MUFG AMERICAS HOLDINGS CORPORATION | |||
Dated: October 28, 2014 | By: | /s/ ROLLAND D. JURGENS | |
ROLLAND D. JURGENS Controller and Chief Accounting Officer (Principal Accounting Officer) |
99.1 | Press release dated October 28, 2014. |
Contact: | Alan Gulick | Doug Lambert | ||||
Corporate Communications | Investor Relations | |||||
(425) 423-7317 | (212) 782-5911 |
◦ | Continued discipline in underwriting standards produced another solid quarter of strong credit quality with low nonperforming assets and charge-offs. |
◦ | The Company continued to have a strong capital position. |
▪ | Capital ratios continued to exceed the regulatory thresholds for "well-capitalized" bank holding companies. Basel III Tier 1 and Total risk-based capital ratios were 12.70 percent and 14.60 percent, respectively, at September 30, 2014. |
◦ | Effective July 1, 2014, UnionBanCal Corporation was renamed MUFG Americas Holdings Corporation and Union Bank, N.A. changed its legal name to MUFG Union Bank, N.A. In addition, the U.S. branch banking management and operations of The Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) were integrated within the Bank. The changes position the Bank to better leverage the strength and global reach of its parent company, Mitsubishi UFJ Financial Group, to provide a broad array of products and services to address our customers' financial needs. |
Percent Change to | |||||||||||||||||||||||||||
As of and for the Three Months Ended | September 30, 2014 from | ||||||||||||||||||||||||||
(Dollars in millions) | September 30, 2014 | June 30, 2014 | March 31, 2014 | December 31, 2013 | September 30, 2013 | June 30, 2014 | September 30, 2013 | ||||||||||||||||||||
Results of operations: | |||||||||||||||||||||||||||
Net interest income | $ | 707 | $ | 763 | $ | 683 | $ | 706 | $ | 685 | (7 | )% | 3 | % | |||||||||||||
Noninterest income | 388 | 202 | 181 | 190 | 234 | 92 | 66 | ||||||||||||||||||||
Total revenue | 1,095 | 965 | 864 | 896 | 919 | 13 | 19 | ||||||||||||||||||||
Noninterest expense | 805 | 649 | 660 | 689 | 689 | 24 | 17 | ||||||||||||||||||||
Pre-tax, pre-provision income (1) | 290 | 316 | 204 | 207 | 230 | (8 | ) | 26 | |||||||||||||||||||
(Reversal of) provision for loan losses | (18 | ) | 9 | (16 | ) | (23 | ) | (16 | ) | (300 | ) | (13 | ) | ||||||||||||||
Income before income taxes and including | |||||||||||||||||||||||||||
noncontrolling interests | 308 | 307 | 220 | 230 | 246 | — | 25 | ||||||||||||||||||||
Income tax expense | 67 | 62 | 50 | 55 | 55 | 8 | 22 | ||||||||||||||||||||
Net income including noncontrolling interests | 241 | 245 | 170 | 175 | 191 | (2 | ) | 26 | |||||||||||||||||||
Deduct: Net loss from noncontrolling interests | 5 | 4 | 5 | 4 | 7 | 25 | (29 | ) | |||||||||||||||||||
Net income attributable to | |||||||||||||||||||||||||||
MUFG Americas Holdings Corporation (MUAH) | $ | 246 | $ | 249 | $ | 175 | $ | 179 | $ | 198 | (1 | ) | 24 | ||||||||||||||
Balance sheet (end of period): | |||||||||||||||||||||||||||
Total assets | $ | 110,879 | $ | 108,820 | $ | 107,237 | $ | 105,894 | $ | 105,484 | 2 | 5 | |||||||||||||||
Total securities | 22,522 | 22,847 | 23,192 | 22,326 | 22,318 | (1 | ) | 1 | |||||||||||||||||||
Total loans held for investment | 74,635 | 72,369 | 69,933 | 68,312 | 67,170 | 3 | 11 | ||||||||||||||||||||
Core deposits (2) | 73,608 | 72,058 | 70,665 | 69,155 | 68,334 | 2 | 8 | ||||||||||||||||||||
Total deposits | 82,356 | 81,566 | 81,179 | 80,101 | 79,415 | 1 | 4 | ||||||||||||||||||||
Long-term debt | 6,984 | 6,995 | 6,545 | 6,547 | 7,803 | — | (10 | ) | |||||||||||||||||||
MUAH Stockholder's equity | 15,051 | 14,815 | 14,460 | 14,215 | 12,549 | 2 | 20 | ||||||||||||||||||||
Balance sheet (period average): | |||||||||||||||||||||||||||
Total assets | $ | 109,739 | $ | 107,871 | $ | 106,491 | $ | 104,424 | $ | 101,534 | 2 | 8 | |||||||||||||||
Total securities | 22,592 | 22,865 | 22,611 | 22,282 | 22,909 | (1 | ) | (1 | ) | ||||||||||||||||||
Total loans held for investment | 73,353 | 71,104 | 69,293 | 67,619 | 66,608 | 3 | 10 | ||||||||||||||||||||
Earning assets | 98,933 | 97,405 | 96,100 | 94,707 | 92,035 | 2 | 7 | ||||||||||||||||||||
Total deposits | 82,239 | 81,221 | 80,433 | 79,747 | 77,434 | 1 | 6 | ||||||||||||||||||||
MUAH Stockholder's equity | 14,969 | 14,657 | 14,390 | 12,604 | 12,210 | 2 | 23 | ||||||||||||||||||||
Performance ratios: | |||||||||||||||||||||||||||
Return on average assets (3) | 0.90 | % | 0.92 | % | 0.66 | % | 0.68 | % | 0.78 | % | |||||||||||||||||
Return on average MUAH stockholder's equity (3) | 6.57 | 6.80 | 4.87 | 5.66 | 6.50 | ||||||||||||||||||||||
Return on average assets excluding the impact of privatization | |||||||||||||||||||||||||||
transaction and merger costs related to acquisitions (3) (4) | 0.94 | 0.97 | 0.72 | 0.75 | 0.81 | ||||||||||||||||||||||
Return on average MUAH stockholder's equity excluding the impact of | |||||||||||||||||||||||||||
privatization transaction and merger costs related to acquisitions (3) (4) | 7.84 | 8.19 | 6.11 | 7.41 | 8.01 | ||||||||||||||||||||||
Efficiency ratio (5) | 73.51 | 67.23 | 76.38 | 76.89 | 75.01 | ||||||||||||||||||||||
Adjusted efficiency ratio (6) | 63.42 | 60.30 | 67.95 | 67.08 | 67.21 | ||||||||||||||||||||||
Net interest margin (3) (7) | 2.87 | 3.15 | 2.87 | 2.99 | 2.99 | ||||||||||||||||||||||
Capital ratios: | U.S. Basel III | U.S. Basel I | |||||||||||||||||||||||||
Common Equity Tier 1 risk-based capital ratio(8) (9) | 12.66 | % | 12.58 | % | 12.59 | % | n/a | n/a | |||||||||||||||||||
Tier 1 common capital ratio (8) (9) (10) | n/a | n/a | n/a | 12.34 | % | 11.10 | % | ||||||||||||||||||||
Tier 1 risk-based capital ratio (8) (9) | 12.70 | 12.62 | 12.62 | 12.41 | 11.17 | ||||||||||||||||||||||
Total risk-based capital ratio (8) (9) | 14.60 | 14.57 | 14.75 | 14.61 | 13.11 | ||||||||||||||||||||||
Tier 1 leverage ratio (8) (9) | 11.43 | 11.35 | 11.26 | 11.27 | 10.22 | ||||||||||||||||||||||
Tangible common equity ratio (11) | 10.79 | 10.84 | 10.65 | 10.54 | 9.01 | ||||||||||||||||||||||
Common Equity Tier 1 risk-based capital ratio (U.S. Basel III | |||||||||||||||||||||||||||
standardized approach; fully phased-in) (8) (12) | 11.89 | 11.60 | 11.42 | 11.14 | % | n/a | |||||||||||||||||||||
As of and for the Nine Months Ended | Percent Change to | |||||||||||||
September 30, | September 30, | September 30, 2014 from | ||||||||||||
(Dollars in millions) | 2014 | 2013 | September 30, 2013 | |||||||||||
Results of operations: | ||||||||||||||
Net interest income | $ | 2,153 | $ | 2,010 | 7 | % | ||||||||
Noninterest income | 771 | 686 | 12 | |||||||||||
Total revenue | 2,924 | 2,696 | 8 | |||||||||||
Noninterest expense | 2,114 | 2,104 | — | |||||||||||
Pre-tax, pre-provision income (1) | 810 | 592 | 37 | |||||||||||
(Reversal of) provision for loan losses | (25 | ) | (22 | ) | (14 | ) | ||||||||
Income before income taxes and including | ||||||||||||||
noncontrolling interests | 835 | 614 | 36 | |||||||||||
Income tax expense | 179 | 140 | 28 | |||||||||||
Net income including noncontrolling interests | 656 | 474 | 38 | |||||||||||
Deduct: Net loss from noncontrolling interests | 14 | 14 | — | |||||||||||
Net income attributable to MUAH | $ | 670 | $ | 488 | 37 | |||||||||
