MUFG Americas Holdings Corp - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 28, 2010

Attached files

file filename
8-K - UNIONBANCAL CORPORATION 8-K - MUFG Americas Holdings Corpa6158456.htm

Exhibit 99.1

UnionBanCal Corporation Reports Fourth Quarter Net Income of $42 Million

Fourth Quarter Highlights:

  • Fourth quarter net income was $42 million. Results included after-tax net expenses of $14 million related to the November 2008 privatization of UnionBanCal Corporation.
  • Fourth quarter revenue was up 3 percent year-over-year and up 2 percent compared with third quarter 2009.
  • Fourth quarter net interest income was up 3 percent year-over-year and up 3 percent compared with third quarter 2009.
  • Fourth quarter average total loans decreased 2 percent year-over-year and decreased 2 percent versus third quarter 2009.
  • Fourth quarter average core deposits were up 64 percent year-over-year and up 11 percent versus third quarter 2009.
  • Fourth quarter net interest margin was 3.06 percent, down 80 basis points year-over-year and down 25 basis points versus third quarter 2009.
  • Fourth quarter annualized average all-in cost of funds was 0.72 percent, compared with 1.51 percent in fourth quarter 2008 and 0.79 percent in third quarter 2009.
  • Fourth quarter asset quality metrics:
    • Total provision for credit losses was $195 million, while net loans charged-off were $95 million, or 0.79 percent annualized, of average total loans.
    • Net loans charged-off on the $16.7 billion residential mortgage portfolio were $11 million, or 0.26 percent annualized, in fourth quarter 2009.
    • Nonperforming assets were $1.3 billion, or 1.58 percent of total assets, at quarter-end.
    • Allowance for credit losses to nonaccrual loans was 116 percent at quarter-end. Allowance for credit losses to total loans was 3.25 percent at quarter-end.
  • Capital:
    • Total stockholder’s equity was $9.6 billion at December 31, 2009.
    • Tangible common equity ratio was 8.29 percent at December 31, 2009, versus 8.94 percent at September 30, 2009.
    • Tier 1 common capital ratio was 11.80 percent at December 31, 2009, versus 11.58 percent at September 30, 2009.
    • Tier 1 risk-based capital ratio was 11.82 percent at December 31, 2009, versus 11.60 percent at September 30, 2009.

Full Year Highlights

  • Total revenue was up 5 percent compared with 2008.
    • Net interest income increased 10 percent, while noninterest income decreased 6 percent.
  • Average total loans were up 6 percent compared with 2008.
  • Average total deposits were up 31 percent compared with 2008.

SAN FRANCISCO--(BUSINESS WIRE)--January 28, 2010--UnionBanCal Corporation (the Company or UB) today reported fourth quarter 2009 net income of $42 million, compared with net loss of $86 million a year earlier, and net loss of $17 million in third quarter 2009. Total provision for credit losses was $195 million in fourth quarter 2009, compared with $245 million a year earlier, and $320 million in third quarter 2009. Fourth quarter 2009 net income included after-tax net expenses of $14 million due to the privatization transaction. Fourth quarter 2008 net loss included after-tax net expenses of $77 million due to the privatization transaction. Third quarter 2009 net loss included after-tax net expenses of $11 million due to the privatization transaction. Mitsubishi UFJ Financial Group, Inc. (MUFG), through its wholly-owned subsidiary, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), completed its acquisition of all of the outstanding shares of the Company’s common stock (the “privatization transaction”), on November 4, 2008.

For full year 2009, net loss was $65 million, compared with net income of $269 million for full year 2008. Total provision for credit losses was $1,165 million for full year 2009, compared with $550 million for full year 2008. Net loss for full year 2009 included after-tax net expenses of $59 million due to the privatization transaction and a one-time FDIC assessment of $21 million (after-tax). Net income for full year 2008 included after-tax net expenses of $83 million due to the privatization transaction.

Summary of Fourth Quarter Results

Fourth Quarter Total Revenue

For fourth quarter 2009, total revenue (taxable-equivalent net interest income plus noninterest income) was $766 million, up 3 percent compared with fourth quarter 2008. Net interest income increased 3 percent and noninterest income increased 4 percent. Fourth quarter 2009 net interest income included $23 million of accretion related to fair value adjustments due to the privatization transaction, compared with $12 million for fourth quarter 2008. Average total loans decreased $1.1 billion, or 2 percent; average interest bearing deposits increased $19.7 billion, or 63 percent; and average noninterest bearing deposits increased $1.9 billion, or 15 percent. The strong growth in total deposits reflects successful deposit-gathering marketing initiatives in both the retail and commercial lines of business, as well as significant increases in money market account deposits from institutional custody and escrow clients. The net interest margin in fourth quarter 2009 was 3.06 percent, a decrease of 80 basis points compared with fourth quarter 2008, primarily due to a substantial increase in lower yielding assets, particularly interest bearing deposits in banks and available for sale securities, as deposit growth far outpaced loan growth.

Average noninterest bearing deposits represented 22.5 percent of average total deposits in fourth quarter 2009, compared with 29.2 percent in fourth quarter 2008. The annualized average all-in cost of funds was 0.72 percent, compared with 1.51 percent in fourth quarter 2008. The Company’s average core deposit-to-loan ratio was 120.8 percent in fourth quarter 2009, compared with 72.1 percent in fourth quarter 2008.

Compared with third quarter 2009, total revenue increased 2 percent, with net interest income up 3 percent and noninterest income flat. Average total loans decreased $0.9 billion, or 2 percent; average interest bearing deposits increased $5.9 billion, or 13 percent; and average noninterest bearing deposits increased $0.3 billion, or 2 percent. The net interest margin decreased 25 basis points compared with third quarter 2009.

Fourth Quarter Noninterest Income and Noninterest Expense

For fourth quarter 2009, noninterest income was $185 million, up $6 million, or 4 percent, from the same quarter a year ago. Trust and investment management fees decreased $5 million, primarily due to lower yields on mutual fund assets. Fees from trading account activities increased $10 million, primarily due to higher trading activity and lower provisions for losses on derivatives. Securities gains (losses), net, increased $12 million, primarily due to a gain on the sale of securities in fourth quarter 2009. Gains (losses) on private capital investments, net, decreased $13 million, primarily due to impairment charges on investments recorded in fourth quarter 2009.

Noninterest income was flat compared with third quarter 2009. Fees from trading account activities increased $14 million, primarily due to lower provisions for losses on derivatives. Gains (losses) on private capital investments, net, decreased $10 million, primarily due to impairment charges on investments recorded in fourth quarter 2009. Gains on the sale of securities of approximately the same magnitude were recorded in both periods.

