Attached files
| file | filename |
|---|---|
| 8-K - 8-K - MUFG Americas Holdings Corp | a14-4369_18k.htm |
Exhibit 99.1
UNIONBANCAL CORPORATION REPORTS FOURTH QUARTER NET INCOME OF $179 MILLION, FULL YEAR NET INCOME OF $667 MILLION
Fourth Quarter Highlights:
· Net income for the fourth quarter was $179 million, down from $198 million for the prior quarter, and up from $123 million for the year-ago quarter.
· Total loans held for investment, excluding purchased credit-impaired (PCI) loans, at December 31, 2013, were $67.2 billion, up from $65.9 billion at September 30, 2013, and up from $58.8 billion at December 31, 2012.
· Core deposits at December 31, 2013, were $69.2 billion, up from $68.3 billion at September 30, 2013, and up from $63.8 billion at December 31, 2012.
· Total provision for credit losses was a benefit of $21 million, compared with a benefit of $15 million in each of the prior and year-ago quarters.
· Key asset quality metrics continued to be strong. Excluding PCI loans and Federal Deposit Insurance Corporation (FDIC) covered other real estate owned (OREO):
· Nonperforming assets at quarter-end were $447 million, or 0.43 percent of total assets, compared with $513 million, or 0.49 percent of total assets, at September 30, 2013.
· Net charge-offs were $18 million for the quarter, or an annualized 0.11 percent of average total loans held for investment, compared with $1 million for the prior quarter and less than $1 million a year ago.
· Net interest margin was 2.99 percent for the fourth quarter, flat from the prior quarter, and down from 3.21 percent for the year-ago quarter.
· Capital ratios remained strong:
· Basel I Tier 1 and Total risk-based capital ratios were 12.44 percent and 14.64 percent, respectively, at December 31, 2013. Basel I Tier 1 common capital ratio was 12.37 percent at December 31, 2013, up 127 basis points from 11.10 percent at September 30, 2013.
· Tangible common equity ratio was 10.54 percent at December 31, 2013, up 153 basis points from 9.01 percent at September 30, 2013.
· UnionBanCal Corporation received a $1.2 billion capital contribution from its parent, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), and issued $300 million of subordinated debt to BTMU.
Full Year Highlights:
· Net income was $667 million, up from $628 million for the prior year.
· Total provision for credit losses was a benefit of $29 million, compared with a provision of $8 million for the prior year.
· Excluding PCI loans, net charge-offs were $41 million, or 0.06 percent of average total loans, down from $123 million, or 0.23 percent of average total loans, for the prior year.
SAN FRANCISCO - UnionBanCal Corporation (the Company), parent company of San Francisco-based Union Bank, N.A., today reported fourth quarter 2013 results. Net income for the quarter was $179 million, down from $198 million for the prior quarter, and up from $123 million for the year-ago quarter. Net income decreased compared to the prior quarter primarily due to lower gains on the sale of securities and higher compensation expense, partially offset by higher loan growth.
On November 22, 2013, Union Bank, N.A. announced that it had completed the acquisition of First Bank Association Bank Services, which provides a full range of banking services to homeowners associations (HOA) and community management companies. The acquisition brought to Union Bank approximately $550 million in deposits.
Summary of Fourth Quarter Results
Fourth Quarter Total Revenue
For fourth quarter 2013, total revenue (net interest income plus noninterest income) was $896 million, down $23 million compared with third quarter 2013. Net interest income increased 3 percent, and noninterest income decreased 19 percent.
Net interest income for fourth quarter 2013 was $706 million, up $21 million, or 3 percent, compared with third quarter 2013. The increase in net interest income was primarily due to growth in average earning assets. Average total loans held for investment, excluding PCI loans, increased $1.3 billion, or 2 percent, compared with third quarter 2013, primarily due to organic growth in commercial and industrial loans and residential mortgages. The net interest margin was 2.99 percent, flat from the prior quarter, which reflected higher yields on loans, partially offset by the impact of higher balances on lower yielding interest-bearing deposits in banks.
Average total deposits increased $2.3 billion, or 3 percent, during the quarter, primarily due to organic retail deposit growth and the First Bank Association Bank Services acquisition. Average interest bearing deposits increased $1.1 billion, or 2 percent, and average noninterest bearing deposits increased $1.2 billion, or 5 percent.
For fourth quarter 2013, noninterest income was $190 million, down $44 million, or 19 percent, compared with third quarter 2013, primarily due to lower net gains on the sale of securities.
Compared to fourth quarter 2012, total revenue grew $7 million, with net interest income up 7 percent and noninterest income down 17 percent. Net interest income increased $46 million compared with the year-ago quarter, primarily due to acquisitions and organic loan growth. This increase was partially offset by a 22 basis point decline in the net interest margin, primarily due to lower yields on loans and securities.
Average total loans held for investment, excluding PCI loans, increased $9.9 billion, or 18 percent, compared with fourth quarter 2012, primarily due to the acquisition of Pacific Capital Bancorp (PCBC) which closed late in the fourth quarter of 2012, the PB Capital portfolio acquisition which closed in the second quarter of 2013, and organic loan growth. Average total deposits increased $10.1 billion compared with the fourth quarter of 2012, primarily due to organic growth and acquisitions, with average interest bearing deposits up $7.6 billion, or 17 percent, and average noninterest bearing deposits up $2.5 billion, or 11 percent.
Noninterest income decreased $39 million, or 17 percent, compared with fourth quarter 2012, primarily due to lower net gains on the sale of securities and a prior year gain on the sale of Visa, Inc. Class B common shares.
Fourth Quarter Noninterest Expense
Noninterest expense for fourth quarter 2013 was $689 million, flat compared with third quarter 2013. Staff expense increased $15 million, primarily reflecting higher salaries and benefits-related costs. Non-staff expense decreased $15 million, primarily due to decreases in net occupancy and equipment costs and regulatory assessments.
Noninterest expense for fourth quarter 2013 was down $26 million, or 4 percent, compared with fourth quarter 2012. This was primarily driven by non-staff expenses, such as professional and outside services, which decreased $17 million, primarily due to one-time costs associated with the PCBC acquisition, which closed in the year-ago quarter.
Full Year 2013 Results
For full year 2013, net income was $667 million, compared with net income of $628 million in 2012. The $39 million increase in net income was due to improved credit quality, largely offset by lower pre-tax, pre-provision income.
Total revenue for full year 2013 was $3.6 billion, an increase of $172 million, or 5 percent, compared with 2012. Net interest income increased $114 million, or 4 percent, primarily due to loan growth, partially offset by a lower net interest margin. Noninterest income increased $58 million, or 7 percent, primarily due to higher gains on the sale of securities. Noninterest expense increased $227 million, or 9 percent, primarily due to higher merger and acquisition costs. The effective tax rate for full year 2013 was 23.1 percent, compared with an effective tax rate of 26.5 percent for 2012. The decrease in the effective tax rate is primarily attributable to the proportionately larger impact of low-income housing and alternative energy income tax credits on pre-tax income.
Balance Sheet
At December 31, 2013, the Company had total assets of $105.9 billion, up $0.4 billion compared with September 30, 2013, primarily due to loan growth. At December 31, 2013, total deposits were $80.1 billion, up $0.7 billion compared with September 30, 2013, reflecting both the First Bank Association Bank Services acquisition and organic deposit growth. Core deposits at December 31, 2013, were $69.2 billion, up $0.9 billion, compared with September 30, 2013.
Credit Quality
Credit quality continued to be strong during the fourth quarter of 2013, reflected by continued decreases in nonperforming assets.
Excluding PCI loans and FDIC covered OREO, nonperforming assets ended the quarter at $447 million, or 0.43 percent of total assets; compared with $513 million, or 0.49 percent of total assets, at September 30, 2013; and $520 million, or 0.54 percent of total assets, at December 31, 2012.
Excluding PCI loans and FDIC covered OREO, net charge-offs were $18 million for fourth quarter 2013, or an annualized 0.11 percent of average total loans. This was an increase from net charge-offs of $1 million, or an annualized 0.01 percent of average total loans, in third quarter 2013; and up from net charge-offs of less than $1 million for fourth quarter 2012.
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 the fourth quarter 2013, the provision for loan losses was a benefit of $23 million and the provision for losses on off-balance sheet commitments was $2 million, for a total provision for credit losses benefit of $21 million. This compares with a total provision for credit losses benefit of $15 million for third quarter 2013. The primary driver of the lower total provision was improved credit quality in the non-PCI portfolio.
The allowance for credit losses as a percent of total loans, excluding PCI loans, was 1.04 percent at December 31, 2013, compared with 1.12 percent at September 30, 2013, and 1.31 percent at December 31, 2012. The allowance for credit losses as a percent of nonaccrual loans, excluding PCI loans, was 164 percent at December 31, 2013, compared with 150 percent at September 30, 2013, and 162 percent at December 31, 2012.
Capital
The Company’s stockholder’s equity was $14.2 billion at December 31, 2013 compared with $12.5 billion at September 30, 2013. The Basel I Tier 1 and Total risk-based capital ratios were 12.44 percent and 14.64 percent, respectively, at December 31, 2013 compared with 11.17 percent and 13.11 percent, respectively, at September 30, 2013. The tangible common equity ratio was 10.54 percent at December 31, 2013, up 153 basis points from 9.01 percent at September 30, 2013.
The Company’s capital ratios increased primarily due to the $1.2 billion BTMU capital contribution. The Company also issued $300 million in subordinated debt to BTMU. The subordinated debt qualifies as Tier 2 regulatory capital for U.S. bank holding company regulatory capital purposes.
The Company expects to treat the BTMU $1.2 billion capital contribution as Common Equity Tier 1 capital and the $300 million subordinated debt as Tier 2 capital under the final U.S. Basel III regulatory capital rules.
Non-GAAP Financial Measures
This press release contains certain references to financial measures identified as excluding PCI loans, FDIC covered OREO, privatization transaction impact, foreclosed asset expense, other credit costs, (reversal of) provision for losses on off-balance sheet commitments, productivity initiative costs and gains, low income housing credit (LIHC) investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger costs related to acquisitions, debt termination fees from balance sheet repositioning, or intangible asset amortization, 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 or credits. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. 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 business results. This press release also includes additional capital ratios (the tangible common equity and Basel I Tier 1 common capital ratios) to facilitate the understanding of the Company’s capital structure and for use in assessing and comparing the quality and composition of UnionBanCal’s capital structure to other financial institutions. 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 the treatment of the subordinated debt as Tier 2 capital and the BTMU capital contribution as Common Equity Tier 1 capital under the final U.S. Basel III regulatory capital rules. 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 financial condition, and results of operations or prospects. For more information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission (SEC), including the discussions under “Management’s Discussion & Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the SEC and available on the SEC’s website at www.sec.gov. Any factor described above or in our SEC reports could, by itself or together with one or more other factors, adversely affect our financial results and condition. 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.
Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $105.9 billion at December 31, 2013. Its primary subsidiary, Union Bank, N.A., provides an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank operated 420 branches in California, Washington, Oregon, Texas, Illinois, New York and Georgia, as well as 2 international offices, on December 31, 2013. 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)
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Percent Change to |
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As of and for the Three Months Ended |
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December 31, 2013 from |
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December 31, |
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September 30, |
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June 30, |
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March 31, |
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December 31, |
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September 30, |
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December 31, |
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(Dollars in millions) |
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2013 |
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2013 |
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2013 (1) |
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2013 (1) |
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2012 (1) |
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2013 |
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2012 |
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Results of operations: |
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Net interest income |
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$ |
706 |
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$ |
685 |
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$ |
672 |
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$ |
653 |
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$ |
660 |
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3 |
% |
7 |
% |
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Noninterest income |
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190 |
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234 |
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201 |
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251 |
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229 |
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(19 |
) |
(17 |
) | |||||
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Total revenue |
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896 |
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919 |
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873 |
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904 |
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889 |
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(3 |
) |
1 |
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Noninterest expense |
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689 |
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689 |
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702 |
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713 |
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715 |
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— |
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(4 |
) | |||||
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Pre-tax, pre-provision income (2) |
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207 |
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230 |
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171 |
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191 |
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174 |
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(10 |
) |
19 |
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(Reversal of) provision for loan losses |
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(23 |
) |
(16 |
) |
(3 |
) |
(3 |
) |
(5 |
) |
(44 |
) |
(360 |
) | |||||
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Income before income taxes and including noncontrolling interests |
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230 |
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246 |
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174 |
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194 |
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179 |
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(7 |
) |
28 |
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Income tax expense |
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55 |
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55 |
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35 |
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50 |
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60 |
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— |
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(8 |
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Net income including noncontrolling interests |
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175 |
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191 |
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139 |
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144 |
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119 |
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(8 |
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47 |
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Deduct: Net loss from noncontrolling interests |
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4 |
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7 |
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3 |
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4 |
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4 |
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(43 |
) |
— |
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Net income attributable to UnionBanCal Corporation (UNBC) |
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$ |
179 |
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$ |
198 |
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$ |
142 |
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$ |
148 |
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$ |
123 |
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(10 |
) |
46 |
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Balance sheet (end of period): |
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Total assets |
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$ |
105,894 |
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$ |
105,484 |
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$ |
102,279 |
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$ |
96,975 |
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$ |
97,008 |
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— |
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9 |
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Total securities |
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22,326 |
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22,318 |
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24,415 |
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22,816 |
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22,455 |
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— |
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(1 |
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Total loans held for investment |
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68,312 |
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67,170 |
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65,843 |
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60,882 |
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60,034 |
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2 |
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14 |
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Core deposits (3) |
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69,155 |
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68,334 |
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65,533 |
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63,585 |
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63,769 |
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1 |
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8 |
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Total deposits |
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80,101 |
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79,415 |
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77,356 |
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74,038 |
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74,304 |
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1 |
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8 |
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Long-term debt |
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6,547 |
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7,803 |
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6,058 |
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5,314 |
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5,622 |
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(16 |
) |
16 |
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UNBC stockholder’s equity |
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14,215 |
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12,549 |
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12,371 |
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12,565 |
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12,461 |
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13 |
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14 |
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Balance sheet (period average): |
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Total assets |
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$ |
104,424 |
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$ |
