MUFG AMERICAS HOLDINGS CORPORATION | |||
Dated: April 25, 2016 | By: | /s/ ROLLAND D. JURGENS | |
ROLLAND D. JURGENS Controller and Chief Accounting Officer (Principal Accounting Officer) |
Contact: | Alan Gulick | Doug Lambert | ||||
Corporate Communications | Investor Relations | |||||
(425) 423-7317 | (212) 782-5911 |
◦ | Net income for the first quarter was $49 million, down $20 million from the fourth quarter of 2015. |
◦ | The provision for credit losses was $162 million primarily due to an increase in reserves within the oil and gas sector, compared with $192 million in the fourth quarter of 2015. |
◦ | Loans held for investment at March 31, 2016 were $79.3 billion, up $1.7 billion from December 31, 2015. |
1 |
Percent Change to | ||||||||||||||||||
As of and for the Three Months Ended | March 31, 2016 from | |||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | March 31, 2015 | December 31, 2015 | March 31, 2015 | |||||||||||||
Results of operations: | ||||||||||||||||||
Net interest income | $ | 697 | $ | 708 | $ | 683 | (2 | )% | 2 | % | ||||||||
Noninterest income | 395 | 413 | 335 | (4 | ) | 18 | ||||||||||||
Total revenue | 1,092 | 1,121 | 1,018 | (3 | ) | 7 | ||||||||||||
Noninterest expense | 876 | 891 | 849 | (2 | ) | 3 | ||||||||||||
Pre-tax, pre-provision income (1) | 216 | 230 | 169 | (6 | ) | 28 | ||||||||||||
Provision for credit losses | 162 | 192 | 3 | (16 | ) | nm | ||||||||||||
Income before income taxes and including | ||||||||||||||||||
noncontrolling interests | 54 | 38 | 166 | 42 | (67 | ) | ||||||||||||
Income tax expense | 17 | (18 | ) | 34 | 194 | (50 | ) | |||||||||||
Net income including noncontrolling interests | 37 | 56 | 132 | (34 | ) | (72 | ) | |||||||||||
Deduct: Net loss from noncontrolling interests | 12 | 13 | 5 | (8 | ) | 140 | ||||||||||||
Net income attributable to | ||||||||||||||||||
MUFG Americas Holdings Corporation (MUAH) | $ | 49 | $ | 69 | $ | 137 | (29 | ) | (64 | ) | ||||||||
Balance sheet (period average): | ||||||||||||||||||
Total assets | $ | 115,866 | $ | 115,914 | $ | 113,134 | — | 2 | ||||||||||
Total securities | 23,507 | 24,351 | 22,172 | (3 | ) | 6 | ||||||||||||
Total loans held for investment | 78,450 | 77,832 | 77,305 | 1 | 1 | |||||||||||||
Earning assets | 104,888 | 104,966 | 102,645 | — | 2 | |||||||||||||
Total deposits | 84,010 | 84,033 | 84,088 | — | — | |||||||||||||
MUAH stockholder's equity | 15,687 | 15,722 | 15,069 | — | 4 | |||||||||||||
Net interest margin (3) (7) | 2.69 | % | 2.72 | % | 2.70 | % | (1 | ) | — | |||||||||
Balance sheet (end of period): | ||||||||||||||||||
Total assets | $ | 120,909 | $ | 116,216 | $ | 113,698 | 4 | 6 | ||||||||||
Total securities | 23,616 | 24,502 | 22,463 | (4 | ) | 5 | ||||||||||||
Total loans held for investment | 79,299 | 77,599 | 76,808 | 2 | 3 | |||||||||||||
Core deposits (2) | 74,882 | 76,094 | 74,190 | (2 | ) | 1 | ||||||||||||
Total deposits | 89,500 | 84,340 | 82,741 | 6 | 8 | |||||||||||||
Long-term debt | 11,843 | 12,349 | 8,856 | (4 | ) | 34 | ||||||||||||
MUAH stockholder's equity | 15,758 | 15,461 | 15,182 | 2 | 4 | |||||||||||||
2 |
3 |
For the Three Months Ended | ||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Fees from affiliates - support services | $ | 149 | $ | 149 | $ | 121 | ||||||
Staff costs associated with fees from | ||||||||||||
affiliates - support services | $ | 139 | $ | 138 | $ | 112 | ||||||
4 |
As of and for the Three Months Ended | |||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||||||
Total provision for credit losses | $ | 162 | $ | 192 | $ | 3 | |||||||
Net loans charged-off (recovered) | 4 | (6 | ) | 3 | |||||||||
Nonaccrual loans | 956 | 552 | 361 | ||||||||||
Criticized loans held for investment (12) | 3,066 | 2,454 | 1,327 | ||||||||||
Credit Ratios: | |||||||||||||
Allowance for loan losses to: | |||||||||||||
Total loans held for investment | 1.11 | % | 0.93 | % | 0.69 | % | |||||||
Nonaccrual loans | 91.99 | 130.53 | 147.21 | ||||||||||
Allowance for credit losses to (13): | |||||||||||||
Total loans held for investment | 1.32 | 1.14 | 0.90 | ||||||||||
Nonaccrual loans | 109.68 | 160.42 | 191.20 | ||||||||||
Nonaccrual loans to total loans held for investment | 1.21 | 0.71 | 0.47 | ||||||||||
As of | ||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
Petroleum Exploration and Production: | ||||||||||||
Loan commitments | $ | 5,519 | $ | 5,768 | $ | 6,147 | ||||||
Loans outstanding | 3,080 | 2,943 | 3,155 | |||||||||
Criticized commitments | 2,701 | 2,156 | 838 | |||||||||
Criticized outstanding | 1,705 | 1,226 | 670 | |||||||||
Allowance for credit losses | 415 | 319 | 127 | |||||||||
Allowance for loan losses | 386 | 291 | 114 |
5 |
March 31, 2016 | December 31, 2015 | |||||
Capital ratios: | ||||||
Regulatory: | U.S. Basel III | |||||
Common Equity Tier 1 risk-based capital ratio (8) (9) | 13.33 | % | 13.63 | % | ||
Tier 1 risk-based capital ratio (8) (9) | 13.33 | 13.64 | ||||
Total risk-based capital ratio (8) (9) | 15.32 | 15.56 | ||||
Tier 1 leverage ratio (8) (9) | 11.41 | 11.40 | ||||
Other: | ||||||
Tangible common equity ratio (10) | 10.55 | % | 10.71 | % | ||
