Breaking News

Tweet TWEET

UnionBanCal Corporation Reports First Quarter Net Income of $175 Million

  UnionBanCal Corporation Reports First Quarter Net Income of $175 Million  Business Wire  SAN FRANCISCO -- April 29, 2014  UnionBanCal Corporation (the Company), parent company of San Francisco-based Union Bank, N.A., today reported net income for the quarter of $175 million, down from $179 million for the prior quarter, and up from $148 million for the year-ago quarter.  First Quarter Highlights:    *Continued strong credit quality during the first quarter was reflected by     low nonperforming assets and a net recovery of loans previously     charged-off.   *Solid organic loan growth of $1.6 billion, or 2 percent, to $69.9 billion     at March 31, 2014 compared with December 31, 2013 while maintaining     disciplined underwriting standards and strong credit quality.         *Growth in residential mortgages and commercial mortgages were primary          drivers of the organic loan growth in the first quarter.    *Total deposits grew $1.1 billion, or 1 percent, to $81.2 billion at March     31, 2014 compared with December 31, 2013, reflecting organic retail     deposit growth.   *The Company continues to have a strong capital position.         *In late March, the Federal Reserve published its stress test results          for the largest U.S. banks; the Federal Reserve did not object to the          Company’s capital plan.    *Mitsubishi UFJ Financial Group, Inc. (MUFG), one of the world’s largest     and most diversified financial groups with total assets of ¥258 trillion,     or approximately $2.55 trillion, as of December 31, 2013, announced that     effective July 1, 2014, it will integrate The Bank of Tokyo-Mitsubishi UFJ     (BTMU) U.S. branch banking operations with the operations of Union Bank,     N.A., and manage the combined U.S. banking operations under the new name     MUFG Union Bank, N.A. All of BTMU’s Americas banking activities, including     the newly unified U.S. organization, will be overseen by UnionBanCal     Corporation, which will be renamed MUFG Americas Holdings Corporation.  Summary of First Quarter Results  First Quarter Total Revenue  For the first quarter 2014, total revenue (net interest income plus noninterest income) was $864 million, down $32 million compared with the fourth quarter 2013.  Net interest income decreased 3 percent and noninterest income decreased 5 percent. Net interest income for the first quarter 2014 was $683 million, down $23 million, or 3 percent, compared with the fourth quarter 2013. The decrease in net interest income was due substantially to lower interest income on our purchased credit-impaired (PCI) loan portfolio. Average total loans held for investment, excluding PCI loans, increased $1.8 billion, or 3 percent, compared with the fourth quarter 2013 primarily due to organic growth in residential mortgages along with commercial and industrial loans. The net interest margin was 2.87 percent, down 12 basis points from the prior quarter substantially due to lower yields in the PCI loan portfolio. Average total deposits increased $0.7 billion, or 1 percent, during the quarter compared with the fourth quarter 2013, primarily due to organic retail deposit growth. Substantially all of the growth in our deposits was in interest-bearing money market deposits.  For the first quarter 2014, noninterest income was $181 million, down $9 million, or 5 percent, compared with fourth quarter 2013, primarily due to lower net gains on the sale of securities and trading account income.  Compared to first quarter 2013, total revenue declined $40 million, with net interest income up 5 percent and noninterest income down 28 percent. Noninterest income decreased $70 million, or 28 percent, primarily due to lower net gains on the sale of securities. Net interest income increased $30 million compared with the year-ago quarter, primarily due to acquisitions and organic loan growth. This increase was partially offset by a 17 basis point decline in the net interest margin, which was primarily due to lower yields on loans and securities. Average total loans held for investment, excluding PCI loans, increased $8.8 billion, or 15 percent, compared with first quarter 2013, primarily due to organic loan growth and the PB Capital portfolio acquisition, which closed in the second quarter of 2013. Average total deposits increased $6.2 billion compared with the first quarter of 2013, primarily due to organic growth and acquisitions, with average interest bearing deposits up $4.4 billion, or 9 percent, and average noninterest bearing deposits up $1.7 billion, or 7 percent.  First Quarter Noninterest Expense  Noninterest expense for the first quarter 2014 was $660 million, down $29 million compared with the fourth quarter 2013. This decrease was substantially due to lower current quarter productivity initiative costs, pension expense and merger costs, partially offset by a higher provision for losses on unfunded credit commitments. Compared to the first quarter 2013, noninterest expense was down $53 million, or 7 percent. This decline was largely driven by lower current quarter merger costs and pension expense.  Balance Sheet  At March 31, 2014, the Company had total assets of $107.2 billion, up $1.3 billion compared with December 31, 2013, primarily due to securities and loan growth. At March 31, 2014, total deposits were $81.2 billion, up $1.1 billion compared with December 31, 2013, reflecting organic deposit growth. Core deposits at March 31, 2014 were $70.7 billion compared with $69.2 billion at December 31, 2013.  Credit Quality  Credit quality remained strong in the first quarter 2014 reflected by continued low levels of nonperforming assets and a net recovery of loans previously charged-off.  Excluding PCI loans and FDIC covered OREO, nonperforming assets ended the quarter at $467 million, or 0.44 percent of total assets; compared with $447 million or 0.43 percent of total assets, at December 31, 2013; and $520 million, or 0.54 percent of total assets, at March 31, 2013.  Excluding PCI loans and FDIC covered OREO, net recoveries of loans previously charged-off were $6 million for the first quarter of 2014 compared with net charge-offs of $18 million for the fourth quarter 2013 and net charge-offs of $12 million for the first quarter 2013.  