MUFG Americas Holdings Corporation (the Company), parent company
of San Francisco-based MUFG Union Bank, N.A. (the Bank), today
reported full year 2014 results. Net income for the full year was
$825 million, compared with net income of $667 million in 2013. Net
income for the quarter was $155 million, compared with $246 million
for the prior quarter and $179 million for the year-ago
quarter.
Full Year Highlights:
- Net income was $825 million, up $158
million, or 24 percent, from the prior year.
- Pre-tax pre-provision income was $1,064
million, up $265 million, or 33 percent, from the prior year.
- Solid loan and deposit growth:
- Loans held for investment were $76.8
billion at December 31, 2014, up $8.5 billion, or 12 percent, from
the prior year-end.
- Core deposits were $76.7 billion at
December 31, 2014, up $7.5 billion, or 11 percent, from the prior
year-end.
- Continued strong capital position:
- Capital ratios continued to exceed the
regulatory thresholds for "well-capitalized" bank holding
companies. Basel I Tier 1 and Total risk-based capital ratios were
12.79 percent and 14.73 percent, respectively, at December 31,
2014.
- In December 2014, the Federal Reserve
Board approved the Company's request to opt-out of the advanced
approaches methodology under U.S. Basel III regulatory capital
rules. The Bank will continue to be subject to the advanced
approaches rules.
Fourth Quarter
Highlights:
- Net income for the fourth quarter was
$155 million, down $91 million from the third quarter due to a
decrease in noninterest income and increases in income tax expense
and provision for loan losses.
- Core deposits grew 4 percent from
September 30, 2014 to $76.7 billion. Loans held for investment
grew 3 percent from September 30, 2014 to $76.8 billion.
- Continued disciplined underwriting
standards produced strong credit quality with low levels of
nonperforming assets and charge-offs.
- Nonperforming assets were $411 million,
or 0.36 percent of total assets, compared with $428 million, or
0.39 percent of total assets at September 30, 2014 and $499
million, or 0.48 percent of total assets, at December 31,
2013.
- Net loans recovered were $1 million for
the quarter, compared with net charge-offs of $12 million for the
prior quarter and $11 million in the year-ago quarter.
Business Integration
Initiative
Effective July 1, 2014, the U.S. branch banking operations of
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) were integrated under
the Bank's operations. This integration did not involve a legal
entity combination, but rather an integration of personnel and
certain business and support activities. The Bank and BTMU entered
into a master services agreement, which provides for employees of
the Bank to perform and make available various business, banking,
financial, and administrative and support services (the Services)
and facilities to BTMU in connection with the operation and
administration of BTMU's businesses in the U.S. (including BTMU's
U.S. branches). In consideration for the Services, BTMU pays to the
Bank fee income, which reflects market-based pricing. Costs related
to the Services performed by the transferred employees are
primarily reflected as salaries and employee benefits expense.
For the quarter and year ending December 31, 2014, the Company
recorded $168 million and $319 million, respectively, in fee income
from this initiative, including $112 million and $206 million,
respectively, related to support services provided by the Company
to BTMU. Noninterest expense related to the Services was $105
million and $193 million for the quarter and year ending December
31, 2014, respectively, primarily comprised of salaries and
employee benefits. The remaining fee income was recognized through
revenue sharing agreements with BTMU, with associated costs
included within the Company’s results.
Full Year 2014 Results
For the full year 2014, net income was $825 million, compared
with net income of $667 million in 2013. Total revenue for the full
year 2014 was $4.0 billion, an increase of $0.4 billion, or 11
percent, compared with 2013. Net interest income increased $146
million, or 5 percent, primarily due to loan growth, partially
offset by a lower net interest margin. Noninterest income increased
$247 million, or 28 percent, primarily due to fee income from
affiliates resulting from the business integration initiative.
Noninterest expense increased $128 million, or 5 percent, primarily
due to increased salaries and employee benefit costs from the
business integration initiative. The effective tax rate for full
year 2014 was 25.4 percent, compared with an effective tax rate of
23.1 percent for 2013.
Summary of Fourth Quarter
Results
Fourth Quarter Total
Revenue
For the fourth quarter 2014, total revenue (net interest income
plus noninterest income) was $1.1 billion, down $34 million
compared with the third quarter of 2014.