Common Equity Tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully phased-in) (8) (11) | 13.31 | 13.46 | ||||
6 |
7 |
Percent Change to | |||||||||||||||||||||||||||
As of and for the Three Months Ended | March 31, 2016 from | ||||||||||||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2015 | March 31, 2015 | ||||||||||||||||||||
Results of operations: | |||||||||||||||||||||||||||
Net interest income | $ | 697 | $ | 708 | $ | 705 | $ | 719 | $ | 683 | (2 | )% | 2 | % | |||||||||||||
Noninterest income | 395 | 413 | 397 | 385 | 335 | (4 | ) | 18 | |||||||||||||||||||
Total revenue | 1,092 | 1,121 | 1,102 | 1,104 | 1,018 | (3 | ) | 7 | |||||||||||||||||||
Noninterest expense | 876 | 891 | 855 | 843 | 849 | (2 | ) | 3 | |||||||||||||||||||
Pre-tax, pre-provision income (1) | 216 | 230 | 247 | 261 | 169 | (6 | ) | 28 | |||||||||||||||||||
Provision for credit losses | 162 | 192 | 18 | 15 | 3 | (16 | ) | nm | |||||||||||||||||||
Income before income taxes and including | |||||||||||||||||||||||||||
noncontrolling interests | 54 | 38 | 229 | 246 | 166 | 42 | (67 | ) | |||||||||||||||||||
Income tax expense | 17 | (18 | ) | 64 | 71 | 34 | 194 | (50 | ) | ||||||||||||||||||
Net income including noncontrolling interests | 37 | 56 | 165 | 175 | 132 | (34 | ) | (72 | ) | ||||||||||||||||||
Deduct: Net loss from noncontrolling interests | 12 | 13 | 21 | 6 | 5 | (8 | ) | 140 | |||||||||||||||||||
Net income attributable to | |||||||||||||||||||||||||||
MUFG Americas Holdings Corporation (MUAH) | $ | 49 | $ | 69 | $ | 186 | $ | 181 | $ | 137 | (29 | ) | (64 | ) | |||||||||||||
Balance sheet (end of period): | |||||||||||||||||||||||||||
Total assets | $ | 120,909 | $ | 116,216 | $ | 115,157 | $ | 114,266 | $ | 113,698 | 4 | 6 | |||||||||||||||
Total securities | 23,616 | 24,502 | 24,696 | 24,287 | 22,463 | (4 | ) | 5 | |||||||||||||||||||
Total loans held for investment | 79,299 | 77,599 | 76,641 | 76,399 | 76,808 | 2 | 3 | ||||||||||||||||||||
Core deposits (2) | 74,882 | 76,094 | 74,785 | 73,080 | 74,190 | (2 | ) | 1 | |||||||||||||||||||
Total deposits | 89,500 | 84,340 | 82,693 | 81,702 | 82,741 | 6 | 8 | ||||||||||||||||||||
Long-term debt | 11,843 | 12,349 | 11,357 | 8,852 | 8,856 | (4 | ) | 34 | |||||||||||||||||||
MUAH stockholder's equity | 15,758 | 15,461 | 15,603 | 15,260 | 15,182 | 2 | 4 | ||||||||||||||||||||
Balance sheet (period average): | |||||||||||||||||||||||||||
Total assets | $ | 115,866 | $ | 115,914 | $ | 113,451 | $ | 112,907 | $ | 113,134 | — | 2 | |||||||||||||||
Total securities | 23,507 | 24,351 | 24,141 | 22,915 | 22,172 | (3 | ) | 6 | |||||||||||||||||||
Total loans held for investment | 78,450 | 77,832 | 76,177 | 76,751 | 77,305 | 1 | 1 | ||||||||||||||||||||
Earning assets | 104,888 | 104,966 | 102,899 | 102,289 | 102,645 | — | 2 | ||||||||||||||||||||
Total deposits | 84,010 | 84,033 | 82,488 | 82,147 | 84,088 | — | — | ||||||||||||||||||||
MUAH stockholder's equity | 15,687 | 15,722 | 15,435 | 15,238 | 15,069 | — | 4 | ||||||||||||||||||||
Performance ratios: | |||||||||||||||||||||||||||
Return on average assets (3) | 0.17 | % | 0.24 | % | 0.66 | % | 0.64 | % | 0.49 | % | |||||||||||||||||
Return on average MUAH stockholder's equity (3) | 1.25 | 1.75 | 4.83 | 4.73 | 3.65 | ||||||||||||||||||||||
Return on average assets excluding the impact of privatization | |||||||||||||||||||||||||||
transaction and merger costs related to acquisitions (3) (4) | 0.18 | 0.27 | 0.70 | 0.67 | 0.53 | ||||||||||||||||||||||
Return on average MUAH stockholder's equity excluding the | |||||||||||||||||||||||||||
impact of privatization transaction and merger costs related to | |||||||||||||||||||||||||||
acquisitions (3) (4) | 1.54 | 2.24 | 5.82 | 5.69 | 4.51 | ||||||||||||||||||||||
Efficiency ratio (5) | 80.17 | 79.51 | 77.62 | 76.42 | 83.35 | ||||||||||||||||||||||
Adjusted efficiency ratio (6) | 72.12 | 69.42 | 70.16 | 69.02 | 74.90 | ||||||||||||||||||||||
Net interest margin (3) (7) | 2.69 | 2.72 | 2.76 | 2.84 | 2.70 | ||||||||||||||||||||||
Capital ratios: | |||||||||||||||||||||||||||
Regulatory: | U.S. Basel III | ||||||||||||||||||||||||||
Common Equity Tier 1 risk-based capital ratio (8) (9) | 13.33 | % | 13.63 | % | 13.84 | % | 13.56 | % | 12.64 | % | |||||||||||||||||
Tier 1 risk-based capital ratio (8) (9) | 13.33 | 13.64 | 13.84 | 13.56 | 12.64 | ||||||||||||||||||||||
Total risk-based capital ratio (8) (9) | 15.32 | 15.56 | 15.60 | 15.30 | 14.41 | ||||||||||||||||||||||
Tier 1 leverage ratio (8) (9) | 11.41 | 11.40 | 11.58 | 11.46 | 11.30 | ||||||||||||||||||||||
Other: | |||||||||||||||||||||||||||
Tangible common equity ratio (10) | 10.55 | % | 10.71 | % | 10.93 | % | 10.70 | % | 10.68 | % | |||||||||||||||||
Common Equity Tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully phased-in) (8) (11) | 13.31 | 13.46 | 13.79 | 13.49 | 12.57 | ||||||||||||||||||||||
Exhibit 1 |
Percent Change to | ||||||||||||||||||||||||||
As of and for the Three Months Ended | March 31, 2016 from | |||||||||||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2015 | March 31, 2015 | |||||||||||||||||||
Credit Data: | ||||||||||||||||||||||||||
(Reversal of) provision for loan losses | $ | 158 | $ | 168 | $ | 23 | $ | 26 | $ | (3 | ) | (6 | )% | nm | ||||||||||||