Noninterest expense for fourth quarter 2009 was $529 million, a decrease of $101 million, or 16 percent, compared with fourth quarter 2008. The decrease was primarily due to lower expenses related to the privatization transaction of $84 million, primarily classified in privatization-related expense and intangible asset amortization expense. Other noninterest expense decreased $37 million, primarily due to legal settlement costs recorded in fourth quarter 2008. Offsetting these decreases was higher regulatory agencies expense of $24 million, which increased primarily due to an industry-wide increase in the FDIC assessment rate, effective January 1, 2009, and an increase in insured deposits. The provision for off-balance sheet losses was $4 million, down $10 million compared with fourth quarter 2008.

Noninterest expense for fourth quarter 2009 increased $23 million, or 5 percent, compared with third quarter 2009. Salaries and employee benefits expense increased $27 million, or 12 percent, primarily due to higher accruals for incentive compensation. Net occupancy expense decreased $4 million, or 10 percent, primarily due to a one-time adjustment for accrual of rent expense recorded in fourth quarter 2009. The provision for off-balance sheet losses decreased $2 million compared with third quarter 2009.

Full Year Results

For full year 2009, net loss was $65 million, compared with net income of $269 million for full year 2008. The decline in net income was primarily due to an increase in total provision for credit losses of $373 million after-tax and an increase in regulatory agencies expense of $67 million after-tax, which included a one-time FDIC assessment of $21 million after-tax, partially offset by a decrease in net expenses related to the privatization transaction of $24 million after-tax.

Total revenue for full year 2009 was $3.0 billion, an increase of $154 million, or 5 percent, over full year 2008. Net interest income increased $200 million, or 10 percent, and noninterest income decreased $46 million, or 6 percent. Net interest income for full year 2009 included $108 million of accretion related to fair value adjustments due to the privatization transaction. Noninterest expense increased $192 million, or 10 percent, primarily due to a $78 million increase in expense related to the privatization transaction, primarily classified in privatization-related expense and intangible asset amortization expense. In addition, regulatory agencies expense increased $110 million, primarily due to a one-time FDIC assessment of $34 million, recorded in second quarter 2009, an industry-wide increase in the FDIC assessment rate, effective January 1, 2009, and an increase in insured deposits, bringing total FDIC-related expense to $126 million for full year 2009. The provision for off-balance sheet losses was $51 million for full year 2009, compared with $35 million for full year 2008.

Balance Sheet

At December 31, 2009, the Company had total assets of $86 billion, up $15.5 billion, or 22 percent, compared with December 31, 2008. Total loans were $47.2 billion, down $2.4 billion, or 5 percent, compared with December 31, 2008. Securities available for sale were $22.6 billion, up $14.4 billion, or 175 percent, as deposit growth far outpaced loan growth.

At December 31, 2009, the Company had total liabilities of $76 billion, up $13.4 billion, or 21 percent, compared with December 31, 2008. Total deposits were $68.5 billion, up $22.5 billion, or 49 percent. Core deposits at period-end were $61 billion, resulting in a core deposit-to-loan ratio of 129 percent.

Credit Quality

Nonperforming assets at December 31, 2009, were $1.35 billion, or 1.58 percent of total assets. This compares with $1.37 billion, or 1.75 percent of total assets, at September 30, 2009, and $437 million, or 0.62 percent of total assets, at December 31, 2008. The increase in nonperforming assets compared with December 31, 2008, was primarily due to higher levels of nonaccrual loans in all categories, reflecting weak economic conditions, and a previously-disclosed change in accounting policy for residential and home equity loans 90 days or more past due, which accounted for $225 million of the increase. Higher levels of nonaccrual loans in the commercial mortgage and residential mortgage categories were offset by lower levels of nonaccrual loans in the commercial, financial and industrial and construction categories.

For fourth quarter 2009, the total provision for credit losses was $195 million, down from $320 million for third quarter 2009. Net loans charged-off were $95 million, or 0.79 percent annualized, of average total loans, down from $136 million, or 1.11 percent annualized, of average total loans for third quarter 2009. For fourth quarter 2008, the total provision for credit losses was $245 million and net loans charged-off were $65 million, or 0.52 percent annualized, of average total loans. For full year 2009, the total provision for credit losses was $1.2 billion and net loans charged-off were $499 million, or 1.02 percent annualized, of average total loans.

For full year 2009, net loans charged-off on the commercial, financial and industrial portfolio were $277 million; net loans charged-off on the construction portfolio were $68 million; net loans charged-off on the commercial mortgage portfolio were $73 million; and net loans charged-off on the consumer portfolio were $41 million. Net loans charged-off on the residential mortgage portfolio, which averaged over $16 billion outstanding for the full year, were $40 million.

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. In fourth quarter 2009, the provision for loan losses was $191 million, the provision for losses on off-balance sheet commitments was $4 million, and the total provision for credit losses was $195 million. For full year 2009, the provision for loan losses was $1,114 million, the provision for losses on off-balance sheet commitments was $51 million, and the total provision for credit losses was $1,165 million.

At December 31, 2009, the allowance for credit losses as a percent of total loans and as a percent of nonaccrual loans was 3.25 percent and 116 percent, respectively. Since January 1, 2009, the allowance for credit losses has increased from $863 million to $1,533 million, as total provision for credit losses has exceeded net loans charged-off by $666 million during the year.

Capital

Total stockholder’s equity was $9.6 billion at December 31, 2009, and tangible common equity was $6.9 billion. The Company’s tangible common equity ratio was 8.29 percent at December 31, 2009, compared with 8.94 percent at September 30, 2009. The Tier 1 common capital ratio at December 31, 2009, was 11.80 percent, compared with 11.58 percent at September 30, 2009. The Company’s Tier 1 and total risk-based capital ratios at December 31, 2009, were 11.82 percent and 14.54 percent, respectively.

Non-GAAP Financial Measures

This press release contains certain references to financial measures identified as excluding privatization transaction expenses, 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 are unusual and substantial costs, 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. 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.

Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $86 billion at December 31, 2009. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank has 340 banking offices in California, Oregon, Washington and Texas and two international offices. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG) (NYSE:MTU), one of the world’s largest financial organizations. Visit www.unionbank.com for more information.

UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)

Exhibit 1

 

        Percent Change to
As of and for the Three Months Ended December 31, 2009 from
December 31, September 30, December 31, December 31,   September 30,
(Dollars in thousands)

2008 (1)

2009 (1)

2009 (1)

2008

  2009
Results of operations:

Net interest income (2)

$ 562,373 $ 564,296 $ 580,412 3.21 % 2.86 %
Noninterest income   178,913     183,929     185,286   3.56 % 0.74 %
Total revenue 741,286 748,225 765,698 3.29 % 2.34 %
Noninterest expense 630,366 505,815 529,245 (16.04 %) 4.63 %
Provision for loan losses   231,000     314,000     191,000   (17.32 %) (39.17 %)
Income (loss) from continuing operations
before income taxes (2) (120,080 ) (71,590 ) 45,453 nm nm
Taxable-equivalent adjustment 2,407 3,260 2,685 11.55 % (17.64 %)
Income tax expense (benefit)   (39,625 )   (57,821 )   885   nm nm
Income (loss) from continuing operations (82,862 ) (17,029 ) 41,883 nm nm
Loss from discontinued operations   (3,018 )   -     -   (100.00 %) -
Net income (loss) $ (85,880 ) $ (17,029 ) $ 41,883   nm nm
 
 
Balance sheet (end of period):
Total assets (3) $ 70,121,390 $ 78,153,207 $ 85,598,128 22.07 % 9.53 %
Total loans 49,585,550 48,169,508 47,228,508 (4.75 %) (1.95 %)
Nonperforming assets 436,515 1,367,691 1,349,793 nm (1.31 %)
Total deposits 46,049,769 60,691,368 68,517,653 48.79 % 12.90 %
Medium- and long-term debt 4,288,488 5,121,553 4,212,184 (1.78 %) (17.76 %)
Stockholder's equity 7,484,305 9,475,004 9,580,333 28.01 % 1.11 %
 
Balance sheet (period average):
Total assets $ 66,521,518 $ 74,352,649 $ 81,964,956 23.22 % 10.24 %
Total loans 49,012,819 48,764,826 47,871,715 (2.33 %) (1.83 %)
Earning assets 58,137,210 68,235,083 75,800,728 30.38 % 11.09 %
Total deposits 44,060,607 59,453,936 65,697,920 49.11 % 10.50 %
Stockholder's equity 6,748,937 7,358,773 9,405,635 39.36 % 27.82 %
 
Financial ratios (4):
Return on average assets (5):
From continuing operations (0.50 %) (0.09 %) 0.20 %
Net income (loss) (0.51 %) (0.09 %) 0.20 %
Return on average stockholder's equity (5):
From continuing operations (4.88 %) (0.92 %) 1.77 %
Net income (loss) (5.06 %) (0.92 %) 1.77 %
Efficiency ratio (6) 81.58 % 65.07 % 66.36 %
Net interest margin (2) 3.86 % 3.31 % 3.06 %
Tangible common equity ratio (7) 6.96 % 8.94 % 8.29 %

Tier 1 common capital ratio (8)(9)

8.76 % 11.58 % 11.80 %
Tier 1 risk-based capital ratio (3) (9) 8.78 % 11.60 % 11.82 %
Total risk-based capital ratio (3) (9) 11.63 % 14.42 % 14.54 %
Leverage ratio (3) (9) 8.42 % 10.39 % 9.45 %
Allowance for loan losses to:
Total loans 1.49 % 2.62 % 2.87 %
Nonaccrual loans 177.79 % 95.15 % 103.03 %

Allowances for credit losses to (10):

Total loans 1.74 % 2.97 % 3.25 %
Nonaccrual loans 208.01 % 108.16 % 116.42 %

Net loans charged off to average total loans (5)

0.52 % 1.11 % 0.79 %

Nonperforming assets to total loans, foreclosed assets and distressed loans held for sale

0.88 % 2.84 % 2.86 %
Nonperforming assets to total assets (3) 0.62 % 1.75 % 1.58 %

Selected financial ratios excluding impact of privatization transaction (4) (15):

From continuing operations:
Return on average assets (5) (0.04 %) (0.03 %) 0.28 %
Return on average stockholder's equity (5) (0.54 %) (0.45 %) 3.15 %
Efficiency ratio (6) 65.30 % 60.36 % 62.29 %
 
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)

Exhibit 2

        Percent Change to
As of and for the Twelve Months Ended December 31, 2009 from
December 31, December 31, December 31,
(Dollars in thousands, except per share data)

2008 (1)

2009 (1)

2008

Results of operations:
Net interest income (2) $ 2,060,660 $ 2,260,422 9.69 %
Noninterest income   772,656     727,144   (5.89 %)
Total revenue 2,833,316 2,987,566 5.44 %
Noninterest expense 1,896,696 2,088,501 10.11 %
Provision for loan losses   515,000     1,114,000   nm

Income (loss) from continuing operations before income taxes (2)

421,620 (214,935 ) nm
Taxable-equivalent adjustment 9,812 11,310 15.27 %
Income tax expense (benefit)   127,868     (161,284 ) nm
Income (loss) from continuing operations 283,940 (64,961 ) nm
Loss from discontinued operations   (15,055 )   -   (100.00 %)
Net income (loss) $ 268,885   $ (64,961 ) nm
 
 
Balance sheet (end of period):
Total assets (3) $ 70,121,390 $ 85,598,128 22.07 %
Total loans 49,585,550 47,228,508 (4.75 %)
Nonperforming assets 436,515 1,349,793 nm
Total deposits 46,049,769 68,517,653 48.79 %
Medium- and long-term debt 4,288,488 4,212,184 (1.78 %)
Stockholder's equity 7,484,305 9,580,333 28.01 %
 
Balance sheet (period average):
Total assets $ 60,908,355 $ 73,766,090 21.11 %
Total loans 46,112,105 48,989,567 6.24 %
Earning assets 55,556,063 67,418,580 21.35 %
Total deposits 43,133,196 56,594,591 31.21 %
Stockholder's equity 5,170,795 7,855,190 51.91 %
 
Financial ratios (4):
Return on average assets (5):
From continuing operations 0.47 % (0.09 %)
Net income (loss) 0.44 % (0.09 %)
Return on average stockholder's equity (5):
From continuing operations 5.49 % (0.83 %)
Net income (loss) 5.20 % (0.83 %)
Efficiency ratio (6) 64.24 % 66.34 %
Net interest margin (2) 3.71 % 3.35 %
Tangible common equity ratio (7) 6.96 % 8.29 %

Tier 1 common capital ratio (8) (9)

