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Highlights:
-- Second quarter loss from continuing operations was $80 million. Second quarter results included after-tax net expenses of $13 million related to the November 2008 privatization of UnionBanCal Corporation and a one-time FDIC assessment of $21 million (after-tax).
-- Second quarter revenue was up 3 percent year-over-year and flat compared with first quarter 2009
-- Second quarter net interest income was up 8 percent year-over-year and down 2 percent compared with first quarter 2009
-- Second quarter average total loans increased 9 percent year-over-year and decreased 0.5 percent versus first quarter 2009
-- Second quarter average core deposits were up 48 percent year-over-year and 21 percent versus first quarter 2009
-- Second quarter net interest margin was 3.41 percent, down 33 basis points year-over-year and down 38 basis points versus first quarter 2009
-- Second quarter annualized average all-in cost of funds was 0.88 percent
-- Second quarter asset quality metrics: -- Total provision for credit losses was $375 million, while net loans charged-off were $151 million, or 1.23 percent annualized of average total loans
-- Nonperforming assets were $1.1 billion, or 1.55 percent of total assets, at quarter-end
-- Allowance for credit losses to nonaccrual loans was 113 percent at quarter-end
-- Tangible common equity ratio was 6.56 percent at June 30, 2009
UnionBanCal Corporation (the Company or UB | Quote | Chart | News | PowerRating) today reported a second quarter 2009 net loss of $80 million. Loss from continuing operations for second quarter 2009 was also $80 million, compared with income from continuing operations of $134 million a year earlier, and loss from continuing operations of $10 million in first quarter 2009. Second quarter 2009 loss from continuing operations included after-tax net expenses of $13 million due to the privatization transaction and a one-time FDIC assessment of $21 million (after-tax). First quarter 2009 loss from continuing operations included after-tax net expenses of $21 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 first half 2009, net loss from continuing operations was $90 million, compared with net income from continuing operations of $257 million for first half 2008. First half 2009 net loss from continuing operations included after-tax net expenses of $34 million due to the privatization transaction and a one-time FDIC assessment of $21 million (after-tax).
Summary of Second Quarter Results From Continuing Operations
Second Quarter Total Revenue
For second quarter 2009, total revenue (taxable-equivalent net interest income plus noninterest income) was $736 million, up 3 percent compared with second quarter 2008. Net interest income increased 8 percent and noninterest income decreased 8 percent. Second quarter 2009 net interest income included $27.5 million of accretion related to fair value adjustments due to the privatization transaction. Average total loans increased $4.1 billion, or 9 percent, average interest bearing deposits increased $10.1 billion, or 33 percent, and average noninterest bearing deposits increased $1.0 billion, or 8 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 government agencies and institutional escrow clients. The net interest margin in second quarter 2009 was 3.41 percent, a decrease of 33 basis points compared with second quarter 2008, primarily due to lower yields on earning assets and higher volumes of interest-bearing deposits.
Average noninterest bearing deposits represented 25.6 percent of average total deposits in second quarter 2009. The annualized average all-in cost of funds was 0.88 percent, compared with 1.56 percent in second quarter 2008. The Company's average core deposit-to-loan ratio was 96.4 percent in second quarter 2009.
Compared with first quarter 2009, total revenue was flat, with net interest income down 2 percent and noninterest income up 5 percent. Average total loans decreased $0.2 billion, or 0.5 percent, average interest bearing deposits increased $6.4 billion, or 19 percent, and average noninterest bearing deposits increased $1.4 billion, or 11 percent. The net interest margin decreased 38 basis points compared with first quarter 2009.
Second Quarter Noninterest Income and Noninterest Expense
For second quarter 2009, noninterest income was $183 million, down $16 million, or 8 percent, from the same quarter a year ago, primarily due to lower service charges on deposit accounts, lower trust and investment management fees and a $7.1 million pre-tax gain on the redemption of MasterCard Inc. common stock recorded in second quarter 2008. These decreases were partially offset by higher merchant banking fees. Noninterest income increased $8 million, or 5 percent, compared with first quarter 2009. The increase was primarily due to higher merchant banking fees.