(Reversal of) provision for losses on unfunded credit commitments | 4 | 24 | (5 | ) | (11 | ) | 6 | (83 | ) | (33 | )% | |||||||||||||||
Total provision for credit losses | $ | 162 | $ | 192 | $ | 18 | $ | 15 | $ | 3 | (16 | ) | nm | |||||||||||||
Net loans charged-off (recovered) | $ | 4 | $ | (6 | ) | $ | 11 | $ | 20 | $ | 3 | 167 | 33 | |||||||||||||
Nonperforming assets | 974 | 573 | 434 | 381 | 390 | 70 | 150 | |||||||||||||||||||
Criticized loans held for investment (12) | 3,066 | 2,454 | 1,642 | 1,395 | 1,327 | 25 | 131 | |||||||||||||||||||
Credit Ratios: | ||||||||||||||||||||||||||
Allowance for loan losses to: | ||||||||||||||||||||||||||
Total loans held for investment | 1.11 | % | 0.93 | % | 0.71 | % | 0.70 | % | 0.69 | % | ||||||||||||||||
Nonaccrual loans | 91.99 | 130.53 | 130.46 | 147.98 | 147.21 | |||||||||||||||||||||
Allowance for credit losses to (13): | ||||||||||||||||||||||||||
Total loans held for investment | 1.32 | 1.14 | 0.90 | 0.89 | 0.90 | |||||||||||||||||||||
Nonaccrual loans | 109.68 | 160.42 | 164.09 | 188.39 | 191.20 | |||||||||||||||||||||
Net loans charged-off (recovered) to average total loans held for investment (3) | 0.02 | (0.03 | ) | 0.06 | 0.10 | 0.01 | ||||||||||||||||||||
Nonperforming assets to total loans held for investment and Other Real Estate Owned (OREO) | 1.23 | 0.74 | 0.57 | 0.50 | 0.51 | |||||||||||||||||||||
Nonperforming assets to total assets | 0.81 | 0.49 | 0.38 | 0.33 | 0.34 | |||||||||||||||||||||
Nonaccrual loans to total loans held for investment | 1.21 | 0.71 | 0.55 | 0.47 | 0.47 | |||||||||||||||||||||
Exhibit 2 |
For the Three Months Ended | |||||||||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||
Interest Income | |||||||||||||||||||||||
Loans | $ | 697 | $ | 693 | $ | 688 | $ | 700 | $ | 678 | |||||||||||||
Securities | 109 | 124 | 116 | 121 | 102 | ||||||||||||||||||
Other | 6 | 4 | 5 | 2 | 3 | ||||||||||||||||||
Total interest income | 812 | 821 | 809 | 823 | 783 | ||||||||||||||||||
Interest Expense | |||||||||||||||||||||||
Deposits | 49 | 50 | 48 | 50 | 52 | ||||||||||||||||||
Commercial paper and other short-term borrowings | 1 | 1 | 3 | 2 | 1 | ||||||||||||||||||
Long-term debt | 65 | 62 | 53 | 52 | 47 | ||||||||||||||||||
Total interest expense | 115 | 113 | 104 | 104 | 100 | ||||||||||||||||||
Net Interest Income | 697 | 708 | 705 | 719 | 683 | ||||||||||||||||||
Provision for credit losses | 162 | 192 | 18 | 15 | 3 | ||||||||||||||||||
Net interest income after provision for credit losses | 535 | 516 | 687 | 704 | 680 | ||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||
Service charges on deposit accounts | 49 | 49 | 49 | 49 | 49 | ||||||||||||||||||
Trust and investment management fees | 31 | 28 | 27 | 26 | 28 | ||||||||||||||||||
Trading account activities | 13 | 21 | 7 | 19 | 8 | ||||||||||||||||||
Securities gains, net | 13 | 6 | 6 | 5 | 3 | ||||||||||||||||||
Credit facility fees | 27 | 28 | 27 | 30 | 30 | ||||||||||||||||||
Merchant banking fees | 14 | 17 | 22 | 20 | 20 | ||||||||||||||||||
Brokerage commissions and fees | 13 | 14 | 13 | 14 | 13 | ||||||||||||||||||
Card processing fees, net | 9 | 8 | 8 | 9 | 8 | ||||||||||||||||||
Fees from affiliates (14) | 200 | 204 | 185 | 192 | 166 | ||||||||||||||||||
Other, net | 26 | 38 | 53 | 21 | 10 | ||||||||||||||||||
Total noninterest income | 395 | 413 | 397 | 385 | 335 | ||||||||||||||||||
Noninterest Expense | |||||||||||||||||||||||
Salaries and employee benefits | 543 | 569 | 557 | 555 | 567 | ||||||||||||||||||
Net occupancy and equipment | 76 | 83 | 79 | 75 | 80 | ||||||||||||||||||
Professional and outside services | 102 | 82 | 78 | 64 | 77 | ||||||||||||||||||
Software | 36 | 34 | 28 | 29 | 28 | ||||||||||||||||||
Regulatory assessments | 14 | 13 | 11 | 14 | 13 | ||||||||||||||||||
Intangible asset amortization | 7 | 10 | 10 | 10 | 10 | ||||||||||||||||||
Other | 98 | 100 | 92 | 96 | 74 | ||||||||||||||||||
Total noninterest expense | 876 | 891 | 855 | 843 | 849 | ||||||||||||||||||
Income before income taxes and including | |||||||||||||||||||||||
noncontrolling interests | 54 | 38 | 229 | 246 | 166 | ||||||||||||||||||
Income tax expense | 17 | (18 | ) | 64 | 71 | 34 | |||||||||||||||||
Net Income including Noncontrolling Interests | 37 | 56 | 165 | 175 | 132 | ||||||||||||||||||
Deduct: Net loss from noncontrolling interests | 12 | 13 | 21 | 6 | 5 | ||||||||||||||||||
Net Income attributable to MUAH | $ | 49 | $ | 69 | $ | 186 | $ | 181 | $ | 137 |
Exhibit 3 |
(Dollars in millions except for per share amount) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Cash and due from banks | $ | 1,599 | $ | 1,756 | $ | 1,596 | $ | 1,815 | $ | 1,735 | |||||||||||||||
Interest bearing deposits in banks | 6,696 | 2,749 | 2,692 | 2,160 | 2,787 | ||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 29 | 24 | 86 | 68 | 92 | ||||||||||||||||||||
Total cash and cash equivalents | 8,324 | 4,529 | 4,374 | 4,043 | 4,614 | ||||||||||||||||||||
Trading account assets | 1,370 | 1,087 | 1,200 | 1,089 | 1,233 | ||||||||||||||||||||
Securities available for sale | 13,011 | 14,344 | 14,355 | 14,285 | 13,338 | ||||||||||||||||||||
