22 $1.20 $1.09 (10.66%) (9.17%)
Net income 1.21 1.20 0.93 (23.14%)(22.50%)
Diluted
earnings:
From
continuing
operations 1.21 1.19 1.08 (10.74%) (9.24%)
Net income 1.20 1.19 0.92 (23.33%)(22.69%)
Dividends (2) 0.47 0.52 0.52 10.64% 0.00%
Book value
(end of
period) 33.17 33.45 33.71 1.63% 0.78%
Common shares
outstanding
(end of
period) (3) 140,326,737 138,314,564 138,523,666 (1.28%) 0.15%
Weighted
average
common shares
outstanding -
basic (3) 140,941,823 137,476,765 137,667,976 (2.32%) 0.14%
Weighted
average
common shares
outstanding -
diluted (3) 142,566,089 139,137,955 139,067,952 (2.45%) (0.05%)
Balance sheet
(end of
period):
Total assets
(4) $52,013,256 $53,173,833 $54,343,045 4.48% 2.20%
Total loans 35,673,469 37,743,222 39,745,341 11.41% 5.30%
Nonperforming
assets 47,803 29,826 52,562 9.96% 76.23%
Total deposits 41,820,206 42,090,306 42,346,091 1.26% 0.61%
Medium and
long-term
debt 1,517,977 1,835,495 1,871,726 23.30% 1.97%
Stockholders'
equity 4,654,789 4,627,147 4,669,454 0.32% 0.91%
Balance sheet
(period
average):
Total assets $50,777,419 $53,116,454 $53,495,685 5.35% 0.71%
Total loans 35,965,823 38,839,769 39,484,785 9.78% 1.66%
Earning assets 45,854,645 48,443,246 48,901,507 6.64% 0.95%
Total deposits 40,582,139 42,684,022 42,066,338 3.66% (1.45%)
Stockholders'
equity 4,578,635 4,588,061 4,664,229 1.87% 1.66%
Financial
ratios (5):
Return on
average
assets (6) :
From
continuing
operations 1.34% 1.25% 1.11%
Net income 1.33% 1.25% 0.95%
Return on
average
stockholders'
equity (6) :
From
continuing
operations 14.90% 14.46% 12.77%
Net income 14.79% 14.46% 10.84%
Efficiency
ratio (7) 61.55% 62.31% 60.85%
Net interest
margin (1) 4.00% 3.56% 3.50%
Dividend
payout ratio 38.52% 43.33% 47.71%
Tangible
common equity
ratio 8.09% 7.87% 7.79%
Tier 1 risk-
based capital
ratio (4) (8) 8.68% 8.59% 8.40%
Total risk-
based capital
ratio (4) (8) 11.74% 11.54% 11.28%
Leverage ratio
(4) (8) 8.47% 8.30% 8.39%
Allowance for
loan losses
to:
Total loans 0.92% 0.89% 0.88%
Nonaccrual
loans 683.96% 1,170.08% 683.96%
Allowances for
credit losses
to (9) :
Total loans 1.14% 1.11% 1.10%
Nonaccrual
loans 850.01% 1,456.97% 852.52%
Net loans
charged off
to average
total loans
(6) 0.02% 0.02% 0.02%
Nonperforming
assets to
total loans
and
foreclosed
assets 0.13% 0.08% 0.13%
Nonperforming
assets to
total assets
(4) 0.09% 0.06% 0.10%
- --------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 2
Percent
Change
to
As of and for the Nine Sept. 30,
Months Ended 2007
from
--------------------------- ---------
Sept. 30, Sept. 30, Sept. 30,
(Dollars in thousands, except
per share data) 2006 2007 2006
- ---------------------------------------------- ------------- ---------
Results of operations:
Net interest income (1) $ 1,395,937 $ 1,290,585 (7.55%)
Noninterest income 654,393 688,135 5.16%
------------- -------------
Total revenue 2,050,330 1,978,720 (3.49%)
Noninterest expense 1,244,595 1,242,376 (0.18%)
(Reversal of) provision for loan
losses (8,000) 25,000 nm
------------- -------------
Income from continuing
operations before income taxes
(1) 813,735 711,344 (12.58%)
Taxable-equivalent adjustment 4,478 6,755 50.85%
Income tax expense 273,255 239,529 (12.34%)
------------- -------------
Income from continuing
operations $ 536,002 $ 465,060 (13.24%)
Loss from discontinued
operations (9,440) (22,636) nm
------------- -------------
Net income $ 526,562 $ 442,424 (15.98%)
============= =============
Per common share:
Basic earnings:
From continuing operations $ 3.76 $ 3.38 (10.11%)
Net income 3.70 3.21 (13.24%)
Diluted earnings:
From continuing operations 3.71 3.34 (9.97%)
Net income 3.65 3.18 (12.88%)
Dividends (2) 1.35 1.51 11.85%
Book value (end of period) 33.17 33.71 1.63%
Common shares outstanding (end
of period) (3) 140,326,737 138,523,666 (1.28%)
Weighted average common shares
outstanding - basic (3) 142,371,445 137,694,682 (3.28%)
Weighted average common shares
outstanding - diluted (3) 144,449,370 139,291,920 (3.57%)
Balance sheet (end of period):
Total assets (4) $ 52,013,256 $ 54,343,045 4.48%
Total loans 35,673,469 39,745,341 11.41%
Nonperforming assets 47,803 52,562 9.96%
Total deposits 41,820,206 42,346,091 1.26%
Medium and long-term debt 1,517,977 1,871,726 23.30%
Stockholders' equity 4,654,789 4,669,454 0.32%
Balance sheet (period average):
Total assets $ 49,426,668 $ 53,196,591 7.63%
Total loans 35,100,506 38,931,283 10.91%
Earning assets 44,481,217 48,568,569 9.19%
Total deposits 39,716,972 42,079,944 5.95%