101,534 |
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$ |
98,714 |
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$ |
96,649 |
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$ |
92,051 |
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3 |
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13 |
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Total securities |
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22,282 |
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22,909 |
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23,183 |
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21,824 |
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21,903 |
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(3 |
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2 |
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Total loans held for investment |
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67,619 |
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66,608 |
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63,673 |
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60,553 |
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57,242 |
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2 |
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18 |
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Earning assets |
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94,707 |
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92,035 |
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89,292 |
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87,055 |
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82,776 |
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3 |
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14 |
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Total deposits |
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79,747 |
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77,434 |
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75,350 |
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74,256 |
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69,601 |
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3 |
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15 |
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UNBC stockholder’s equity |
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12,604 |
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12,210 |
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12,599 |
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12,584 |
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12,559 |
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3 |
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— |
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Performance ratios: |
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Return on average assets (4) |
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0.68 |
% |
0.78 |
% |
0.58 |
% |
0.61 |
% |
0.54 |
% |
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Return on average UNBC stockholder’s equity (4) |
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5.66 |
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6.50 |
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4.53 |
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4.68 |
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3.95 |
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Return on average assets excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5) |
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0.75 |
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0.81 |
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0.66 |
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0.72 |
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0.68 |
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Return on average UNBC stockholder’s equity excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5) |
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7.41 |
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8.01 |
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6.17 |
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6.69 |
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5.95 |
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Efficiency ratio (6) |
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76.89 |
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75.01 |
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80.37 |
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78.84 |
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80.37 |
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Adjusted efficiency ratio (7) |
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67.08 |
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67.21 |
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69.45 |
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67.72 |
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70.22 |
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Net interest margin (4) (8) |
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2.99 |
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2.99 |
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3.03 |
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3.04 |
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3.21 |
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Capital ratios: |
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Tier 1 risk-based capital ratio (9) (10) |
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12.44 |
% |
11.17 |
% |
11.55 |
% |
12.54 |
% |
12.44 |
% |
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Total risk-based capital ratio (9) (10) |
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14.64 |
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13.11 |
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13.63 |
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14.02 |
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13.93 |
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Leverage ratio (10) |
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11.28 |
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10.22 |
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10.36 |
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10.70 |
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11.18 |
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Tier 1 common capital ratio (9) (10) (11) |
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12.37 |
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11.10 |
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11.47 |
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12.45 |
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12.35 |
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Tangible common equity ratio (12) |
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10.54 |
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9.01 |
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9.08 |
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10.02 |
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9.89 |
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Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
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As of and for the Year Ended |
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Percent Change to |
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December 31, |
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December 31, |
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December 31, |
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(Dollars in millions) |
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2013 |
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2012 (1) |
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2012 |
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Results of operations: |
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Net interest income |
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$ |
2,716 |
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$ |
2,602 |
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4 |
% |
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Noninterest income |
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876 |
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818 |
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7 |
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Total revenue |
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3,592 |
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3,420 |
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5 |
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Noninterest expense |
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2,793 |
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2,566 |
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9 |
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Pre-tax, pre-provision income (2) |
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799 |
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854 |
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(6 |
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(Reversal of) provision for loan losses |
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(45 |
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25 |
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(280 |
) | ||
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Income before income taxes and including noncontrolling interests |
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844 |
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829 |
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2 |
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Income tax expense |
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195 |
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220 |
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(11 |
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Net income including noncontrolling interests |