In the first quarter of 2014, the overall provision for credit losses was zero compared with a benefit of $21 million for the fourth quarter 2013 and a provision of $12 million for the first quarter 2013. The allowance for credit losses as a percentage of total loans, excluding PCI loans, was 1.02 percent at March 31, 2014, compared with 1.04 percent at December 31, 2013, and 1.30 percent at March 31, 2013. The allowance for credit losses as a percentage of nonaccrual loans, excluding PCI loans, was 156 percent at March 31, 2014 compared with 164 percent at December 31, 2013 and 158 percent at March 31, 2013.  Capital  The Company’s stockholder’s equity was $14.5 billion at March 31, 2014 compared with $14.2 billion at December 31, 2013. The Basel I Tier 1 and Total risk-based capital ratios were 12.64 percent and 14.85 percent, respectively, at March 31, 2014. The Basel I Tier 1 common capital ratio was 12.57 percent at March 31, 2014. The tangible common equity ratio was 10.65 percent at March 31, 2014.  The Company’s estimated Common equity tier 1 risk-based capital ratio was 11.42 percent at March 31, 2014. The Common equity tier 1 risk-based capital ratio was calculated using the standardized approach on a fully phased-in basis under the 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 unfunded credit 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, 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 (Basel I Tier 1 common capital, the tangible common equity and the Basel III Common equity tier 1 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. 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, 2013, 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 and bank holding company with assets of $107.2 billion at March 31, 2014. Its principal subsidiary, Union Bank, N.A., provides an array of financial services to individuals, small businesses, middle-market companies, and major corporations. Union Bank, N.A. operated 422 branches, comprised primarily of retail banking branches in the West Coast states, along with branches in Texas, Illinois, New York and Georgia, as well as two international offices. UnionBanCal Corporation is a wholly owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd. which is a wholly owned subsidiary of Mitsubishi UFJ Financial Group, Inc., one of the world’s largest and most diversified financial groups. 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                                 March 31, 2014                                                                                         from                    March 31,    December     September    June 30,     March 31,    December  March                                  31,           30,                                      31,        31, (Dollars in        2014          2013          2013          2013 ^(1)     2013 ^(1)    2013       2013 millions) Results of operations: Net interest       $ 683         $ 706         $ 685         $ 672         $ 653        (3   )%    5    % income Noninterest         181         190         234         201         251       (5   )     (28  ) income Total revenue        864           896           919           873           904        (4   )     (4   ) Noninterest         660         689         689         702         713       (4   )     (7   ) expense Pre-tax, pre-provision        204           207           230           171           191        (1   )     7 income ^(2) (Reversal of) provision for       (16     )    (23     )    (16     )    (3      )    (3     )   30         (433 ) loan losses Income before income taxes and including        220           230           246           174           194        (4   )     13 noncontrolling interests Income tax          50          55          55          35          50        (9   )     - expense Net income including            170           175           191           139           144        (3   )     18 noncontrolling interests Deduct: Net loss from           5           4           7           3           4         25         25 noncontrolling interests Net income attributable to UnionBanCal     $ 175        $ 179        $ 198        $ 142        $ 148       (2   )     18 Corporation (UNBC)                     Balance sheet (end of period): Total assets       $ 107,237     $ 105,894     $ 105,484     $ 102,279     $ 96,975     1          11 Total                23,192        22,326        22,318        24,415        22,816     4          2 securities Total loans held for             69,933        68,312        67,170        65,843        60,882     2          15 investment Core deposits        70,665        69,155        68,334        65,533        63,585     2          11 ^(3) Total deposits       81,179        80,101        79,415        77,356        74,038     1          10 Long-term debt       6,545         6,547         7,803         6,058         5,314      -          23 UNBC stockholder's        14,460        14,215        12,549        12,371        12,565     2          15 equity                     Balance sheet (period average): Total assets       $ 106,491     $ 104,424     $ 101,534     $ 98,714      $ 96,649     2          10 Total                22,611        22,282        22,909        23,183        21,824     1          4 securities Total loans held for             69,293        67,619        66,608        63,673        60,553     2          14 investment Earning assets       96,100        94,707        92,035        89,292        87,055     1          10 Total deposits       80,433        79,747        77,434        75,350        74,256     1          8 UNBC stockholder's        14,390        12,604        12,210        12,599        12,584     14         14 equity  Performance ratios: Return on average assets       0.66    %     0.68    %     0.78    %     0.58    %     0.61   % ^ (4) Return on average UNBC         4.87          5.66          6.50          4.53          4.68 stockholder's equity ^ (4) Return on average assets excluding the impact of privatization transaction          0.72          0.75          0.81          0.66          0.72 and merger costs related to acquisitions ^ (4) (5) Return on average UNBC stockholder's equity excluding the impact of privatization        6.11          7.41          8.01          6.17          6.69 transaction and merger costs related to acquisitions ^ (4) (5) Efficiency           76.38         76.89         75.01         80.37         78.84 ratio ^ (6) Adjusted efficiency           67.95         67.08         67.21         69.45         67.72 ratio ^ (7) Net interest margin ^ (4)         2.87          2.99          2.99          3.03          3.04 (8)  Capital ratios: Tier 1 risk-based           12.64   %     12.41   %     11.17   %     11.55   %     12.54  % capital ratio ^(9) (10) Total risk-based           14.85         14.61         13.11         13.63         14.02 capital ratio ^(9) (10) Tier 1 leverage ratio       11.27         11.27         10.22         10.36         10.70 ^(10) Tier 1 common capital ratio        12.57         12.34         11.10         11.47         12.45 ^(9) (10) (11) Tangible common equity        10.65         10.54         9.01          9.08          10.02 ratio ^ (12) Common equity tier 1 risk-based capital ratio (U.S. Basel III                  11.42         11.14         n/a           n/a           n/a standardized approach; fully phased-in) ^(10) (13)  Refer to Exhibit 11 for footnote explanations.    