Net interest income increased slightly while noninterest income
decreased 9 percent. Net interest income for the fourth quarter
2014 was $709 million, up slightly compared with the third quarter
of 2014. The increase in net interest income was largely due to
growth in loans held for investment. Average total loans held for
investment increased $2.4 billion, or 3 percent, compared with the
third quarter of 2014 largely due to growth in commercial and
industrial loans and residential mortgages. The net interest margin
was 2.81 percent, down 6 basis points from the prior quarter
substantially due to lower yields on loans held for investment and
investment securities reflecting the low interest rate environment,
partially offset by lower funding costs. Average total deposits
increased $1.8 billion, or 2 percent, during the quarter compared
with the third quarter of 2014.
For the fourth quarter 2014, noninterest income was $352
million, down $36 million, or 9 percent, compared with the third
quarter of 2014, largely due to higher trading account activities
and investment securities gains in the prior quarter.
Compared with the fourth quarter of 2013, total revenue
increased $165 million, with net interest income increasing
slightly while noninterest income increased 85 percent. Noninterest
income increased largely due to fees from affiliates resulting from
the business integration initiative. Average total loans held for
investment increased $8.2 billion, or 12 percent, compared with the
fourth quarter 2013. Average total deposits increased $4.3 billion
compared with the fourth quarter of 2013, with average interest
bearing deposits up $0.8 billion, or 2 percent, and average
noninterest bearing deposits up $3.5 billion, or 13 percent.
Fourth Quarter Noninterest
Expense
Noninterest expense for the fourth quarter 2014 was $807
million, up slightly compared with the third quarter 2014 and up
$118 million from the fourth quarter 2013. The increase from the
fourth quarter 2013 was largely due to increased employee costs as
a result of the business integration initiative. The effective tax
rate for the fourth quarter of 2014 was 38.9 percent, compared with
an effective tax rate of 21.7 percent for the third quarter of
2014. Income tax expense recorded in the fourth quarter includes an
adjustment to align estimated expense with actual full year 2014
results.
Balance Sheet
At December 31, 2014, total assets were $113.7 billion, up
$2.8 billion compared with September 30, 2014, primarily
reflecting loan growth. Total loans held for investment increased 3
percent compared with the third quarter of 2014 reflecting growth
in core customer segments within the commercial and industrial loan
portfolio and continuing growth in residential mortgage lending in
our geographic footprint, with credit quality attributes consistent
with the existing portfolio.
Total liabilities were $98.5 billion, up $2.9 billion compared
with September 30, 2014, primarily due to an increase in
deposit growth. At December 31, 2014, total deposits were
$86.0 billion, up $3.6 billion compared with September 30,
2014. Core deposits at December 31, 2014 were $76.7 billion
compared with $73.6 billion at September 30, 2014.
Credit Quality
Credit quality remained strong in the fourth quarter 2014
reflected by continued low levels of nonperforming assets and a net
recovery of loans previously charged off.
Nonperforming assets as of December 31, 2014 were $411 million,
or 0.36 percent of total assets, compared with $428 million, or
0.39 percent of total assets, at September 30, 2014, and $499
million, or 0.48 percent of total assets at December 31,
2013.
Net loans recovered were $1 million for the fourth quarter of
2014 compared with net loans charged off of $12 million for the
third quarter 2014 and $11 million for the fourth quarter 2013.
The allowance for credit losses as a percentage of total loans
was 0.90 percent at December 31, 2014, compared with 0.92
percent at September 30, 2014, and 1.02 percent at
December 31, 2013. The allowance for credit losses as a
percentage of nonaccrual loans was 184 percent at December 31,
2014, compared with 171 percent at September 30, 2014 and 158
percent at December 31, 2013. In the fourth quarter of 2014,
the overall provision for credit losses was a net reversal of $1
million, compared with a provision of $1 million for the third
quarter of 2014 and a net reversal of $21 million for the fourth
quarter of 2013.
Capital
The Company’s stockholder’s equity was $15.0 billion at
December 31, 2014 compared with $15.1 billion at
September 30, 2014.
In December 2014, the Federal Reserve Board approved the
Company's request to opt-out of the advanced approaches methodology
under U.S. Basel III regulatory capital rules. As required, the
Company will calculate its regulatory capital ratios under the
standardized approach of the U.S. Basel III rules beginning in the
first quarter of 2015, with certain provisions subject to phase-in
periods. The Bank will continue to be subject to the advanced
approaches rules.
The Company's Tier 1 and Total risk-based capital ratios,
calculated in accordance with U.S. Basel I regulatory capital
rules, were 12.79 percent and 14.73 percent, respectively, at
December 31, 2014. The Tier 1 common capital and tangible
common equity ratios were 12.73 percent and 10.54 percent at
December 31, 2014, respectively.