Balance sheet (end of period): | ||||||||||||||
Total assets | $ | 110,879 | $ | 105,484 | 5 | |||||||||
Total securities | 22,522 | 22,318 | 1 | |||||||||||
Total loans held for investment | 74,635 | 67,170 | 11 | |||||||||||
Core deposits (2) | 73,608 | 68,334 | 8 | |||||||||||
Total deposits | 82,356 | 79,415 | 4 | |||||||||||
Long-term debt | 6,984 | 7,803 | (10 | ) | ||||||||||
MUAH stockholder's equity | 15,051 | 12,549 | 20 | |||||||||||
Balance sheet (period average): | ||||||||||||||
Total assets | $ | 108,039 | $ | 98,984 | 9 | |||||||||
Total securities | 22,689 | 22,643 | — | |||||||||||
Total loans held for investment | 71,264 | 63,633 | 12 | |||||||||||
Earning assets | 97,486 | 89,479 | 9 | |||||||||||
Total deposits | 81,298 | 75,692 | 7 | |||||||||||
MUAH stockholder's equity | 14,675 | 12,463 | 18 | |||||||||||
Performance ratios: | ||||||||||||||
Return on average assets (3) | 0.83 | % | 0.66 | % | ||||||||||
Return on average MUAH stockholder's equity (3) | 6.08 | 5.23 | ||||||||||||
Return on average assets excluding the impact of privatization transaction and merger costs related to acquisitions (3) (4) | 0.87 | 0.73 | ||||||||||||
Return on average MUAH stockholders' equity excluding the impact of privatization transaction and merger costs related to acquisitions (3) (4) | 7.37 | 6.95 | ||||||||||||
Efficiency ratio (5) | 72.29 | 78.03 | ||||||||||||
Adjusted efficiency ratio (6) | 63.74 | 68.10 | ||||||||||||
Net interest margin (3) (7) | 2.97 | 3.02 | ||||||||||||
Percent Change to | |||||||||||||||||||||||||||
As of and for the Three Months Ended | September 30, 2014 from | ||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | September 30, | |||||||||||||||||||||
(Dollars in millions) | 2014 | 2014 | 2014 | 2013 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Credit Data: | |||||||||||||||||||||||||||
(Reversal of) provision for loan losses, excluding purchased credit-impaired loans | $ | (18 | ) | $ | 9 | $ | (18 | ) | $ | (22 | ) | $ | (16 | ) | (300 | )% | (13 | )% | |||||||||
(Reversal of) provision for purchased credit-impaired loan losses not subject to FDIC indemnification | — | — | 2 | (1 | ) | — | - | - | |||||||||||||||||||
(Reversal of) provision for losses on unfunded credit commitments | 19 | (3 | ) | 16 | 2 | 1 | nm | nm | |||||||||||||||||||
Total (reversal of) provision for credit losses | $ | 1 | $ | 6 | $ | — | $ | (21 | ) | $ | (15 | ) | (83 | ) | 107 | ||||||||||||
Net loans charged-off (recovered) | $ | 12 | $ | 7 | $ | (6 | ) | $ | 11 | $ | (1 | ) | 71 | nm | |||||||||||||
Nonperforming assets | 428 | 547 | 506 | 499 | 574 | (22 | ) | (25 | ) | ||||||||||||||||||
Criticized loans held for investment (13) | 1,245 | 1,450 | 1,317 | 1,274 | 1,270 | (14 | ) | (2 | ) | ||||||||||||||||||
Credit Ratios: | |||||||||||||||||||||||||||
Allowance for loan losses to: | |||||||||||||||||||||||||||
Total loans held for investment | 0.71 | % | 0.77 | % | 0.80 | % | 0.83 | % | 0.91 | % | |||||||||||||||||
Nonaccrual loans | 131.28 | 108.90 | 119.58 | 128.42 | 119.04 | ||||||||||||||||||||||
Allowance for credit losses to (14): | |||||||||||||||||||||||||||
Total loans held for investment | 0.92 | 0.97 | 1.01 | 1.02 | 1.10 | ||||||||||||||||||||||
Nonaccrual loans | 171.42 | 137.13 | 151.35 | 158.30 | 144.63 | ||||||||||||||||||||||
Net loans charged-off (recovered) to average total loans held for investment (3) | 0.06 | 0.04 | (0.04 | ) | 0.07 | (0.01 | ) | ||||||||||||||||||||
Nonperforming assets to total loans held for investment and Other Real Estate Owned (OREO) | 0.57 | 0.75 | 0.72 | 0.74 | 0.85 | ||||||||||||||||||||||
Nonperforming assets to total assets | 0.39 | 0.50 | 0.47 | 0.48 | 0.54 | ||||||||||||||||||||||
Nonaccrual loans to total loans held for investment | 0.54 | 0.71 | 0.67 | 0.65 | 0.76 | ||||||||||||||||||||||
Excluding purchased credit-impaired loans and FDIC covered OREO (15): | |||||||||||||||||||||||||||
Allowance for loan losses to: | |||||||||||||||||||||||||||
Total loans held for investment | 0.71 | % | 0.78 | % | 0.80 | % | 0.84 | % | 0.92 | % | |||||||||||||||||
Nonaccrual loans | 134.80 | 111.88 | 123.14 | 132.82 | 123.53 | ||||||||||||||||||||||
Allowance for credit losses to (14): | |||||||||||||||||||||||||||
Total loans held for investment | 0.93 | 0.98 | 1.02 | 1.04 | 1.12 | ||||||||||||||||||||||
Nonaccrual loans | 176.28 | 141.06 | 156.05 | 163.78 | 150.14 | ||||||||||||||||||||||
Net loans charged-off (recovered) to average total loans held for investment (3) | 0.07 | 0.04 | (0.04 | ) | 0.11 | 0.01 | |||||||||||||||||||||
Nonperforming assets to total loans held for investment and OREO | 0.54 | 0.71 | 0.68 | 0.66 | 0.78 | ||||||||||||||||||||||
Nonperforming assets to total assets | 0.36 | 0.47 | 0.44 | 0.43 | 0.49 | ||||||||||||||||||||||
Nonaccrual loans to total loans held for investment | 0.53 | 0.69 | 0.65 | 0.63 | 0.75 | ||||||||||||||||||||||
As of and for the Nine Months Ended | Percent Change | ||||||||||||||||||||||||||
September 30, | September 30, | to September 30, 2014 | |||||||||||||||||||||||||
(Dollars in millions) | 2014 | 2013 | from September 30, 2013 | ||||||||||||||||||||||||
Credit Data: | |||||||||||||||||||||||||||
(Reversal of) provision for loan losses, excluding purchased credit-impaired loans | $ | (27 | ) | $ | (22 | ) | (23 | ) | % | ||||||||||||||||||
(Reversal of) provision for purchased credit-impaired loan losses not subject to FDIC indemnification | 2 | — | 200 | ||||||||||||||||||||||||
(Reversal of) provision for losses on unfunded credit commitments | 32 | 14 | 129 | ||||||||||||||||||||||||
Total (reversal of) provision for credit losses | $ | 7 | $ | (8 | ) | 188 | |||||||||||||||||||||
Net loans charged-off | $ | 13 | $ | 21 | (38 | ) | |||||||||||||||||||||
Nonperforming assets | 428 | 574 | (25 | ) | |||||||||||||||||||||||
Credit Ratios: | |||||||||||||||||||||||||||
Net loans charged-off to average total loans held for investment (3) | 0.02 | % | 0.04 | % | |||||||||||||||||||||||
Nonperforming assets to total assets | 0.39 | 0.54 | |||||||||||||||||||||||||
Excluding purchased credit-impaired loans and FDIC covered OREO (15): | |||||||||||||||||||||||||||
Net loans charged-off to average total loans held for investment (3) | 0.02 | % | 0.05 | % | |||||||||||||||||||||||
Nonperforming assets to total assets | 0.36 | 0.49 |
For the Three Months Ended | ||||||||||||||||||||||
(Dollars in millions) | September 30, 2014 | June 30, 2014 | March 31, 2014 | December 31, 2013 | September 30, 2013 | |||||||||||||||||
Interest Income | ||||||||||||||||||||||
Loans | $ | 693 | $ | 749 | $ | 667 | $ | 695 | $ | 668 | ||||||||||||
Securities | 113 | 115 | 115 | 115 | 118 | |||||||||||||||||
Other | 2 | 3 | 5 | 6 | 2 | |||||||||||||||||
Total interest income | 808 | 867 | 787 | 816 | 788 | |||||||||||||||||
Interest Expense | ||||||||||||||||||||||
Deposits | 58 | 61 | 62 | 64 | 63 | |||||||||||||||||
Commercial paper and other short-term borrowings | 1 | 2 | 1 | 1 | 2 | |||||||||||||||||
Long-term debt | 42 | 41 | 41 | 45 | 38 | |||||||||||||||||
Total interest expense | 101 | 104 | 104 | 110 | 103 | |||||||||||||||||
Net Interest Income | 707 | 763 | 683 | 706 | 685 | |||||||||||||||||