UnionBanCal Corporation and Subsidiaries Credit Quality (Unaudited) Exhibit 2                                                                                       Percent Change to                   As of and for the Three Months Ended                               March 31, 2014                                                                                        from                     March 31,   December    September   June 30,    March 31,      December  March                                  31,          30,                                      31,        31, (Dollars in         2014         2013         2013         2013         2013           2013       2013 millions)                                                                                                         Credit Data: (Reversal of) provision for loan losses, excluding           $ (18    )   $ (22    )   $ (16    )   $ (3     )   $ (3     )     18     %   (500 )% purchased credit-impaired loans (Reversal of) provision for purchased credit-impaired       2            (1     )     -            -            -            300        nm loan losses not subject to FDIC indemnification (Reversal of) provision for losses on            16         2          1          (2     )    15          nm         7 unfunded credit commitments Total (reversal of) provision       $ -         $ (21    )   $ (15    )   $ (5     )   $ 12          (100   )   (100 ) for credit losses                                                                                                         Net loans charged-off         $ (6     )   $ 11         $ (1     )   $ 8          $ 14           (155   )   (143 ) (recovered) Nonperforming         506          499          574          589          607          1          (17  ) assets Criticized loans held for        1,317        1,274        1,270        1,362        1,545        3          (15  ) investment ^(14)                                                                                         Credit Ratios: Allowance for                                                                                      loan losses to: Total loans held for              0.80   %    0.83   %    0.91   %    0.95   %    1.05   %    investment Nonaccrual            119.58       128.42       119.04       120.11       122.62 loans Allowance for credit losses to ^(15) : Total loans held for              1.01         1.02         1.10         1.16         1.27 investment Nonaccrual            151.35       158.30       144.63       146.34       149.24 loans Net loans charged-off (recovered) to        (0.04  )     0.07         (0.01  )     0.05         0.10 average total loans held for investment ^(4) Nonperforming assets to total loans held for investment and        0.72         0.74         0.85         0.89         1.00 Other Real Estate Owned (OREO) Nonperforming assets to total       0.47         0.48         0.54         0.58         0.63 assets Nonaccrual loans to total        0.67         0.65         0.76         0.79         0.85 loans held for investment                                                                                                         Excluding purchased credit-impaired loans and FDIC covered OREO ^ (16): Allowance for loan losses to: Total loans held for              0.80   %    0.84   %    0.92   %    0.97   %    1.06   %                investment Nonaccrual            123.14       132.82       123.53       125.69       129.56 loans Allowance for credit losses to ^(15) : Total loans held for              1.02         1.04         1.12         1.18         1.30 investment Nonaccrual            156.05       163.78       150.14       153.18       157.75 loans Net loans charged-off (recovered) to        (0.04  )     0.11         0.01         0.06         0.08 average total loans held for investment ^(4) Nonperforming assets to total loans held for        0.68         0.66         0.78         0.81         0.87 investment and OREO Nonperforming assets to total       0.44         0.43         0.49         0.52         0.54 assets Nonaccrual loans to total        0.65         0.63         0.75         0.77         0.82 loans held for investment  Refer to Exhibit 11 for footnote explanations.                                                                                                                                                                                                                  UnionBanCal Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) Exhibit 3                       For the Three Months Ended                        March 31,  December    September   June     March                                    31,          30,          30,       31, (Dollars in            2014        2013         2013         2013      2013 millions)                                                    ^(1)      ^(1) Interest Income Loans                  $  667      $  695       $  668       $ 649     $ 629 Securities                115         115          118         118       118 Other                    5         6          2         2       3    Total interest           787       816        788       769     750  income                                                                         Interest Expense Deposits                  62          64           63          61        60 Commercial paper and other                 1           1            2           1         1 short-term borrowings Long-term debt           41        45         38        35      36   Total interest           104       110        103       97      97   expense                                                                         Net Interest              683         706          685         672       653 Income (Reversal of) provision for loan       (16  )     (23  )      (16  )     (3  )    (3  ) losses Net interest income after (reversal of)            699       729        701       675     656  provision for loan losses                                                                         Noninterest Income Service charges on        51          51           