8.76 % 11.80 %
Tier 1 risk-based capital ratio (3) (9) 8.78 % 11.82 %
Total risk-based capital ratio (3) (9) 11.63 % 14.54 %
Leverage ratio (3) (9) 8.42 % 9.45 %
Allowance for loan losses to:
Total loans 1.49 % 2.87 %
Nonaccrual loans 177.79 % 103.03 %
Allowances for credit losses to (10) :
Total loans 1.74 % 3.25 %
Nonaccrual loans 208.01 % 116.42 %

Net loans charged off to average total loans (5)

0.37 % 1.02 %

Nonperforming assets to total loans, foreclosed assets and distressed loans held for sale

0.88 % 2.86 %
Nonperforming assets to total assets (3) 0.62 % 1.58 %

Selected financial ratios excluding impact of privatization transaction (4) (15):

From continuing operations:
Return on average assets (5) 0.61 % (0.01 %)
Return on average stockholder's equity (5) 8.04 % (0.11 %)
Efficiency ratio (6) 59.74 % 61.44 %
 
Refer to Exhibit 12 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 Twelve Months Ended
December 31,   September 30,   December 31, December 31,
(Amounts in thousands)

2008 (1)

2009 (1)

2009 (1)

2008 (1)

 

2009 (1)

Interest Income (2)
Loans $ 667,373 $ 578,514 $ 559,350 $ 2,557,105 $ 2,328,821
Securities 112,422 110,170 144,982 417,464 457,187
Interest bearing deposits in banks 71

4,956

4,043 574 13,449
Federal funds sold and securities purchased under resale agreements 899 110 23 6,472 371
Trading account assets   527     271     434     5,814     1,094  
Total interest income   781,292     694,021     708,832     2,987,429     2,800,922  
 
Interest Expense
Deposits 138,142 101,374 101,703 639,047 408,301
Federal funds purchased and securities sold under repurchase agreements 3,473 41 24 47,875 137
Commercial paper 5,640 355 194 31,767 3,095
Other borrowed funds 37,135 604 613 107,698 18,310
Medium- and long-term debt 34,291 27,112 25,648 99,429 109,704
Trust notes   238     239     238     953     953  
Total interest expense   218,919     129,725     128,420     926,769     540,500  
 
Net Interest Income (2) 562,373 564,296 580,412 2,060,660 2,260,422
Provision for loan losses   231,000     314,000     191,000     515,000     1,114,000  
Net interest income after provision for loan losses   331,373     250,296     389,412     1,545,660     1,146,422  
 
Noninterest Income
Service charges on deposit accounts 73,444 74,888 72,711 302,965 290,764
Trust and investment management fees 37,427 34,506 32,454 165,255 134,997
Trading account activities 14,434 10,513 24,134 54,530 73,590
Merchant banking fees 13,879 14,601 16,295 49,546 64,652
Brokerage commissions and fees 8,877 8,611 8,160 38,891 33,584
Card processing fees, net 7,493 8,559 8,293 31,553 32,512
Securities gains (losses), net (4 ) 12,694 11,759 44 24,281
Other   23,363     19,557     11,480     129,872     72,764  
Total noninterest income   178,913     183,929     185,286     772,656     727,144  
 
Noninterest Expense
Salaries and employee benefits 254,983 233,981 261,055 978,081 971,656
Net occupancy 41,558 43,146 38,793 154,566 167,082
Intangible asset amortization 42,924 40,641 40,101 44,935 161,910
Regulatory agencies 7,893 30,739 32,103 23,971 133,616
Outside services 20,888 22,219 25,288 78,933 89,289
Professional services 23,122 17,647 16,981 70,886 70,055
Equipment 16,646 17,838 16,383 61,571 66,236
Software 16,432 16,502 17,205 60,448 62,950
Foreclosed asset expense (income) 323 (144 ) 2,315 1,019 6,339
Provision for losses on off-balance sheet commitments 14,000 6,000 4,000 35,000 51,000
Privatization-related expense 84,312 6,649 4,981 90,505 45,882
Other   107,285     70,597     70,040     296,781     262,486  
Total noninterest expense   630,366     505,815     529,245     1,896,696     2,088,501  
 
Income (loss) from continuing operations before income taxes (2) (120,080 ) (71,590 ) 45,453 421,620 (214,935 )
Taxable-equivalent adjustment 2,407 3,260 2,685 9,812 11,310
Income tax expense (benefit)   (39,625 )   (57,821 )   885     127,868     (161,284 )
Income (Loss) from Continuing Operations   (82,862 )   (17,029 )   41,883     283,940     (64,961 )
 
Loss from discontinued operations before income taxes (4,676 ) - - (27,368 ) -
Income tax benefit   (1,658 )   -     -     (12,313 )   -  
Loss from Discontinued Operations   (3,018 )   -     -     (15,055 )   -  
Net Income (Loss) $ (85,880 ) $ (17,029 ) $ 41,883   $ 268,885   $ (64,961 )
     
Refer to Exhibit 12 for footnote explanations.
 

UnionBanCal Corporation and Subsidiaries

Consolidated Balance Sheets

Exhibit 4

          (Unaudited)
December 31, December 31,
(Dollars in thousands)

2008 (1)

2009 (1)

Assets
Cash and due from banks $ 1,568,578 $ 1,198,258
Interest bearing deposits in banks 2,872,698 6,585,029
Federal funds sold and securities purchased under resale agreements   63,069     442,552  
Total cash and cash equivalents 4,504,345 8,225,839
Trading account assets:
Pledged as collateral 6,283 15,168
Held in portfolio 1,210,496 710,480
Securities available for sale:
Pledged as collateral 54,525 2,500
Held in portfolio 8,140,013 22,556,329
Securities held to maturity (Fair value: 2009, $1,457,558) - 1,227,718

Loans (net of allowance for credit losses: 2008, $737,767; 2009, $1,357,000)

48,847,783 45,871,508
Due from customers on acceptances 23,131 8,514
Premises and equipment, net 680,004 674,298
Intangible assets, net 713,485 561,040
Goodwill 2,369,326 2,369,326
Other assets 3,571,995 3,375,408
Assets of discontinued operations to be disposed or sold   4     -  
Total assets $ 70,121,390   $ 85,598,128  
 
Liabilities
Noninterest bearing $ 13,566,873 $ 14,558,989
Interest bearing   32,482,896     53,958,664  
Total deposits 46,049,769 68,517,653
Federal funds purchased and securities sold under repurchase agreements 172,758 150,453
Commercial paper 1,164,327 888,541
Other borrowed funds 8,196,597 591,934
Trading account liabilities 1,034,663 538,894
Acceptances outstanding 23,131 8,514
Other liabilities 1,685,412 1,096,095
Medium- and long-term debt 4,288,488 4,212,184
Junior subordinated debt payable to subsidiary grantor trust 13,980 13,527
Liabilities of discontinued operations to be extinguished or assumed   7,960     -  
Total liabilities   62,637,085     76,017,795  
 