Noninterest expense for second quarter 2009 was $532 million, an increase of $113 million, or 27 percent, compared with second quarter 2008. The increase was primarily due to expenses related to the privatization transaction of $49 million, primarily classified in privatization-related expense and intangible asset amortization expense; an increase in regulatory agencies expense of $48 million, primarily due to a one-time FDIC assessment of $34 million, recorded June 30, 2009, and an industry-wide increase in the FDIC assessment rate, effective January 1, 2009; and an increase in the provision for losses on off-balance sheet commitments of $15 million. Salaries and other compensation expense decreased $13 million compared with second quarter 2008, primarily due to lower accruals for performance-related incentive expense.
Noninterest expense for second quarter 2009 increased $11 million, or 2 percent, compared with first quarter 2009. Regulatory agencies expense increased $35 million, primarily due to a one-time FDIC assessment of $34 million, recorded June 30, 2009. Expenses associated with the privatization transaction, primarily classified in privatization-related expense and intangible asset amortization expense, decreased $20 million. Salaries and employee benefits expense decreased $11 million, or 4 percent, primarily due to annual seasonal factors that result in lower payroll taxes and 401(k) matching contributions. The provision for off-balance sheet losses decreased $11 million, compared with first quarter 2009.
Year-to-Date Results
For first half 2009, net loss was $90 million. Net loss from continuing operations was also $90 million, compared with net income from continuing operations of $257 million for first half 2008. The decline in income from continuing operations was primarily due to a $470 million increase in total provision for credit losses ($285 million after-tax), after-tax net expenses of $34 million related to the privatization transaction and a one-time FDIC assessment of $21 million (after-tax).
Total revenue for first half 2009 was $1.5 billion, an increase of $103 million, or 7.5 percent, over first half 2008. Net interest income increased $140 million, or 14 percent, and noninterest income decreased $37 million, or 9 percent. First half 2009 net interest income included $62.4 million of accretion related to fair value adjustments due to the privatization transaction. Noninterest expense increased $231 million, or 28.1 percent, primarily due to $119 million in expense related to the privatization transaction, classified in privatization-related expense and intangible asset amortization expense. In addition, regulatory agencies expense increased $63 million, primarily due to a one-time FDIC assessment of $34 million, recorded June 30, 2009, and an industry-wide increase in the FDIC assessment rate, effective January 1, 2009.
Balance Sheet
At June 30, 2009, the Company had total assets of $74 billion, up $13.4 billion, or 22 percent, compared with June 30, 2008. Total loans were $48.9 billion, up $2.9 billion, or 6 percent, compared with June 30, 2008. At June 30, 2009, the Company had goodwill and intangibles of $3.0 billion, up $2.7 billion compared with June 30, 2008, due to the privatization transaction, which closed during fourth quarter 2008.
At June 30, 2009, the Company had total liabilities of $66.6 billion, up $10.7 billion, or 19 percent, compared with June 30, 2008. Total deposits were $58.3 billion, up $15.7 billion, or 37 percent. Core deposits at period-end were $51.7 billion, resulting in a core deposit-to-loan ratio of 106 percent.
Credit Quality
Nonperforming assets at June 30, 2009, were $1.1 billion, or 1.55 percent of total assets. This compares with $835 million, or 1.21 percent of total assets, at March 31, 2009, and $225 million, or 0.37 percent of total assets, at June 30, 2008. The increase in nonperforming assets compared with second quarter 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 $159 million of the increase. The increase in nonperforming assets compared with March 31, 2009, was primarily due to higher levels of nonaccrual loans in the construction and commercial mortgage categories, reflecting weak income property market conditions.
For second quarter 2009, the total provision for credit losses was $375 million and net loans charged-off were $151 million, or 1.23 percent of average total loans annualized. For first quarter 2009, the total provision for credit losses was $275 million and net loans charged-off were $116 million, or 0.95 percent of average total loans annualized. For second quarter 2008, the total provision for credit losses was $100 million and net loans charged-off were $31 million, or 0.28 percent of average total loans annualized. For first half 2009, the total provision for credit losses was $650 million and net loans charged-off were $267 million, or 1.09 percent of average total loans annualized.