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649 |
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609 |
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7 |
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Deduct: Net loss from noncontrolling interests |
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18 |
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19 |
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(5 |
) | ||
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Net income attributable to UNBC |
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$ |
667 |
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$ |
628 |
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6 |
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Balance sheet (end of period): |
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Total assets |
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$ |
105,894 |
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$ |
97,008 |
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9 |
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Total securities |
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22,326 |
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22,455 |
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(1 |
) | ||
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Total loans held for investment |
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68,312 |
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60,034 |
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14 |
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Core deposits (3) |
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69,155 |
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63,769 |
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8 |
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Total deposits |
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80,101 |
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74,304 |
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8 |
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Long-term debt |
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6,547 |
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5,622 |
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16 |
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UNBC stockholder’s equity |
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14,215 |
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12,461 |
|
14 |
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Balance sheet (period average): |
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|
|
|
|
|
| ||
|
Total assets |
|
$ |
100,355 |
|
$ |
89,716 |
|
12 |
|
|
Total securities |
|
22,552 |
|
23,216 |
|
(3 |
) | ||
|
Total loans held for investment |
|
64,638 |
|
55,407 |
|
17 |
| ||
|
Earning assets |
|
90,797 |
|
80,761 |
|
12 |
| ||
|
Total deposits |
|
76,714 |
|
65,743 |
|
17 |
| ||
|
UNBC stockholder’s equity |
|
12,499 |
|
12,075 |
|
4 |
| ||
|
|
|
|
|
|
|
|
| ||
|
Performance ratios: |
|
|
|
|
|
|
| ||
|
Return on average assets (4) |
|
0.66 |
% |
0.70 |
% |
|
| ||
|
Return on average UNBC stockholder’s equity (4) |
|
5.33 |
|
5.21 |
|
|
| ||
|
Return on average assets excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5) |
|
0.74 |
|
0.78 |
|
|
| ||
|
Return on average stockholders’ equity excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5) |
|
7.06 |
|
7.01 |
|
|
| ||
|
Efficiency ratio (6) |
|
77.74 |
|
75.03 |
|
|
| ||
|
Adjusted efficiency ratio (7) |
|
67.85 |
|
68.45 |
|
|
| ||
|
Net interest margin (4) (8) |
|
3.01 |
|
3.24 |
|
|
| ||
|
|
|
|
|
|
|
|
| ||
|
Capital ratios: |
|
|
|
|
|
|
| ||
|
Tier 1 risk-based capital ratio (9) (10) |
|
12.44 |
% |
12.44 |
% |
|
| ||
|
Total risk-based capital ratio (9) (10) |
|
14.64 |
|
13.93 |
|
|
| ||
|
Leverage ratio (10) |
|
11.28 |
|
11.18 |
|
|
| ||
|
Tier 1 common capital ratio (9) (10) (11) |
|
12.37 |
|
12.35 |
|
|
| ||
|
Tangible common equity ratio (12) |
|
10.54 |
|
9.89 |
|
|
| ||
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Credit Quality (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent Change to |
| |||||||
|
|
|
As of and for the Three Months Ended |
|
December 31, 2013 from |
| |||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
December 31, |
| |||||
|
(Dollars in millions) |
|
2013 |
|
2013 |
|
2013 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Credit Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
(Reversal of) provision for loan losses, excluding FDIC covered loans |
|
$ |
(22 |
) |
$ |
(16 |
) |
$ |
(3 |
) |
$ |
(3 |
) |
$ |
(3 |
) |
(38 |
)% |
nm |
% |
|
(Reversal of) provision for FDIC covered loan losses not subject to FDIC indemnification |
|
(1 |
) |
— |
|
— |
|
— |
|
(2 |
) |
nm |
|
50 |
| |||||
|
(Reversal of) provision for losses on off-balance sheet commitments |
|
2 |
|
1 |
|
(2 |
) |
15 |
|
(10 |
) |
100 |
|
120 |
| |||||
|
Total (reversal of) provision for credit losses |
|
$ |
(21 |
) |
$ |
(15 |
) |
$ |
(5 |
) |
$ |
12 |
|
$ |
(15 |
) |
(40 |
) |
(40 |
) |
|
Net loans charged off (recovered) |
|
$ |
11 |
|
$ |
(1 |
) |
$ |
8 |
|
$ |
14 |
|
$ |
5 |
|
nm |
|
120 |
|
|
Nonperforming assets |
|
499 |
|
574 |
|
589 |
|
607 |
|
616 |
|
(13 |
) |
(19 |
) | |||||
|
Criticized loans held for investment (13) |
|
1,274 |
|
1,270 |
|
1,362 |
|
1,545 |
|
1,277 |
|
— |
|
— |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Credit Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Allowance for loan losses to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total loans held for investment |
|
0.83 |
% |
0.91 |
% |
0.95 |
% |
1.05 |
% |
1.09 |
% |
|
|
|
| |||||
|
Nonaccrual loans |
|
128.42 |
|
119.04 |
|
120.11 |
|
122.62 |
|
129.47 |
|
|
|
|
| |||||
|
Allowance for credit losses to (14) : |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total loans held for investment |
|
1.02 |
|
1.10 |
|
1.16 |
|
1.27 |
|
1.28 |
|
|
|
|
| |||||
|
Nonaccrual loans |
|
158.30 |
|
144.63 |
|
146.34 |
|
149.24 |
|
152.67 |
|
|
|
|
| |||||
|
Net loans charged off to average total loans held for investment (4) |
|
0.07 |
|
(0.01 |
) |
0.05 |
|
0.10 |
|
0.03 |
|
|
|
|
| |||||
|
Nonperforming assets to total loans held for investment and Other Real Estate Owned (OREO) |
|
0.74 |
|
0.85 |
|
0.89 |
|
1.00 |
|
1.02 |
|
|
|
|
| |||||
|
Nonperforming assets to total assets |
|
0.48 |
|
0.54 |
|
0.58 |
|
0.63 |
|
0.63 |
|
|
|
|
| |||||
|
Nonaccrual loans to total loans held for investment |
|
0.65 |
|
0.76 |
|
0.79 |
|
0.85 |
|
0.84 |
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Excluding purchased credit-impaired loans and FDIC covered OREO (15): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Allowance for loan losses to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total loans held for investment |
|
0.84 |
% |
0.92 |
% |
0.97 |
% |
1.06 |
% |
1.11 |
% |
|
|
|
| |||||
|
Nonaccrual loans |
|
132.82 |
|
123.53 |
|
125.69 |
|
129.56 |
|
137.40 |
|
|
|
|
| |||||
|
Allowance for credit losses to (14) : |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total loans held for investment |
|
1.04 |
|
1.12 |
|
1.18 |
|
1.30 |
|
1.31 |
|
|
|
|
| |||||
|
Nonaccrual loans |
|
163.78 |
|
150.14 |
|
153.18 |
|
157.75 |
|
162.05 |
|
|
|
|
| |||||
|
Net loans charged off to average total loans held for investment (4) |
|
0.11 |
|
0.01 |
|
0.06 |
|
0.08 |
|
0.01 |
|
|
|
|
| |||||
|
Nonperforming assets to total loans held for investment and OREO |
|
0.66 |
|
0.78 |
|
0.81 |
|
0.87 |
|
0.88 |
|
|
|
|
| |||||
|
Nonperforming assets to total assets |
|
0.43 |
|
0.49 |
|
0.52 |
|
0.54 |
|
0.54 |
|
|
|
|
| |||||
|
Nonaccrual loans to total loans held for investment |
|
0.63 |
|
0.75 |
|
0.77 |
|
0.82 |
|
0.81 |
|
|
|
|
| |||||
|
|
|
As of and for the |
|
Percent Change |
| ||||
|
|
|
December 31, |
|
December 31, |
|
to December 31, 2013 |
| ||
|
(Dollars in millions) |
|
2013 |
|
2012 |
|
from December 31, 2012 |
| ||
|
|
|
|
|
|
|
|
| ||
|
Credit Data: |
|
|
|
|
|
|
| ||
|
(Reversal of) provision for loan losses, excluding FDIC covered loans |
|
$ |
(44 |
) |
$ |
28 |
|
(257 |
)% |
|
(Reversal of) provision for FDIC covered loan losses not subject to FDIC indemnification |
|
(1 |
) |
(3 |
) |
67 |
| ||
|
(Reversal of) provision for losses on off-balance sheet commitments |
|
16 |
|
(17 |
) |
194 |
| ||
|
Total (reversal of) provision for credit losses |
|
$ |
(29 |
) |
$ |
8 |
|
(463 |
) |
|
Net loans charged off (recovered) |
|
$ |
32 |
|
$ |
131 |
|
(76 |
) |
|
Nonperforming assets |
|
499 |
|
616 |
|
(19 |
) | ||
|
|
|
|
|
|
|
|
| ||
|
Credit Ratios: |
|
|
|
|
|
|
| ||
|
Net loans charged off to average total loans held for investment (4) |
|
0.05 |
% |
0.24 |
% |
|
| ||
|
Nonperforming assets to total assets |
|
0.48 |
|
0.63 |
|
|
| ||
|
|
|
|
|
|
|
|
| ||
|
Excluding purchased credit-impaired loans and FDIC covered OREO (15): |
|
|
|
|
|
|
| ||
|
Net loans charged off to average total loans held for investment (4) |
|
0.06 |
% |
0.23 |
% |
|
| ||
|
Nonperforming assets to total assets |
|
0.43 |
|
0.54 |
|
|
| ||
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
|
|
|
For the Three Months Ended |
| |||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
(Dollars in millions) |
|
2013 |
|
2013 |
|
2013(1) |
|
2013(1) |
|
2012(1) |
| |||||
|
Interest Income |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans |
|
$ |
695 |
|
$ |
668 |
|
$ |
649 |
|
$ |
629 |
|
$ |
629 |
|
|
Securities |
|
115 |
|
118 |
|
118 |
|
118 |
|
122 |
| |||||
|
Other |
|
6 |
|
2 |
|
2 |
|
3 |
|
3 |
| |||||
|
Total interest income |
|
816 |
|
788 |
|
769 |
|
750 |
|
754 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
64 |
|
63 |
|
61 |
|
60 |
|
57 |
| |||||
|
Commercial paper and other short-term borrowings |
|
1 |
|
2 |
|
1 |
|
1 |
|
1 |
| |||||
|
Long-term debt |
|
45 |
|
38 |
|
35 |
|
36 |
|
36 |
| |||||
|
Total interest expense |
|
110 |
|
103 |
|
97 |
|
97 |
|
94 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net Interest Income |
|
706 |
|
685 |
|
672 |
|
653 |
|
660 |
| |||||
|
(Reversal of) provision for loan losses |
|
(23 |
) |
(16 |
) |
(3 |
) |
(3 |
) |
(5 |
) | |||||
|
Net interest income after (reversal of) provision for loan losses |
|
729 |
|
701 |
|
675 |
|
656 |
|
665 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
51 |
|
53 |
|
52 |
|
53 |
|
51 |
| |||||
|
Trust and investment management fees |