Stockholders' equity 4,552,410 4,588,063 0.78%
Financial ratios (5):
Return on average assets (6) :
From continuing operations 1.45% 1.17%
Net income 1.42% 1.11%
Return on average stockholders'
equity (6) :
From continuing operations 15.74% 13.55%
Net income 15.46% 12.89%
Efficiency ratio (7) 61.79% 62.53%
Net interest margin (1) 4.19% 3.55%
Dividend payout ratio 35.90% 44.67%
Tangible common equity ratio 8.09% 7.79%
Tier 1 risk-based capital ratio
(4) (8) 8.68% 8.40%
Total risk-based capital ratio
(4) (8) 11.74% 11.28%
Leverage ratio (4) (8) 8.47% 8.39%
Allowance for loan losses to:
Total loans 0.92% 0.88%
Nonaccrual loans 683.96% 683.96%
Allowances for credit losses to
(9) :
Total loans 1.14% 1.10%
Nonaccrual loans 850.01% 852.52%
Net loans charged off to average
total loans (6) 0.06% 0.02%
Nonperforming assets to total
loans and foreclosed assets 0.13% 0.13%
Nonperforming assets to total
assets (4) 0.09% 0.10%
- --------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(Taxable-Equivalent Basis)
Exhibit 3
For the Three Months Ended For the Nine Months
Ended
---------------------------- -----------------------
Sept. 30, June 30, Sept, 30, September 30,
(Dollars in
thousands,
except per share
data) 2006 2007 2007 2006 2007
- ----------------- --------- -------- --------- ----------- -----------
Interest Income
(1)
Loans $575,799 $618,204 $640,511 $1,636,804 $1,862,217
Securities 108,609 109,839 113,084 309,968 331,345
Interest bearing
deposits in
banks 411 1,295 709 1,570 3,113
Federal funds
sold and
securities
purchased under
resale
agreements 12,024 7,809 4,683 20,594 23,644
Trading account
assets 1,832 1,601 1,898 5,047 5,200
--------- -------- --------- ----------- -----------
Total interest
income 698,675 738,748 760,885 1,973,983 2,225,519
--------- -------- --------- ----------- -----------
Interest Expense
Deposits 182,298 246,175 259,497 441,284 727,929
Federal funds
purchased and
securities sold
under
repurchase
agreements 4,891 10,120 14,284 22,148 37,928
Commercial paper 20,835 17,429 19,753 52,420 59,446
Medium and long-
term debt 21,974 28,973 26,957 49,246 75,625
Trust notes 239 238 239 715 715
Other borrowed
funds 7,842 4,689 11,321 12,233 33,291
--------- -------- --------- ----------- -----------
Total interest
expense 238,079 307,624 332,051 578,046 934,934
--------- -------- --------- ----------- -----------
Net Interest
Income (1) 460,596 431,124 428,834 1,395,937 1,290,585
(Reversal of)
provision for
loan losses - 5,000 16,000 (8,000) 25,000
--------- -------- --------- ----------- -----------
Net interest
income after
(reversal of)
provision for
loan losses 460,596 426,124 412,834 1,403,937 1,265,585
--------- -------- --------- ----------- -----------
Noninterest
Income
Service charges
on deposit
accounts 79,083 77,218 76,210 242,555 228,373
Trust and
investment
management fees 47,555 51,585 51,262 146,050 151,407
Insurance
commissions 17,301 16,501 15,988 54,571 52,739
Trading account
activities 14,311 13,838 21,795 41,495 50,473
Brokerage
commissions and
fees 8,531 9,533 10,476 26,656 29,669
Merchant banking
fees 11,655 8,809 10,031 28,280 27,917
Card processing
fees, net 7,241 7,824 7,785 21,144 22,736
Securities
gains, net 43 230 171 1,822 1,621
Other 31,535 44,307 42,014 91,820 123,200
--------- -------- --------- ----------- -----------
Total
noninterest
income 217,255 229,845 235,732 654,393 688,135
--------- -------- --------- ----------- -----------
Noninterest
Expense
Salaries and
employee
benefits 244,613 251,430 236,575 745,745 746,520
Net occupancy 35,753 35,244 39,017 103,109 109,398
Outside services 31,890 18,851 21,394 91,203 60,081
Equipment 17,387 16,367 15,964 52,155 48,885
Professional
services 12,169 11,970 18,162 43,754 47,219
Software 15,334 15,136 15,325 47,001 44,657
Communications 9,942 8,855 9,965 30,555 28,611
Foreclosed asset
expense
(income) (183) 9 37 (15,332) 55
(Reversal of)
provision for
losses on off-
balance sheet
commitments - - 4,000 (7,000) 5,000
Other 50,116 54,003 47,981 153,405 151,950
--------- -------- --------- ----------- -----------
Total
noninterest
expense 417,021 411,865 408,420 1,244,595 1,242,376
--------- -------- --------- ----------- -----------
Income from
continuing
operations
before income
taxes (1) 260,830 244,104 240,146 813,735 711,344
Taxable-
equivalent
adjustment 1,872 2,251 2,389 4,478 6,755
Income tax
expense 87,048 76,499 87,662 273,255 239,529
--------- -------- --------- ----------- -----------