For first half 2009, net loans charged-off on the commercial, financial and industrial portfolio were $180 million; net loans charged-off on the construction portfolio were $24 million; net loans charged-off on the commercial mortgage portfolio were $27 million; and net loans charged-off on the consumer portfolio were $21 million. Net loans charged-off on the residential mortgage portfolio, which averaged $16 billion outstanding in first half 2009, were only $15 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 second quarter 2009, the provision for loan losses was $360 million, the provision for losses on off-balance sheet commitments was $15 million, and the total provision for credit losses was $375 million.
At June 30, 2009, the allowance for credit losses as a percent of total loans and as a percent of nonaccrual loans was 2.55 percent and 113 percent, respectively.
Capital and Liquidity
Total stockholder's equity was $7.4 billion at June 30, 2009, up $2.7 billion compared with June 30, 2008, primarily due to a $2 billion increase in goodwill related to the privatization transaction, and a $1 billion capital contribution from BTMU in fourth quarter 2008. The Company's tangible common equity ratio was 6.56 percent at June 30, 2009. The Company's Tier I and total risk-based capital ratios at June 30, 2009, were 8.68 percent and 11.54 percent, respectively. The Tier 1 common ratio at June 30, 2009, was 8.66 percent.
The Company maintains diverse sources of wholesale funding capacity and a relatively stable core deposit base, which has resulted in healthy liquidity. Wholesale funding declined to $4.4 billion at June 30, 2009, compared to $12.6 billion at March 31, 2009, primarily due to a $9.4 billion increase in period-end deposits. The Company also maintains significant sources of contingent liquidity through the Federal Home Loan Bank and Federal Reserve Bank.
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 incurred in the first and second quarters of 2009, 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.
Forward-Looking Statements
The following appears in accordance with the Private Securities Litigation Reform Act. This press release includes forward-looking statements that involve risks and uncertainties.
Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include the words "believe," "continue," "expect," "target," "anticipate," "intend," "plan," "estimate," "potential," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." They may also consist of annualized amounts based on historical interim period results. Forward-looking statements in this press release include those related to the Company's intentions regarding and resources for funding.
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. Such risks and uncertainties include, but are not limited to, further declines or disruptions in the financial markets which may adversely affect the Company or the Company's borrowers or other customers; continued or worsening adverse economic conditions in the United States; continued or worsening adverse economic and fiscal conditions in California; increased energy costs; global political and general economic conditions related to the war on terrorism and other hostilities; fluctuations in interest rates; the ownership interest in UnionBanCal Corporation by BTMU, which is a wholly-owned subsidiary of MUFG; competition in the banking and financial services industries; deposit pricing pressures; the levels of commercial and residential real estate activity in our market; adverse effects of current and future banking laws, rules and regulations and their enforcement; effects of governmental fiscal or monetary policies; legal or regulatory proceedings or investigations; changes in accounting practices or requirements; and risks associated with various strategies the Company may pursue, including potential acquisitions, divestitures and restructurings. A complete description of the Company, including related risk factors, is discussed in the Company's public filings with the Securities and Exchange Commission, which are available online at http://www.sec.gov. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.
Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $74 billion at June 30, 2009. UnionBanCal Corporation is the 16th largest commercial bank holding company in the U.S. based on assets at March 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. Union Bank is California's fifth largest bank by deposits at March 31, 2009. The bank has 335 banking offices in California, Oregon, and Washington 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. (NYSE: MTU). 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 June 30, 2009 from
June 30, March 31, June 30, June 30, March 31,
(Dollars in thousands) 2008 2009(1) 2009(1) 2008 2009
Results of operations:
Net interest income (2) $ 512,887 $ 562,620 $ 553,094 7.84% (1.69%)
Noninterest income 199,626 174,716 183,213 (8.22%) 4.86%
Total revenue 712,513 737,336 736,307 3.34% (0.14%)
Noninterest expense 419,312 521,383 532,058 26.89% 2.05%
Provision for loan losses 95,000 249,000 360,000 nm 44.58%
Income (loss) from continuing operations before income taxes (2) 198,201 (33,047) (155,751) nm nm
Taxable-equivalent adjustment 2,329 2,617 2,748 17.99% 5.01%
Income tax expense (benefit) 61,574 (25,856) (78,492) nm nm
Income (loss) from continuing operations 134,298 (9,808) (80,007) nm nm
Income from discontinued operations 7,047 - - (100.00%) -
Net income (loss) $ 141,345 $ (9,808) $ (80,007) nm nm
Balance sheet (end of period):
Total assets (3) $ 60,593,921 $ 68,725,270 $ 73,984,788 22.10% 7.65%
Total loans 46,041,358 49,441,063 48,896,520 6.20% (1.10%)
Nonperforming assets 224,944 834,738 1,144,602 nm 37.12%
Total deposits 42,604,419 48,878,733 58,282,770 36.80% 19.24%
Medium- and long-term debt 2,809,329 5,140,931 5,131,068 82.64% (0.19%)
Stockholder's equity 4,708,790 7,475,472 7,429,500 57.78% (0.61%)
Balance sheet (period average):
Total assets $ 59,269,965 $ 67,072,499 $ 71,495,226 20.63% 6.59%
Total loans 45,494,161 49,789,046 49,556,222 8.93% (0.47%)
Earning assets 54,935,058 59,626,207 65,008,223 18.34% 9.03%
Total deposits 43,203,180 46,633,173 54,352,412 25.81% 16.55%
Stockholder's equity 4,616,596 7,336,212 7,303,050 58.19% (0.45%)
Financial ratios (4):
Return on average assets (5):
From continuing operations 0.91% (0.06%) (0.45%)
Net income (loss) 0.96% (0.06%) (0.45%)
Return on average stockholder's equity (5):
From continuing operations 11.70% (0.54%) (4.39%)
Net income (loss) 12.31% (0.54%) (4.39%)
Efficiency ratio (6) 56.94% 65.69% 68.28%
Net interest margin (2) 3.74% 3.79% 3.41%
Tangible common equity ratio (7) 7.22% 7.12% 6.56%
Tier 1 risk-based capital ratio (3) (8) 7.96% 8.74% 8.68%
Total risk-based capital ratio (3) (8) 10.84% 11.59% 11.54%
Leverage ratio (3) (8) 7.95% 8.46% 7.89%
Allowance for loan losses to:
Total loans 1.14% 1.76% 2.21%
Nonaccrual loans 243.59% 107.41% 98.14%
Allowances for credit losses to (9):
Total loans 1.37% 2.07% 2.55%
Nonaccrual loans 291.42% 126.10% 113.24%
Net loans charged off to average total loans (5) 0.28% 0.95% 1.23%
Nonperforming assets to total loans and foreclosed assets 0.49% 1.69% 2.34%
Nonperforming assets to total assets (3) 0.37% 1.21% 1.55%
Selected financial ratios excluding impact of privatization
transaction (1) (4) (15):
From continuing operations:
Return on average assets (5) 0.91% 0.07% (0.39%)
Return on average stockholder's equity (5) 11.70% 0.91% (5.48%)
Efficiency ratio (6) 56.94% 59.08% 63.97%
Refer to Exhibit 12 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 2
Percent Change to
As of and for the Six Months Ended June 30, 2009 from