(Reversal of) provision for loan losses | (18 | ) | 9 | (16 | ) | (23 | ) | (16 | ) | |||||||||||||
Net interest income after (reversal of) provision for loan losses | 725 | 754 | 699 | 729 | 701 | |||||||||||||||||
Noninterest Income | ||||||||||||||||||||||
Service charges on deposit accounts | 52 | 50 | 51 | 51 | 53 | |||||||||||||||||
Trust and investment management fees | 26 | 26 | 26 | 28 | 34 | |||||||||||||||||
Trading account activities | 33 | 14 | 16 | 20 | 15 | |||||||||||||||||
Securities gains, net | 13 | 1 | 2 | 8 | 47 | |||||||||||||||||
Credit facility fees | 30 | 31 | 28 | 28 | 31 | |||||||||||||||||
Merchant banking fees | 38 | 27 | 24 | 25 | 29 | |||||||||||||||||
Brokerage commissions and fees | 14 | 13 | 13 | 12 | 12 | |||||||||||||||||
Card processing fees, net | 8 | 9 | 8 | 8 | 8 | |||||||||||||||||
Fees from affiliates (16) | 151 | — | — | — | — | |||||||||||||||||
Other, net | 23 | 31 | 13 | 10 | 5 | |||||||||||||||||
Total noninterest income | 388 | 202 | 181 | 190 | 234 | |||||||||||||||||
Noninterest Expense | ||||||||||||||||||||||
Salaries and employee benefits | 492 | 378 | 388 | 406 | 391 | |||||||||||||||||
Net occupancy and equipment | 74 | 75 | 71 | 70 | 77 | |||||||||||||||||
Professional and outside services | 66 | 63 | 55 | 64 | 66 | |||||||||||||||||
Intangible asset amortization | 13 | 13 | 13 | 16 | 16 | |||||||||||||||||
Regulatory assessments | 13 | 16 | 15 | 14 | 20 | |||||||||||||||||
(Reversal of) provision for losses on unfunded credit commitments | 19 | (3 | ) | 16 | 2 | 1 | ||||||||||||||||
Other | 128 | 107 | 102 | 117 | 118 | |||||||||||||||||
Total noninterest expense | 805 | 649 | 660 | 689 | 689 | |||||||||||||||||
Income before income taxes and including | ||||||||||||||||||||||
noncontrolling interests | 308 | 307 | 220 | 230 | 246 | |||||||||||||||||
Income tax expense | 67 | 62 | 50 | 55 | 55 | |||||||||||||||||
Net Income including Noncontrolling Interests | 241 | 245 | 170 | 175 | 191 | |||||||||||||||||
Deduct: Net loss from noncontrolling interests | 5 | 4 | 5 | 4 | 7 | |||||||||||||||||
Net Income attributable to MUAH | $ | 246 | $ | 249 | $ | 175 | $ | 179 | $ | 198 |
For the Nine Months Ended | ||||||||||
(Dollars in millions) | September 30, 2014 | September 30, 2013 | ||||||||
Interest Income | ||||||||||
Loans | $ | 2,109 | $ | 1,946 | ||||||
Securities | 343 | 354 | ||||||||
Other | 10 | 7 | ||||||||
Total interest income | 2,462 | 2,307 | ||||||||
Interest Expense | ||||||||||
Deposits | 181 | 184 | ||||||||
Commercial paper and other short-term borrowings | 4 | 4 | ||||||||
Long-term debt | 124 | 109 | ||||||||
Total interest expense | 309 | 297 | ||||||||
Net Interest Income | 2,153 | 2,010 | ||||||||
(Reversal of) provision for loan losses | (25 | ) | (22 | ) | ||||||
Net interest income after (reversal of) provision for loan losses | 2,178 | 2,032 | ||||||||
Noninterest Income | ||||||||||
Service charges on deposit accounts | 153 | 158 | ||||||||
Trust and investment management fees | 78 | 107 | ||||||||
Trading account activities | 63 | 41 | ||||||||
Securities gains, net | 16 | 170 | ||||||||
Credit facility fees | 89 | 83 | ||||||||
Merchant banking fees | 89 | 68 | ||||||||
Brokerage commissions and fees | 40 | 34 | ||||||||
Card processing fees, net | 25 | 26 | ||||||||
Fees from affiliates (16) | 151 | — | ||||||||
Other, net | 67 | (1 | ) | |||||||
Total noninterest income | 771 | 686 | ||||||||
Noninterest Expense | ||||||||||
Salaries and employee benefits | 1,258 | 1,225 | ||||||||
Net occupancy and equipment | 220 | 236 | ||||||||
Professional and outside services | 184 | 186 | ||||||||
Intangible asset amortization | 39 | 49 | ||||||||
Regulatory assessments | 44 | 60 | ||||||||
(Reversal of) provision for losses on unfunded credit commitments | 32 | 14 | ||||||||
Other | 337 | 334 | ||||||||
Total noninterest expense | 2,114 | 2,104 | ||||||||
Income before income taxes and including | ||||||||||
noncontrolling interests | 835 | 614 | ||||||||
Income tax expense | 179 | 140 | ||||||||
Net Income including Noncontrolling Interests | 656 | 474 | ||||||||
Deduct: Net loss from noncontrolling interests | 14 | 14 | ||||||||
Net Income attributable to MUAH | $ | 670 | $ | 488 |
(Dollars in millions except for per share amount) | September 30, 2014 | June 30, 2014 | March 31, 2014 | December 31, 2013 | September 30, 2013 | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Cash and due from banks | $ | 1,593 | $ | 1,911 | $ | 1,792 | $ | 1,863 | $ | 1,719 | |||||||||||||||
Interest bearing deposits in banks | 2,772 | 2,353 | 2,883 | 4,329 | 5,471 | ||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 154 | 65 | 32 | 11 | 122 | ||||||||||||||||||||
Total cash and cash equivalents | 4,519 | 4,329 | 4,707 | 6,203 | 7,312 | ||||||||||||||||||||
Trading account assets (includes $14 at September 30, 2014, $25 at June 30, 2014; $9 at March 31, 2014; $8 at December 31, 2013; and $13 at September 30, 2013 of assets pledged as collateral) | 883 | 941 | 841 | 851 | 776 | ||||||||||||||||||||
Securities available for sale | 14,064 | 14,670 | 15,366 | 15,817 | 16,872 | ||||||||||||||||||||
Securities held to maturity (Fair value: September 30, 2014 $8,491; June 30, 2014, $8,251; March 31, 2014, $7,810; December 31, 2013, $6,439; September 30, 2013, $5,450) | 8,458 | 8,177 | 7,826 | 6,509 | 5,446 | ||||||||||||||||||||
Loans held for investment | 74,635 | 72,369 | 69,933 | 68,312 | 67,170 | ||||||||||||||||||||
Allowance for loan losses | (529 | ) | (559 | ) | (557 | ) | (568 | ) | (608 | ) | |||||||||||||||
Loans held for investment, net | 74,106 | 71,810 | 69,376 | 67,744 | 66,562 | ||||||||||||||||||||
Premises and equipment, net | 617 | 632 | 641 | 688 | 685 | ||||||||||||||||||||
Goodwill | 3,227 | 3,227 | 3,227 | 3,228 | 3,168 | ||||||||||||||||||||
Other assets | 5,005 | 5,034 | 5,253 | 4,854 | 4,663 | ||||||||||||||||||||
Total assets | $ | 110,879 | $ | 108,820 | $ | 107,237 | $ | 105,894 | $ | 105,484 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||
Noninterest bearing | $ | 28,676 | $ | 27,446 | $ | 26,881 | $ | 26,495 | $ | 26,126 | |||||||||||||||
Interest bearing | 53,680 | 54,120 | 54,298 | 53,606 | 53,289 | ||||||||||||||||||||
Total deposits | 82,356 | 81,566 | 81,179 | 80,101 | 79,415 | ||||||||||||||||||||
Commercial paper and other short-term borrowings | 3,876 | 2,870 | 2,660 | 2,563 | 3,078 | ||||||||||||||||||||
Long-term debt | 6,984 | 6,995 | 6,545 | 6,547 | 7,803 | ||||||||||||||||||||
Trading account liabilities | 596 | 664 | 531 | 540 | 614 | ||||||||||||||||||||
Other liabilities | 1,777 | 1,666 | 1,611 | 1,675 | 1,767 | ||||||||||||||||||||
Total liabilities | 95,589 | 93,761 | 92,526 | 91,426 | 92,677 | ||||||||||||||||||||
Equity | |||||||||||||||||||||||||
MUAH Stockholder's Equity: | |||||||||||||||||||||||||
Common stock, par value $1 per share: | |||||||||||||||||||||||||
Authorized 300,000,000 shares; 136,330,831 shares issued and outstanding as of September 30, 2014 and 136,330,830 as of June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013 respectively | 136 | 136 | 136 | 136 | 136 | ||||||||||||||||||||
Additional paid-in capital | 7,223 | 7,184 | 7,196 | 7,191 | 5,985 | ||||||||||||||||||||
Retained earnings | 8,191 | 7,936 | 7,687 | 7,512 | 7,333 | ||||||||||||||||||||