|
28 |
|
34 |
|
38 |
|
35 |
|
33 |
| |||||
|
Trading account activities |
|
20 |
|
15 |
|
21 |
|
5 |
|
30 |
| |||||
|
Securities gains, net |
|
8 |
|
47 |
|
27 |
|
96 |
|
20 |
| |||||
|
Credit facility fees |
|
28 |
|
31 |
|
26 |
|
26 |
|
27 |
| |||||
|
Merchant banking fees |
|
25 |
|
29 |
|
23 |
|
16 |
|
23 |
| |||||
|
Brokerage commissions and fees |
|
12 |
|
12 |
|
11 |
|
11 |
|
11 |
| |||||
|
Card processing fees, net |
|
8 |
|
8 |
|
9 |
|
9 |
|
8 |
| |||||
|
Other, net |
|
10 |
|
5 |
|
(6 |
) |
— |
|
26 |
| |||||
|
Total noninterest income |
|
190 |
|
234 |
|
201 |
|
251 |
|
229 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Salaries and employee benefits |
|
406 |
|
391 |
|
413 |
|
421 |
|
408 |
| |||||
|
Net occupancy and equipment |
|
70 |
|
77 |
|
84 |
|
75 |
|
70 |
| |||||
|
Professional and outside services |
|
64 |
|
66 |
|
62 |
|
58 |
|
81 |
| |||||
|
Intangible asset amortization |
|
16 |
|
16 |
|
17 |
|
16 |
|
19 |
| |||||
|
Regulatory assessments |
|
14 |
|
20 |
|
20 |
|
20 |
|
17 |
| |||||
|
(Reversal of) provision for losses on off-balance sheet commitments |
|
2 |
|
1 |
|
(2 |
) |
15 |
|
(10 |
) | |||||
|
Other |
|
117 |
|
118 |
|
108 |
|
108 |
|
130 |
| |||||
|
Total noninterest expense |
|
689 |
|
689 |
|
702 |
|
713 |
|
715 |
| |||||
|
Income before income taxes and including noncontrolling interests |
|
230 |
|
246 |
|
174 |
|
194 |
|
179 |
| |||||
|
Income tax expense |
|
55 |
|
55 |
|
35 |
|
50 |
|
60 |
| |||||
|
Net Income including Noncontrolling Interests |
|
175 |
|
191 |
|
139 |
|
144 |
|
119 |
| |||||
|
Deduct: Net loss from noncontrolling interests |
|
4 |
|
7 |
|
3 |
|
4 |
|
4 |
| |||||
|
Net Income attributable to UNBC |
|
$ |
179 |
|
$ |
198 |
|
$ |
142 |
|
$ |
148 |
|
$ |
123 |
|
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
|
|
|
For the Years Ended |
| ||||
|
|
|
December 31, |
|
December 31, |
| ||
|
(Dollars in millions) |
|
2013 |
|
2012(1) |
| ||
|
Interest Income |
|
|
|
|
| ||
|
Loans |
|
$ |
2,641 |
|
$ |
2,439 |
|
|
Securities |
|
469 |
|
527 |
| ||
|
Other |
|
13 |
|
6 |
| ||
|
Total interest income |
|
3,123 |
|
2,972 |
| ||
|
|
|
|
|
|
| ||
|
Interest Expense |
|
|
|
|
| ||
|
Deposits |
|
248 |
|
214 |
| ||
|
Commercial paper and other short-term borrowings |
|
5 |
|
9 |
| ||
|
Long-term debt |
|
154 |
|
147 |
| ||
|
Total interest expense |
|
407 |
|
370 |
| ||
|
|
|
|
|
|
| ||
|
Net Interest Income |
|
2,716 |
|
2,602 |
| ||
|
(Reversal of) provision for loan losses |
|
(45 |
) |
25 |
| ||
|
Net interest income after (reversal of) provision for loan losses |
|
2,761 |
|
2,577 |
| ||
|
|
|
|
|
|
| ||
|
Noninterest Income |
|
|
|
|
| ||
|
Service charges on deposit accounts |
|
209 |
|
209 |
| ||
|
Trust and investment management fees |
|
135 |
|
119 |
| ||
|
Trading account activities |
|
61 |
|
101 |
| ||
|
Securities gains, net |
|
178 |
|
108 |
| ||
|
Credit facility fees |
|
111 |
|
105 |
| ||
|
Merchant banking fees |
|
93 |
|
89 |
| ||
|
Brokerage commissions and fees |
|
46 |
|
39 |
| ||
|
Card processing fees, net |
|
34 |
|
32 |
| ||
|
Other, net |
|
9 |
|
16 |
| ||
|
Total noninterest income |
|
876 |
|
818 |
| ||
|
|
|
|
|
|
| ||
|
Noninterest Expense |
|
|
|
|
| ||
|
Salaries and employee benefits |
|
1,631 |
|
1,479 |
| ||
|
Net occupancy and equipment |
|
306 |
|
267 |
| ||
|
Professional and outside services |
|
250 |
|
228 |
| ||
|
Intangible asset amortization |
|
65 |
|
81 |
| ||
|
Regulatory assessments |
|
74 |
|
65 |
| ||
|
(Reversal of) provision for losses on off-balance sheet commitments |
|
16 |
|
(17 |
) | ||
|
Other |
|
451 |
|
463 |
| ||
|
Total noninterest expense |
|
2,793 |
|
2,566 |
| ||
|
|
|
|
|
|
| ||
|
Income before income taxes and including noncontrolling interests |
|
844 |
|
829 |
| ||
|
Income tax expense |
|
195 |
|
220 |
| ||
|
Net Income including Noncontrolling Interests |
|
649 |
|
609 |
| ||
|
Deduct: Net loss from noncontrolling interests |
|
18 |
|
19 |
| ||
|
|
|
|
|
|
| ||
|
Net Income attributable to UNBC |
|
$ |
667 |
|
$ |
628 |
|
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
(Dollars in millions except for per share amount) |
|
2013 |
|
2013 |
|
2013 (1) |
|
2013 (1) |
|
2012 (1) |
| |||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Cash and due from banks |
|
$ |
1,863 |
|
$ |
1,719 |
|
$ |
1,405 |
|
$ |
1,265 |
|
$ |
1,845 |
|
|
Interest bearing deposits in banks |
|
4,329 |
|
5,471 |
|
1,899 |
|
3,776 |
|
3,477 |
| |||||
|
Federal funds sold and securities purchased under resale agreements |
|
11 |
|
122 |
|
50 |
|
50 |
|
169 |
| |||||
|
Total cash and cash equivalents |
|
6,203 |
|
7,312 |
|
3,354 |
|
5,091 |
|
5,491 |
| |||||
|
Trading account assets (includes $8 at December 31, 2013; $13 at September 30, 2013; $4 at June 30, 2013; $40 at March 31, 2013; and $1 at December 31, 2012 of assets pledged as collateral) |
|
851 |
|
776 |
|
844 |
|
1,119 |
|
1,208 |
| |||||
|
Securities available for sale |
|
15,817 |
|
16,872 |
|
23,510 |
|
21,801 |
|
21,352 |
| |||||
|
Securities held to maturity (Fair value: December 31, 2013, $6,439; September 30, 2013, $5,450; June 30, 2013, $891; March 31, 2012, $1,036; and December 31, 2012, $1,135) |
|
6,509 |
|
5,446 |
|
905 |
|
1,015 |
|
1,103 |
| |||||
|
Loans held for investment |
|
68,312 |
|
67,170 |
|
65,843 |
|
60,882 |
|
60,034 |
| |||||
|
Allowance for loan losses |
|
(568 |
) |
(608 |
) |
(625 |
) |
(638 |
) |
(653 |
) | |||||
|
Loans held for investment, net |
|
67,744 |
|
66,562 |
|
65,218 |
|
60,244 |
|
59,381 |
| |||||
|
Premises and equipment, net |
|
688 |
|
685 |
|
699 |
|
707 |
|
710 |
| |||||
|
Intangible assets, net |
|
290 |
|
288 |
|
322 |
|
339 |
|
376 |
| |||||
|
Goodwill |
|
3,228 |
|
3,168 |
|
3,186 |
|
2,952 |
|
2,942 |
| |||||
|
Other assets |
|
4,564 |
|
4,375 |
|
4,241 |
|
3,707 |
|
4,445 |
| |||||
|
Total assets |
|
$ |
105,894 |
|
$ |
105,484 |
|
$ |
102,279 |
|
$ |
96,975 |
|
$ |
97,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest bearing |
|
$ |
26,495 |
|
$ |
26,126 |
|
$ |
25,655 |
|
$ |
24,679 |
|
$ |
25,478 |
|
|
Interest bearing |
|
53,606 |
|
53,289 |
|
51,701 |
|
49,359 |
|
48,826 |
| |||||
|
Total deposits |
|
80,101 |
|
79,415 |
|
77,356 |
|
74,038 |
|
74,304 |
| |||||
|
Commercial paper and other short-term borrowings |
|
2,563 |
|
3,078 |
|
3,792 |
|
2,228 |
|
1,363 |
| |||||
|
Long-term debt |
|
6,547 |
|
7,803 |
|
6,058 |
|
5,314 |
|
5,622 |
| |||||
|
Trading account liabilities |
|
540 |
|
614 |
|
566 |
|
742 |
|
895 |
| |||||
|
Other liabilities |
|
1,675 |
|
1,767 |
|
1,866 |
|
1,818 |
|
2,099 |
| |||||
|
Total liabilities |
|
91,426 |
|
92,677 |
|
89,638 |
|
84,140 |
|
84,283 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity |
|
|
|
|
|
|
|
|
|
|
| |||||
|
UNBC Stockholder’s Equity: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Common stock, par value $1 per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Authorized 300,000,000 shares; 136,330,830 shares issued and outstanding as of December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 |
|
136 |
|
136 |
|
136 |
|
136 |
|
136 |
| |||||
|
Additional paid-in capital |
|
7,191 |
|
5,985 |
|
5,979 |
|
5,997 |
|
5,994 |
| |||||
|
Retained earnings |
|
7,512 |
|
7,333 |
|
7,135 |
|
6,993 |
|
6,845 |
| |||||
|
Accumulated other comprehensive loss |
|
(624 |
) |
(905 |
) |
(879 |
) |
(561 |
) |
(514 |
) | |||||
|
Total UNBC stockholder’s equity |
|
14,215 |
|
12,549 |
|
12,371 |
|
12,565 |
|
12,461 |
| |||||
|
Noncontrolling interests |
|
253 |
|
258 |
|
270 |
|
270 |
|
264 |
| |||||
|
Total equity |
|
14,468 |
|
12,807 |
|
12,641 |
|
12,835 |
|
12,725 |
| |||||
|
Total liabilities and equity |
|
$ |
105,894 |
|
$ |
105,484 |
|
$ |
102,279 |
|
$ |
96,975 |
|
$ |
97,008 |
|
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
|
|
|
For the Three Months Ended |
| ||||||||||||||
|
|
|
December 31, 2013 |
|
September 30, 2013 |
| ||||||||||||
|
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||
|
(Dollars in millions) |
|
Balance |
|
Expense (8) |
|
Rate (4)(8) |
|
Balance |
|
Expense (8) |
|
Rate (4)(8) |
| ||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Loans held for investment: (16) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial and industrial |
|
$ |
23,176 |
|
$ |
196 |
|
3.35 |
% |
$ |
22,930 |
|
$ |
192 |
|
3.32 |
% |
|
Commercial mortgage |
|
12,984 |
|
123 |
|
3.78 |
|
12,936 |
|
117 |
|
3.62 |
| ||||
|
Construction |
|
868 |
|
7 |
|
3.46 |
|
827 |
|
7 |
|
3.30 |
| ||||
|
Lease financing |
|
981 |
|
8 |
|
3.43 |
|
973 |
|
12 |
|
4.92 |
| ||||
|
Residential mortgage |
|
25,143 |
|
231 |
|
3.67 |
|
24,157 |
|
225 |
|
3.72 |
| ||||
|
Home equity and other consumer loans |
|
3,305 |
|
35 |
|
4.13 |
|
3,384 |
|
33 |
|
3.87 |
| ||||
|
Loans, before purchased credit-impaired loans |
|
66,457 |
|
600 |
|
3.60 |
|
65,207 |
|
586 |
|
3.58 |
| ||||
|
Purchased credit-impaired loans |
|
1,162 |
|
96 |
|
32.75 |
|
1,401 |
|
82 |
|
23.46 |
| ||||
|
Total loans held for investment |
|
67,619 |
|
696 |
|
4.10 |
|
66,608 |
|
668 |
|
4.00 |
| ||||
|
Securities |
|
22,282 |
|
118 |
|
2.12 |
|
22,909 |
|
122 |
|
2.12 |
| ||||
|
Interest bearing deposits in banks |
|
4,242 |
|
3 |
|
0.26 |
|
2,050 |
|
1 |
|
0.25 |
| ||||
|
Federal funds sold and securities purchased under resale agreements |
|
138 |
|
— |
|
0.09 |
|
101 |
|
— |
|
0.13 |
| ||||
|
Trading account assets |
|
203 |
|
2 |
|
4.36 |
|
134 |
|
1 |
|
0.43 |
| ||||
|
Other earning assets |
|
223 |
|
1 |
|
1.89 |
|
233 |
|
— |
|
0.97 |
| ||||
|
Total earning assets |
|
94,707 |
|
820 |
|
3.45 |
|
92,035 |
|
792 |
|
3.43 |
| ||||
|
Allowance for loan losses |
|
(618 |
) |
|
|
|
|
(633 |
) |
|
|
|
| ||||
|
Cash and due from banks |
|
1,553 |
|
|
|
|
|
1,315 |
|
|
|
|
| ||||
|
Premises and equipment, net |
|
678 |
|
|
|
|
|
694 |
|
|
|
|
| ||||
|
Other assets |
|
8,104 |
|
|
|
|
|
8,123 |
|
|
|
|
| ||||
|
Total assets |
|
$ |
104,424 |
|
|
|
|
|
$ |
101,534 |
|
|
|
|
| ||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Transaction and money market accounts |
|
$ |
36,636 |
|
35 |
|
0.38 |
|
$ |
34,912 |
|
31 |
|
0.36 |
| ||
|
Savings |
|
5,576 |
|
1 |
|
0.13 |
|
5,633 |
|
2 |
|
0.13 |
| ||||
|
Time |
|
11,431 |
|
28 |
|
0.96 |
|
12,017 |
|
30 |
|
0.98 |
| ||||
|
Total interest bearing deposits |
|
53,643 |
|
64 |
|
0.48 |
|
52,562 |
|
63 |
|
0.47 |
| ||||
|
Commercial paper and other short-term borrowings (17) |
|
2,562 |
|
1 |
|
0.22 |
|
3,376 |
|
2 |
|
0.20 |
| ||||
|
Long-term debt |