June 30, June 30, June 30,
(Dollars in thousands, except per share data) 2008 2009(1) 2008
Results of operations:
Net interest income (2) $ 975,991 $ 1,115,714 14.32%
Noninterest income 395,022 357,929 (9.39%)
Total revenue 1,371,013 1,473,643 7.49%
Noninterest expense 822,518 1,053,441 28.08%
Provision for loan losses 167,000 609,000 nm
Income (loss) from continuing operations before income taxes (2) 381,495 (188,798 ) nm
Taxable-equivalent adjustment 4,855 5,365 10.50%
Income tax expense (benefit) 119,944 (104,348 ) nm
Income (loss) from continuing operations 256,696 (89,815 ) nm
Loss from discontinued operations (6,761 ) - (100.00%)
Net income (loss) $ 249,935 $ (89,815 ) nm
Balance sheet (end of period):
Total assets (3) $ 60,593,921 $ 73,984,788 22.10%
Total loans 46,041,358 48,896,520 6.20%
Nonperforming assets 224,944 1,144,602 nm
Total deposits 42,604,419 58,282,770 36.80%
Medium- and long-term debt 2,809,329 5,131,068 82.64%
Stockholder's equity 4,708,790 7,429,500 57.78%
Balance sheet (period average):
Total assets $ 57,951,110 $ 69,296,183 19.58%
Total loans 44,097,805 49,671,989 12.64%
Earning assets 53,561,569 62,743,021 17.14%
Total deposits 43,408,469 50,514,116 16.37%
Stockholder's equity 4,667,429 7,319,518 56.82%
Financial ratios (4):
Return on average assets (5):
From continuing operations 0.89 % (0.26 %)
Net income 0.87 % (0.26 %)
Return on average stockholder's equity (5):
From continuing operations 11.06 % (2.47 %)
Net income 10.77 % (2.47 %)
Efficiency ratio (6) 57.75 % 66.98 %
Net interest margin (2) 3.65 % 3.56 %
Tangible common equity ratio (7) 7.22 % 6.56 %
Tier 1 risk-based capital ratio (3) (8) 7.96 % 8.68 %
Total risk-based capital ratio (3) (8) 10.84 % 11.54 %
Leverage ratio (3) (8) 7.95 % 7.89 %
Allowance for loan losses to:
Total loans 1.14 % 2.21 %
Nonaccrual loans 243.59 % 98.14 %
Allowances for credit losses to (9):
Total loans 1.37 % 2.55 %
Nonaccrual loans 291.42 % 113.24 %
Net loans charged off to average total loans (5) 0.20 % 1.09 %
Nonperforming assets to total loans and foreclosed assets 0.49 % 2.34 %
Nonperforming assets to total assets (3) 0.37 % 1.55 %
Selected financial ratios excluding impact of privatization
transaction (1) (4) (15):
From continuing operations:
Return on average assets (5) 0.89 % (0.17 %)
Return on average stockholder's equity (5) 11.06 % (2.28 %)
Efficiency ratio (6) 57.75 % 61.54 %
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 Six Months Ended
June 30, March 31, June 30, June 30,
(Amounts in thousands) 2008 2009(1) 2009(1) 2008 2009(1)
Interest Income (2)
Loans $ 617,508 $ 604,067 $ 586,890 $ 1,250,870 $ 1,190,957
Securities 98,338 103,281 98,754 204,383 202,035
Interest bearing deposits in banks 228 900 3,550 356 4,450
Federal funds sold and securities purchased under resale agreements 1,093 141 97 3,786 238
Trading account assets 1,119 158 231 3,923 389
Total interest income 718,286 708,547 689,522 1,463,318 1,398,069
Interest Expense
Deposits 144,509 105,038 100,186 365,169 205,224
Federal funds purchased and securities sold under repurchase 13,057 53 19 28,772 72
agreements
Commercial paper 8,279 1,592 954 18,071 2,546
Medium- and long-term debt 19,692 27,529 29,415 39,149 56,944
Trust notes 238 238 238 476 476
Other borrowed funds 19,624 11,477 5,616 35,690 17,093
Total interest expense 205,399 145,927 136,428 487,327 282,355
Net Interest Income (2) 512,887 562,620 553,094 975,991 1,115,714
Provision for loan losses 95,000 249,000 360,000 167,000 609,000