Accumulated other comprehensive loss | (499 | ) | (441 | ) | (559 | ) | (624 | ) | (905 | ) | |||||||||||||||
Total MUAH stockholder's equity | 15,051 | 14,815 | 14,460 | 14,215 | 12,549 | ||||||||||||||||||||
Noncontrolling interests | 239 | 244 | 251 | 253 | 258 | ||||||||||||||||||||
Total equity | 15,290 | 15,059 | 14,711 | 14,468 | 12,807 | ||||||||||||||||||||
Total liabilities and equity | $ | 110,879 | $ | 108,820 | $ | 107,237 | $ | 105,894 | $ | 105,484 |
For the Three Months Ended | ||||||||||||||||||||||
September 30, 2014 | June 30, 2014 | |||||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||||
(Dollars in millions) | Balance | Expense (7) | Rate (3)(7) | Balance | Expense (7) | Rate (3)(7) | ||||||||||||||||
Assets | ||||||||||||||||||||||
Loans held for investment: (17) | ||||||||||||||||||||||
Commercial and industrial | $ | 25,746 | $ | 220 | 3.39 | % | $ | 24,421 | $ | 202 | 3.33 | % | ||||||||||
Commercial mortgage | 13,643 | 122 | 3.57 | 13,529 | 124 | 3.66 | ||||||||||||||||
Construction | 1,336 | 10 | 3.12 | 1,146 | 10 | 3.24 | ||||||||||||||||
Lease financing | 811 | 12 | 5.69 | 840 | 14 | 6.74 | ||||||||||||||||
Residential mortgage | 27,967 | 250 | 3.58 | 27,063 | 247 | 3.66 | ||||||||||||||||
Home equity and other consumer loans | 3,164 | 32 | 4.08 | 3,191 | 32 | 4.04 | ||||||||||||||||
Loans, before purchased credit-impaired loans | 72,667 | 646 | 3.54 | 70,190 | 629 | 3.59 | ||||||||||||||||
Purchased credit-impaired loans | 686 | 48 | 27.70 | 914 | 120 | 52.45 | ||||||||||||||||
Total loans held for investment | 73,353 | 694 | 3.77 | 71,104 | 749 | 4.22 | ||||||||||||||||
Securities | 22,592 | 117 | 2.08 | 22,865 | 120 | 2.10 | ||||||||||||||||
Interest bearing deposits in banks | 2,380 | 2 | 0.26 | 2,878 | 2 | 0.25 | ||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 106 | — | — | 102 | — | 0.02 | ||||||||||||||||
Trading account assets | 164 | — | 0.66 | 194 | 1 | 1.04 | ||||||||||||||||
Other earning assets | 338 | 1 | 0.73 | 262 | — | 0.83 | ||||||||||||||||
Total earning assets | 98,933 | 814 | 3.28 | 97,405 | 872 | 3.58 | ||||||||||||||||
Allowance for loan losses | (566 | ) | (561 | ) | ||||||||||||||||||
Cash and due from banks | 1,597 | 1,450 | ||||||||||||||||||||
Premises and equipment, net | 626 | 642 | ||||||||||||||||||||
Other assets | 9,149 | 8,935 | ||||||||||||||||||||
Total assets | $ | 109,739 | $ | 107,871 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||
Transaction and money market accounts | $ | 39,128 | 33 | 0.34 | $ | 37,646 | 35 | 0.38 | ||||||||||||||
Savings | 5,574 | 2 | 0.08 | 5,590 | 1 | 0.09 | ||||||||||||||||
Time | 9,766 | 23 | 0.96 | 10,761 | 25 | 0.91 | ||||||||||||||||
Total interest bearing deposits | 54,468 | 58 | 0.42 | 53,997 | 61 | 0.45 | ||||||||||||||||
Commercial paper and other short-term borrowings (18) | 2,820 | 1 | 0.17 | 2,521 | 2 | 0.20 | ||||||||||||||||
Long-term debt | 6,994 | 42 | 2.38 | 6,923 | 41 | 2.39 | ||||||||||||||||
Total borrowed funds | 9,814 | 43 | 1.75 | 9,444 | 43 | 1.80 | ||||||||||||||||
Total interest bearing liabilities | 64,282 | 101 | 0.63 | 63,441 | 104 | 0.65 | ||||||||||||||||
Noninterest bearing deposits | 27,771 | 27,224 | ||||||||||||||||||||
Other liabilities | 2,474 | 2,298 | ||||||||||||||||||||
Total liabilities | 94,527 | 92,963 | ||||||||||||||||||||
Equity | ||||||||||||||||||||||
MUAH Stockholder's equity | 14,969 | 14,657 | ||||||||||||||||||||
Noncontrolling interests | 243 | 251 | ||||||||||||||||||||
Total equity | 15,212 | 14,908 | ||||||||||||||||||||
Total liabilities and equity | $ | 109,739 | $ | 107,871 | ||||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 713 | 2.65 | % | 768 | 2.93 | % | ||||||||||||||||
Impact of noninterest bearing deposits | 0.19 | 0.19 | ||||||||||||||||||||
Impact of other noninterest bearing sources | 0.03 | 0.03 | ||||||||||||||||||||
Net interest margin | 2.87 | 3.15 | ||||||||||||||||||||
Less: taxable-equivalent adjustment | 6 | 5 | ||||||||||||||||||||
Net interest income | $ | 707 | $ | 763 |
For the Three Months Ended | ||||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||||
(Dollars in millions) | Balance | Expense (7) | Rate (3)(7) | Balance | Expense (7) | Rate (3)(7) | ||||||||||||||||
Assets | ||||||||||||||||||||||
Loans held for investment: (17) | ||||||||||||||||||||||
Commercial and industrial | $ | 25,746 | $ | 220 | 3.39 | % | $ | 22,930 | $ | 192 | 3.32 | % | ||||||||||
Commercial mortgage | 13,643 | 122 | 3.57 | 12,936 | 117 | 3.62 | ||||||||||||||||
Construction | 1,336 | 10 | 3.12 | 827 | 7 | 3.30 | ||||||||||||||||
Lease financing | 811 | 12 | 5.69 | 973 | 12 | 4.92 | ||||||||||||||||
Residential mortgage | 27,967 | 250 | 3.58 | 24,157 | 225 | 3.72 | ||||||||||||||||
Home equity and other consumer loans | 3,164 | 32 | 4.08 | 3,384 | 33 | 3.87 | ||||||||||||||||
Loans, before purchased credit-impaired loans | 72,667 | 646 | 3.54 | 65,207 | 586 | 3.58 | ||||||||||||||||
Purchased credit-impaired loans | 686 | 48 | 27.70 | 1,401 | 82 | 23.46 | ||||||||||||||||
Total loans held for investment | 73,353 | 694 | 3.77 | 66,608 | 668 | 4.00 | ||||||||||||||||
Securities | 22,592 | 117 | 2.08 | 22,909 | 122 | 2.12 | ||||||||||||||||
Interest bearing deposits in banks | 2,380 | 2 | 0.26 | 2,050 | 1 | 0.25 | ||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 106 | — | — | 101 | — | 0.13 | ||||||||||||||||
Trading account assets | 164 | — | 0.66 | 134 | 1 | 0.43 | ||||||||||||||||
Other earning assets | 338 | 1 | 0.73 | 233 | — | 0.97 | ||||||||||||||||
Total earning assets | 98,933 | 814 | 3.28 | 92,035 | 792 | 3.43 | ||||||||||||||||
Allowance for loan losses | (566 | ) | (633 | ) | ||||||||||||||||||
Cash and due from banks | 1,597 | 1,315 | ||||||||||||||||||||
Premises and equipment, net | 626 | 694 | ||||||||||||||||||||
Other assets | 9,149 | 8,123 | ||||||||||||||||||||
Total assets | $ | 109,739 | $ | 101,534 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||
Transaction and money market accounts | $ | 39,128 | 33 | 0.34 | $ | 34,912 | 31 | 0.36 | ||||||||||||||
Savings | 5,574 | 2 | 0.08 | 5,633 | 2 | 0.13 | ||||||||||||||||
Time | 9,766 | 23 | 0.96 | 12,017 | 30 | 0.98 | ||||||||||||||||
Total interest bearing deposits | 54,468 | 58 | 0.42 | 52,562 | 63 | 0.47 | ||||||||||||||||
Commercial paper and other short-term borrowings (18) | 2,820 | 1 | 0.17 | 3,376 | 2 | 0.20 | ||||||||||||||||
Long-term debt | 6,994 | 42 | 2.38 | 6,135 | 38 | 2.47 | ||||||||||||||||
Total borrowed funds | 9,814 | 43 | 1.75 | 9,511 | 40 | 1.66 | ||||||||||||||||
Total interest bearing liabilities | 64,282 | 101 | 0.63 | 62,073 | 103 | 0.66 | ||||||||||||||||
Noninterest bearing deposits | 27,771 | 24,872 | ||||||||||||||||||||
Other liabilities | 2,474 | 2,110 | ||||||||||||||||||||
Total liabilities | 94,527 | 89,055 | ||||||||||||||||||||
Equity | ||||||||||||||||||||||
MUAH Stockholder's equity | 14,969 | 12,210 | ||||||||||||||||||||
Noncontrolling interests | 243 | 269 | ||||||||||||||||||||
Total equity | 15,212 | 12,479 | ||||||||||||||||||||
Total liabilities and equity | $ | 109,739 | $ | 101,534 | ||||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 713 | 2.65 | % | 689 | 2.77 | % | ||||||||||||||||