Securities held to maturity | 10,605 | 10,158 | 10,341 | 10,002 | 9,125 | ||||||||||||||||||||
Loans held for investment | 79,299 | 77,599 | 76,641 | 76,399 | 76,808 | ||||||||||||||||||||
Allowance for loan losses | (879 | ) | (721 | ) | (547 | ) | (536 | ) | (530 | ) | |||||||||||||||
Loans held for investment, net | 78,420 | 76,878 | 76,094 | 75,863 | 76,278 | ||||||||||||||||||||
Premises and equipment, net | 632 | 608 | 607 | 622 | 623 | ||||||||||||||||||||
Goodwill | 3,225 | 3,225 | 3,225 | 3,225 | 3,225 | ||||||||||||||||||||
Other assets | 5,322 | 5,387 | 4,961 | 5,137 | 5,262 | ||||||||||||||||||||
Total assets | $ | 120,909 | $ | 116,216 | $ | 115,157 | $ | 114,266 | $ | 113,698 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||
Noninterest bearing | $ | 38,556 | $ | 32,463 | $ | 31,869 | $ | 30,156 | $ | 29,854 | |||||||||||||||
Interest bearing | 50,944 | 51,877 | 50,824 | 51,546 | 52,887 | ||||||||||||||||||||
Total deposits | 89,500 | 84,340 | 82,693 | 81,702 | 82,741 | ||||||||||||||||||||
Commercial paper and other short-term borrowings | 647 | 1,038 | 2,338 | 5,262 | 3,475 | ||||||||||||||||||||
Long-term debt | 11,843 | 12,349 | 11,357 | 8,852 | 8,856 | ||||||||||||||||||||
Trading account liabilities | 747 | 796 | 891 | 734 | 944 | ||||||||||||||||||||
Other liabilities | 2,203 | 2,017 | 2,044 | 2,216 | 2,250 | ||||||||||||||||||||
Total liabilities | 104,940 | 100,540 | 99,323 | 98,766 | 98,266 | ||||||||||||||||||||
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 March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015, and March 31, 2015 | 136 | 136 | 136 | 136 | 136 | ||||||||||||||||||||
Additional paid-in capital | 7,250 | 7,241 | 7,224 | 7,208 | 7,241 | ||||||||||||||||||||
Retained earnings | 8,885 | 8,836 | 8,768 | 8,582 | 8,402 | ||||||||||||||||||||
Accumulated other comprehensive loss | (513 | ) | (752 | ) | (525 | ) | (666 | ) | (597 | ) | |||||||||||||||
Total MUAH stockholder's equity | 15,758 | 15,461 | 15,603 | 15,260 | 15,182 | ||||||||||||||||||||
Noncontrolling interests | 211 | 215 | 231 | 240 | 250 | ||||||||||||||||||||
Total equity | 15,969 | 15,676 | 15,834 | 15,500 | 15,432 | ||||||||||||||||||||
Total liabilities and equity | $ | 120,909 | $ | 116,216 | $ | 115,157 | $ | 114,266 | $ | 113,698 |
Exhibit 4 |
For the Three Months Ended | |||||||||||||||||||||||
March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||
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: (15) | |||||||||||||||||||||||
Commercial and industrial | $ | 29,957 | $ | 253 | 3.40 | % | $ | 29,720 | $ | 255 | 3.40 | % | |||||||||||
Commercial mortgage | 14,485 | 122 | 3.36 | 13,997 | 115 | 3.29 | |||||||||||||||||
Construction | 2,272 | 19 | 3.28 | 2,210 | 17 | 2.99 | |||||||||||||||||
Lease financing | 732 | 8 | 4.56 | 748 | 10 | 5.56 | |||||||||||||||||
Residential mortgage | 27,366 | 231 | 3.38 | 27,622 | 234 | 3.39 | |||||||||||||||||
Home equity and other consumer loans | 3,315 | 40 | 4.85 | 3,171 | 37 | 4.57 | |||||||||||||||||
Loans, before purchased credit-impaired loans | 78,127 | 673 | 3.46 | 77,468 | 668 | 3.43 | |||||||||||||||||
Purchased credit-impaired loans | 323 | 25 | 31.04 | 364 | 27 | 30.30 | |||||||||||||||||
Total loans held for investment | 78,450 | 698 | 3.57 | 77,832 | 695 | 3.56 | |||||||||||||||||
Securities | 23,507 | 115 | 1.95 | 24,351 | 129 | 2.12 | |||||||||||||||||
Interest bearing deposits in banks | 2,400 | 3 | 0.53 | 2,455 | 2 | 0.28 | |||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 78 | — | 0.46 | 85 | — | (0.08 | ) | ||||||||||||||||
Trading account assets | 162 | — | 0.57 | 157 | — | 0.58 | |||||||||||||||||
Other earning assets | 291 | 3 | 3.62 | 86 | 2 | 5.02 | |||||||||||||||||
Total earning assets | 104,888 | 819 | 3.13 | 104,966 | 828 | 3.14 | |||||||||||||||||
Allowance for loan losses | (719 | ) | (552 | ) | |||||||||||||||||||
Cash and due from banks | 1,704 | 1,805 | |||||||||||||||||||||
Premises and equipment, net | 608 | 601 | |||||||||||||||||||||
Other assets (16) | 9,385 | 9,094 | |||||||||||||||||||||
Total assets | $ | 115,866 | $ | 115,914 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||||
Transaction and money market accounts | $ | 38,397 | 28 | 0.30 | $ | 38,154 | 27 | 0.28 | |||||||||||||||
Savings | 5,715 | 1 | 0.06 | 5,670 | 1 | 0.06 | |||||||||||||||||
Time | 7,577 | 20 | 1.08 | 7,671 | 22 | 1.14 | |||||||||||||||||
Total interest bearing deposits | 51,689 | 49 | 0.38 | 51,495 | 50 | 0.39 | |||||||||||||||||
Commercial paper and other short-term borrowings (17) | 1,098 | 1 | 0.37 | 1,290 | 1 | 0.28 | |||||||||||||||||
Long-term debt | 12,148 | 65 | 2.12 | 12,063 | 62 | 2.04 | |||||||||||||||||
Total borrowed funds | 13,246 | 66 | 1.98 | 13,353 | 63 | 1.87 | |||||||||||||||||
Total interest bearing liabilities | 64,935 | 115 | 0.71 | 64,848 | 113 | 0.69 | |||||||||||||||||
Noninterest bearing deposits | 32,321 | 32,538 | |||||||||||||||||||||
Other liabilities (18) | 2,745 | 2,613 | |||||||||||||||||||||
Total liabilities | 100,001 | 99,999 | |||||||||||||||||||||
Equity | |||||||||||||||||||||||
MUAH stockholder's equity | 15,687 | 15,722 | |||||||||||||||||||||