 
 
Stockholder's Equity
Preferred stock:

Authorized 5,000,000 shares, no shares issued or outstanding at December 31, 2008 and 2009

- -
Common stock, par value $1 per share:

Authorized 300,000,000 shares, issued 136,330,829 shares in 2008 and 2009

136,331 136,331
Additional paid-in capital 3,195,023 5,195,023
Retained earnings 4,964,802 4,899,841
Accumulated other comprehensive loss   (811,851 )   (650,862 )
Total stockholder's equity   7,484,305     9,580,333  
  Total liabilities and stockholder's equity $ 70,121,390   $ 85,598,128  
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
Loans and Allowance for Credit Losses (Unaudited)

Exhibit 5

                     
Percent Change to
Three Months Ended December 31, 2009 from
December 31, September 30, December 31, December 31,   September 30,
(Dollars in millions)    

2008 (1)

2009 (1)

2009 (1)

2008 (1)

2009

 
Loans (period average)
Commercial, financial and industrial $ 18,297 $ 16,804 $ 15,761 (13.86 %) (6.21 %)
Construction 2,686 2,773 2,591 (3.54 %) (6.56 %)
Mortgage - Commercial 8,087 8,261 8,268 2.24 % 0.08 %
Mortgage - Residential 15,698 16,372 16,670 6.19 % 1.82 %
Consumer 3,589 3,883 3,912 9.00 % 0.75 %
Lease financing   648     662     664   2.47 % 0.30 %
 
Total loans held to maturity 49,005 48,755 47,866 (2.32 %) (1.82 %)
Total loans held for sale   8     10     6   (28.17 %) -
 
Total loans $ 49,013   $ 48,765   $ 47,872   (2.33 %) (1.83 %)
 
Nonperforming Assets (period end)
Nonaccrual loans:
Commercial, financial and industrial $ 260 $ 380 $ 336 29.23 % (11.58 %)
Construction 99 388 335 nm (13.66 %)
Mortgage - Commercial 56 355 414 nm 16.62 %
Mortgage - Residential (11) - 165 194 nm 17.58 %
Consumer (11) - 21 21 nm 0.00 %
Restructured - nonaccrual (11) - 16 17 nm 6.25 %
     
Total nonaccrual loans 415 1,325 1,317 nm (0.60 %)
 
Restructured loans - nonperforming 1 - - (100.00 %) -
Distressed loans held for sale - 9 - - (100.00 %)
Foreclosed assets   21     34     33   57.14 % (2.94 %)
 
Total nonperforming assets $ 437   $ 1,368   $ 1,350   nm (1.32 %)

Loans 90 days or more past due and still accruing

$ 71   $ 5   $ 5   (92.96 %) 0.00 %
Restructured loans that are still accruing $ -   $ 2   $ 4   nm 100.00 %
 
Analysis of Allowances for Credit Losses
Beginning balance $ 581 $ 1,082 $ 1,261
 
Provision for loan losses 231 314 191
 
Loans charged off:
Commercial, financial and industrial (49 ) (78 ) (46 )
Construction (7 ) (14 ) (31 )
Mortgage - Commercial - (26 ) (19 )
Mortgage - Residential (3 ) (14 ) (11 )
Consumer   (8 )   (11 )   (10 )
Total loans charged off   (67 )   (143 )   (117 )
 
Loans recovered:
Commercial, financial and industrial 1 6 21
Construction 1 - 1
Consumer   -     1     -  
Total loans recovered   2     7     22  
Net loans recovered (charged off)   (65 )   (136 )   (95 )
 
Adjustment for impaired loans related to privatization (8 ) - -
Foreign translation adjustment   (1 )   1     -  
Ending balance of allowance for loan losses 738 1,261 1,357

Allowance for off-balance sheet commitment losses

  125     172     176  
Allowances for credit losses $ 863   $ 1,433   $ 1,533  
               
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)

Exhibit 6

               
For the Three Months Ended
December 31, 2008 (1) December 31, 2009 (1)
  Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
(Dollars in thousands) Balance Expense (2) Rate (2)(5)   Balance Expense (2) Rate (2)(5)  
Assets
Loans: (12)
Commercial, financial and industrial $ 18,300,686 $ 239,664 5.21 % $ 15,761,679 $ 175,967 4.43 %
Construction 2,686,102 32,259 4.78 2,591,025 19,556 2.99
Residential mortgage 15,701,726 226,053 5.76 16,675,231 229,979 5.52
Commercial mortgage 8,086,680 111,154 5.50 8,268,335 87,166 4.22
Consumer 3,588,873 53,231 5.90 3,911,899 44,100 4.47
Lease financing   648,752     5,012   3.09   663,546     2,582 1.56
Total loans 49,012,819 667,373 5.43 47,871,715 559,350 4.66
Securities - taxable 7,927,236 111,370 5.62 20,186,074 143,992 2.85
Securities - tax-exempt 52,118 1,052 8.07 44,780 990 8.85
Interest bearing deposits in banks 6,764 71 4.20 6,662,211 4,043 0.24

Federal funds sold and securities purchased under resale agreements

122,640 899 2.92 144,599 23 0.06
Trading account assets   1,015,633     527   0.21   891,349     434 0.19
Total earning assets 58,137,210   781,292   5.36 75,800,728   708,832 3.73
Allowance for loan losses (551,627 ) (1,237,014 )
Cash and due from banks 2,775,154 1,257,857
Premises and equipment, net 668,628 673,721
Other assets   5,492,153     5,469,664  
Total assets $ 66,521,518   $ 81,964,956  
Liabilities
Deposits:
Transaction accounts $ 18,277,265 71,731 1.56 $ 37,759,339 74,193 0.78
Savings and consumer time 4,185,219 15,591 1.48 5,280,596 14,422 1.08
Large time   8,718,514     50,820   2.32   7,867,984     13,088 0.66
Total interest bearing deposits   31,180,998     138,142   1.76   50,907,919     101,703 0.79

Federal funds purchased and securities sold under repurchase agreements

1,183,014 3,437 1.16 137,133 24 0.07

Net funding allocated from (to) discontinued operations (13)