Impact of noninterest bearing deposits | 0.19 | 0.19 | ||||||||||||||||||||
Impact of other noninterest bearing sources | 0.03 | 0.03 | ||||||||||||||||||||
Net interest margin | 2.87 | 2.99 | ||||||||||||||||||||
Less: taxable-equivalent adjustment | 6 | 4 | ||||||||||||||||||||
Net interest income | $ | 707 | $ | 685 |
For the Nine Months Ended | |||||||||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||||||||
Interest | Average | Interest | Average | ||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||
(Dollars in millions) | Balance | Expense (7) | Rate (3)(7) | Balance | Expense (7) | Rate (3)(7) | |||||||||||||||
Assets | |||||||||||||||||||||
Loans held for investment: (17) | |||||||||||||||||||||
Commercial and industrial | $ | 24,708 | $ | 620 | 3.36 | % | $ | 21,996 | $ | 554 | 3.37 | % | |||||||||
Commercial mortgage | 13,469 | 365 | 3.61 | 11,573 | 330 | 3.81 | |||||||||||||||
Construction | 1,154 | 28 | 3.30 | 760 | 22 | 3.84 | |||||||||||||||
Lease financing | 833 | 37 | 5.95 | 1,030 | 28 | 3.61 | |||||||||||||||
Residential mortgage | 27,014 | 735 | 3.63 | 23,485 | 667 | 3.79 | |||||||||||||||
Home equity and other consumer loans | 3,196 | 96 | 4.04 | 3,495 | 100 | 3.85 | |||||||||||||||
Loans, before purchased credit-impaired loans | 70,374 | 1,881 | 3.57 | 62,339 | 1,701 | 3.64 | |||||||||||||||
Purchased credit-impaired loans | 890 | 229 | 34.27 | 1,294 | 245 | 25.30 | |||||||||||||||
Total loans held for investment | 71,264 | 2,110 | 3.95 | 63,633 | 1,946 | 4.08 | |||||||||||||||
Securities | 22,689 | 357 | 2.10 | 22,643 | 365 | 2.15 | |||||||||||||||
Interest bearing deposits in banks | 2,934 | 6 | 0.25 | 2,671 | 5 | 0.25 | |||||||||||||||
Federal funds sold and securities purchased under resale agreements | 113 | — | 0.06 | 131 | — | 0.17 | |||||||||||||||
Trading account assets | 208 | 3 | 1.80 | 149 | 1 | 0.36 | |||||||||||||||
Other earning assets | 278 | 2 | 0.95 | 252 | 1 | 0.62 | |||||||||||||||
Total earning assets | 97,486 | 2,478 | 3.39 | 89,479 | 2,318 | 3.46 | |||||||||||||||
Allowance for loan losses | (568 | ) | (642 | ) | |||||||||||||||||
Cash and due from banks | 1,512 | 1,356 | |||||||||||||||||||
Premises and equipment, net | 638 | 701 | |||||||||||||||||||
Other assets | 8,971 | 8,090 | |||||||||||||||||||
Total assets | $ | 108,039 | $ | 98,984 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||
Transaction and money market accounts | 38,097 | 104 | 0.37 | 32,983 | 79 | 0.32 | |||||||||||||||
Savings | 5,579 | 4 | 0.09 | 5,717 | 6 | 0.13 | |||||||||||||||
Time | 10,575 | 73 | 0.93 | 12,346 | 99 | 1.07 | |||||||||||||||
Total interest bearing deposits | 54,251 | 181 | 0.45 | 51,046 | 184 | 0.48 | |||||||||||||||
Commercial paper and other short-term borrowings (18) | 2,658 | 4 | 0.19 | 2,814 | 4 | 0.19 | |||||||||||||||
Long-term debt | 6,822 | 124 | 2.42 | 5,629 | 109 | 2.57 | |||||||||||||||
Total borrowed funds | 9,480 | 128 | 1.79 | 8,443 | 113 | 1.78 | |||||||||||||||
Total interest bearing liabilities | 63,731 | 309 | 0.65 | 59,489 | 297 | 0.67 | |||||||||||||||
Noninterest bearing deposits | 27,047 | 24,646 | |||||||||||||||||||
Other liabilities | 2,337 | 2,118 | |||||||||||||||||||
Total liabilities | 93,115 | 86,253 | |||||||||||||||||||
Equity | |||||||||||||||||||||
MUAH Stockholder's equity | 14,675 | 12,463 | |||||||||||||||||||
Noncontrolling interests | 249 | 268 | |||||||||||||||||||
Total equity | 14,924 | 12,731 | |||||||||||||||||||
Total liabilities and equity | $ | 108,039 | $ | 98,984 | |||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 2,169 | 2.74 | % | 2,021 | 2.79 | % | |||||||||||||||
Impact of noninterest bearing deposits | 0.19 | 0.20 | |||||||||||||||||||
Impact of other noninterest bearing sources | 0.04 | 0.03 | |||||||||||||||||||
Net interest margin | 2.97 | 3.02 | |||||||||||||||||||
Less: taxable-equivalent adjustment | 16 | 11 | |||||||||||||||||||
Net interest income | $ | 2,153 | $ | 2,010 |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||
(Dollars in millions) | 2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||||||||||
Loans held for investment (period end) | |||||||||||||||||||||||||||
Loans held for investment: | |||||||||||||||||||||||||||
Commercial and industrial | $ | 26,429 | $ | 25,162 | $ | 23,654 | $ | 23,528 | $ | 23,125 | |||||||||||||||||
Commercial mortgage | 13,766 | 13,549 | 13,568 | 13,092 | 12,905 | ||||||||||||||||||||||
Construction | 1,436 | 1,248 | 1,019 | 905 | 855 | ||||||||||||||||||||||
Lease financing | 811 | 829 | 845 | 854 | 972 | ||||||||||||||||||||||
Total commercial portfolio | 42,442 | 40,788 | 39,086 | 38,379 | 37,857 | ||||||||||||||||||||||
Residential mortgage | 28,425 | 27,619 | 26,602 | 25,547 | 24,714 | ||||||||||||||||||||||
Home equity and other consumer loans | 3,141 | 3,178 | 3,194 | 3,280 | 3,336 | ||||||||||||||||||||||
Total consumer portfolio | 31,566 | 30,797 | 29,796 | 28,827 | 28,050 | ||||||||||||||||||||||
Loans held for investment, before purchased credit-impaired loans | 74,008 | 71,585 | 68,882 | 67,206 | 65,907 | ||||||||||||||||||||||
Purchased credit-impaired loans | 627 | 784 | 1,051 | 1,106 | 1,263 | ||||||||||||||||||||||
Total loans held for investment | $ | 74,635 | $ | 72,369 | $ | 69,933 | $ | 68,312 | $ | 67,170 | |||||||||||||||||
Nonperforming Assets (period end) | |||||||||||||||||||||||||||
Nonaccrual loans: | |||||||||||||||||||||||||||
Commercial and industrial | $ | 71 | $ | 161 | $ | 89 | $ | 44 | $ | 62 | |||||||||||||||||
Commercial mortgage | 34 | 47 | 46 | 51 | 88 | ||||||||||||||||||||||
Total commercial portfolio | 105 | 208 | 135 | 95 | 150 | ||||||||||||||||||||||
Residential mortgage | 239 | 243 | 266 | 286 | 293 | ||||||||||||||||||||||
Home equity and other consumer loans | 46 | 46 | 49 | 46 | 48 | ||||||||||||||||||||||
Total consumer portfolio | 285 | 289 | 315 | 332 | 341 | ||||||||||||||||||||||
Nonaccrual loans, before purchased credit-impaired loans | 390 | 497 | 450 | 427 | 491 | ||||||||||||||||||||||
Purchased credit-impaired loans | 13 | 17 | 16 | 15 | 20 | ||||||||||||||||||||||
Total nonaccrual loans | 403 | 514 | 466 | 442 | 511 | ||||||||||||||||||||||
OREO | 12 | 14 | 17 | 20 | 22 | ||||||||||||||||||||||
FDIC covered OREO | 13 | 19 | 23 | 37 | 41 | ||||||||||||||||||||||
Total nonperforming assets | $ | 428 | $ | 547 | $ | 506 | $ | 499 | $ | 574 | |||||||||||||||||
Total nonperforming assets, excluding purchased credit-impaired | |||||||||||||||||||||||||||
loans and FDIC covered OREO | $ | 402 | $ | 511 | $ | 467 | $ | 447 | $ | 513 | |||||||||||||||||
Loans 90 days or more past due and still accruing (19) | $ | 4 | $ | 11 | $ | 4 | $ | 5 | $ | 8 | |||||||||||||||||
As of and for the Three Months Ended | |||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||
(Dollars in millions) | 2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||||
Analysis of Allowance for Credit Losses | |||||||||||||||||||||
Balance, beginning of period | $ | 559 | $ | 557 | $ | 568 | $ | 608 | $ | 625 | |||||||||||
(Reversal of) provision for loan losses, excluding purchased credit-impaired loans | (18 | ) | 9 | (18 | ) | (22 | ) | (16 | ) | ||||||||||||
(Reversal of) provision for purchased credit-impaired loan losses not subject to FDIC indemnification | — | — | 2 | (1 | ) | — | |||||||||||||||