53          52        53 deposit accounts Trust and investment                26          28           34          38        35 management fees Trading account           16          20           15          21        5 activities Securities gains,         2           8            47          27        96 net Credit facility           28          28           31          26        26 fees Merchant banking          24          25           29          23        16 fees Brokerage commissions and           13          12           12          11        11 fees Card processing           8           8            8           9         9 fees, net Other, net               13        10         5         (6  )    -    Total noninterest        181       190        234       201     251  income                                                                         Noninterest Expense Salaries and              388         406          391         413       421 employee benefits Net occupancy and         71          70           77          84        75 equipment Professional and          55          64           66          62        58 outside services Intangible asset          13          16           16          17        16 amortization Regulatory                15          14           20          20        20 assessments (Reversal of) provision for             16          2            1           (2  )     15 losses on unfunded credit commitments Other                    102       117        118       108     108  Total noninterest        660       689        689       702     713  expense                                                                         Income before income taxes and including                 220         230          246         174       194 noncontrolling interests Income tax expense       50        55         55        35      50                                                                           Net Income including                 170         175          191         139       144 Noncontrolling Interests Deduct: Net loss from                     5         4          7         3       4    noncontrolling interests Net Income attributable to        $  175     $  179      $  198      $ 142    $ 148  UNBC  Refer to Exhibit 11 for footnote explanations.    UnionBanCal Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) Exhibit 4                   March 31,    December     September    June 30,     March 31,                                  31,           30, (Dollars in millions           2014          2013          2013          2013 ^(1)     2013 ^(1) except for per share amount) Assets Cash and due       $ 1,792       $ 1,863       $ 1,719       $ 1,405       $ 1,265 from banks Interest bearing              2,883         4,329         5,471         1,899         3,776 deposits in banks Federal funds sold and securities          32          11          122         50          50      purchased under resale agreements Total cash and cash                 4,707         6,203         7,312         3,354         5,091 equivalents Trading account assets (includes $9 at March 31, 2014; $8 at December 31, 2013; $13 at September 30,        841           851           776           844           1,119 2013; $4 at June 30, 2013; and $40 at March 31, 2013 of assets pledged as collateral) Securities available for        15,366        15,817        16,872        23,510        21,801 sale Pledged as collateral Held in portfolio Securities held to maturity (Fair value: March 31, 2014, $7,810; December 31,         7,826         6,509         5,446         905           1,015 2013, $6,439; September 30, 2013, $5,450; June 30, 2013, $891; and March 31, 2013, $1,036) Loans held for       69,933        68,312        67,170        65,843        60,882 investment Allowance for       (557    )    (568    )    (608    )    (625    )    (638   ) loan losses Loans held for investment,          69,376        67,744        66,562        65,218        60,244 net Premises and         641           688           685           699           707 equipment, net Goodwill             3,227         3,228         3,168         3,186         2,952 Other assets        5,253       4,854       4,663       4,563       4,046   Total assets       $ 107,237    $ 105,894    $ 105,484    $ 102,279    $ 96,975                                                                              Liabilities Deposits: Noninterest        $ 26,881      $ 26,495      $ 26,126      $ 25,655      $ 24,679 bearing Interest            54,298      53,606      53,289      51,701      49,359  bearing Total deposits       81,179        80,101        79,415        77,356        74,038 Commercial paper and other                2,660         2,563         3,078         3,792         2,228 short-term borrowings Long-term debt       6,545         6,547         7,803         6,058         5,314 Trading account              531           540           614           566           742 liabilities Other               1,611       1,675       1,767       1,866       1,818   liabilities Total               92,526      91,426      92,677      89,638      84,140  liabilities                                                                             Equity UNBC Stockholder's Equity: Preferred                         stock: Authorized 5,000,000 shares; no           -             -             -             -             - shares issued or outstanding Common stock, par value $1 per share: Authorized 300,000,000 shares; 136,330,830 shares issued and outstanding as of March 31, 2014, December 31, 2013, September 30, 2013, June 30,       136           136           136           136           136 2013, and March 31, 2013 Additional paid-in              7,196         7,191         5,985         5,979         5,997 capital Retained             7,687         7,512         7,333         7,135         6,993 earnings Accumulated other               (559    )    (624    )    (905    )    (879    )    (561   ) comprehensive loss Total UNBC stockholder's        14,460        14,215        12,549        12,371        12,565 equity Noncontrolling      251         253         258         270         270     interests Total equity        14,711      14,468      12,807      12,641      12,835  Total liabilities        $ 107,237    $ 105,894    $ 105,484    $ 102,279    $ 96,975  and equity  Refer to Exhibit 11 for footnote explanations.    