Income from
Continuing
Operations 171,910 165,354 150,095 536,002 465,060
--------- -------- --------- ----------- -----------
Loss from
discontinued
operations
before income
taxes (2,061) - (23,297) (15,233) (23,297)
Income tax
benefit (857) - (661) (5,793) (661)
--------- -------- --------- ----------- -----------
Loss from
Discontinued
Operations (1,204) - (22,636) (9,440) (22,636)
--------- -------- --------- ----------- -----------
Net Income $170,706 $165,354 $127,459 $526,562 $442,424
========= ======== ========= =========== ===========
Income from
continuing
operations per
common share -
basic $1.22 $1.20 $1.09 $3.76 $3.38
========= ======== ========= =========== ===========
Net income per
common share -
basic $1.21 $1.20 $0.93 $3.70 $3.21
========= ======== ========= =========== ===========
Income from
continuing
operations per
common share -
diluted $1.21 $1.19 $1.08 $3.71 $3.34
========= ======== ========= =========== ===========
Net income per
common share -
diluted $1.20 $1.19 $0.92 $3.65 $3.18
========= ======== ========= =========== ===========
Weighted average
common shares
outstanding -
basic 140,942 137,477 137,668 142,371 137,695
========= ======== ========= =========== ===========
Weighted average
common shares
outstanding -
diluted 142,566 139,138 139,068 144,449 139,292
========= ======== ========= =========== ===========
- -----------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets
Exhibit 4
(Unaudited) (Unaudited)
Sept. 30, Dec. 31, Sept. 30,
(Dollars in thousands) 2006 2006 2007
- ------------------------------- ------------ ------------ ------------
Assets
Cash and due from banks $ 2,168,245 $ 2,213,782 $ 1,715,745
Interest bearing deposits in
banks 26,700 824,456 151,000
Federal funds sold and
securities purchased under
resale agreements 1,827,000 943,200 381,604
------------ ------------ ------------
Total cash and cash
equivalents 4,021,945 3,981,438 2,248,349
Trading account assets 360,267 376,321 507,961
Securities available for sale:
Securities pledged as
collateral 58,877 89,184 77,732
Held in portfolio 8,582,667 8,667,038 8,427,777
Loans (net of allowance for
loan losses: September 30,
2006, $326,955; December 31,
2006, $331,077; September 30,
2007, $350,491) 35,346,514 36,340,646 39,394,850
Due from customers on
acceptances 25,851 17,834 18,648
Premises and equipment, net 499,702 495,302 483,374
Intangible assets 32,331 28,930 22,201
Goodwill 453,489 453,489 453,489
Other assets 2,594,084 2,148,954 2,708,664
Assets of discontinued
operations to be disposed or
sold 37,529 20,440 -
------------ ------------ ------------
Total assets $52,013,256 $52,619,576 $54,343,045
============ ============ ============
Liabilities
Noninterest bearing $17,446,321 $17,113,890 $13,675,887
Interest bearing 24,373,885 24,855,478 28,670,204
------------ ------------ ------------
Total deposits 41,820,206 41,969,368 42,346,091
Federal funds purchased and
securities sold under
repurchase agreements 265,596 1,083,927 1,823,872
Commercial paper 1,859,747 1,661,163 1,706,135
Other borrowed funds 308,080 432,401 299,027
Acceptances outstanding 25,851 17,834 18,648
Other liabilities 1,542,719 1,545,165 1,593,546
Medium and long-term debt 1,517,977 1,318,847 1,871,726
Junior subordinated debt
payable to subsidiary grantor
trust 14,998 14,885 14,546
Liabilities of discontinued
operations to be extinguished
or assumed 3,293 4,585 -
------------ ------------ ------------
Total liabilities 47,358,467 48,048,175 49,673,591
------------ ------------ ------------
Stockholders' Equity
Preferred stock:
Authorized 5,000,000 shares;
no shares issued or
outstanding as of September
30, 2006, December 31, 2006
and September 30, 2007 - - -
Common stock, par value $1 per
share:
Authorized 300,000,000 shares;
issued 155,854,756 shares as
of September 30, 2006,
156,460,057 shares as of
December 31, 2006 and
157,272,167 shares as of
September 30, 2007 155,855 156,460 157,272
Additional paid-in capital 1,064,993 1,083,649 1,144,971
Treasury stock - 15,528,019
shares as of September 30,
2006, 17,352,803 shares as of
December 31, 2006 and
18,748,501 shares as of
September 30, 2007 (956,545) (1,064,606) (1,152,157)
Retained earnings 4,494,698 4,655,272 4,818,477
Accumulated other comprehensive
loss (104,212) (259,374) (299,109)
------------ ------------ ------------
Total stockholders' equity 4,654,789 4,571,401 4,669,454
------------ ------------ ------------
Total liabilities and