9,149 36 1.57 - - -
Commercial paper 1,151,296 5,640 1.95 386,067 194 0.20
Other borrowed funds (14) 7,496,938 37,135 1.97 313,747 613 0.78
Medium- and long-term debt 3,871,749 34,291 3.52 4,481,900 25,648 2.27
Trust notes   14,035     238   6.79   13,582     238 7.02
Total borrowed funds   13,726,181     80,777   2.34   5,332,429     26,717 1.99
Total interest bearing liabilities 44,907,179   218,919   1.94 56,240,348   128,420 0.91
Noninterest bearing deposits 12,879,609 14,790,001
Other liabilities   1,985,793     1,528,972  
Total liabilities 59,772,581 72,559,321
Stockholder's Equity
Common equity   6,748,937     9,405,635  
Total stockholder's equity   6,748,937     9,405,635  

Total liabilities and stockholder's equity

$ 66,521,518   $ 81,964,956  
Reported Net Interest Income/Margin

Net interest income/margin (taxable-equivalent basis)

562,373 3.86 % 580,412 3.06 %
Less: taxable-equivalent adjustment   2,407     2,685
Net interest income $ 559,966   $ 577,727
                             
Average Assets and Liabilities of Discontinued Operations for Period Ended:
December 31, 2008 December 31, 2009
Assets $ 755 $ -
Liabilities $ 9,904 $ -
Net Liabilities $ (9,149 ) $ -
                             
       
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)

Exhibit 7

                 
For the Three Months Ended
September 30, 2009 (1) December 31, 2009 (1)
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
(Dollars in thousands) Balance Expense (2) Rate (2)(5)   Balance Expense (2) Rate (2)(5)  
Assets
Loans: (12)
Commercial, financial and industrial $ 16,805,449 $ 188,974 4.46 % $ 15,761,679 $ 175,967 4.43 %
Construction 2,772,804 20,828 2.98 2,591,025 19,556 2.99
Residential mortgage 16,380,014 230,210 5.62 16,675,231 229,979 5.52
Commercial mortgage 8,261,161 88,998 4.31 8,268,335 87,166 4.22
Consumer 3,882,929 44,042 4.50 3,911,899 44,100 4.47
Lease financing   662,469     5,462 3.30   663,546     2,582 1.56
Total loans 48,764,826 578,514 4.73 47,871,715 559,350 4.66
Securities - taxable 10,590,200 107,171 4.05 20,186,074 143,992 2.85
Securities - tax-exempt 184,772 2,999 6.49 44,780 990 8.85
Interest bearing deposits in banks 7,496,380 4,956 0.26 6,662,211 4,043 0.24

Federal funds sold and securities purchased under resale agreements

282,457 110 0.15 144,599 23 0.06
Trading account assets   916,448     271 0.12   891,349     434 0.19
Total earning assets 68,235,083   694,021 4.06 75,800,728   708,832 3.73
Allowance for loan losses (1,044,533 ) (1,237,014 )
Cash and due from banks 1,135,794 1,257,857
Premises and equipment, net 668,699 673,721
Other assets   5,357,606     5,469,664  
Total assets $ 74,352,649   $ 81,964,956  
Liabilities
Deposits:
Transaction accounts $ 33,064,944 72,837 0.87 $ 37,759,339 74,193 0.78
Savings and consumer time 4,486,545 12,572 1.11 5,280,596 14,422 1.08
Large time   7,430,960     15,965 0.85   7,867,984     13,088 0.66
Total interest bearing deposits   44,982,449     101,374 0.89   50,907,919     101,703 0.79

Federal funds purchased and securities sold under repurchase agreements

169,267 41 0.09 137,133 24 0.07
Commercial paper 472,246 355 0.30 386,067 194 0.20
Other borrowed funds (14) 262,441 604 0.91 313,747 613 0.78
Medium- and long-term debt 5,098,821 27,112 2.11 4,481,900 25,648 2.27
Trust notes   13,696     239 6.96   13,582     238 7.02
Total borrowed funds   6,016,471     28,351 1.87   5,332,429     26,717 1.99
Total interest bearing liabilities 50,998,920   129,725 1.01 56,240,348   128,420 0.91
Noninterest bearing deposits 14,471,487 14,790,001
Other liabilities   1,523,469     1,528,972  
Total liabilities 66,993,876 72,559,321
Stockholder's Equity
Common equity   7,358,773     9,405,635  
Total stockholder's equity   7,358,773     9,405,635  

Total liabilities and stockholder's equity

$ 74,352,649   $ 81,964,956  
Reported Net Interest Income/Margin

Net interest income/margin (taxable-equivalent basis)

564,296 3.31 % 580,412 3.06 %
Less: taxable-equivalent adjustment   3,260   2,685
Net interest income $ 561,036 $ 577,727
       
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)

Exhibit 8

                 
For the Twelve Months Ended
December 31, 2008 (1) December 31, 2009 (1)
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/

(Dollars in thousands)

Balance Expense (2) Rate (2)   Balance Expense (2) Rate (2)  
Assets
Loans: (12)
Commercial, financial and industrial $ 17,045,080 $ 936,956 5.50 % $ 17,239,150 $ 753,288 4.37 %
Construction 2,585,221 130,022 5.03 2,721,282 80,303 2.95
Residential mortgage 14,872,261 830,559 5.58 16,269,413 924,896 5.68
Commercial mortgage 7,793,422 447,662 5.74 8,259,400 370,242 4.48
Consumer 3,170,513 193,360 6.10 3,840,209 178,797 4.66
Lease financing   645,608     18,546   2.87   660,113     21,295 3.23
Total loans 46,112,105 2,557,105 5.55 48,989,567 2,328,821 4.75
Securities - taxable 8,230,740 413,180 5.02 11,943,958 451,157 3.78
Securities - tax-exempt 52,510 4,284 8.16 82,302 6,030 7.33
Interest bearing deposits in banks 29,352 574 1.96 5,168,329 13,449 0.26

Federal funds sold and securities purchased under resale agreements

256,281 6,472 2.53 206,853 371 0.18
Trading account assets   875,075     5,814   0.66   1,027,571     1,094 0.11
Total earning assets 55,556,063   2,987,429   5.38 67,418,580   2,800,922 4.15
Allowance for loan losses (478,661 ) (958,975 )
Cash and due from banks 1,951,761 1,248,226
Premises and equipment, net 527,943 671,599
Other assets   3,351,249     5,386,660  
Total assets $ 60,908,355   $ 73,766,090  
Liabilities
Deposits:
Transaction accounts $ 16,066,060 275,795 1.72 $ 30,757,333 274,676 0.89
Savings and consumer time 4,027,824 66,275 1.65 4,617,999 56,479 1.22
Large time   10,358,779     296,977   2.87   7,286,282     77,146 1.06
Total interest bearing deposits   30,452,663     639,047   2.10   42,661,614     408,301 0.96