Noncontrolling interests | 178 | 193 | |||||||||||||||||||||
Total equity | 15,865 | 15,915 | |||||||||||||||||||||
Total liabilities and equity | $ | 115,866 | $ | 115,914 | |||||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 704 | 2.42 | % | 715 | 2.45 | % | |||||||||||||||||
Impact of noninterest bearing deposits | 0.23 | 0.23 | |||||||||||||||||||||
Impact of other noninterest bearing sources | 0.04 | 0.04 | |||||||||||||||||||||
Net interest margin | 2.69 | 2.72 | |||||||||||||||||||||
Less: taxable-equivalent adjustment | 7 | 7 | |||||||||||||||||||||
Net interest income | $ | 697 | $ | 708 |
Exhibit 5 |
For the Three Months Ended | ||||||||||||||||||||||
March 31, 2016 | March 31, 2015 | |||||||||||||||||||||
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: (15) | ||||||||||||||||||||||
Commercial and industrial | $ | 29,957 | $ | 253 | 3.40 | % | $ | 28,394 | $ | 223 | 3.18 | % | ||||||||||
Commercial mortgage | 14,485 | 122 | 3.36 | 13,903 | 115 | 3.31 | ||||||||||||||||
Construction | 2,272 | 19 | 3.28 | 1,853 | 14 | 3.03 | ||||||||||||||||
Lease financing | 732 | 8 | 4.56 | 776 | 10 | 5.11 | ||||||||||||||||
Residential mortgage | 27,366 | 231 | 3.38 | 28,766 | 247 | 3.43 | ||||||||||||||||
Home equity and other consumer loans | 3,315 | 40 | 4.85 | 3,103 | 32 | 4.22 | ||||||||||||||||
Loans, before purchased credit-impaired loans | 78,127 | 673 | 3.46 | 76,795 | 641 | 3.36 | ||||||||||||||||
Purchased credit-impaired loans | 323 | 25 | 31.04 | 510 | 38 | 30.49 | ||||||||||||||||
Total loans held for investment | 78,450 | 698 | 3.57 | 77,305 | 679 | 3.54 | ||||||||||||||||
Securities | 23,507 | 115 | 1.95 | 22,172 | 106 | 1.92 | ||||||||||||||||
Interest bearing deposits in banks | 2,400 | 3 | 0.53 | 2,776 | 2 | 0.25 | ||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 78 | — | 0.46 | 97 | — | — | ||||||||||||||||
Trading account assets | 162 | — | 0.57 | 196 | — | 0.70 | ||||||||||||||||
Other earning assets | 291 | 3 | 3.62 | 99 | 1 | 2.07 | ||||||||||||||||
Total earning assets | 104,888 | 819 | 3.13 | 102,645 | 788 | 3.09 | ||||||||||||||||
Allowance for loan losses | (719 | ) | (542 | ) | ||||||||||||||||||
Cash and due from banks | 1,704 | 1,631 | ||||||||||||||||||||
Premises and equipment, net | 608 | 621 | ||||||||||||||||||||
Other assets (16) | 9,385 | 8,779 | ||||||||||||||||||||
Total assets | $ | 115,866 | $ | 113,134 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||
Transaction and money market accounts | $ | 38,397 | 28 | 0.30 | $ | 39,713 | 30 | 0.31 | ||||||||||||||
Savings | 5,715 | 1 | 0.06 | 5,550 | 1 | 0.06 | ||||||||||||||||
Time | 7,577 | 20 | 1.08 | 8,975 | 21 | 0.93 | ||||||||||||||||
Total interest bearing deposits | 51,689 | 49 | 0.38 | 54,238 | 52 | 0.39 | ||||||||||||||||
Commercial paper and other short-term borrowings (17) | 1,098 | 1 | 0.37 | 2,991 | 1 | 0.20 | ||||||||||||||||
Long-term debt | 12,148 | 65 | 2.12 | 8,008 | 47 | 2.34 | ||||||||||||||||
Total borrowed funds | 13,246 | 66 | 1.98 | 10,999 | 48 | 1.76 | ||||||||||||||||
Total interest bearing liabilities | 64,935 | 115 | 0.71 | 65,237 | 100 | 0.62 | ||||||||||||||||
Noninterest bearing deposits | 32,321 | 29,850 | ||||||||||||||||||||
Other liabilities (18) | 2,745 | 2,750 | ||||||||||||||||||||
Total liabilities | 100,001 | 97,837 | ||||||||||||||||||||
Equity | ||||||||||||||||||||||
MUAH stockholder's equity | 15,687 | 15,069 | ||||||||||||||||||||
Noncontrolling interests | 178 | 228 | ||||||||||||||||||||
Total equity | 15,865 | 15,297 | ||||||||||||||||||||
Total liabilities and equity | $ | 115,866 | $ | 113,134 | ||||||||||||||||||
Net interest income/spread (taxable-equivalent basis) | 704 | 2.42 | % | 688 | 2.47 | % | ||||||||||||||||
Impact of noninterest bearing deposits | 0.23 | 0.19 | ||||||||||||||||||||
Impact of other noninterest bearing sources | 0.04 | 0.04 | ||||||||||||||||||||
Net interest margin | 2.69 | 2.70 | ||||||||||||||||||||
Less: taxable-equivalent adjustment | 7 | 5 | ||||||||||||||||||||
Net interest income | $ | 697 | $ | 683 |
Exhibit 6 |
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||||||
Loans held for investment (period end) | |||||||||||||||||||||||||||
Loans held for investment: | |||||||||||||||||||||||||||
Commercial and industrial | $ | 30,212 | $ | 29,730 | $ | 28,462 | $ | 27,854 | $ | 27,979 | |||||||||||||||||
Commercial mortgage | 14,920 | 13,904 | 13,943 | 13,800 | 13,923 | ||||||||||||||||||||||
Construction | 2,251 | 2,297 | 2,120 | 2,071 | 1,996 | ||||||||||||||||||||||
Lease financing | 732 | 737 | 748 | 759 | 776 | ||||||||||||||||||||||
Total commercial portfolio | 48,115 | 46,668 | 45,273 | 44,484 | 44,674 | ||||||||||||||||||||||
Residential mortgage | 27,495 | 27,344 | 27,856 | 28,374 | 28,558 | ||||||||||||||||||||||
Home equity and other consumer loans | 3,385 | 3,251 | 3,124 | 3,098 | 3,081 | ||||||||||||||||||||||
Total consumer portfolio | 30,880 | 30,595 | 30,980 | 31,472 | 31,639 | ||||||||||||||||||||||
Loans held for investment, before purchased credit-impaired loans | 78,995 | 77,263 | 76,253 | 75,956 | 76,313 | ||||||||||||||||||||||
Purchased credit-impaired loans | 304 | 336 | 388 | 443 | 495 | ||||||||||||||||||||||