stockholders' equity $52,013,256 $52,619,576 $54,343,045
============ ============ ============
UnionBanCal Corporation and Subsidiaries
Loans (Unaudited)
Exhibit 5
Percent Change to
Three Months Ended September 30,
2007 from
---------------------------- -----------------
Sept. 30, June 30, Sept. 30, Sept. 30, June
30,
(Dollars in
millions) 2006 2007 2007 2006 2007
- ----------------------- --------- -------- --------- --------- -------
Loans (period
average)
Commercial, financial
and industrial $13,237 $14,610 $14,258 7.71% (2.41%)
Construction 1,991 2,296 2,372 19.14% 3.31%
Mortgage -
Commercial 5,681 6,213 6,387 12.43% 2.80%
Mortgage -
Residential 11,971 12,591 13,193 10.21% 4.78%
Consumer 2,507 2,557 2,570 2.51% 0.51%
Lease
financing 570 569 617 8.25% 8.44%
--------- -------- ---------
Total loans
held to
maturity $35,957 $38,836 $39,397 9.57% 1.44%
Total loans
held for sale 9 4 88 nm nm
--------- -------- ---------
Total loans $35,966 $38,840 $39,485 9.78% 1.66%
========= ======== =========
Nonperforming
Assets (period
end)
Nonaccrual
loans:
Commercial, financial
and industrial $14 $19 $37 nm 94.74%
Mortgage -
Commercial 19 10 15 (21.05%) 50.00%
Lease
financing 15 - - (100.00%) -
--------- -------- ---------
Total
nonaccrual
loans 48 29 52 8.33% 79.31%
Foreclosed
assets - 1 1 nm -
--------- -------- ---------
Total
nonperforming
assets $48 $30 $53 10.42% 76.67%
========= ======== =========
Loans 90 days or more
past due and still
accruing $4 $10 $18 nm 80.00%
========= ======== =========
Analysis of Allowances
for Credit Losses
Beginning
balance $329 $333 $336
Provision for
loan losses - 5 16
Loans charged
off:
Commercial, financial
and industrial (4) (3) (3)
Consumer (1) (1) (2)
--------- -------- ---------
Total loans
charged off (5) (4) (5)
--------- -------- ---------
Loans
recovered:
Commercial, financial
and industrial 3 2 2
Consumer - - 1
--------- -------- ---------
Total loans
recovered 3 2 3
--------- -------- ---------
Net loans
charged off (2) (2) (2)
--------- -------- ---------
Ending balance of
allowance for loan
losses $327 $336 $350
Allowance for
off-balance
sheet
commitment
losses 79 82 86
--------- -------- ---------
Allowances for
credit losses $406 $418 $436
========= ======== =========
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 6
For the Three Months Ended
------------------------------
September 30, 2006
-----------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ----------------------------------------------------------------------
Assets
Loans (11)
Commercial, financial and industrial $13,244,947 $225,177 6.74%
Construction 1,990,535 39,147 7.80
Residential mortgage 11,972,024 154,983 5.18
Commercial mortgage 5,680,603 102,577 7.16
Consumer 2,507,524 49,672 7.86
Lease financing 570,190 4,243 2.98
---------------------
Total loans 35,965,823 575,799 6.37
Securities - taxable 8,548,420 107,378 5.02
Securities - tax-exempt 59,644 1,231 8.26
Interest bearing deposits in banks 37,351 411 4.37
Federal funds sold and securities
purchased under resale agreements 894,039 12,024 5.34
Trading account assets 349,368 1,832 2.08
---------------------
Total earning assets 45,854,645 698,675 6.06
---------
Allowance for loan losses (328,399)
Cash and due from banks 2,063,653
Premises and equipment, net 497,957
Other assets 2,689,563
------------
Total assets $50,777,419
============
Liabilities
Deposits:
Transaction accounts $12,405,367 73,826 2.36
Savings and consumer time 4,493,082 25,682 2.27
Large time 6,692,874 82,790 4.91
---------------------
Total interest bearing deposits 23,591,323 182,298 3.07
---------------------
Federal funds purchased and securities
sold under repurchase agreements 419,665 5,345 5.05
Net funding allocated from (to)
discontinued operations (12) (34,738) (454) 5.18
Commercial paper 1,645,428 20,835 5.02
Other borrowed funds 577,533 7,842 5.39
Medium and long-term debt 1,496,207 21,974 5.83
Trust notes 15,054 239 6.33
---------------------
Total borrowed funds 4,119,149 55,781 5.37
---------------------
Total interest bearing liabilities 27,710,472 238,079 3.41
---------
Noninterest bearing deposits 16,990,816
Other liabilities 1,497,496
------------
Total liabilities 46,198,784
Stockholders' Equity
Common equity 4,578,635
------------
Total stockholders' equity 4,578,635
------------
Total liabilities and stockholders'
equity $50,777,419
============
Reported Net Interest Income/Margin
Net interest income/margin (taxable-
equivalent basis) 460,596 4.00%