|
7,094 |
|
45 |
|
2.52 |
|
6,135 |
|
38 |
|
2.47 |
| ||||
|
Total borrowed funds |
|
9,656 |
|
46 |
|
1.91 |
|
9,511 |
|
40 |
|
1.66 |
| ||||
|
Total interest bearing liabilities |
|
63,299 |
|
110 |
|
0.69 |
|
62,073 |
|
103 |
|
0.66 |
| ||||
|
Noninterest bearing deposits |
|
26,104 |
|
|
|
|
|
24,872 |
|
|
|
|
| ||||
|
Other liabilities |
|
2,160 |
|
|
|
|
|
2,110 |
|
|
|
|
| ||||
|
Total liabilities |
|
91,563 |
|
|
|
|
|
89,055 |
|
|
|
|
| ||||
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
UNBC Stockholder’s equity |
|
12,604 |
|
|
|
|
|
12,210 |
|
|
|
|
| ||||
|
Noncontrolling interests |
|
257 |
|
|
|
|
|
269 |
|
|
|
|
| ||||
|
Total equity |
|
12,861 |
|
|
|
|
|
12,479 |
|
|
|
|
| ||||
|
Total liabilities and equity |
|
$ |
104,424 |
|
|
|
|
|
$ |
101,534 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net interest income/spread (taxable-equivalent basis) |
|
|
|
710 |
|
2.76 |
% |
|
|
689 |
|
2.77 |
% | ||||
|
Impact of noninterest bearing deposits |
|
|
|
|
|
0.20 |
|
|
|
|
|
0.19 |
| ||||
|
Impact of other noninterest bearing sources |
|
|
|
|
|
0.03 |
|
|
|
|
|
0.03 |
| ||||
|
Net interest margin |
|
|
|
|
|
2.99 |
|
|
|
|
|
2.99 |
| ||||
|
Less: taxable-equivalent adjustment |
|
|
|
4 |
|
|
|
|
|
4 |
|
|
| ||||
|
Net interest income |
|
|
|
$ |
706 |
|
|
|
|
|
$ |
685 |
|
|
| ||
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
|
|
|
For the Three Months Ended |
| ||||||||||||||
|
|
|
December 31, 2013 |
|
December 31, 2012 |
| ||||||||||||
|
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||
|
(Dollars in millions) |
|
Balance |
|
Expense (8) |
|
Rate (4)(8) |
|
Balance |
|
Expense (1)(8) |
|
Rate (1)(4)(8) |
| ||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Loans held for investment: (16) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial and industrial |
|
$ |
23,176 |
|
$ |
196 |
|
3.35 |
% |
$ |
20,585 |
|
$ |
182 |
|
3.53 |
% |
|
Commercial mortgage |
|
12,984 |
|
123 |
|
3.78 |
|
8,814 |
|
91 |
|
4.12 |
| ||||
|
Construction |
|
868 |
|
7 |
|
3.46 |
|
687 |
|
8 |
|
4.24 |
| ||||
|
Lease financing |
|
981 |
|
8 |
|
3.43 |
|
987 |
|
11 |
|
4.50 |
| ||||
|
Residential mortgage |
|
25,143 |
|
231 |
|
3.67 |
|
21,914 |
|
220 |
|
4.01 |
| ||||
|
Home equity and other consumer loans |
|
3,305 |
|
35 |
|
4.13 |
|
3,527 |
|
33 |
|
3.79 |
| ||||
|
Loans, before purchased credit-impaired loans |
|
66,457 |
|
600 |
|
3.60 |
|
56,514 |
|
545 |
|
3.85 |
| ||||
|
Purchased credit-impaired loans |
|
1,162 |
|
96 |
|
32.75 |
|
728 |
|
85 |
|
46.39 |
| ||||
|
Total loans held for investment |
|
67,619 |
|
696 |
|
4.10 |
|
57,242 |
|
630 |
|
4.39 |
| ||||
|
Securities |
|
22,282 |
|
118 |
|
2.12 |
|
21,903 |
|
125 |
|
2.28 |
| ||||
|
Interest bearing deposits in banks |
|
4,242 |
|
3 |
|
0.26 |
|
3,250 |
|
2 |
|
0.26 |
| ||||
|
Federal funds sold and securities purchased under resale agreements |
|
138 |
|
— |
|
0.09 |
|
79 |
|
— |
|
0.20 |
| ||||
|
Trading account assets |
|
203 |
|
2 |
|
4.36 |
|
140 |
|
— |
|
0.35 |
| ||||
|
Other earning assets |
|
223 |
|
1 |
|
1.89 |
|
162 |
|
— |
|
0.49 |
| ||||
|
Total earning assets |
|
94,707 |
|
820 |
|
3.45 |
|
82,776 |
|
757 |
|
3.65 |
| ||||
|
Allowance for loan losses |
|
(618 |
) |
|
|
|
|
(673 |
) |
|
|
|
| ||||
|
Cash and due from banks |
|
1,553 |
|
|
|
|
|
1,375 |
|
|
|
|
| ||||
|
Premises and equipment, net |
|
678 |
|
|
|
|
|
663 |
|
|
|
|
| ||||
|
Other assets |
|
8,104 |
|
|
|
|
|
7,910 |
|
|
|
|
| ||||
|
Total assets |
|
$ |
104,424 |
|
|
|
|
|
$ |
92,051 |
|
|
|
|
| ||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Transaction and money market accounts |
|
$ |
36,636 |
|
35 |
|
0.38 |
|
$ |
28,988 |
|
18 |
|
0.25 |
| ||
|
Savings |
|
5,576 |
|
1 |
|
0.13 |
|
5,436 |
|
2 |
|
0.14 |
| ||||
|
Time |
|
11,431 |
|
28 |
|
0.96 |
|
11,571 |
|
37 |
|
1.25 |
| ||||
|
Total interest bearing deposits |
|
53,643 |
|
64 |
|
0.48 |
|
45,995 |
|
57 |
|
0.49 |
| ||||
|
Commercial paper and other short-term borrowings (17) |
|
2,562 |
|
1 |
|
0.22 |
|
1,482 |
|
1 |
|
0.28 |
| ||||
|
Long-term debt |
|
7,094 |
|
45 |
|
2.52 |
|
5,562 |
|
36 |
|
2.61 |
| ||||
|
Total borrowed funds |
|
9,656 |
|
46 |
|
1.91 |
|
7,044 |
|
37 |
|
2.12 |
| ||||
|
Total interest bearing liabilities |
|
63,299 |
|
110 |
|
0.69 |
|
53,039 |
|
94 |
|
0.70 |
| ||||
|
Noninterest bearing deposits |
|
26,104 |
|
|
|
|
|
23,606 |
|
|
|
|
| ||||
|
Other liabilities |
|
2,160 |
|
|
|
|
|
2,588 |
|
|
|
|
| ||||
|
Total liabilities |
|
91,563 |
|
|
|
|
|
79,233 |
|
|
|
|
| ||||
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
UNBC Stockholder’s equity |
|
12,604 |
|
|
|
|
|
12,559 |
|
|
|
|
| ||||
|
Noncontrolling interests |
|
257 |
|
|
|
|
|
259 |
|
|
|
|
| ||||
|
Total equity |
|
12,861 |
|
|
|
|
|
12,818 |
|
|
|
|
| ||||
|
Total liabilities and equity |
|
$ |
104,424 |
|
|
|
|
|
$ |
92,051 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net interest income/spread (taxable-equivalent basis) |
|
|
|
710 |
|
2.76 |
% |
|
|
663 |
|
2.95 |
% | ||||
|
Impact of noninterest bearing deposits |
|
|
|
|
|
0.20 |
|
|
|
|
|
0.22 |
| ||||
|
Impact of other noninterest bearing sources |
|
|
|
|
|
0.03 |
|
|
|
|
|
0.04 |
| ||||
|
Net interest margin |
|
|
|
|
|
2.99 |
|
|
|
|
|
3.21 |
| ||||
|
Less: taxable-equivalent adjustment |
|
|
|
4 |
|
|
|
|
|
3 |
|
|
| ||||
|
Net interest income |
|
|
|
$ |
706 |
|
|
|
|
|
$ |
660 |
|
|
| ||
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
|
|
|
For the Years Ended |
| ||||||||||||||
|
|
|
December 31, 2013 |
|
December 31, 2012 |
| ||||||||||||
|
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||
|
(Dollars in millions) |
|
Balance |
|
Expense (8) |
|
Rate (4)(8) |
|
Balance |
|
Expense (1)(8) |
|
Rate (1)(4)(8) |
| ||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Loans held for investment: (16) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial and industrial |
|
$ |
22,294 |
|
$ |
750 |
|
3.36 |
% |
$ |
20,196 |
|
$ |
718 |
|
3.55 |
% |
|
Commercial mortgage |
|
11,928 |
|
453 |
|
3.80 |
|
8,357 |
|
338 |
|
4.05 |
| ||||
|
Construction |
|
787 |
|
29 |
|
3.74 |
|
712 |
|
30 |
|
4.15 |
| ||||
|
Lease financing |
|
1,018 |
|
36 |
|
3.57 |
|
1,001 |
|
43 |
|
4.30 |
| ||||
|
Residential mortgage |
|
23,903 |
|
898 |
|
3.76 |
|
20,778 |
|
874 |
|
4.21 |
| ||||
|
Home equity and other consumer loans |
|
3,447 |
|
135 |
|
3.92 |
|
3,602 |
|
138 |
|
3.83 |
| ||||
|
Loans, before purchased credit-impaired loans |
|
63,377 |
|
2,301 |
|
3.63 |
|
54,646 |
|
2,141 |
|
3.92 |
| ||||
|
Purchased credit-impaired loans |
|
1,261 |
|
341 |
|
27.03 |
|
761 |
|
304 |
|
39.92 |
| ||||
|
Total loans held for investment |
|
64,638 |
|
2,642 |
|
4.09 |
|
55,407 |
|
2,445 |
|
4.41 |
| ||||
|
Securities |
|
22,552 |
|
483 |
|
2.14 |
|
23,216 |
|
534 |
|
2.30 |
| ||||
|
Interest bearing deposits in banks |
|
3,067 |
|
8 |
|
0.25 |
|
1,756 |
|
4 |
|
0.26 |
| ||||
|
Federal funds sold and securities purchased under resale agreements |
|
133 |
|
— |
|
0.15 |
|
67 |
|
— |
|
0.21 |
| ||||
|
Trading account assets |
|
163 |
|
3 |
|
1.62 |
|
173 |
|
1 |
|
0.52 |
| ||||
|
Other earning assets |
|
244 |
|
2 |
|
0.91 |
|
142 |
|
— |
|
0.25 |
| ||||
|
Total earning assets |
|
90,797 |
|
3,138 |
|
3.46 |
|
80,761 |
|
2,984 |
|
3.70 |
| ||||
|
Allowance for loan losses |
|
(636 |
) |
|
|
|
|
(701 |
) |
|
|
|
| ||||
|
Cash and due from banks |
|
1,405 |
|
|
|
|
|
1,318 |
|
|
|
|
| ||||
|
Premises and equipment, net |
|
695 |
|
|
|
|
|
660 |
|
|
|
|
| ||||
|
Other assets |
|
8,094 |
|
|
|
|
|
7,678 |
|
|
|
|
| ||||
|
Total assets |
|
$ |
100,355 |
|
|
|
|
|
$ |
89,716 |
|
|
|
|
| ||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Transaction and money market accounts |
|
$ |
33,904 |
|
114 |
|
0.34 |
|
$ |
26,696 |
|
61 |
|
0.23 |
| ||
|
Savings |
|
5,682 |
|
7 |
|
0.13 |
|
5,312 |
|
8 |
|
0.15 |
| ||||
|
Time |
|
12,115 |
|
127 |
|
1.04 |
|
12,368 |
|
145 |
|
1.17 |
| ||||
|
Total interest bearing deposits |
|
51,701 |
|
248 |
|
0.48 |
|
44,376 |
|
214 |
|
0.48 |
| ||||
|
Commercial paper and other short-term borrowings (17) |
|
2,751 |
|
5 |
|
0.20 |
|
3,256 |
|
9 |
|
0.27 |
| ||||
|
Long-term debt |
|
5,998 |
|
154 |
|
2.56 |
|
5,820 |
|
147 |
|
2.53 |
| ||||
|
Total borrowed funds |
|
8,749 |
|
159 |
|
1.82 |
|
9,076 |
|
156 |
|
1.72 |
| ||||
|
Total interest bearing liabilities |
|
60,450 |
|
407 |
|
0.67 |
|
53,452 |
|
370 |
|
0.69 |
| ||||
|
Noninterest bearing deposits |
|
25,013 |
|
|
|
|
|
21,367 |
|
|
|
|
| ||||
|
Other liabilities |
|
2,128 |
|
|
|
|
|
2,562 |
|
|
|
|
| ||||
|
Total liabilities |
|
87,591 |
|
|
|
|
|
77,381 |
|
|
|
|
| ||||
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
UNBC Stockholder’s equity |
|
12,499 |
|
|
|
|
|
12,075 |
|
|
|
|
| ||||
|
Noncontrolling interests |
|
265 |
|
|
|
|
|
260 |
|
|
|
|
| ||||
|
Total equity |
|
12,764 |
|
|
|
|
|
12,335 |
|
|
|
|
| ||||
|
Total liabilities and equity |
|
$ |
100,355 |
|
|
|
|
|
$ |
89,716 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net interest income/spread (taxable-equivalent basis) |
|
|
|
2,731 |
|
2.79 |
% |
|
|
2,614 |
|
3.01 |
% | ||||
|
Impact of noninterest bearing deposits |
|
|
|
|
|
0.19 |
|
|
|
|
|
0.19 |
| ||||
|
Impact of other noninterest bearing sources |
|
|
|
|
|
0.03 |
|
|
|
|
|
0.04 |
| ||||
|
Net interest margin |
|
|
|
|
|
3.01 |
|
|
|
|
|
3.24 |
| ||||
|
Less: taxable-equivalent adjustment |
|
|
|
15 |
|
|
|
|
|
12 |
|
|
| ||||
|
Net interest income |
|
|
|
$ |
2,716 |
|
|
|
|
|
$ |
2,602 |
|
|
| ||
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Loans and Nonperforming Assets (Unaudited)
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
(Dollars in millions) |
|
2013 |
|
2013 |
|
2013 |
|
2013 |
|
2012 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans held for investment (period end) |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans held for investment: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Commercial and industrial |
|
$ |
23,528 |
|
$ |
23,125 |
|
$ |
22,266 |
|
$ |
21,433 |
|
$ |
20,827 |
|
|
Commercial mortgage |
|
13,092 |
|
12,905 |
|
13,008 |
|
9,918 |
|
9,939 |
| |||||
|
Construction |
|
905 |
|
855 |
|
808 |
|
659 |
|
627 |
| |||||
|
Lease financing |
|
854 |
|
972 |
|
984 |
|
1,060 |
|
1,104 |
| |||||
|
Total commercial portfolio |
|
38,379 |
|
37,857 |
|
37,066 |
|
33,070 |
|
32,497 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Residential mortgage |
|
25,547 |
|
24,714 |
|
23,835 |
|
23,146 |
|