Total loans held for investment | $ | 79,299 | $ | 77,599 | $ | 76,641 | $ | 76,399 | $ | 76,808 | |||||||||||||||||
Nonperforming Assets (period end) | |||||||||||||||||||||||||||
Nonaccrual loans: | |||||||||||||||||||||||||||
Commercial and industrial | $ | 702 | $ | 284 | $ | 138 | $ | 64 | $ | 52 | |||||||||||||||||
Commercial mortgage | 30 | 37 | 40 | 43 | 40 | ||||||||||||||||||||||
Total commercial portfolio | 732 | 321 | 178 | 107 | 92 | ||||||||||||||||||||||
Residential mortgage | 186 | 190 | 201 | 209 | 221 | ||||||||||||||||||||||
Home equity and other consumer loans | 32 | 35 | 32 | 36 | 39 | ||||||||||||||||||||||
Total consumer portfolio | 218 | 225 | 233 | 245 | 260 | ||||||||||||||||||||||
Nonaccrual loans, before purchased credit-impaired loans | 950 | 546 | 411 | 352 | 352 | ||||||||||||||||||||||
Purchased credit-impaired loans | 6 | 6 | 8 | 10 | 9 | ||||||||||||||||||||||
Total nonaccrual loans | 956 | 552 | 419 | 362 | 361 | ||||||||||||||||||||||
OREO | 18 | 21 | 15 | 19 | 29 | ||||||||||||||||||||||
Total nonperforming assets | $ | 974 | $ | 573 | $ | 434 | $ | 381 | $ | 390 | |||||||||||||||||
Loans 90 days or more past due and still accruing (19) | $ | 6 | $ | 2 | $ | 4 | $ | 2 | $ | 4 | |||||||||||||||||
Exhibit 7 |
As of and for the Three Months Ended | ||||||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
Analysis of Allowance for Credit Losses | ||||||||||||||||||||
Allowance for loan losses, beginning of period | $ | 721 | $ | 547 | $ | 536 | $ | 530 | $ | 537 | ||||||||||
(Reversal of) provision for loan losses | 158 | 168 | 23 | 26 | (3 | ) | ||||||||||||||
Other | 4 | — | (1 | ) | — | (1 | ) | |||||||||||||
Loans charged-off: | ||||||||||||||||||||
Commercial and industrial | (8 | ) | — | (11 | ) | (12 | ) | (1 | ) | |||||||||||
Commercial mortgage | — | — | — | (1 | ) | (3 | ) | |||||||||||||
Total commercial portfolio | (8 | ) | — | (11 | ) | (13 | ) | (4 | ) | |||||||||||
Residential mortgage | 1 | — | — | — | (1 | ) | ||||||||||||||
Home equity and other consumer loans | (2 | ) | (1 | ) | (1 | ) | (3 | ) | (2 | ) | ||||||||||
Total consumer portfolio | (1 | ) | (1 | ) | (1 | ) | (3 | ) | (3 | ) | ||||||||||
Purchased credit-impaired loans | — | (1 | ) | (3 | ) | (8 | ) | — | ||||||||||||
Total loans charged-off | (9 | ) | (2 | ) | (15 | ) | (24 | ) | (7 | ) | ||||||||||
Recoveries of loans previously charged-off: | ||||||||||||||||||||
Commercial and industrial | 1 | 7 | 2 | 3 | 4 | |||||||||||||||
Commercial mortgage | 3 | — | 1 | — | — | |||||||||||||||
Total commercial portfolio | 4 | 7 | 3 | 3 | 4 | |||||||||||||||
Home equity and other consumer loans | 1 | — | 1 | 1 | — | |||||||||||||||
Total consumer portfolio | 1 | — | 1 | 1 | — | |||||||||||||||
Purchased credit-impaired loans | — | 1 | — | — | — | |||||||||||||||
Total recoveries of loans previously charged-off | 5 | 8 | 4 | 4 | 4 | |||||||||||||||
Net loans (charged-off) recovered | (4 | ) | 6 | (11 | ) | (20 | ) | (3 | ) | |||||||||||
Ending balance of allowance for loan losses | 879 | 721 | 547 | 536 | 530 | |||||||||||||||
Allowance for losses on unfunded credit commitments | 169 | 165 | 141 | 147 | 158 | |||||||||||||||
Total allowance for credit losses | $ | 1,048 | $ | 886 | $ | 688 | $ | 683 | $ | 688 | ||||||||||
Exhibit 8 |
Securities Available for Sale | ||||||||||||||||||||||||||
March 31, 2016 | December 31, 2015 | Fair Value | Fair Value | |||||||||||||||||||||||
Amortized | Fair | Amortized | Fair | Change from | % Change from | |||||||||||||||||||||
(Dollars in millions) | Cost | Value | Cost | Value | December 31, 2015 | December 31, 2015 | ||||||||||||||||||||
Asset Liability Management securities: | ||||||||||||||||||||||||||
U.S. Treasury | $ | 148 | $ | 152 | $ | 596 | $ | 594 | $ | (442 | ) | (74 | )% | |||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||
U.S. government agency and government-sponsored agencies | 6,302 | 6,308 | 7,298 | 7,201 | (893 | ) | (12 | ) | ||||||||||||||||||
Privately issued | 202 | 203 | 150 | 151 | 52 | 34 | ||||||||||||||||||||
Privately issued - commercial mortgage-backed securities | 1,469 | 1,492 | 1,566 | 1,546 | (54 | ) | (3 | ) | ||||||||||||||||||
Collateralized loan obligations | 3,267 | 3,227 | 3,266 | 3,233 | (6 | ) | — | |||||||||||||||||||
Asset-backed and other | 7 | 7 | 7 | 7 | — | — | ||||||||||||||||||||
Asset Liability Management securities | 11,395 | 11,389 | 12,883 | 12,732 | (1,343 | ) | (11 | ) | ||||||||||||||||||
Other debt securities: | ||||||||||||||||||||||||||
Direct bank purchase bonds | 1,560 | 1,581 | 1,549 | 1,572 | 9 | 1 | ||||||||||||||||||||
Other | 32 | 33 | 32 | 32 | 1 | 3 | ||||||||||||||||||||
Equity securities | 6 | 8 | 6 | 8 | — | — | ||||||||||||||||||||
Total securities available for sale | $ | 12,993 | $ | 13,011 | $ | 14,470 | $ | 14,344 | $ | (1,333 | ) | (9 | )% | |||||||||||||
Securities Held to Maturity | ||||||||||||||||||||||||||
March 31, 2016 | December 31, 2015 | Carrying Amount | Carrying Amount | |||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Change from | % Change from | |||||||||||||||||||||
(Dollars in millions) | Amount (20) | Value | Amount (20) | Value | December 31, 2015 | December 31, 2015 | ||||||||||||||||||||