Net interest income after provision for loan losses 417,887 313,620 193,094 808,991 506,714
Noninterest Income
Service charges on deposit accounts 77,706 71,322 71,843 152,442 143,165
Trust and investment management fees 43,802 33,907 34,130 87,190 68,037
Trading account activities 16,687 22,692 16,251 27,699 38,943
Merchant banking fees 11,085 13,832 19,924 22,878 33,756
Brokerage commissions and fees 10,635 8,307 8,506 20,494 16,813
Card processing fees, net 8,167 7,536 8,124 15,931 15,660
Securities losses, net - - (172 ) (2 ) (172 )
Other 31,544 17,120 24,607 68,390 41,727
Total noninterest income 199,626 174,716 183,213 395,022 357,929
Noninterest Expense
Salaries and employee benefits 243,299 243,563 233,057 484,969 476,620
Net occupancy 38,232 41,921 43,222 74,434 85,143
Intangible asset amortization 670 40,887 40,281 1,340 81,168
Regulatory agencies 4,897 17,938 52,836 7,506 70,774
Outside services 20,295 18,834 22,948 37,304 41,782
Professional services 15,931 15,938 19,489 30,528 35,427
Equipment 15,141 15,413 16,602 30,488 32,015
Software 14,409 15,038 14,205 29,204 29,243
Foreclosed asset expense 83 886 3,282 172 4,168
Provision for losses on off-balance sheet commitments 5,000 26,000 15,000 13,000 41,000
Privatization-related expense - 26,819 7,433 - 34,252
Other 61,355 58,146 63,703 113,573 121,849
Total noninterest expense 419,312 521,383 532,058 822,518 1,053,441
Income (loss) from continuing operations before income taxes (2) 198,201 (33,047 ) (155,751 ) 381,495 (188,798 )
Taxable-equivalent adjustment 2,329 2,617 2,748 4,855 5,365
Income tax expense (benefit) 61,574 (25,856 ) (78,492 ) 119,944 (104,348 )
Income (Loss) from Continuing Operations 134,298 (9,808 ) (80,007 ) 256,696 (89,815 )
Income (loss) from discontinued operations before income taxes 3,068 - - (14,517 ) -
Income tax benefit (3,979 ) - - (7,756 ) -
Income (Loss) from Discontinued Operations 7,047 - - (6,761 ) -
Net Income (Loss) $ 141,345 $ (9,808 ) $ (80,007 ) $ 249,935 $ (89,815 )
Refer to Exhibit 12 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets
Exhibit 4
(Unaudited) (Unaudited)
June 30, December 31, June 30,
(Dollars in thousands) 2008 2008(1) 2009(1)
Assets
Cash and due from banks $ 1,800,313 $ 1,568,578 $ 1,285,780
Interest bearing deposits in banks 65,788 2,872,698 8,556,837
Federal funds sold and securities purchased under resale agreements 172,345 63,069 198,955
Total cash and cash equivalents 2,038,446 4,504,345 10,041,572
Trading account assets:
Pledged as collateral - 6,283 51,714
Held in portfolio 1,136,416 1,210,496 853,922
Securities available for sale:
Pledged as collateral 1,079,491 54,525 -
Held in portfolio 7,396,824 8,140,013 7,403,173
Securities held to maturity (fair value: June 30, 2009, $1,112,813) - - 1,171,380
Loans (net of allowance for loan losses: June 30, 2008, $526,401; 45,514,957 48,847,783 47,814,887
December 31, 2008, $737,767; June 30, 2009, $1,081,633)
Due from customers on acceptances 21,272 23,131 19,944
Premises and equipment, net 480,366 680,004 664,673
Intangible assets, net 5,117 713,485 641,406
Goodwill 355,287 2,369,326 2,369,326
Other assets 2,559,694 3,571,995 2,952,791
Assets of discontinued operations to be disposed or sold 6,051 4 -
Total assets $ 60,593,921 $ 70,121,390 $ 73,984,788
Liabilities
Noninterest bearing $ 13,440,290 $ 13,566,873 $ 14,926,564
Interest bearing 29,164,129 32,482,896 43,356,206
Total deposits 42,604,419 46,049,769 58,282,770
Federal funds purchased and securities sold under repurchase 2,296,587 172,758 203,205