Less: taxable-equivalent adjustment 1,872
---------
Net interest income $458,724
=========
- ----------------------------------------------------------------------
For the Three Months Ended
-----------------------------
September 30, 2007
-----------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ----------------------------------------------------------------------
Assets
Loans (11)
Commercial, financial and industrial $14,342,095 $246,275 6.81%
Construction 2,371,833 46,043 7.70
Residential mortgage 13,196,677 178,589 5.41
Commercial mortgage 6,386,963 112,743 7.00
Consumer 2,570,234 50,601 7.81
Lease financing 616,983 6,260 4.06
--------------------
Total loans 39,484,785 640,511 6.45
Securities - taxable 8,593,958 111,934 5.21
Securities - tax-exempt 55,236 1,150 8.32
Interest bearing deposits in banks 44,185 709 6.37
Federal funds sold and securities
purchased under resale agreements 355,111 4,683 5.23
Trading account assets 368,232 1,898 2.04
--------------------
Total earning assets 48,901,507 760,885 6.19
--------
Allowance for loan losses (335,932)
Cash and due from banks 1,845,331
Premises and equipment, net 485,934
Other assets 2,598,845
------------
Total assets $53,495,685
============
Liabilities
Deposits:
Transaction accounts $14,288,967 108,653 3.02
Savings and consumer time 4,475,522 30,453 2.70
Large time 9,515,315 120,391 5.02
--------------------
Total interest bearing deposits 28,279,804 259,497 3.64
--------------------
Federal funds purchased and securities
sold under repurchase agreements 1,130,404 14,284 5.01
Net funding allocated from (to)
discontinued operations (12) - - -
Commercial paper 1,559,098 19,753 5.03
Other borrowed funds 828,655 11,321 5.42
Medium and long-term debt 1,846,674 26,957 5.79
Trust notes 14,601 239 6.53
--------------------
Total borrowed funds 5,379,432 72,554 5.35
--------------------
Total interest bearing liabilities 33,659,236 332,051 3.91
--------
Noninterest bearing deposits 13,786,534
Other liabilities 1,385,686
------------
Total liabilities 48,831,456
Stockholders' Equity
Common equity 4,664,229
------------
Total stockholders' equity 4,664,229
------------
Total liabilities and stockholders'
equity $53,495,685
============
Reported Net Interest Income/Margin
Net interest income/margin (taxable-
equivalent basis) 428,834 3.50%
Less: taxable-equivalent adjustment 2,389
--------
Net interest income $426,445
========
- ---------------------------------------------------------------------
Average Assets and Liabilities of Discontinued
Operations for Period Ended:
September 30, 2006
-------------------
Assets $ 41,135
Liabilities $ 6,397
Net Asset $ 34,738
- ---------------------------------------------------------------------
- --------------------------------------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 7
For the Three Months Ended
-------------------------------
June 30, 2007
------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ------------------------------------- ------------ -------- ---------
Assets
Loans: (11)
Commercial, financial and
industrial $14,610,728 $238,175 6.54%
Construction 2,296,098 44,047 7.69
Residential mortgage 12,594,065 167,342 5.31
Commercial mortgage 6,213,092 111,720 7.21
Consumer 2,557,085 49,579 7.78
Lease financing 568,701 7,341 5.16
------------ --------
Total loans 38,839,769 618,204 6.38
Securities - taxable 8,548,063 108,675 5.09
Securities - tax-exempt 56,084 1,164 8.30
Interest bearing deposits in banks 88,592 1,295 5.86
Federal funds sold and securities
purchased under resale agreements 593,718 7,809 5.28
Trading account assets 317,020 1,601 2.03
------------ --------
Total earning assets 48,443,246 738,748 6.11
--------
Allowance for loan losses (331,820)
Cash and due from banks 2,000,691
Premises and equipment, net 486,776
Other assets 2,517,561
------------
Total assets $53,116,454
============
Liabilities
Deposits:
Transaction accounts $14,075,542 102,833 2.93
Savings and consumer time 4,445,326 28,962 2.61
Large time 9,173,928 114,380 5.00
------------ --------
Total interest bearing deposits 27,694,796 246,175 3.57
------------ --------
Federal funds purchased and
securities sold under repurchase
agreements 782,000 10,120 5.19
Net funding allocated from (to)
discontinued operations (12) - - -
Commercial paper 1,389,847 17,429 5.03
Other borrowed funds 333,252 4,689 5.64
Medium and long-term debt 2,033,377 28,973 5.72
Trust notes 14,714 238 6.48