Federal funds purchased and securities sold under repurchase agreements

2,137,718 47,065 2.20 180,087 137 0.08

Net funding allocated from (to) discontinued operations (13)

36,378 810 2.23 - - -
Commercial paper 1,319,360 31,767 2.41 536,170 3,095 0.58
Other borrowed funds (14) 4,425,435 107,698 2.43 1,928,245 18,310 0.95
Medium- and long-term debt 2,915,838 99,429 3.41 4,867,602 109,704 2.25
Trust notes   14,204     953   6.71   13,751     953 6.93
Total borrowed funds   10,848,933     287,722   2.65   7,525,855     132,199 1.76
Total interest bearing liabilities 41,301,596   926,769   2.24 50,187,469   540,500 1.08
Noninterest bearing deposits 12,680,533 13,932,977
Other liabilities   1,755,431     1,790,454  
Total liabilities 55,737,560 65,910,900
Stockholder's Equity
Common equity   5,170,795     7,855,190  
Total stockholder's equity   5,170,795     7,855,190  

Total liabilities and stockholder's equity

$ 60,908,355   $ 73,766,090  
Reported Net Interest Income/Margin

Net interest income/margin (taxable-equivalent basis)

2,060,660 3.71 % 2,260,422 3.35 %
Less: taxable-equivalent adjustment   9,812     11,310
Net interest income $ 2,050,848   $ 2,249,112
                               
Average Assets and Liabilities of Discontinued Operations for Period Ended:
December 31, 2008 December 31, 2009
Assets $ 56,130 $ -
Liabilities $ 92,508 $ -
Net Liabilities $ (36,378 ) $ -
                               
       
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
               
Noninterest income (Unaudited)

Exhibit 9

 
Percentage Change to
For the Three Months Ended December 31, 2009 from
December 31, September 30, December 31, December 31, September 30,
(Dollars in thousands)

2008 (1)

2009 (1)

2009 (1)

2008

2009
Service charges on deposit accounts $ 73,444 $ 74,888 $ 72,711 (1.00 ) % (2.91 ) %
Trust and investment management fees 37,427 34,506 32,454 (13.29 ) (5.95 )
Trading account activities 14,434 10,513 24,134 67.20 nm
Merchant banking fees 13,879 14,601 16,295 17.41 11.60
Securities gains (losses), net (4 ) 12,694 11,759 nm (7.37 )
Card processing fees, net 7,493 8,559 8,293 10.68 (3.11 )
Brokerage commissions and fees 8,877 8,611 8,160 (8.08 ) (5.24 )
Gains (losses) on private capital investments, net 3,750 (18 ) (9,519 ) nm nm
Other   19,613     19,575     20,999   7.07 7.27
Total noninterest income $ 178,913   $ 183,929   $ 185,286   3.56 % 0.74 %
 
 
Noninterest expense (Unaudited)
 
Percentage Change to

For the Three Months Ended

December 31, 2009 from
December 31, September 30, December 31, December 31, September 30,
(Dollars in thousands)

2008 (1)

2009 (1)

2009 (1)

2008 2009
Salaries and other compensation $ 209,800 $ 198,768 $ 220,789 5.24 % 11.08 %
Employee benefits   45,183     35,213     40,266   (10.88 ) 14.35
Salaries and employee benefits 254,983 233,981 261,055 2.38 11.57
Intangible asset amortization 42,924 40,641 40,101 (6.58 ) (1.33 )
Net occupancy 41,558 43,146 38,793 (6.65 ) (10.09 )
Regulatory agencies 7,893 30,739 32,103 nm 4.44
Outside services 20,888 22,219 25,288 21.06 13.81
Software 16,432 16,502 17,205 4.70 4.26
Professional services 23,122 17,647 16,981 (26.56 ) (3.77 )
Equipment 16,646 17,838 16,383 (1.58 ) (8.16 )
Low income housing credit investment amortization 11,330 13,064 14,825 30.85 13.48
Advertising and public relations 17,565 14,562 13,354 (23.97 ) (8.30 )
Communications 9,377 9,494 9,556 1.91 0.65
Data processing 8,285 7,975 8,658 4.50 8.56
Foreclosed asset expense (income) 323 (144 ) 2,315 nm nm

Provision for losses on off-balance sheet commitments

14,000 6,000 4,000 (71.43 ) (33.33 )
Privatization-related expense 84,312 6,649 4,981 (94.09 ) (25.09 )
Other   60,728     25,502     23,647   (61.06 ) (7.27 )
Total noninterest expense $ 630,366   $ 505,815   $ 529,245   (16.04 ) % 4.63 %
       
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
         
Noninterest income (Unaudited)

Exhibit 10

 
Percentage Change to
For the Twelve Months Ended December 31, 2009 from
December 31, December 31, December 31,
(Dollars in thousands)

2008 (1)

2009 (1)

2008
Service charges on deposit accounts $ 302,965 $ 290,764 (4.03 ) %
Trust and investment management fees 165,255 134,997 (18.31 )
Trading account activities 54,530 73,590 34.95
Merchant banking fees 49,546 64,652 30.49
Brokerage commissions and fees 38,891 33,584 (13.65 )
Card processing fees, net 31,553 32,512 3.04
Securities gains, net 44 24,281 nm
Gains (losses) on private capital investments, net 11,699 (12,781 ) nm
Gains on the VISA IPO redemption 14,211 - (100.00 )
Other   103,962     85,545   (17.72 )
Total noninterest income $ 772,656   $ 727,144   (5.89 ) %
 
 
Noninterest expense (Unaudited)
 
Percentage Change to

For the Twelve Months Ended

December 31, 2009 from
December 31, December 31, December 31,
(Dollars in thousands)

2008 (1)

2009 (1)

2008
Salaries and other compensation $ 810,277 $ 798,883 (1.41 ) %
Employee benefits   167,804     172,773   2.96
Salaries and employee benefits 978,081 971,656 (0.66 )
Net occupancy 154,566 167,082 8.10
Intangible asset amortization 44,935 161,910 nm
Regulatory agencies 23,971 133,616 nm
Outside services 78,933 89,289 13.12
Professional services 70,886 70,055 (1.17 )
Equipment 61,571 66,236 7.58
Software 60,448 62,950 4.14
Advertising and public relations 51,144 49,886 (2.46 )
Low income housing credit investment amortization 40,577 49,081 20.96
Communications 37,067 36,960 (0.29 )
Data processing 32,090 33,250 3.61
Foreclosed asset expense 1,019 6,339 nm
Provision for losses on off-balance sheet commitments 35,000 51,000 45.71
Privatization-related expense 90,505 45,882 (49.30 )
Other   135,903     93,309   (31.34 )
Total noninterest expense $ 1,896,696   $ 2,088,501   10.11 %
     
Refer to Exhibit 12 for footnote explanations.
 