agreements
Commercial paper 1,397,159 1,164,327 548,316
Other borrowed funds 4,719,809 8,196,597 606,019
Trading account liabilities 892,240 1,034,663 690,704
Acceptances outstanding 21,272 23,131 19,944
Other liabilities 1,012,403 1,685,412 1,059,508
Medium- and long-term debt 2,809,329 4,288,488 5,131,068
Junior subordinated debt payable to subsidiary grantor trust 14,206 13,980 13,754
Liabilities of discontinued operations to be extinguished or assumed 117,707 7,960 -
Total liabilities 55,885,131 62,637,085 66,555,288
Stockholder's Equity
Preferred stock:
Authorized 5,000,000 shares; no shares issued or outstanding as of - - -
June 30, 2008, December 31, 2008 and June 30, 2009
Common stock, par value $1 per share:
Authorized 300,000,000 shares; issued 157,811,268 shares as of 157,811 136,331 136,331
June 30, 2008, 136,330,829 shares as of December 31, 2008 and
136,330,829 shares as of June 30, 2009
Additional paid-in capital 1,182,978 3,195,023 3,195,023
Treasury stock - 19,760,597 shares as of June 30, 2008, no shares (1,204,469 ) - -
as of December 31, 2008 and June 30, 2009
Retained earnings 5,018,601 4,964,802 4,874,987
Accumulated other comprehensive loss (446,131 ) (811,851 ) (776,841 )
Total stockholder's equity 4,708,790 7,484,305 7,429,500
Total liabilities and stockholder's equity $ 60,593,921 $ 70,121,390 $ 73,984,788
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 June 30, 2009 from
June 30, March 31, June 30, June 30, March 31,
(Dollars in millions) 2008 2009(1) 2009 (1) 2008 2009
Loans (period average)
Commercial, financial and industrial $ 16,729 $ 18,498 $ 17,917 7.10% (3.14%)
Construction 2,566 2,734 2,789 8.68% 2.00%
Mortgage - Commercial 7,822 8,253 8,255 5.53% 0.02%
Mortgage - Residential 14,490 15,919 16,083 11.00% 1.03%
Consumer 2,978 3,722 3,841 28.99% 3.20%
Lease financing 645 653 662 2.57% 1.32%
Total loans held to maturity 45,230 49,779 49,546 9.54% (0.47%)
Total loans held for sale 264 10 10 (96.21%) (0.01%)
Total loans $ 45,494 $ 49,789 $ 49,556 8.93% (0.47%)
Nonperforming Assets (period end)
Nonaccrual loans:
Commercial, financial and industrial $ 82 $ 347 $ 370 nm 6.63%
Construction 95 218 314 nm 44.04%
Mortgage - Commercial 39 125 265 nm nm
Mortgage - Residential (10) - 102 133 nm 30.39%
Consumer (10) - 18 20 nm 11.11%
Total nonaccrual loans 216 810 1,102 nm 36.05%
Restructured loans 2 3 10 nm nm
Foreclosed assets 7 22 33 nm 50.00%
Total nonperforming assets $ 225 $ 835 $ 1,145 nm 37.13%
Loans 90 days or more past due and still accruing $ 51 $ 24 $ 4 (92.16%) (83.33%)
Restructured loans that are still accruing $ - $ - $ 1
Analysis of Allowances for Credit Losses
Beginning balance $ 463 $ 738 $ 870
Provision for loan losses 95 249 360
Loans charged off:
Commercial, financial and industrial (18 ) (96 ) (86 )
Construction (10 ) (2 ) (23 )
Mortgage - Commercial - (4 ) (23 )
Mortgage - Residential (2 ) (6 ) (9 )
Consumer (3 ) (10 ) (12 )
Total loans charged off (33 ) (118 ) (153 )
Loans recovered:
Commercial, financial and industrial 1 1 1
Construction 1 1 -
Consumer - - 1
Total loans recovered 2 2 2
Net loans recovered (charged off) (31 ) (116 ) (151 )
Adjustment for impaired loans related to privatization - - 2
Foreign translation adjustment - (1 ) 1
Ending balance of allowance for loan losses 527 870 1,082
Allowance for off-balance sheet commitment losses 103 151 166
$ -
Allowances for credit losses $ 630 $ 1,021 $ 1,248
Refer to Exhibit 12 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 6