Increase/(decrease) in allowance covered by FDIC indemnification | — | — | — | (6 | ) | (2 | ) | ||||||||||||||
Other | — | — | (1 | ) | — | — | |||||||||||||||
Loans charged-off: | |||||||||||||||||||||
Commercial and industrial | (15 | ) | (6 | ) | (5 | ) | (18 | ) | (6 | ) | |||||||||||
Commercial mortgage | — | (2 | ) | (1 | ) | (2 | ) | (2 | ) | ||||||||||||
Construction | — | — | — | — | (1 | ) | |||||||||||||||
Total commercial portfolio | (15 | ) | (8 | ) | (6 | ) | (20 | ) | (9 | ) | |||||||||||
Residential mortgage | — | (2 | ) | (1 | ) | (1 | ) | (2 | ) | ||||||||||||
Home equity and other consumer loans | (2 | ) | (2 | ) | (2 | ) | (4 | ) | (2 | ) | |||||||||||
Total consumer portfolio | (2 | ) | (4 | ) | (3 | ) | (5 | ) | (4 | ) | |||||||||||
Purchased credit-impaired loans | (1 | ) | — | — | — | — | |||||||||||||||
Total loans charged-off | (18 | ) | (12 | ) | (9 | ) | (25 | ) | (13 | ) | |||||||||||
Recoveries of loans previously charged-off: | |||||||||||||||||||||
Commercial and industrial | 3 | 3 | 11 | 6 | 5 | ||||||||||||||||
Commercial mortgage | 2 | 1 | — | — | 4 | ||||||||||||||||
Construction | — | — | 3 | — | 1 | ||||||||||||||||
Lease financing | — | — | — | 1 | — | ||||||||||||||||
Total commercial portfolio | 5 | 4 | 14 | 7 | 10 | ||||||||||||||||
Home equity and other consumer loans | — | 1 | 1 | — | 2 | ||||||||||||||||
Total consumer portfolio | — | 1 | 1 | — | 2 | ||||||||||||||||
Purchased credit-impaired loans | 1 | — | — | 7 | 2 | ||||||||||||||||
Total recoveries of loans previously charged-off | 6 | 5 | 15 | 14 | 14 | ||||||||||||||||
Net loans recovered (charged-off) | (12 | ) | (7 | ) | 6 | (11 | ) | 1 | |||||||||||||
Ending balance of allowance for loan losses | 529 | 559 | 557 | 568 | 608 | ||||||||||||||||
Allowance for losses on unfunded credit commitments | 162 | 145 | 148 | 132 | 131 | ||||||||||||||||
Total allowance for credit losses | $ | 691 | $ | 704 | $ | 705 | $ | 700 | $ | 739 | |||||||||||
Components of allowance for loan losses and credit losses: | |||||||||||||||||||||
Allowance for loan losses, excluding allowance on purchased credit-impaired loans | $ | 526 | $ | 556 | $ | 554 | $ | 567 | $ | 607 | |||||||||||
Allowance for loan losses on purchased credit-impaired loans | 3 | 3 | 3 | 1 | 1 | ||||||||||||||||
Total allowance for loan losses | $ | 529 | $ | 559 | $ | 557 | $ | 568 | $ | 608 | |||||||||||
Securities Available for Sale | ||||||||||||||||||||||||||
September 30, 2014 | June 30, 2014 | Fair Value | Fair Value | |||||||||||||||||||||||
Amortized | Fair | Amortized | Fair | Change from | % Change from | |||||||||||||||||||||
(Dollars in millions) | Cost | Value | Cost | Value | June 30, 2014 | June 30, 2014 | ||||||||||||||||||||
Asset Liability Management securities: | ||||||||||||||||||||||||||
U.S. Treasury | $ | 70 | $ | 70 | $ | — | $ | — | $ | 70 | 100 | % | ||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||
U.S. government agency and government-sponsored agencies | 7,886 | 7,739 | 8,281 | 8,157 | (418 | ) | (5 | ) | ||||||||||||||||||
Privately issued | 175 | 177 | 188 | 191 | (14 | ) | (7 | ) | ||||||||||||||||||
Privately issued - commercial mortgage-backed securities | 1,770 | 1,745 | 1,824 | 1,813 | (68 | ) | (4 | ) | ||||||||||||||||||
Collateralized loan obligations | 2,438 | 2,422 | 2,543 | 2,534 | (112 | ) | (4 | ) | ||||||||||||||||||
Asset-backed and other | 13 | 14 | 18 | 19 | (5 | ) | (26 | ) | ||||||||||||||||||
Asset Liability Management securities | 12,352 | 12,167 | 12,854 | 12,714 | (547 | ) | (4 | ) | ||||||||||||||||||
Other debt securities: | ||||||||||||||||||||||||||
Direct bank purchase bonds | 1,819 | 1,833 | 1,888 | 1,897 | (64 | ) | (3 | ) | ||||||||||||||||||
Other | 54 | 52 | 54 | 52 | — | — | ||||||||||||||||||||
Equity securities | 10 | 12 | 6 | 7 | 5 | 71 | ||||||||||||||||||||
Total securities available for sale | $ | 14,235 | $ | 14,064 | $ | 14,802 | $ | 14,670 | $ | (606 | ) | (4 | )% | |||||||||||||
Securities Held to Maturity | ||||||||||||||||||||||||||
September 30, 2014 | June 30, 2014 | Carrying Amount | Carrying Amount | |||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Change from | % Change from | |||||||||||||||||||||
(Dollars in millions) | Amount (20) | Value | Amount (20) | Value | June 30, 2014 | June 30, 2014 | ||||||||||||||||||||
U.S. Treasury | $ | 485 | $ | 484 | $ | 484 | $ | 486 | $ | 1 | — | % | ||||||||||||||
U.S. government-sponsored agencies | 125 | 125 | 275 | 275 | (150 | ) | (55 | ) | ||||||||||||||||||
U.S. government agency and government-sponsored | ||||||||||||||||||||||||||
agencies - residential mortgage-backed securities | 6,102 | 6,107 | 5,669 | 5,698 | 433 | 8 | ||||||||||||||||||||
U.S. government agency and government-sponsored | ||||||||||||||||||||||||||
agencies - commercial mortgage-backed securities | 1,746 | 1,775 | 1,749 | 1,792 | (3 | ) | — | |||||||||||||||||||
Total securities held to maturity | $ | 8,458 | $ | 8,491 | $ | 8,177 | $ | 8,251 | $ | 281 | 3 |
As of and for the Three Months Ended | ||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
(Dollars in millions) | 2014 | 2014 | 2014 | 2013 | 2013 | |||||||||||||||||||
Net income attributable to MUAH | $ | 246 | $ | 249 | $ | 175 | $ | 179 | $ | 198 | ||||||||||||||
Net adjustments for merger costs related to acquisitions, net of tax | 13 | 15 | 11 | 12 | 15 | |||||||||||||||||||
Net adjustments for privatization transaction, net of tax | (8 | ) | (9 | ) | 1 | 2 | (14 | ) | ||||||||||||||||
Net income attributable to MUAH, excluding impact of | ||||||||||||||||||||||||
privatization transaction and merger costs related to acquisitions | $ | 251 | $ | 255 | $ | 187 | $ | 193 | $ | 199 | ||||||||||||||
Average total assets | $ | 109,739 | $ | 107,871 | $ | 106,491 | $ | 104,424 | $ | 101,534 | ||||||||||||||
Less: Net adjustments related to privatization transaction | 2,255 | 2,260 | 2,272 | 2,297 | 2,309 | |||||||||||||||||||
Average total assets, excluding impact of privatization transaction | $ | 107,484 | $ | 105,611 | $ | 104,219 | $ | 102,127 | $ | 99,225 | ||||||||||||||
Return on average assets (3) | 0.90 | % | 0.92 | % | 0.66 | % | 0.68 | % | 0.78 | % | ||||||||||||||
Return on average assets, excluding impact of privatization | ||||||||||||||||||||||||
transaction and merger costs related to acquisitions (3) (4) | 0.94 | 0.97 | 0.72 | 0.75 | 0.81 | |||||||||||||||||||
Average MUAH stockholder's equity | $ | 14,969 | $ | 14,657 | $ | 14,390 | $ | 12,604 | $ | 12,210 | ||||||||||||||
Less: Adjustments for merger costs related to acquisitions | (147 | ) | (132 | ) | (118 | ) | (105 | ) | (93 | ) | ||||||||||||||
Less: Net adjustments for privatization transaction | 2,290 | 2,297 | 2,302 | 2,306 | 2,319 | |||||||||||||||||||
Average MUAH stockholder's equity, excluding impact of privatization | ||||||||||||||||||||||||
transaction and merger costs related to acquisitions | $ | 12,826 | $ | 12,492 | $ | 12,206 | $ | 10,403 | $ | 9,984 | ||||||||||||||
Return on average MUAH stockholder's equity (3) | 6.57 | % | 6.80 | % | 4.87 | % | 5.66 | % | 6.50 | % | ||||||||||||||
Return on average MUAH stockholder's equity, excluding impact of | ||||||||||||||||||||||||