------------ --------
Total borrowed funds 4,553,190 61,449 5.41
------------ --------
Total interest bearing
liabilities 32,247,986 307,624 3.83
--------
Noninterest bearing deposits 14,989,226
Other liabilities 1,291,181
------------
Total liabilities 48,528,393
Stockholders' Equity
Common equity 4,588,061
------------
Total stockholders' equity 4,588,061
------------
Total liabilities and
stockholders' equity $53,116,454
============
Reported Net Interest Income/Margin
Net interest income/margin (taxable-
equivalent basis) 431,124 3.56%
Less: taxable-equivalent adjustment 2,251
--------
Net interest income $428,873
========
- --------------------------------------
For the Three Months Ended
-------------------------------
September 30, 2007
------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- --------------------------------------------------- -------- ---------
Assets
Loans: (11)
Commercial, financial and industrial$14,342,095 $246,275 6.81%
Construction 2,371,833 46,043 7.70
Residential mortgage 13,196,677 178,589 5.41
Commercial mortgage 6,386,963 112,743 7.00
Consumer 2,570,234 50,601 7.81
Lease financing 616,983 6,260 4.06
------------ --------
Total loans 39,484,785 640,511 6.45
Securities - taxable 8,593,958 111,934 5.21
Securities - tax-exempt 55,236 1,150 8.32
Interest bearing deposits in banks 44,185 709 6.37
Federal funds sold and securities
purchased under resale agreements 355,111 4,683 5.23
Trading account assets 368,232 1,898 2.04
------------ --------
Total earning assets 48,901,507 760,885 6.19
--------
Allowance for loan losses (335,932)
Cash and due from banks 1,845,331
Premises and equipment, net 485,934
Other assets 2,598,845
------------
Total assets $53,495,685
============
Liabilities
Deposits:
Transaction accounts $14,288,967 108,653 3.02
Savings and consumer time 4,475,522 30,453 2.70
Large time 9,515,315 120,391 5.02
------------ --------
Total interest bearing deposits 28,279,804 259,497 3.64
------------ --------
Federal funds purchased and securities
sold under repurchase agreements 1,130,404 14,284 5.01
Net funding allocated from (to)
discontinued operations (12) - - -
Commercial paper 1,559,098 19,753 5.03
Other borrowed funds 828,655 11,321 5.42
Medium and long-term debt 1,846,674 26,957 5.79
Trust notes 14,601 239 6.53
------------ --------
Total borrowed funds 5,379,432 72,554 5.35
------------ --------
Total interest bearing liabilities 33,659,236 332,051 3.91
--------
Noninterest bearing deposits 13,786,534
Other liabilities 1,385,686
------------
Total liabilities 48,831,456
Stockholders' Equity
Common equity 4,664,229
------------
Total stockholders' equity 4,664,229
------------
Total liabilities and
stockholders' equity $53,495,685
============
Reported Net Interest Income/Margin
Net interest income/margin (taxable-
equivalent basis) 428,834 3.50%
Less: taxable-equivalent adjustment 2,389
--------
Net interest income $426,445
========
- ---------------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 8
For the Nine Months Ended
----------------------------------
September 30, 2006
----------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ----------------------------------------------------------- ---------
Assets
Loans: (11)
Commercial, financial and
industrial $12,899,687 $ 635,197 6.58%
Construction 1,747,603 99,166 7.59
Residential mortgage 11,719,852 448,192 5.10
Commercial mortgage 5,664,966 300,116 7.08
Consumer 2,500,890 142,343 7.61
Lease financing 567,508 11,790 2.77
-------------------------
Total loans 35,100,506 1,636,804 6.23
Securities - taxable 8,378,496 306,164 4.87
Securities - tax-exempt 62,670 3,804 8.09
Interest bearing deposits in banks 43,804 1,570 4.79
Federal funds sold and securities
purchased under resale agreements 541,607 20,594 5.08
Trading account assets 354,134 5,047 1.91
-------------------------
Total earning assets 44,481,217 1,973,983 5.93
------------
Allowance for loan losses (337,145)
Cash and due from banks 2,096,935
Premises and equipment, net 510,416
Other assets 2,675,245
-------------
Total assets $49,426,668
=============
Liabilities
Deposits:
Transaction accounts $12,757,571 201,641 2.11
Savings and consumer time 4,477,251 65,672 1.96
Large time 5,133,186 173,971 4.53
-------------------------
Total interest bearing deposits 22,368,008 441,284 2.64
-------------------------
Federal funds purchased and
securities sold under repurchase
agreements 678,926 23,657 4.66
Net funding allocated from (to)