22,705 |
| |||||
|
Home equity and other consumer loans |
|
3,280 |
|
3,336 |
|
3,456 |
|
3,542 |
|
3,647 |
| |||||
|
Total consumer portfolio |
|
28,827 |
|
28,050 |
|
27,291 |
|
26,688 |
|
26,352 |
| |||||
|
Loans held for investment, before purchased credit-impaired loans |
|
67,206 |
|
65,907 |
|
64,357 |
|
59,758 |
|
58,849 |
| |||||
|
Purchased credit-impaired loans |
|
1,106 |
|
1,263 |
|
1,486 |
|
1,124 |
|
1,185 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total loans held for investment |
|
$ |
68,312 |
|
$ |
67,170 |
|
$ |
65,843 |
|
$ |
60,882 |
|
$ |
60,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Nonperforming Assets (period end) |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Commercial and industrial |
|
$ |
44 |
|
$ |
62 |
|
$ |
69 |
|
$ |
49 |
|
$ |
48 |
|
|
Commercial mortgage |
|
51 |
|
88 |
|
62 |
|
57 |
|
65 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total commercial portfolio |
|
95 |
|
150 |
|
131 |
|
106 |
|
113 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Residential mortgage |
|
286 |
|
293 |
|
315 |
|
326 |
|
306 |
| |||||
|
Home equity and other consumer loans |
|
46 |
|
48 |
|
50 |
|
59 |
|
56 |
| |||||
|
Total consumer portfolio |
|
332 |
|
341 |
|
365 |
|
385 |
|
362 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Nonaccrual loans, before purchased credit-impaired loans |
|
427 |
|
491 |
|
496 |
|
491 |
|
475 |
| |||||
|
Purchased credit-impaired loans |
|
15 |
|
20 |
|
24 |
|
29 |
|
30 |
| |||||
|
Total nonaccrual loans |
|
442 |
|
511 |
|
520 |
|
520 |
|
505 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
OREO |
|
20 |
|
22 |
|
25 |
|
29 |
|
45 |
| |||||
|
FDIC covered OREO |
|
37 |
|
41 |
|
44 |
|
58 |
|
66 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total nonperforming assets |
|
$ |
499 |
|
$ |
574 |
|
$ |
589 |
|
$ |
607 |
|
$ |
616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total nonperforming assets, excluding purchased credit-impaired loans and FDIC covered OREO |
|
$ |
447 |
|
$ |
513 |
|
$ |
521 |
|
$ |
520 |
|
$ |
520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans 90 days or more past due and still accruing (18) |
|
$ |
5 |
|
$ |
8 |
|
$ |
7 |
|
$ |
3 |
|
$ |
1 |
|
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Allowance for Credit Losses (Unaudited)
|
|
|
As of and for the Three Months Ended |
| ||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| ||||||
|
(Dollars in millions) |
|
2013 |
|
2013 |
|
2013 |
|
2013 |
|
2012 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Analysis of Allowance for Credit Losses |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Balance, beginning of period |
|
$ |
|
608 |
|
$ |
625 |
|
$ |
638 |
|
$ |
653 |
|
$ |
668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
(Reversal of) provision for loan losses, excluding FDIC covered loans |
|
(22 |
) |
(16 |
) |
(3 |
) |
(3 |
) |
(3 |
) | ||||||
|
(Reversal of) provision for FDIC covered loan losses not subject to FDIC indemnification |
|
(1 |
) |
— |
|
— |
|
— |
|
(2 |
) | ||||||
|
Increase (decrease) in allowance covered by FDIC indemnification |
|
(6 |
) |
(2 |
) |
(2 |
) |
2 |
|
(4 |
) | ||||||
|
Other |
|
— |
|
— |
|
— |
|
— |
|
(1 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Loans charged off: |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Commercial and industrial |
|
(18 |
) |
(6 |
) |
(11 |
) |
(1 |
) |
(6 |
) | ||||||
|
Commercial mortgage |
|
(2 |
) |
(2 |
) |
(1 |
) |
(2 |
) |
(3 |
) | ||||||
|
Construction |
|
— |
|
(1 |
) |
— |
|
— |
|
— |
| ||||||
|
Total commercial portfolio |
|
(20 |
) |
(9 |
) |
(12 |
) |
(3 |
) |
(9 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Residential mortgage |
|
(1 |
) |
(2 |
) |
(3 |
) |
(7 |
) |
(6 |
) | ||||||
|
Home equity and other consumer loans |
|
(4 |
) |
(2 |
) |
(5 |
) |
(6 |
) |
(9 |
) | ||||||
|
Total consumer portfolio |
|
(5 |
) |
(4 |
) |
(8 |
) |
(13 |
) |
(15 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
FDIC covered loans |
|
— |
|
— |
|
— |
|
(3 |
) |
(8 |
) | ||||||
|
Total loans charged off |
|
(25 |
) |
(13 |
) |
(20 |
) |
(19 |
) |
(32 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Recoveries of loans previously charged off: |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Commercial and industrial |
|
6 |
|
5 |
|
7 |
|
3 |
|
6 |
| ||||||
|
Commercial mortgage |
|
— |
|
4 |
|
2 |
|
— |
|
10 |
| ||||||
|
Construction |
|
— |
|
1 |
|
— |
|
— |
|
2 |
| ||||||
|
Lease financing |
|
1 |
|
— |
|
— |
|
— |
|
5 |
| ||||||
|
Total commercial portfolio |
|
7 |
|
10 |
|
9 |
|
3 |
|
23 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Home equity and other consumer loans |
|
— |
|
2 |
|
1 |
|
1 |
|
1 |
| ||||||
|
Total consumer portfolio |
|
— |
|
2 |
|
1 |
|
1 |
|
1 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
FDIC covered loans |
|
7 |
|
2 |
|
2 |
|
1 |
|
3 |
| ||||||
|
Total recoveries of loans previously charged off |
|
14 |
|
14 |
|
12 |
|
5 |
|
27 |
| ||||||
|
Net loans recovered (charged off) |
|
(11 |
) |
1 |
|
(8 |
) |
(14 |
) |
(5 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Ending balance of allowance for loan losses |
|
568 |
|
608 |
|
625 |
|
638 |
|
653 |
| ||||||
|
Allowance for losses on off-balance sheet commitments |
|
132 |
|
131 |
|
136 |
|
138 |
|
117 |
| ||||||
|
Total allowance for credit losses |
|
$ |
|
700 |
|
$ |
739 |
|
$ |
761 |
|
$ |
776 |
|
$ |
770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Components of allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Allowance for loan losses, excluding allowance on purchased credit-impaired loans |
|
$ |
|
567 |
|
$ |
607 |
|
$ |
624 |
|
$ |
637 |
|
$ |
652 |
|
|
Allowance for loan losses on purchased credit-impaired loans |
|
1 |
|
1 |
|
1 |
|
1 |
|
1 |
| ||||||
|
Total allowance for loan losses |
|
$ |
|
568 |
|
$ |
608 |
|
$ |
625 |
|
$ |
638 |
|
$ |
653 |
|
UnionBanCal Corporation and Subsidiaries
Securities Available for Sale (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
Fair Value |
| |||||
|
|
|
December 31, 2013 |
|
September 30, 2013 |
|
Amount Change from |
|
% Change from |
| |||||||||
|
|
|
Amortized |
|
Fair |
|
Amortized |
|
Fair |
|
September 30, |
|
September 30, |
| |||||
|
(Dollars in millions) |
|
Cost |
|
Value |
|
Cost |
|
Value |
|
2013 |
|
2013 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
U.S. government sponsored agencies |
|
$ |
73 |
|
$ |
73 |
|
$ |
138 |
|
$ |
139 |
|
$ |
(66 |
) |
(47 |
)% |
|
Residential mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
U.S. government and government sponsored agencies |
|
9,194 |
|
8,900 |
|
10,035 |
|
9,782 |
|
(882 |
) |
(9 |
) | |||||
|
Privately issued |
|
220 |
|
222 |
|
238 |
|
241 |
|
(19 |
) |
(8 |
) | |||||
|
Commercial mortgage-backed securities |
|
1,947 |
|
1,870 |
|
2,047 |
|
1,976 |
|
(106 |
) |
(5 |
) | |||||
|
Collateralized loan obligations |
|
2,670 |
|
2,673 |
|
2,605 |
|
2,613 |
|
60 |
|
2 |
| |||||
|
Asset-backed and other |
|
34 |
|
35 |
|
58 |
|
59 |
|
(24 |
) |
(41 |
) | |||||
|
Asset Liability Management securities |
|
14,138 |
|
13,773 |
|
15,121 |
|
14,810 |
|
(1,037 |
) |
(7 |
) | |||||
|
Other debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Direct bank purchase bonds |
|
1,968 |
|
1,960 |
|
1,916 |
|
1,908 |
|
52 |
|
3 |
| |||||
|
Other |
|
81 |
|
76 |
|
148 |
|
147 |
|
(71 |
) |
(48 |
) | |||||
|
Equity securities |
|
7 |
|
8 |
|
6 |
|
7 |
|
1 |
|
14 |
| |||||
|
Total securities available for sale |
|
$ |
16,194 |
|
$ |
15,817 |
|
$ |
17,191 |
|
$ |
16,872 |
|
$ |
(1,055 |
) |
(6 |
)% |
UnionBanCal Corporation and Subsidiaries
Reconciliation of Non-GAAP Measures (Unaudited)
The following table presents a reconciliation between certain Generally Accepted Accounting Principles (GAAP) amounts and specific non-GAAP measures as used to compute selected non-GAAP financial ratios.
|
|
|
As of and for the Three Months Ended |
|
For the Years Ended |
| |||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
December 31, |
|
December 31, |
| |||||||
|
(Dollars in millions) |
|
2013 |
|
2013 |
|
2013 (1) |
|
2013 (1) |
|
2012 (1) |
|
2013 |
|
2012 (1) |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net income attributable to UNBC |
|
$ |
179 |
|
$ |
198 |
|
$ |
142 |
|
$ |
148 |
|
$ |
123 |
|
$ |
667 |
|
$ |
628 |
|
|
Net adjustments for merger costs related to acquisitions, net of tax |
|
12 |
|
15 |
|
27 |
|
24 |
|
26 |
|
78 |
|
32 |
| |||||||
|
Net adjustments for privatization transaction, net of tax |
|
2 |
|
(14 |
) |
(8 |
) |
(1 |
) |
2 |
|
(21 |
) |
20 |
| |||||||
|
Net income attributable to UNBC, excluding impact of privatization transaction and merger costs related to acquisitions |
|
$ |
193 |
|
$ |
199 |
|
$ |
161 |
|
$ |
171 |
|
$ |
151 |
|
$ |
724 |
|
$ |
680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Average total assets |
|
$ |
104,424 |
|
$ |
101,534 |
|
$ |
98,714 |
|
$ |
96,649 |
|
$ |
92,051 |
|
$ |
100,355 |
|
$ |
89,716 |
|
|
Net adjustments related to privatization transaction |
|
2,297 |
|
2,309 |
|
2,318 |
|
2,330 |
|
2,345 |
|
2,313 |
|
2,368 |
| |||||||
|
Average total assets, excluding impact of privatization transaction |
|
$ |
102,127 |
|
$ |
99,225 |
|
$ |
96,396 |
|
$ |
94,319 |
|
$ |
89,706 |
|
$ |
98,042 |
|
$ |
87,348 |
|
|
Return on average assets (4) |
|
0.68 |
% |
0.78 |
% |
0.58 |
% |
0.61 |
% |
0.54 |
% |
0.66 |
% |
0.70 |
% | |||||||
|
Return on average assets, excluding impact of privatization transaction and merger costs related to acquisitions (4) (5) |
|
0.75 |
|
0.81 |
|
0.66 |
|
0.72 |
|
0.68 |
|
0.74 |
|
0.78 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Average UNBC stockholder’s equity |
|
$ |
12,604 |
|
$ |
12,210 |
|
$ |
12,599 |
|
$ |
12,584 |
|
$ |
12,559 |
|
$ |
12,499 |
|
$ |
12,075 |
|
|
Adjustments for merger costs related to acquisitions |
|
(105 |
) |
(93 |
) |
(64 |
) |
(48 |
) |
(15 |
) |
(80 |
) |
(6 |
) | |||||||
|
Net adjustments for privatization transaction |
|
2,306 |
|
2,319 |
|
2,337 |
|
2,353 |
|
2,360 |
|
2,329 |
|
2,368 |
| |||||||
|
Average UNBC stockholder’s equity, excluding impact of privatization transaction and merger costs related to acquisitions |
|
$ |
10,403 |
|
$ |
9,984 |
|
$ |
10,326 |
|
$ |
10,279 |
|
$ |
10,214 |
|
$ |
10,250 |
|
$ |
9,713 |
|
|
Return on average UNBC stockholder’s equity (4) |
|
5.66 |
% |
6.50 |
% |
4.53 |
% |
4.68 |
% |
3.95 |
% |
5.33 |
% |
5.21 |
% | |||||||
|