UnionBanCal Corporation and Subsidiaries Net Interest Income (Unaudited) Exhibit 5                        For the Three Months Ended                         March 31, 2014                     December 31, 2013                                      Interest  Average                  Interest  Average                         Average       Income/    Yield/      Average       Income/    Yield/ (Dollars in             Balance       Expense    Rate        Balance       Expense    Rate millions)                             ^(8)       ^(4)(8)                   ^(8)       ^(4)(8) Assets Loans held for investment: ^(17) Commercial and          $ 23,969      $   198    3.34  %     $ 23,176      $   196    3.35  % industrial Commercial mortgage       13,230          119    3.61          12,984          123    3.78 Construction              946             8      3.67          868             7      3.46 Lease financing           849             11     5.41          981             8      3.43 Residential               25,990          238    3.66          25,143          231    3.67 mortgage Home equity and other consumer           3,233         32     3.99         3,305         35     4.13 loans Loans, before purchased                 68,217          606    3.58          66,457          600    3.60 credit-impaired loans Purchased credit-impaired          1,076         61     22.90        1,162         96     32.75 loans Total loans held          69,293          667    3.88          67,619          696    4.10 for investment Securities                22,611          120    2.12          22,282          118    2.12 Interest bearing          3,565           2      0.25          4,242           3      0.26 deposits in banks Federal funds sold and securities            131             -      0.18          138             -      0.09 purchased under resale agreements Trading account           267             2      3.08          203             2      4.36 assets Other earning            233           1      1.40         223           1      1.89 assets Total earning             96,100         792    3.31          94,707         820    3.45 assets Allowance for loan        (577    )                            (618    ) losses Cash and due from         1,499                                1,553 banks Premises and              645                                  678 equipment, net Other assets             8,824                              8,104    Total assets            $ 106,491                           $ 104,424  Liabilities Interest bearing deposits: Transaction and money market            $ 37,519          36     0.38        $ 36,636          35     0.38 accounts Savings                   5,572           1      0.11          5,576           1      0.13 Time                     11,214        25     0.92         11,431        28     0.96 Total interest           54,305        62     0.47         53,643        64     0.48 bearing deposits Commercial paper and other                 2,632           1      0.21          2,562           1      0.22 short-term borrowings ^(18) Long-term debt           6,546         41     2.47         7,094         45     2.52 Total borrowed           9,178         42     1.82         9,656         46     1.91 funds Total interest            63,483         104    0.66          63,299         110    0.69 bearing liabilities Noninterest bearing       26,128                               26,104 deposits Other liabilities        2,237                              2,160    Total liabilities         91,848                               91,563 Equity UNBC Stockholder's        14,390                               12,604 equity Noncontrolling           253                                257      interests Total equity             14,643                             12,861   Total liabilities       $ 106,491                           $ 104,424  and equity                                                                                        Net interest income/spread                             688    2.65  %                       710    2.76  % (taxable-equivalent basis) Impact of noninterest bearing                              0.19                                 0.20 deposits Impact of other noninterest bearing                              0.03                                 0.03 sources Net interest margin                              2.87                                 2.99 Less: taxable-equivalent                       5                                   4 adjustment Net interest income                   $   683                              $   706  Refer to Exhibit 11 for footnote explanations.    UnionBanCal Corporation and Subsidiaries Net Interest Income (Unaudited) Exhibit 6                        For the Three Months Ended                         March 31, 2014                     March 31, 2013                                      Interest  Average                 Interest  Average                         Average       Income/    Yield/      Average      Income/    Yield/ (Dollars in             Balance       Expense   Rate        Balance      Expense    Rate millions)                             ^(8)       ^(4)(8)                  ^(1)(8)    ^(1)(4)(8) Assets Loans held for investment: ^(17) Commercial and          $ 23,969      $   198    3.34  %    $ 21,341     $   177    3.37    % industrial Commercial mortgage       13,230          119    3.61          9,898          101    4.10 Construction              946             8      3.67          650            8      5.21 Lease financing           849             11     5.41          1,062          7      2.49 Residential               25,990          238    3.66          22,858         222    3.88 mortgage Home equity and other consumer           3,233         32     3.99         3,602        34     3.84 loans Loans, before purchased                 68,217          606    3.58          59,411         549    3.72 credit-impaired loans Purchased credit-impaired          1,076         61     22.90        1,142        80     28.33 loans Total loans held          69,293          667    3.88          60,553         629    4.19 for investment Securities                22,611          120    2.12          21,824         121    2.21 Interest bearing          3,565           2      0.25          4,223          3      0.25 deposits in banks Federal funds sold and securities            131             -      0.18          171            -      0.19 purchased under resale agreements Trading account           267             2      3.08          151            -      0.29 assets Other earning            233           1      1.40         133          -      0.64 assets Total earning             96,100         792    3.31          87,055        753    3.48 assets Allowance for loan        (577    )                            (653   ) losses Cash and due from         1,499                                1,399 banks Premises and              645                                  705 equipment, net Other assets             8,824                              8,143   Total assets            $ 106,491                           $ 96,649  Liabilities Interest bearing deposits: Transaction and money market            $ 37,519          36     0.38        $ 31,705         22     0.28 accounts Savings                   5,572           1      0.11          5,855          2      0.14 Time                     11,214        25     0.92         12,314       36     1.17 Total interest           54,305        62     0.47         49,874       60     0.49 bearing deposits Commercial paper and other                 2,632           1      0.21          1,837          1      0.21 short-term borrowings ^(18) Long-term debt           6,546         41     2.47         5,406        36     2.68 Total borrowed           9,178         42     1.82         7,243        37     2.05 funds Total interest            63,483         104    0.66          57,117        97     0.68 bearing liabilities Noninterest bearing       26,128                               24,382 deposits Other liabilities        2,237                              2,302   Total liabilities         91,848                               83,801 Equity UNBC Stockholder's        14,390                               12,584 equity Noncontrolling           253                                264     interests Total equity             14,643                             12,848  Total liabilities       $ 106,491                           $ 96,649  and equity                                                                                       Net interest income/spread                             688    2.65  %                     656    2.80    % (taxable-equivalent basis) Impact of noninterest bearing                              0.19                                0.20 deposits Impact of other noninterest bearing                              0.03                                0.04 sources Net interest margin                              2.87                                3.04 Less: taxable-equivalent                       5                                  3 adjustment Net interest income                   $   683                             $   653  Refer to Exhibit 11 for footnote explanations.    UnionBanCal Corporation and Subsidiaries Loans and Nonperforming Assets (Unaudited) Exhibit 7                      March 31,  December    September  June 30,  March                                   31,          30,                    31, (Dollars in           2014        2013         2013        2013       2013 millions)                                                                        Loans held for investment (period end) Loans held for investment: Commercial and        $  23,654   $  23,528    $  23,125   $ 22,266   $ 21,433 industrial Commercial               13,568      13,092       12,905     13,008     9,918 mortgage Construction             1,019       905          855        808        659 Lease financing         845        854         972       984       1,060 Total commercial         39,086      38,379       37,857     37,066     33,070 portfolio                                                                        Residential              26,602      25,547       24,714     23,835     23,146 mortgage Home equity and other consumer          3,194      3,280       3,336     3,456     3,542 loans Total consumer          29,796     28,827      28,050    27,291    26,688 portfolio Loans held for investment, before purchased        68,882     67,206      65,907    64,357    59,758 credit-impaired loans Purchased credit-impaired         1,051      1,106       1,263     1,486     1,124 loans Total loans held      $  69,933   $  68,312    $  67,170   $ 65,843   $ 60,882 for investment                                                                        Nonperforming Assets (period end) Nonaccrual loans: Commercial and        $  89       $  44        $  62       $ 69       $ 49 industrial Commercial              46         51          88        62        57 mortgage Total commercial         135         95           150        131        106 portfolio                                                                        Residential              266         286          293        315        326 mortgage Home equity and other consumer          49         46          48        50        59 loans Total consumer          315        332         341       365       385 portfolio                                                                        Nonaccrual loans, before purchased         450         427          491        496        491 credit-impaired loans Purchased credit-impaired         16         15          20        24        29 loans Total nonaccrual         466         442          511        520        520 loans                                                                        OREO                     17          20           22         25         29 FDIC covered OREO       23         37          41        44        58                                                                        Total nonperforming         $  506      $  499       $  574      $ 589      $ 607 assets                                                                        Total nonperforming assets, excluding purchased             $  467      $  447       $  513      $ 521      $ 520 credit-impaired loans and FDIC covered OREO                                                                        Loans 90 days or more past due and     $  4        $  5         $  8        $ 7        $ 3 still accruing ^ (18)  Refer to Exhibit 11 for footnote explanations.    