discontinued operations (12) (42,570) (1,509) 4.74
Commercial paper 1,514,196 52,420 4.63
Other borrowed funds 319,096 12,233 5.13
Medium and long-term debt 1,164,090 49,246 5.66
Trust notes 15,166 715 6.28
-------------------------
Total borrowed funds 3,648,904 136,762 5.01
-------------------------
Total interest bearing liabilities 26,016,912 578,046 2.97
------------
Noninterest bearing deposits 17,348,964
Other liabilities 1,508,382
-------------
Total liabilities 44,874,258
Stockholders' Equity
Common equity 4,552,410
-------------
Total stockholders' equity 4,552,410
-------------
Total liabilities and
stockholders' equity $49,426,668
=============
Reported Net Interest
Income/Margin
Net interest income/margin
(taxable-equivalent basis) 1,395,937 4.19%
Less: taxable-equivalent
adjustment 4,478
------------
Net interest income $1,391,459
============
For the Nine Months Ended
---------------------------------
September 30, 2007
--------------------------------
Interest Average
Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate (6)
(10) (10)
- ----------------------------------------------------------------------
Assets
Loans: (11)
Commercial, financial and industrial $14,544,388 $ 721,728 6.63%
Construction 2,300,862 132,865 7.72
Residential mortgage 12,728,651 509,697 5.34
Commercial mortgage 6,222,590 331,429 7.12
Consumer 2,556,710 149,159 7.80
Lease financing 578,082 17,339 4.00
-----------------------
Total loans 38,931,283 1,862,217 6.39
Securities - taxable 8,574,162 327,877 5.10
Securities - tax-exempt 56,316 3,468 8.21
Interest bearing deposits in banks 70,650 3,113 5.89
Federal funds sold and securities
purchased under resale agreements 596,492 23,644 5.30
Trading account assets 339,666 5,200 2.05
-----------------------
Total earning assets 48,568,569 2,225,519 6.12
-----------
Allowance for loan losses (332,690)
Cash and due from banks 1,931,371
Premises and equipment, net 488,562
Other assets 2,540,779
------------
Total assets $53,196,591
============
Liabilities
Deposits:
Transaction accounts $13,969,058 302,991 2.90
Savings and consumer time 4,445,590 86,372 2.60
Large time 9,045,417 338,566 5.00
-----------------------
Total interest bearing deposits 27,460,065 727,929 3.54
-----------------------
Federal funds purchased and
securities sold under repurchase
agreements 986,589 37,928 5.14
Net funding allocated from (to)
discontinued operations (12) - - -
Commercial paper 1,576,745 59,446 5.04
Other borrowed funds 821,910 33,291 5.42
Medium and long-term debt 1,752,240 75,625 5.77
Trust notes 14,713 715 6.48
-----------------------
Total borrowed funds 5,152,197 207,005 5.37
-----------------------
Total interest bearing liabilities 32,612,262 934,934 3.83
-----------
Noninterest bearing deposits 14,619,879
Other liabilities 1,376,387
------------
Total liabilities 48,608,528
Stockholders' Equity
Common equity 4,588,063
------------
Total stockholders' equity 4,588,063
------------
Total liabilities and stockholders'
equity $53,196,591
============
Reported Net Interest Income/Margin
Net interest income/margin (taxable-
equivalent basis) 1,290,585 3.55%
Less: taxable-equivalent adjustment 6,755
-----------
Net interest income $1,283,830
===========
- ---------------------------------------------------------------------
Average Assets and Liabilities of Discontinued Operations for Period
Ended:
September 30,
2006
-----------------
Assets $244,210
Liabilities $201,640
Net Asset $42,570
- ---------------------------------------------------------------------
- ---------------------------------------------------------------
Refer to Exhibit 11 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Noninterest income (Unaudited)
Exhibit 9
Percentage Change
to
For the Three Months Ended September 30, 2007
from
---------------------------- --------------------
Sept. 30, June 30, Sept. 30, Sept. 30, June 30,
(Dollars in
thousands) 2006 2007 2007 2006 2007
------------------- --------- -------- --------- ----------- --------
Service charges on
deposit accounts $ 79,083 $ 77,218 $ 76,210 (3.63)% (1.31)%
Trust and
investment
management fees 47,555 51,585 51,262 7.80 (0.63)
Trading account
activities 14,311 13,838 21,795 52.30 57.50
Insurance
commissions 17,301 16,501 15,988 (7.59) (3.11)
Brokerage
commissions and
fees 8,531 9,533 10,476 22.80 9.89
Merchant banking
fees 11,655 8,809 10,031 (13.93) 13.87
Card processing
fees, net 7,241 7,824 7,785 7.51 (0.50)
Securities gains,