privatization transaction and merger costs related to acquisitions (3) (4) | 7.84 | 8.19 | 6.11 | 7.41 | 8.01 | |||||||||||||||||||
Noninterest expense | $ | 805 | $ | 649 | $ | 660 | $ | 689 | $ | 689 | ||||||||||||||
Less: Staff costs associated with fees from affiliates - support services | 88 | — | — | — | — | |||||||||||||||||||
Less: Foreclosed asset expense and other credit costs | (1 | ) | 1 | — | 2 | (2 | ) | |||||||||||||||||
Less: (Reversal of) provision for losses on unfunded credit commitments | 19 | (3 | ) | 16 | 2 | 1 | ||||||||||||||||||
Less: Productivity initiative costs | 6 | 4 | 1 | 20 | 14 | |||||||||||||||||||
Less: Low income housing credit (LIHC) investment amortization expense | 25 | 20 | 20 | 24 | 17 | |||||||||||||||||||
Less: Expenses of the LIHC consolidated VIEs | 8 | 8 | 8 | 6 | 11 | |||||||||||||||||||
Less: Merger and business integration costs | 22 | 25 | 17 | 25 | 25 | |||||||||||||||||||
Less: Net adjustments related to privatization transaction | 11 | 10 | 10 | 14 | 13 | |||||||||||||||||||
Less: Intangible asset amortization | 3 | 3 | 3 | 3 | 3 | |||||||||||||||||||
Noninterest expense, as adjusted (a) | $ | 624 | $ | 581 | $ | 585 | $ | 593 | $ | 607 | ||||||||||||||
Total revenue | $ | 1,095 | $ | 965 | $ | 864 | $ | 896 | $ | 919 | ||||||||||||||
Add: Net interest income taxable-equivalent adjustment | 6 | 5 | 5 | 4 | 4 | |||||||||||||||||||
Less: Fees from affiliates - support services | 94 | — | — | — | — | |||||||||||||||||||
Less: Productivity initiative gains | — | — | — | 6 | 11 | |||||||||||||||||||
Less: Accretion related to privatization-related fair value adjustments | 4 | 9 | 6 | 8 | 8 | |||||||||||||||||||
Less: Other credit costs | 17 | (2 | ) | 2 | 1 | 1 | ||||||||||||||||||
Total revenue, as adjusted (b) | $ | 986 | $ | 963 | $ | 861 | $ | 885 | $ | 903 | ||||||||||||||
Adjusted efficiency ratio (a)/(b) (6) | 63.42 | % | 60.30 | % | 67.95 | % | 67.08 | % | 67.21 | % | ||||||||||||||
Total MUAH stockholder's equity | $ | 15,051 | $ | 14,815 | $ | 14,460 | $ | 14,215 | $ | 12,549 | ||||||||||||||
Less: Goodwill | 3,227 | 3,227 | 3,227 | 3,228 | 3,168 | |||||||||||||||||||
Less: Intangible assets, except mortgage servicing rights (MSRs) | 249 | 262 | 275 | 288 | 287 | |||||||||||||||||||
Less: Deferred tax liabilities related to goodwill and intangible assets | (20 | ) | (99 | ) | (102 | ) | (105 | ) | (110 | ) | ||||||||||||||
Tangible common equity (c) | $ | 11,595 | $ | 11,425 | $ | 11,060 | $ | 10,804 | $ | 9,204 | ||||||||||||||
Total assets | $ | 110,879 | $ | 108,820 | $ | 107,237 | $ | 105,894 | $ | 105,484 | ||||||||||||||
Less: Goodwill | 3,227 | 3,227 | 3,227 | 3,228 | 3,168 | |||||||||||||||||||
Less: Intangible assets, except MSRs | 249 | 262 | 275 | 288 | 287 | |||||||||||||||||||
Less: Deferred tax liabilities related to goodwill and intangible assets | (20 | ) | (99 | ) | (102 | ) | (105 | ) | (110 | ) | ||||||||||||||
Tangible assets (d) | $ | 107,423 | $ | 105,430 | $ | 103,837 | $ | 102,483 | $ | 102,139 | ||||||||||||||
Tangible common equity ratio (c)/(d) (11) | 10.79 | % | 10.84 | % | 10.65 | % | 10.54 | % | 9.01 | % | ||||||||||||||
Tier 1 capital, determined in accordance with U.S. Basel I regulatory requirements | n/a | n/a | n/a | $ | 11,471 | $ | 10,153 | |||||||||||||||||
Less: Junior subordinated debt payable to trusts | n/a | n/a | n/a | 66 | 66 | |||||||||||||||||||
Basel I Tier 1 common capital (e) | n/a | n/a | n/a | $ | 11,405 | $ | 10,087 | |||||||||||||||||
Common Equity Tier 1 capital under U.S. Basel III (transitional) | $ | 12,189 | $ | 11,900 | $ | 11,640 | n/a | n/a | ||||||||||||||||
Accumulated other comprehensive loss related to securities available for | ||||||||||||||||||||||||
sale and pension and other benefits (9) | (388 | ) | (377 | ) | (449 | ) | (522 | ) | n/a | |||||||||||||||
Other (9) | (122 | ) | (130 | ) | (138 | ) | (95 | ) | n/a | |||||||||||||||
Common Equity Tier 1 capital estimated under U.S. Basel III (standardized approach; | ||||||||||||||||||||||||
fully phased-in) (f) | $ | 11,679 | $ | 11,393 | $ | 11,053 | $ | 10,788 | n/a | |||||||||||||||
Risk-weighted assets, determined in accordance with regulatory requirements (g) (9) | $ | 96,239 | $ | 94,556 | $ | 92,476 | $ | 92,410 | $ | 90,900 | ||||||||||||||
Add: Adjustments (9) | 1,955 | 3,638 | 4,293 | 4,444 | n/a | |||||||||||||||||||
Total risk-weighted assets, estimated under U.S. Basel III (standardized approach; | ||||||||||||||||||||||||
fully phased-in) (h) | $ | 98,194 | $ | 98,194 | $ | 96,769 | $ | 96,854 | n/a | |||||||||||||||
Common Equity Tier 1 risk-based capital ratio (f)/(h) (8) (12) | 11.89 | % | 11.60 | % | 11.42 | % | 11.14 | % | n/a | |||||||||||||||
Tier 1 common capital ratio (e)/(g) (8) (9) (10) | n/a | n/a | n/a | 12.34 | % | 11.10 | % |
For the Nine Months Ended | ||||||||||||
September 30, | September 30, | |||||||||||
(Dollars in millions) | 2014 | 2013 | ||||||||||
Net income attributable to MUAH | $ | 670 | $ | 488 | ||||||||
Net adjustments for merger costs related to acquisitions, net of tax | 39 | 66 | ||||||||||
Net adjustments for privatization transaction, net of tax | (16 | ) | (23 | ) | ||||||||
Net income attributable to MUAH, excluding impact of | ||||||||||||
privatization transaction and merger costs related to acquisitions | $ | 693 | $ | 531 | ||||||||
Average total assets | $ | 108,039 | $ | 98,984 | ||||||||
Less: Net adjustments related to privatization transaction | 2,262 | 2,319 | ||||||||||
Average total assets, excluding impact of privatization transaction | $ | 105,777 | $ | 96,665 | ||||||||
Return on average assets (3) | 0.83 | % | 0.66 | % | ||||||||
Return on average assets, excluding impact of privatization | ||||||||||||
transaction and merger costs related to acquisitions (3) (4) | 0.87 | 0.73 | ||||||||||
Average MUAH stockholder's equity | $ | 14,675 | $ | 12,463 | ||||||||
Less: Adjustments for merger costs related to acquisitions | (132 | ) | (71 | ) | ||||||||
Less: Net adjustments for privatization transaction | 2,296 | 2,336 | ||||||||||
Average MUAH stockholder's equity, excluding impact of privatization | ||||||||||||
transaction and merger costs related to acquisitions | $ | 12,511 | $ | 10,198 | ||||||||
Return on average MUAH stockholder's equity (3) | 6.08 | % | 5.23 | % | ||||||||
Return on average MUAH stockholder's equity, excluding impact of | ||||||||||||
privatization transaction and merger costs related to acquisitions (3) (4) | 7.37 | 6.95 | ||||||||||
Noninterest expense | $ | 2,114 | $ | 2,104 | ||||||||
Less: Staff costs associated with fees from affiliates - support services | 88 | — | ||||||||||
Less: Foreclosed asset expense and other credit costs | (1 | ) | (6 | ) | ||||||||
Less: (Reversal of) provision for losses on unfunded credit commitments | 32 | 14 | ||||||||||
Less: Productivity initiative costs | 11 | 31 | ||||||||||
Less: Low income housing credit (LIHC) investment amortization expense | 65 | 52 | ||||||||||
Less: Expenses of the LIHC consolidated VIEs | 23 | 23 | ||||||||||
Less: Merger and business integration costs | 64 | 109 | ||||||||||
Less: Net adjustments related to privatization transaction | 31 | 41 | ||||||||||