UnionBanCal Corporation and Subsidiaries Allowance for Credit Losses (Unaudited) Exhibit 8                        As of and for the Three Months Ended                         March 31,  December    September  June     March                                     31,          30,         30,       31, (Dollars in             2014        2013         2013        2013      2013 millions)                                                                         Analysis of Allowance for Credit Losses Balance, beginning      $  568      $  608       $  625      $ 638     $ 653 of period                                                                         (Reversal of) provision for loan losses, excluding          (18  )      (22  )       (16  )     (3  )     (3  ) purchased credit-impaired loans (Reversal of) provision for purchased credit-impaired            2           (1   )       -          -         - loan losses not subject to FDIC indemnification Increase (decrease) in allowance               -           (6   )       (2   )     (2  )     2 covered by FDIC indemnification Other                      (1   )      -            -          -         -                                                                         Loans charged-off: Commercial and             (5   )      (18  )       (6   )     (11 )     (1  ) industrial Commercial mortgage        (1   )      (2   )       (2   )     (1  )     (2  ) Construction              -         -          (1   )    -       -    Lease financing           -         -          -        -       -    Total commercial           (6   )      (20  )       (9   )     (12 )     (3  ) portfolio                                                                         Residential                (1   )      (1   )       (2   )     (3  )     (7  ) mortgage Home equity and other consumer            (2   )     (4   )      (2   )    (5  )    (6  ) loans Total consumer             (3   )      (5   )       (4   )     (8  )     (13 ) portfolio                                                                         Purchased                 -         -          -        -       (3  ) credit-impaired Total loans                (9   )      (25  )       (13  )     (20 )     (19 ) charged-off                                                                         Recoveries of loans previously charged-off: Commercial and             11          6            5          7         3 industrial Commercial mortgage        -           -            4          2         - Construction               3           -            1          -         - Lease financing           -         1          -        -       -    Total commercial           14          7            10         9         3 portfolio                                                                         Residential                -           -            -          -         - mortgage Home equity and other consumer            1         -          2        1       1    loans Total consumer            1         -          2        1       1    portfolio                                                                         Purchased                 -         7          2        2       1    credit-impaired Total recoveries of loans previously          15        14         14       12      5    charged-off Net loans recovered       6         (11  )      1        (8  )    (14 ) (charged-off)                                                                         Ending balance of allowance for loan         557         568          608        625       638 losses Allowance for losses on unfunded        148       132        131      136     138  credit commitments Total allowance for     $  705     $  700      $  739     $ 761    $ 776  credit losses                                                                         Components of allowance for loan losses: Allowance for loan losses, excluding allowance on            $  554      $  567       $  607      $ 624     $ 637 purchased credit-impaired loans Allowance for loan losses on purchased       3          1            1          1         1 credit-impaired loans Allowance for loan losses to be              -         -          -        -       -    reimbursed by the FDIC Total allowance for     $  557     $  568      $  608     $ 625    $ 638  loan losses                                                                                                                                                              UnionBanCal Corporation and Subsidiaries Securities (Unaudited) Exhibit 9  Securities Available   for Sale                                                                     Fair       Fair                                                                        Value       Value                          March 31, 2014         December 31, 2013      Change      % Change                                                                        from        from                          Amortized   Fair       Amortized   Fair       December    December                                                                        31,         31, (Dollars in              Cost        Value      Cost        Value      2013        2013 millions) Asset Liability Management securities: U.S. government-sponsored     $  72       $ 72       $  73       $ 73       $ (1    )   (1    )% agencies Residential mortgage-backed securities: U.S. government agency and                  8,754      8,529       9,194      8,900      (371  )   (4    ) government-sponsored agencies Privately issued            207        210         220        222        (12   )   (5    ) Privately issued - commercial                  1,876      1,830       1,947      1,870      (40   )   (2    ) mortgage-backed securities Collateralized loan         2,642      2,642       2,670      2,673      (31   )   (1    ) obligations Asset-backed and           24        25         34        35        (10   )   (29   ) other Asset Liability Management                  13,575     13,308      14,138     13,773     (465  )   (3    ) securities Other debt securities: Direct bank purchase        1,986      1,987       1,968      1,960      27        1 bonds Other                       67         63          81         76         (13   )   (17   ) Equity securities          7         8          7         8         -        - Total securities         $  15,635   $ 15,366   $  16,194   $ 15,817   $ (451  )   (3    ) available for sale                                                                                                                                                                                     Securities Held to Maturity                                                                                                                                                                  Carrying    Carrying                                                                        Amount      Amount                          March 31, 2014         December 31, 2013      Change      % Change                                                                        from        from                          Carrying    Fair       Carrying    Fair       December    December                                                                        31,         31, (Dollars in              Amount      Value      Amount      Value      2013        2013 millions)                ^(20)                  ^(20) U.S. government agency and