For the Three Months Ended
6/30/2008 6/30/2009(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 $ 16,987,504 $ 229,612 5.44 % $ 17,920,408 $ 194,560 4.35 %
Construction 2,566,207 30,794 4.83 2,788,671 20,658 2.97
Mortgage - Residential 14,495,754 199,756 5.51 16,089,739 230,269 5.72
Mortgage - Commercial 7,822,056 111,722 5.71 8,254,595 91,689 4.44
Consumer 2,977,852 44,453 6.00 3,841,202 44,116 4.61
Lease financing 644,788 1,171 0.73 661,607 5,598 3.38
Total loans 45,494,161 617,508 5.44 49,556,222 586,890 4.74
Securities - taxable 8,293,036 97,233 4.69 8,564,355 97,738 4.56
Securities - tax-exempt 52,742 1,105 8.38 48,176 1,016 8.44
Interest bearing deposits in banks 67,553 228 1.36 5,594,318 3,550 0.25
Federal funds sold and securities purchased under resale agreements 213,292 1,093 2.06 203,529 97 0.19
Trading account assets 814,274 1,119 0.55 1,041,623 231 0.09
Total earning assets 54,935,058 718,286 5.24 65,008,223 689,522 4.25
Allowance for loan losses (456,191 ) (839,115 )
Cash and due from banks 1,662,638 1,285,449
Premises and equipment, net 482,950 669,993
Other assets 2,645,510 5,370,676
Total assets $ 59,269,965 $ 71,495,226
Liabilities
Deposits:
Transaction accounts $ 15,550,970 59,513 1.54 $ 29,514,913 66,549 0.90
Savings and consumer time 3,846,404 13,918 1.46 4,328,326 13,546 1.26
Large time 10,929,983 71,078 2.62 6,604,845 20,091 1.22
Total interest bearing deposits 30,327,357 144,509 1.92 40,448,084 100,186 0.99
Federal funds purchased and securities sold under repurchase 2,428,357 12,697 2.10 163,381 19 0.05
agreements
Net funding allocated from (to) discontinued operations (13) 64,945 360 2.23 - - -
Commercial paper 1,487,032 8,279 2.24 569,337 954 0.67
Other borrowed funds (14) 3,201,612 19,624 2.47 2,124,419 5,616 1.06
Medium and long-term debt 2,629,308 19,692 3.01 5,137,901 29,415 2.30
Trust notes 14,261 238 6.68 13,809 238 6.90
Total borrowed funds 9,825,515 60,890 2.49 8,008,847 36,242 1.82
Total interest bearing liabilities 40,152,872 205,399 2.06 48,456,931 136,428 1.13
Noninterest bearing deposits 12,875,823 13,904,328
Other liabilities 1,624,674 1,830,917
Total liabilities 54,653,369 64,192,176
Stockholder's Equity
Common equity 4,616,596 7,303,050
Total stockholder's equity 4,616,596 7,303,050
Total liabilities and stockholder's equity $ 59,269,965 $ 71,495,226
Reported Net Interest Income/Margin
Net interest income/margin (taxable-equivalent basis) 512,887 3.74 % 553,094 3.41 %
Less: taxable-equivalent adjustment 2,329 2,748
Net interest income $ 510,558 $ 550,346
Average Assets and Liabilities of Discontinued Operations for Period
Ended:
June 30, 2008 June 30, 2009
Assets $ 95,415 $ -
Liabilities $ 160,360 $ -
Net Liabilities $ (64,945 ) $ -
Refer to Exhibit 12 for footnote explanations.
UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 7
For the Three Months Ended
3/31/2009 (1) 6/30/2009 (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: (11)
Commercial, financial and industrial $ 18,503,965 $ 193,787 4.25 % $ 17,920,408 $ 194,560 4.35 %
Construction 2,733,630 19,261 2.86 2,788,671 20,658 2.97
Mortgage - Residential 15,923,191 234,438 5.89 16,089,739 230,269 5.72
Mortgage - Commercial 8,253,324 102,389 4.96 8,254,595 91,689 4.44
Consumer 3,722,252 46,539 5.07 3,841,202 44,116 4.61
Lease financing 652,684 7,653 4.69 661,607 5,598 3.38
Total loans 49,789,046 604,067 4.88 49,556,222 586,890 4.74
Securities - taxable 8,319,754 For full details for UB click here.
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