Less: Intangible asset amortization | 10 | 10 | ||||||||||
Noninterest expense, as adjusted (a) | $ | 1,791 | $ | 1,830 | ||||||||
Total revenue | $ | 2,924 | $ | 2,696 | ||||||||
Add: Net interest income taxable-equivalent adjustment | 16 | 11 | ||||||||||
Less: Fees from affiliates - support services | 94 | — | ||||||||||
Less: Productivity initiative gains | — | 11 | ||||||||||
Less: Accretion related to privatization-related fair value adjustments | 20 | 16 | ||||||||||
Less: Other credit costs | 18 | (6 | ) | |||||||||
Total revenue, as adjusted (b) | $ | 2,808 | $ | 2,686 | ||||||||
Adjusted efficiency ratio (a)/(b) (6) | 63.74 | % | 68.10 | % | ||||||||
(1) | Pre-tax, pre-provision income is total revenue less noninterest expense. Management believes that this is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover loan losses through a credit cycle. |
(2) | Core deposits exclude brokered deposits, foreign time deposits and domestic time deposits greater than $250,000. |
(3) | Annualized. |
(4) | These ratios exclude the impact of the privatization transaction and merger costs related to acquisitions. Management believes that these ratios provide useful supplemental information regarding the Company's business results. Please refer to Exhibits 13 and 14 for reconciliations between certain GAAP amounts and these non-GAAP measures. |
(5) | The efficiency ratio is total noninterest expense as a percentage of total revenue (net interest income and noninterest income). |
(6) | The adjusted efficiency ratio, a non-GAAP financial measure, is adjusted noninterest expense (noninterest expense excluding staff costs associated with fees from affiliates - support services, foreclosed asset expense and other credit costs, (reversal of) provision for losses on unfunded credit commitments, certain costs related to productivity initiatives, low income housing credit (LIHC) investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger and business integration costs, privatization-related expenses, and intangible asset amortization) as a percentage of adjusted total revenue (net interest income (taxable-equivalent basis) and noninterest income), excluding the impact of fees from affiliates - support services, gains from productivity initiatives related to the sale of certain business units and premises, accretion related to privatization-related fair value adjustments, and other credit costs. Management discloses the adjusted efficiency ratio as a measure of the efficiency of our operations, focusing on those costs most relevant to our business activities. Please refer to Exhibits 13 and 14 for reconciliations between certain GAAP amounts and these non-GAAP measures. |
(7) | Yields, interest income and net interest margin are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent. |
(8) | Estimated as of September 30, 2014. |
(9) | The capital ratios displayed as of September 30, 2014, June 30, 2014, and March 30, 2014 are calculated in accordance with the transition guidelines set forth in the U.S. federal banking agencies' revised capital framework for implementing the final U.S. Basel III regulatory capital rules. The capital ratios as of and prior to December 31, 2013 are calculated under Basel I rules. |
(10) | The Tier 1 common capital ratio is the ratio, calculated under Basel I rules, of Tier 1 capital, less qualifying trust preferred securities, to risk-weighted assets. The Tier 1 common capital ratio, a non-GAAP financial measure, facilitates the understanding of the Company's capital structure and is used to assess and compare the quality and composition of the Company's capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
(11) | The tangible common equity ratio, a non-GAAP financial measure, is calculated as tangible common equity divided by tangible assets. The methodology for determining tangible common equity may differ among companies. The tangible common equity ratio facilitates the understanding of the Company's capital structure and is used to assess and compare the quality and composition of the Company's capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
(12) | Common Equity Tier 1 risk-based capital (standardized, fully phased-in basis) is a non-GAAP financial measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies as if the transition provisions of the U.S. Basel III rules were fully phased in for the periods in which the ratio is disclosed. Management reviews this ratio, which includes components of accumulated other comprehensive loss, along with other measures of capital as part of its financial analyses and has included this non-GAAP information, and the corresponding reconciliation from Common Equity Tier 1 capital (calculated according to the transition provisions under U.S. Basel III rules) because of current interest in such information by market participants. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
(13) | Criticized loans held for investment reflects loans in the commercial portfolio segment that are monitored for credit quality based on internal ratings. Amounts exclude small business loans, which are monitored by business credit score and delinquency status. |
(14) | The allowance for credit losses ratios include the allowances for loan losses and losses on unfunded credit commitments against end of period total loans held for investment or total nonaccrual loans, as appropriate. |
(15) | These ratios exclude the impact of all purchased credit-impaired loans and FDIC covered OREO. Purchased credit-impaired loans and OREO related to the April 2010 acquisitions of certain assets and assumption of certain liabilities of Frontier Bank and Tamalpais Bank are covered under loss share agreements between the Bank and the Federal Deposit Insurance Corporation. Management believes the exclusion of purchased credit-impaired loans and FDIC covered OREO from certain asset quality ratios that include nonaccrual loans, nonperforming assets, net loans charged-off, total loans held for investment and the allowance for loan losses or credit losses in the numerator or denominator provides a better perspective into underlying asset quality trends. |
(16) | Fees from affiliates represents income resulting from the July 1, 2014 business integration initiative. |
(17) | Average balances on loans held for investment include all nonperforming loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield. |
(18) | Includes interest bearing trading liabilities. |
(19) | Excludes loans totaling $65 million, $103 million, $123 million, $124 million, and $203 million that are 90 days or more past due and still accruing at September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013, respectively, which consist of loans accounted for within loan pools in accordance with the accounting standards for purchased credit-impaired loans. The past due status of individual loans within the pools is not a meaningful indicator of credit quality, as potential credit losses are measured at the loan pool level. |
(20) | Carrying amount reflects amortized cost except for balances transferred from available for sale to held to maturity securities. Those balances reflect amortized cost plus any unrealized gains or losses at the date of transfer. |