UnionBanCal Corporation and Subsidiaries
           
Reconciliation of Non-GAAP Measures (Unaudited)

Exhibit 11

 

The following table presents a reconciliation between certain Generally Accepted Accounting Principles (GAAP) amounts and specific non-GAAP measures as used to complete selected non-GAAP financial ratios.

 
For the three months ended For the twelve months ended
(Dollars in thousands) December 31, 2008 September 30, 2009 December 31, 2009 December 31, 2008 December 31, 2009
 
Income (loss) from continuing operations $ (82,862 ) $ (17,029 ) $ 41,883 $ 283,940 $ (64,961 )
Privatization-related expense, net of tax 57,498 (460 ) 2,993 63,691 23,407
Net accretion and amortization related to fair value adjustments, net of tax   19,474     11,832     10,556     19,474     35,671  

Income (loss) from continuing operations, excluding impact of privatization transaction

$ (5,890 ) $ (5,657 ) $ 55,432   $ 367,105   $ (5,883 )
 
Average total assets $ 66,521,518 $ 74,352,649 $ 81,964,956 $ 60,908,355 $ 73,766,090
Net adjustments related to privatization transaction   2,659,315     2,590,543     2,569,276     668,462     2,597,668  
Average total assets, excluding impact of privatization transaction $ 63,862,203   $ 71,762,106   $ 79,395,680   $ 60,239,893   $ 71,168,422  
 
Return on average assets from continuing operations (0.50 %) (0.09 %) 0.20 % 0.47 % (0.09 %)
Effect of privatization transaction   0.46 %   0.06 %   0.08 %   0.14 %   0.08 %

Return on average assets from continuing operations, excluding impact of privatization transaction

  (0.04 %)   (0.03 %)   0.28 %   0.61 %   (0.01 %)
 
Average stockholder's equity $ 6,748,937 $ 7,358,773 $ 9,405,635 $ 5,170,795 $ 7,855,190
Net adjustments related to privatization transaction   2,397,011     2,418,824     2,416,677     602,527     2,411,897  
Average stockholder's equity, excluding impact of privatization transaction $ 4,351,926   $ 4,939,949   $ 6,988,958   $ 4,568,268   $ 5,443,293  
 
Return on stockholder's equity from continuing operations (4.88 %) (0.92 %) 1.77 % 5.49 % (0.83 %)
Effect of privatization transaction   4.34 %   0.47 %   1.38 %   2.55 %   0.72 %
Return on stockholder's equity, excluding impact of privatization transaction   (0.54 %)   (0.45 %)   3.15 %   8.04 %   (0.11 %)
 
Noninterest expense $ 630,366 $ 505,815 $ 529,245 $ 1,896,696 $ 2,088,501
Privatization-related expense 84,312 6,649 4,981 90,505 45,882
Amortization related to fair value adjustments   44,373     42,549     39,743     44,373     166,728  
Noninterest expense, excluding impact of privatization transaction $ 501,681   $ 456,617   $ 484,521   $ 1,761,818   $ 1,875,891  
 
Total revenue $ 741,286 $ 748,225 $ 765,698 $ 2,833,316 $ 2,987,566
Accretion related to fair value adjustments   12,354     23,060     21,799     12,354     107,415  
Total revenue, excluding impact of privatization transaction $ 728,932   $ 725,165   $ 743,899   $ 2,820,962   $ 2,880,151  
 
Efficiency ratio 81.58 % 65.07 % 66.36 % 64.24 % 66.34 %
Effect of privatization transaction   (16.28 %)   (4.71 %)   (4.07 %)   (4.50 %)   (4.90 %)
Efficiency ratio, excluding impact of privatization transaction   65.30 %   60.36 %   62.29 %   59.74 %   61.44 %
 
UnionBanCal Corporation and Subsidiaries
   
Footnotes

Exhibit 12

       
 
(1)

On November 4, 2008, Mitsubishi UFJ Financial Group, Inc. (MUFG), through its wholly-owned subsidiary, The Bank of Tokyo - Mitsubishi UFJ, Ltd. (BTMU), completed its acquisition of all of the remaining outstanding shares of UnionBanCal Corporation (the Company) common stock (the “privatization transaction”). The Company estimated the fair value of its tangible assets and liabilities as of October 1, 2008 and recorded fair value adjustments to its tangible assets and liabilities equivalent to the proportionate incremental percentage ownership acquired by BTMU in the privatization transaction. In addition, the Company recorded goodwill and other intangible assets. The Company’s financial condition as of December 31, 2008 and subsequent periods reflect the impact of these fair value adjustments and other amounts recorded. The Company’s results of operations for the twelve months ended December 31, 2009 include accretion and amortization related to the fair value adjustments.

(2) Yields and interest income are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent.
(3) End of period total assets and assets used in calculating these ratios include those of discontinued operations.
(4) Average balances used to calculate our financial ratios are based on continuing operations data only, unless otherwise indicated.
(5) Annualized.
(6)

The efficiency ratio is noninterest expense, excluding foreclosed asset expense (income), the provision for losses on off-balance sheet commitments and low income housing credit (LIHC) investment amortization expense, as a percentage of net interest income (taxable-equivalent basis) and noninterest income, and is calculated for continuing operations only.

(7)

The tangible common equity ratio is the ratio of total equity less intangibles (net of the corresponding deferred tax liability), as a percentage of total assets, less intangibles.

(8) The Tier 1 common capital ratio is the ratio of Tier 1 common capital to risk weighted assets.
(9) Estimated as of December 31, 2009. The regulatory capital and leverage ratios include discontinued operations.
(10)

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.

(11)

Reflects previously disclosed change in accounting policy for residential and home equity loans 90 days or more past due, which was effective January 1, 2009.

(12)

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.

(13)

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.

(14) Includes interest bearing trading liabilities.
(15)

These ratios exclude the impact of the privatization transaction. Please refer to Exhibit 11 for a reconciliation between certain Generally Accepted Accounting Principles (GAAP) amounts and these non-GAAP measures.

nm = not meaningful
 

CONTACT:
UnionBanCal Corporation
Public Relations:
Stephen L. Johnson, 415-765-3252
Investor Relations:
Michelle R. Crandall, 415-765-2780

MUFG Americas Holdings Corp Reports

Also read