U.S. Treasury | $ | 490 | $ | 502 | $ | 489 | $ | 493 | $ | 1 | — | % | ||||||||||||||
U.S. government-sponsored agencies | 200 | 200 | 220 | 216 | (20 | ) | (9 | ) | ||||||||||||||||||
U.S. government agency and government-sponsored agencies-residential mortgage-backed securities | 8,254 | 8,403 | 7,782 | 7,790 | 472 | 6 | ||||||||||||||||||||
U.S. government agency and government-sponsored agencies-commercial mortgage-backed securities | 1,661 | 1,743 | 1,667 | 1,708 | (6 | ) | — | |||||||||||||||||||
Total securities held to maturity | $ | 10,605 | $ | 10,848 | $ | 10,158 | $ | 10,207 | $ | 447 | 4 | % |
Exhibit 9 |
As of and for the Three Months Ended | ||||||||||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||||||
Net income attributable to MUAH | $ | 49 | $ | 69 | $ | 186 | $ | 181 | $ | 137 | ||||||||||||||
Net adjustments for merger costs related to acquisitions, net of tax | 4 | 4 | 5 | 3 | 6 | |||||||||||||||||||
Net adjustments for privatization transaction, net of tax | — | 4 | 3 | 3 | 3 | |||||||||||||||||||
Net income attributable to MUAH, excluding impact of | ||||||||||||||||||||||||
privatization transaction and merger costs related to acquisitions | $ | 53 | $ | 77 | $ | 194 | $ | 187 | $ | 146 | ||||||||||||||
Average total assets | $ | 115,866 | $ | 115,914 | $ | 113,451 | $ | 112,907 | $ | 113,134 | ||||||||||||||
Less: Net adjustments related to privatization transaction | 2,215 | 2,218 | 2,224 | 2,230 | 2,235 | |||||||||||||||||||
Average total assets, excluding impact of privatization transaction | $ | 113,651 | $ | 113,696 | $ | 111,227 | $ | 110,677 | $ | 110,899 | ||||||||||||||
Return on average assets (3) | 0.17 | % | 0.24 | % | 0.66 | % | 0.64 | % | 0.49 | % | ||||||||||||||
Return on average assets, excluding impact of privatization | ||||||||||||||||||||||||
transaction and merger costs related to acquisitions (3) (4) | 0.18 | 0.27 | 0.70 | 0.67 | 0.53 | |||||||||||||||||||
Average MUAH stockholder's equity | $ | 15,687 | $ | 15,722 | $ | 15,435 | $ | 15,238 | $ | 15,069 | ||||||||||||||
Less: Adjustments for merger costs related to acquisitions | (183 | ) | (179 | ) | (175 | ) | (171 | ) | (167 | ) | ||||||||||||||
Less: Net adjustments for privatization transaction | 2,273 | 2,273 | 2,273 | 2,275 | 2,276 | |||||||||||||||||||
Average MUAH stockholder's equity, excluding impact of privatization | ||||||||||||||||||||||||
transaction and merger costs related to acquisitions | $ | 13,597 | $ | 13,628 | $ | 13,337 | $ | 13,134 | $ | 12,960 | ||||||||||||||
Return on average MUAH stockholder's equity (3) | 1.25 | % | 1.75 | % | 4.83 | % | 4.73 | % | 3.65 | % | ||||||||||||||
Return on average MUAH stockholder's equity, excluding impact of | ||||||||||||||||||||||||
privatization transaction and merger costs related to acquisitions (3) (4) | 1.54 | 2.24 | 5.82 | 5.69 | 4.51 | |||||||||||||||||||
Noninterest expense | $ | 876 | $ | 891 | $ | 855 | $ | 843 | $ | 849 | ||||||||||||||
Less: Staff costs associated with fees from affiliates - support services | 139 | 138 | 128 | 123 | 112 | |||||||||||||||||||
Less: Foreclosed asset expense and other credit costs | (1 | ) | — | 3 | — | 1 | ||||||||||||||||||
Less: Productivity initiative costs | 12 | 41 | 3 | 2 | 28 | |||||||||||||||||||
Less: Low income housing credit (LIHC) investment amortization expense | 2 | 6 | 5 | 2 | 2 | |||||||||||||||||||
Less: Expenses of the LIHC consolidated VIEs | 12 | 13 | 14 | 10 | 9 | |||||||||||||||||||
Less: Merger and business integration costs | 5 | 6 | 8 | 6 | 9 | |||||||||||||||||||
Less: Net adjustments related to privatization transaction | 5 | 8 | 8 | 7 | 8 | |||||||||||||||||||
Less: Intangible asset amortization | 3 | 3 | 2 | 3 | 3 | |||||||||||||||||||
Less: Contract termination fee | — | — | — | 23 | — | |||||||||||||||||||
Noninterest expense, as adjusted (a) | $ | 699 | $ | 676 | $ | 684 | $ | 667 | $ | 677 | ||||||||||||||
Total revenue | $ | 1,092 | $ | 1,121 | $ | 1,102 | $ | 1,104 | $ | 1,018 | ||||||||||||||
Add: Net interest income taxable-equivalent adjustment | 7 | 7 | 7 | 6 | 5 | |||||||||||||||||||
Less: Fees from affiliates - support services | 149 | 149 | 138 | 134 | 121 | |||||||||||||||||||
Less: Productivity initiative gains | — | — | — | (1 | ) | 1 | ||||||||||||||||||
Less: Accretion related to privatization-related fair value adjustments | 5 | 2 | 3 | 2 | 1 | |||||||||||||||||||
Less: Other credit costs | (13 | ) | 4 | (8 | ) | 8 | (4 | ) | ||||||||||||||||
Less: Impairment on private equity investments | (12 | ) | — | — | — | — | ||||||||||||||||||
Total revenue, as adjusted (b) | $ | 970 | $ | 973 | $ | 976 | $ | 967 | $ | 904 | ||||||||||||||
Adjusted efficiency ratio (a)/(b) (6) | 72.12 | % | 69.42 | % | 70.16 | % | 69.02 | % | 74.90 | % | ||||||||||||||
Exhibit 10 |
As of and for the Three Months Ended | |||||||||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||
Total MUAH stockholder's equity | $ | 15,758 | $ | 15,461 | $ | 15,603 | $ | 15,260 | $ | 15,182 | |||||||||||||
Less: Goodwill | 3,225 | 3,225 | 3,225 | 3,225 | 3,225 | ||||||||||||||||||