Return on average UNBC stockholder’s equity, excluding impact of privatization transaction and merger costs related to acquisitions (4) (5) |
|
7.41 |
|
8.01 |
|
6.17 |
|
6.69 |
|
5.95 |
|
7.06 |
|
7.01 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Noninterest expense |
|
$ |
689 |
|
$ |
689 |
|
$ |
702 |
|
$ |
713 |
|
$ |
715 |
|
$ |
2,793 |
|
$ |
2,566 |
|
|
Less: Foreclosed asset expense and other credit costs |
|
2 |
|
(2 |
) |
(3 |
) |
(1 |
) |
6 |
|
(4 |
) |
8 |
| |||||||
|
Less: (Reversal of) provision for losses on off-balance sheet commitments |
|
2 |
|
1 |
|
(2 |
) |
15 |
|
(10 |
) |
16 |
|
(17 |
) | |||||||
|
Less: Productivity initiative costs |
|
20 |
|
14 |
|
13 |
|
4 |
|
19 |
|
51 |
|
37 |
| |||||||
|
Less: Low income housing credit (LIHC) investment amortization expense |
|
24 |
|
17 |
|
20 |
|
15 |
|
17 |
|
76 |
|
63 |
| |||||||
|
Less: Expenses of the LIHC consolidated VIEs |
|
6 |
|
11 |
|
6 |
|
6 |
|
6 |
|
29 |
|
31 |
| |||||||
|
Less: Merger costs related to acquisitions |
|
25 |
|
25 |
|
44 |
|
40 |
|
43 |
|
134 |
|
53 |
| |||||||
|
Less: Net adjustments related to privatization transaction |
|
14 |
|
13 |
|
14 |
|
14 |
|
17 |
|
55 |
|
81 |
| |||||||
|
Less: Debt termination fees from balance sheet repositioning |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
30 |
| |||||||
|
Less: Intangible asset amortization |
|
3 |
|
3 |
|
4 |
|
3 |
|
— |
|
13 |
|
— |
| |||||||
|
Noninterest expense, as adjusted (a) |
|
$ |
593 |
|
$ |
607 |
|
$ |
606 |
|
$ |
617 |
|
$ |
617 |
|
$ |
2,423 |
|
$ |
2,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Total revenue |
|
$ |
896 |
|
$ |
919 |
|
$ |
873 |
|
$ |
904 |
|
$ |
889 |
|
$ |
3,592 |
|
$ |
3,420 |
|
|
Add: Net interest income taxable-equivalent adjustment |
|
4 |
|
4 |
|
4 |
|
3 |
|
3 |
|
15 |
|
12 |
| |||||||
|
Less: Productivity initiative gains |
|
6 |
|
11 |
|
— |
|
— |
|
— |
|
17 |
|
23 |
| |||||||
|
Less: Accretion related to privatization-related fair value adjustments |
|
8 |
|
8 |
|
3 |
|
5 |
|
15 |
|
24 |
|
78 |
| |||||||
|
Less: Other credit costs |
|
1 |
|
1 |
|
2 |
|
(9 |
) |
— |
|
(5 |
) |
— |
| |||||||
|
Total revenue, as adjusted (b) |
|
$ |
885 |
|
$ |
903 |
|
$ |
872 |
|
$ |
911 |
|
$ |
877 |
|
$ |
3,571 |
|
$ |
3,331 |
|
|
Adjusted efficiency ratio (a)/(b) (7) |
|
67.08 |
% |
67.21 |
% |
69.45 |
% |
67.72 |
% |
70.22 |
% |
67.85 |
% |
68.45 |
% | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Total UNBC stockholder’s equity |
|
$ |
14,215 |
|
$ |
12,549 |
|
$ |
12,371 |
|
$ |
12,565 |
|
$ |
12,461 |
|
|
|
|
| ||
|
Less: Goodwill |
|
3,228 |
|
3,168 |
|
3,186 |
|
2,952 |
|
2,942 |
|
|
|
|
| |||||||
|
Less: Intangible assets, except mortgage servicing rights (MSRs) |
|
288 |
|
287 |
|
321 |
|
337 |
|
373 |
|
|
|
|
| |||||||
|
Less: Deferred tax liabilities related to goodwill and intangible assets |
|
(105 |
) |
(110 |
) |
(118 |
) |
(122 |
) |
(129 |
) |
|
|
|
| |||||||
|
Tangible common equity (c) |
|
$ |
10,804 |
|
$ |
9,204 |
|
$ |
8,982 |
|
$ |
9,398 |
|
$ |
9,275 |
|
|
|
|
| ||
|
Tier 1 capital, determined in accordance with regulatory requirements |
|
$ |
11,486 |
|
$ |
10,153 |
|
$ |
9,931 |
|
$ |
10,031 |
|
$ |
9,864 |
|
|
|
|
| ||
|
Less: Junior subordinated debt payable to trusts |
|
66 |
|
66 |
|
66 |
|
66 |
|
66 |
|
|
|
|
| |||||||
|
Tier 1 common equity (d) |
|
$ |
11,420 |
|
$ |
10,087 |
|
$ |
9,865 |
|
$ |
9,965 |
|
$ |
9,798 |
|
|
|
|
| ||
|
Total assets |
|
$ |
105,894 |
|
$ |
105,484 |
|
$ |
102,279 |
|
$ |
96,975 |
|
$ |
97,008 |
|
|
|
|
| ||
|
Less: Goodwill |
|
3,228 |
|
3,168 |
|
3,186 |
|
2,952 |
|
2,942 |
|
|
|
|
| |||||||
|
Less: Intangible assets, except MSRs |
|
288 |
|
287 |
|
321 |
|
337 |
|
373 |
|
|
|
|
| |||||||
|
Less: Deferred tax liabilities related to goodwill and intangible assets |
|
(105 |
) |
(110 |
) |
(118 |
) |
(122 |
) |
(129 |
) |
|
|
|
| |||||||
|
Tangible assets (e) |
|
$ |
102,483 |
|
$ |
102,139 |
|
$ |
98,890 |
|
$ |
93,808 |
|
$ |
93,822 |
|
|
|
|
| ||
|
Risk-weighted assets, determined in accordance with regulatory requirements (f) (8) |
|
$ |
92,334 |
|
$ |
90,900 |
|
$ |
85,979 |
|
$ |
80,018 |
|
$ |
79,321 |
|
|
|
|
| ||
|
Tangible common equity ratio (c)/(e) (12) |
|
10.54 |
% |
9.01 |
% |
9.08 |
% |
10.02 |
% |
9.89 |
% |
|
|
|
| |||||||
|
Tier 1 common capital ratio (d)/(f) (9) (10) (11) |
|
12.37 |
|
11.10 |
|
11.47 |
|
12.45 |
|
12.35 |
|
|
|
|
| |||||||
Refer to Exhibit 14 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Footnotes
|
(1) |
During the third quarter of 2013, the Company corrected prior period errors related to the recognition of income and expense associated with market-linked certificates of deposits. The Company concluded that these errors were not material to the periods in which the corrections were made. |
|
|
|
|
(2) |
Pre-tax, pre-provision income is total revenue less noninterest expense. Management believes that this is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover loan losses through a credit cycle. |
|
|
|
|
(3) |
Core deposits exclude brokered deposits, foreign time deposits and domestic time deposits greater than $250,000. |
|
|
|
|
(4) |
Annualized. |
|
|
|
|
(5) |
These ratios exclude the impact of the privatization transaction and merger costs related to acquisitions. Management believes that these ratios provide useful supplemental information regarding UnionBanCal’s business results. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
|
|
|
|
(6) |
The efficiency ratio is total noninterest expense as a percentage of total revenue (net interest income and noninterest income). |
|
|
|
|
(7) |
The adjusted efficiency ratio, a non-GAAP financial measure, is adjusted noninterest expense (noninterest expense excluding privatization-related expenses and fair value amortization/accretion, foreclosed asset expense and other credit costs, (reversal of) provision for losses on off-balance sheet commitments, low income housing credit (LIHC) investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger costs related to acquisitions, certain costs related to productivity initiatives, debt termination fees from balance sheet repositioning and intangible asset amortization) as a percentage of adjusted total revenue (net interest income (taxable-equivalent basis) and noninterest income), excluding impact of privatization, gains from productivity initiatives related to the sale of certain business units and premises, and other credit costs. Management discloses the adjusted efficiency ratio as a measure of the efficiency of our operations, focusing on those costs most relevant to our business activities. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
|
|
|
|
(8) |
Yields, interest income and net interest margin are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent. |
|
|
|
|
(9) |
Effective September 30, 2013, the Company updated the methodologies applied to the calculation of its regulatory capital ratios as the result of recent regulatory correspondence, which clarified the treatment of certain off-balance sheet credit exposures. If the Company had applied the new methodology on a retrospective basis, the Tier 1 risk-based capital ratio would have been 11.04%, 11.97%, and 11.87% as of June 30, 2013, March 31, 2013 and December 31, 2012, respectively; the Total risk-based capital ratio would have been 13.03%, 13.40% and 13.30% as of June 30, 2013, March 31, 2013 and December 31, 2012, respectively; and the Tier 1 common capital ratio would have been 10.97%, 11.90% and 11.79% as of June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
|
|
|
|
(10) |
Estimated as of December 31, 2013. |
|
(11) |
The Tier 1 common capital ratio is the ratio of Tier 1 capital, less qualifying trust preferred securities, to risk-weighted assets. The Tier 1 common capital ratio, a non-GAAP financial measure, facilitates the understanding of UnionBanCal’s capital structure and is used to assess and compare the quality and composition of UnionBanCal’s capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
|
(12) |
The tangible common equity ratio, a non-GAAP financial measure, is calculated as tangible common equity divided by tangible assets. The methodology for determining tangible common equity may differ among companies. The tangible common equity ratio facilitates the understanding of UnionBanCal’s capital structure and is used to assess and compare the quality and composition of UnionBanCal’s capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
|
|
|
|
(13) |
Criticized loans held for investment reflect loans in the commercial portfolio segment that are monitored for credit quality based on internal ratings. Amounts exclude small business loans, which are monitored by business credit score and delinquency status. |
|
|
|
|
(14) |
The allowance for credit losses ratios include the allowances for loan losses and losses on off-balance sheet commitments. |
|
|
|
|
(15) |
These ratios exclude the impact of all purchased credit-impaired loans and FDIC covered OREO. Purchased credit-impaired loans and OREO related to the April 2010 acquisitions of certain assets and assumption of certain liabilities of Frontier Bank and Tamalpais Bank are covered under loss share agreements between Union Bank, N.A. and the Federal Deposit Insurance Corporation. Management believes the exclusion of purchased credit-impaired loans and FDIC covered OREO from certain asset quality ratios that include nonperforming loans, nonperforming assets, net loans charged off, total loans held for investment and the allowance for loan losses or credit losses in the numerator or denominator provides a better perspective into underlying asset quality trends. |
|
|
|
|
(16) |
Average balances on loans outstanding include all nonperforming loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield. |
|
|
|
|
(17) |
Includes interest bearing trading liabilities. |
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(18) |
Excludes loans totaling $124 million, $203 million, $210 million, $125 million, and $124 million that are 90 days or more past due and still accruing at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012, respectively, which consist of loans accounted for in accordance with the accounting standards for purchased credit-impaired loans. The past due status of individual loans within the pools is not a meaningful indicator of credit quality, as potential credit losses are measured at the loan pool level. |
nm = not meaningful