government-sponsored agencies -               $  5,466    $ 5,443    $  4,995    $ 4,934    $ 471       9     % residential mortgage-backed securities U.S. government agency and government-sponsored agencies -                  1,751      1,762       1,514      1,505      237       16 commercial mortgage-backed securities U.S. Treasury               484        481         -          -          484       nm U.S. government-sponsored       125       124        -         -         125      nm agencies Total securities         $  7,826    $ 7,810    $  6,509    $ 6,439    $ 1,317    20 held to maturity                                                                                                                                                                                      <td class*Story too large* UnionBanCal Corporation and Subsidiaries Reconciliation of Non-GAAP Measures (Unaudited) Exhibit 10  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                           March 31,     December      September     June 30,     March 31,                                           31,             30, (Dollars in millions)     2014            2013            2013            2013 ^(1)      2013 ^(1)                                                                                                    Net income                $ 175           $ 179           $ 198           $ 142          $ 148 attributable to UNBC Net adjustments for merger costs related        11              12              15              27             24 to acquisitions, net of tax Net adjustments for privatization              1             2             (14     )      (8     )      (1     ) transaction, net of tax Net income attributable to UNBC, excluding impact of privatization             $ 187          $ 193          $ 199          $ 161         $ 171     transaction and merger costs related to acquisitions                                                                                                    Average total assets      $ 106,491       $ 104,424       $ 101,534       $ 98,714       $ 96,649 Less: Net adjustments related to                 2,272         2,297         2,309         2,318        2,330   privatization transaction Average total assets, excluding impact of       $ 104,219      $ 102,127      $ 99,225       $ 96,396      $ 94,319  privatization transaction Return on average           0.66    %      0.68    %      0.78    %      0.58   %      0.61   % assets ^ (4) Return on average assets, excluding impact of privatization               0.72            0.75            0.81            0.66           0.72 transaction and merger costs related to acquisitions ^ (4) (5)                                                                                                    Average UNBC              $ 14,390        $ 12,604        $ 12,210        $ 12,599       $ 12,584 stockholder's equity Less: Adjustments for merger costs related        (118    )       (105    )       (93     )       (64    )       (48    ) to acquisitions Less: Net adjustments for privatization          2,302         2,306         2,319         2,337        2,353   transaction Average UNBC stockholder's equity, excluding impact of privatization             $ 12,206       $ 10,403       $ 9,984        $ 10,326      $ 10,279  transaction and merger costs related to acquisitions Return on average UNBC stockholder's          4.87    %      5.66    %      6.50    %      4.53   %      4.68   % equity ^(4) Return on average UNBC stockholder's equity, excluding impact of privatization               6.11            7.41            8.01            6.17           6.69 transaction and merger costs related to acquisitions ^(4) (5)                                                                                                    Noninterest expense       $ 660           $ 689           $ 689           $ 702          $ 713 Less: Foreclosed asset expense and           -               2               (2      )       (3     )       (1     ) other credit costs Less: (Reversal of) provision for losses        16              2               1               (2     )       15 on unfunded credit commitments Less: Productivity          1               20              14              13             4 initiative costs Less: Low income housing credit (LIHC)       20              24              17              20             15 investment amortization expense Less: Expenses of the LIHC consolidated           8               6               11              6              6 VIEs Less: Merger costs related to                  17              25              25              44             40 acquisitions Less: Net adjustments related to                  10              14              13              14             14 privatization transaction Less: Intangible           3             3             3             4            3       asset amortization Noninterest expense,      $ 585          $ 593          $ 607          $ 606         $ 617     as adjusted (a)                                                                                                    Total revenue             $ 864           $ 896           $ 919           $ 873          $ 904 Add: Net interest income                      5               4               4               4              3 taxable-equivalent adjustment Less: Productivity          -               6               11              -              - initiative gains Less: Accretion related to privatization-related       6               8               8               3              5 fair value adjustments Less: Other credit         2             1             1             2            (9     ) costs Total revenue, as         $ 861          $ 885          $ 903          $ 872         $ 911     adjusted (b) Adjusted efficiency         67.95   %      67.08   %      67.21   %      69.45  %      67.72  % ratio (a)/(b) ^(7)                                                                                                    Total UNBC                $ 14,460        $ 14,215        $ 12,549        $ 12,371       $ 12,565 stockholder's equity Less: Goodwill              3,227           3,228           3,168           3,186          2,952 Less: Intangible assets, except              275             288             287             321            337 mortgage servicing rights (MSRs) Less: Deferred tax liabilities related        (102    )      (105    )      (110    )      (118   )      (122   ) to goodwill and intangible assets Tangible common           $ equity (c)  [TRUNCATED]  
Press spacebar to pause and continue. Press esc to stop.