Less: Intangible assets, except mortgage servicing rights (MSRs) | 182 | 190 | 199 | 214 | 222 | ||||||||||||||||||
Less: Deferred tax liabilities related to goodwill and intangible assets | (49 | ) | (39 | ) | (39 | ) | (41 | ) | (40 | ) | |||||||||||||
Tangible common equity (c) | $ | 12,400 | $ | 12,085 | $ | 12,218 | $ | 11,862 | $ | 11,775 | |||||||||||||
Total assets | $ | 120,909 | $ | 116,216 | $ | 115,157 | $ | 114,266 | $ | 113,698 | |||||||||||||
Less: Goodwill | 3,225 | 3,225 | 3,225 | 3,225 | 3,225 | ||||||||||||||||||
Less: Intangible assets, except MSRs | 182 | 190 | 199 | 214 | 222 | ||||||||||||||||||
Less: Deferred tax liabilities related to goodwill and intangible assets | (49 | ) | (39 | ) | (39 | ) | (41 | ) | (40 | ) | |||||||||||||
Tangible assets (d) | $ | 117,551 | $ | 112,840 | $ | 111,772 | $ | 110,868 | $ | 110,291 | |||||||||||||
Tangible common equity ratio (c)/(d) (10) | 10.55 | % | 10.71 | % | 10.93 | % | 10.70 | % | 10.68 | % | |||||||||||||
Common Equity Tier 1 capital under U.S. Basel III (standardized transitional) (e) | $ | 12,936 | $ | 12,920 | $ | 12,834 | $ | 12,632 | $ | 12,480 | |||||||||||||
Other | (43 | ) | (61 | ) | (67 | ) | (74 | ) | (80 | ) | |||||||||||||
Common Equity Tier 1 capital estimated under U.S. Basel III (standardized approach; fully phased-in) (f) | $ | 12,893 | $ | 12,859 | $ | 12,767 | $ | 12,558 | $ | 12,400 | |||||||||||||
Risk-weighted assets, estimated under U.S. Basel III (standardized transitional) (g) | $ | 97,011 | $ | 94,775 | $ | 92,729 | 93,179 | $ | 98,723 | ||||||||||||||
Add: Adjustments | (122 | ) | 756 | (160 | ) | (67 | ) | (74 | ) | ||||||||||||||
Total risk-weighted assets, estimated under U.S. Basel III (standardized approach; fully phased-in) (h) | $ | 96,889 | $ | 95,531 | $ | 92,569 | $ | 93,112 | $ | 98,649 | |||||||||||||
Common Equity Tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully phased-in) (f)/(h) (8) (11) | 13.31 | % | 13.46 | % | 13.79 | % | 13.49 | % | 12.57 |
Exhibit 11 |
(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 credit losses through a credit cycle. |
(2) | Core deposits exclude brokered deposits, foreign time deposits, domestic time deposits greater than $250,000 and certain other deposits not considered to be core customer relationships. |
(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 Exhibit 10 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, certain costs related to productivity initiatives, LIHC investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger and business integration costs, privatization-related expenses, intangible asset amortization, and a contract termination fee) 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, productivity initiatives related to the sale of certain premises, accretion related to privatization-related fair value adjustments, other credit costs and impairment on private equity investments. Management discloses the adjusted efficiency ratio as a measure of the efficiency of our operations, focusing on those costs most relevant to our business activities. Please refer to Exhibit 10 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%. |
(8) | Preliminary as of March 31, 2016. |
(9) | These capital ratios are calculated in accordance with the transition guidelines set forth in the U.S. federal banking agencies' final U.S. Basel III regulatory capital rules. |
(10) | 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 11 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
(11) | 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 excludes accumulated other comprehensive loss, along with other measures of capital as part of its financial analyses and has included this non-GAAP information because of current interest in such information by market participants. Please refer to Exhibit 11 for a reconciliation between certain GAAP amounts and these non-GAAP measures. |
(12) | 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. |
(13) | The allowance for credit losses ratios include the allowances for loan losses and for losses on unfunded credit commitments as a percentage of end of period total loans held for investment or total nonaccrual loans, as appropriate. |
(14) | Fees from affiliates represent income resulting from the business integration initiative effective July 1, 2014, whereby BTMU integrated its U.S. branch banking operations, including its employees, under the Bank's operations. The Bank and BTMU participate in a master services agreement whereby the Bank provides BTMU with support services in exchange for fee income. |
(15) | Average balances on loans held for investment include all nonaccrual loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield. |
(16) | Includes noninterest bearing trading account assets. |
(17) | Includes interest bearing trading liabilities. |
(18) | Includes noninterest bearing trading account liabilities. |
(19) | Excludes loans totaling $28 million, $16 million, $30 million, $36 million, and $52 million that are 90 days or more past due and still accruing at March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015, and March 31, 2015, 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. |
Exhibit 12 |