net 43 230 171 nm (25.65)
Gain on private
capital
investments, net 7,681 20,171 12,203 58.87 (39.50)
Other 23,854 24,136 29,811 24.97 23.51
--------- -------- ---------
Total noninterest
income $217,255 $229,845 $235,732 8.50 % 2.56 %
========= ======== =========
Noninterest expense (Unaudited)
Percentage Change
to
September 30, 2007
For the Three Months Ended from
---------------------------- --------------------
Sept. 30, June 30, Sept. 30, Sept. 30, June 30,
(Dollars in
thousands) 2006 2007 2007 2006 2007
------------------- --------- -------- --------- ----------- --------
Salaries and other
compensation $200,591 $206,110 $203,914 1.66 % (1.07)%
Employee benefits 44,022 45,320 32,661 (25.81) (27.93)
--------- -------- ---------
Salaries and
employee benefits 244,613 251,430 236,575 (3.29) (5.91)
Net occupancy 35,753 35,244 39,017 9.13 10.71
Outside services 31,890 18,851 21,394 (32.91) 13.49
Professional
services 12,169 11,970 18,162 49.25 51.73
Equipment 17,387 16,367 15,964 (8.18) (2.46)
Software 15,334 15,136 15,325 (0.06) 1.25
Advertising and
public relations 11,726 10,476 10,339 (11.83) (1.31)
Communications 9,942 8,855 9,965 0.23 12.54
Data processing 7,933 8,626 8,152 2.76 (5.50)
Intangible asset
amortization 3,427 2,243 2,243 (34.55) 0.00
Foreclosed asset
expense (income) (183) 9 37 nm nm
Provision for
losses on off-
balance sheet
commitments - - 4,000 nm nm
Other 27,030 32,658 27,247 0.80 (16.57)
--------- -------- ---------
Total noninterest
expense $417,021 $411,865 $408,420 (2.06)% (0.84)%
========= ======== =========
UnionBanCal Corporation and Subsidiaries
Noninterest income (Unaudited)
Exhibit 10
Percentage
Change to
For the Nine Months September
Ended 30, 2007
from
---------------------- -----------
Sept. 30, Sept. 30, Sept. 30,
(Dollars in thousands) 2006 2007 2006
---------------------------------- ----------- ---------- -----------
Service charges on deposit
accounts $ 242,555 $ 228,373 (5.85)%
Trust and investment management
fees 146,050 151,407 3.67
Insurance commissions 54,571 52,739 (3.36)
Trading account activities 41,495 50,473 21.64
Brokerage commissions and fees 26,656 29,669 11.30
Merchant banking fees 28,280 27,917 (1.28)
Card processing fees, net 21,144 22,736 7.53
Securities gains, net 1,822 1,621 (11.03)
Gain on private capital
investments, net 14,210 41,469 nm
Other 77,610 81,731 5.31
----------- ----------
Total noninterest income $ 654,393 $ 688,135 5.16 %
=========== ==========
Noninterest expense (Unaudited)
Percentage
Change to
September
For the Nine Months 30, 2007
Ended from
---------------------- -----------
Sept. 30, Sept. 30, Sept. 30,
(Dollars in thousands) 2006 2007 2006
---------------------------------- ----------- ---------- -----------
Salaries and other compensation $ 596,539 $ 617,681 3.54 %
Employee benefits 149,206 128,839 (13.65)
----------- ----------
Salaries and employee benefits 745,745 746,520 0.10
Net occupancy 103,109 109,398 6.10
Outside services 91,203 60,081 (34.12)
Equipment 52,155 48,885 (6.27)
Professional services 43,754 47,219 7.92
Software 47,001 44,657 (4.99)
Advertising and public relations 33,228 29,204 (12.11)
Communications 30,555 28,611 (6.36)
Data processing 23,175 25,019 7.96
Intangible asset amortization 10,284 6,729 (34.57)
Foreclosed asset expense (income) (15,332) 55 nm
(Reversal of) provision for
allowance for losses on off-
balance sheet commitments (7,000) 5,000 nm
Other 86,718 90,998 4.94
----------- ----------
Total noninterest expense $1,244,595 $1,242,376 (0.18)%
=========== ==========
UnionBanCal Corporation and Subsidiaries
Footnotes
Exhibit 11
- ----------------------------------------------------------------------
(1) Taxable-equivalent basis.
(2) Dividends per share reflect dividends declared on UnionBanCal
Corporation's common stock outstanding as of the declaration
date.
(3) Common shares outstanding reflect common shares issued less
treasury shares. Weighted average common shares outstanding
(basic) excludes nonvested restricted shares but includes the
impact of those shares in the calculation of diluted shares.
(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 calculated for continuing operations only.
(8) Estimated as of September 30, 2007. The regulatory capital and
leverage ratios 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 and loans held for sale. 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 Federal 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)