The Company’s estimated Common Equity Tier 1 risk-based capital
ratio under U.S. Basel III regulatory capital rules (standardized
approach, fully phased in) was 12.57 percent at December 31,
2014.
Non-GAAP Financial
Measures
This press release contains certain references to financial
measures identified as privatization transaction impact, fees from
affiliates - support services and associated staff costs,
foreclosed asset expense, other credit costs, (reversal of)
provision for losses on unfunded credit commitments, productivity
initiative costs and gains, low income housing credit (LIHC)
investment amortization expense, expenses of the LIHC consolidated
variable interest entities, merger and business integration costs,
or intangible asset amortization, which are adjustments from
comparable measures calculated and presented in accordance with
accounting principles generally accepted in the United States of
America (GAAP). These financial measures, as used herein, differ
from financial measures reported under GAAP in that they exclude
unusual or non-recurring charges, losses or credits. This press
release identifies the specific items excluded from the comparable
GAAP financial measure in the calculation of each non-GAAP
financial measure. Management believes that financial presentations
excluding the impact of these items provide useful supplemental
information which is important to a proper understanding of the
Company’s business results. This press release also includes
additional capital ratios (Tier 1 common capital, tangible common
equity and Common Equity Tier 1 capital (calculated under the Basel
III standardized approach on a transitional and fully phased-in
basis)) to facilitate the understanding of the Company’s capital
structure and for use in assessing and comparing the quality and
composition of the Company's capital structure to other financial
institutions. These presentations should not be viewed as a
substitute for results determined in accordance with GAAP, nor are
they necessarily comparable to non-GAAP financial measures
presented by other companies.
Headquartered in New York, MUFG Americas Holdings Corporation is
a financial holding company and bank holding company with assets of
$113.7 billion at December 31, 2014. Its principal subsidiary,
MUFG Union Bank, N.A., provides an array of financial services to
individuals, small businesses, middle-market companies, and major
corporations. As of December 31, 2014, MUFG Union Bank, N.A.
operated 414 branches, comprised primarily of retail banking
branches in the West Coast states, along with commercial branches
in Texas, Illinois, New York and Georgia, as well as two
international offices. MUFG Americas Holdings Corporation is a
wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
which is a wholly-owned subsidiary of Mitsubishi UFJ Financial
Group, Inc., one of the world’s largest and most diversified
financial groups. Visit www.unionbank.com for more information.
MUFG Americas Holdings Corporation and Subsidiaries
Financial Highlights (Unaudited) Exhibit 1
Percent Change to As of and for the
Three Months Ended December 31, 2014 from December
31, September 30, June 30, March 31,
December 31, September 30, December
31, (Dollars in millions) 2014 2014
2014 2014 2013
2014 2013 Results of operations: Net interest
income $ 709 $ 707 $ 763 $ 683 $ 706 — % — % Noninterest income 352
388 202 181 190 (9 ) 85 Total
revenue 1,061 1,095 965 864 896 (3 ) 18 Noninterest expense 807
805 649 660 689 — 17 Pre-tax,
pre-provision income (1) 254 290 316 204 207 (12 ) 23 (Reversal of)
provision for loan losses 9 (18 ) 9 (16 ) (23 ) 150
139
Income before income taxes and including
noncontrolling interests
245 308 307 220 230 (20 ) 7 Income tax expense 95 67
62 50 55 42 73 Net income including
noncontrolling interests 150 241 245 170 175 (38 ) (14 ) Deduct:
Net loss from noncontrolling interests 5 5 4 5
4 — 25 Net income attributable to MUFG Americas
Holdings Corporation (MUAH) $ 155 $ 246 $ 249
$ 175 $ 179 (37 ) (13 )
Balance sheet (end
of period): Total assets $ 113,678 $ 110,879 $ 108,820 $
107,237 $ 105,894 3 7 Total securities 22,015 22,522 22,847 23,192
22,326 (2 ) (1 ) Total loans held for investment 76,804 74,635
72,369 69,933 68,312 3 12 Core deposits (2) 76,666 73,608 72,058
70,665 69,155 4 11 Total deposits 86,004 82,356 81,566 81,179
80,101 4 7 Long-term debt 6,972 6,984 6,995 6,545 6,547 — 6 MUAH
stockholder's equity 14,985 15,051 14,815 14,460 14,215 — 5
Balance sheet (period average): Total assets $ 112,589 $
109,739 $ 107,871 $ 106,491 $ 104,424 3 8 Total securities 22,171
22,592 22,865 22,611 22,282 (2 ) — Total loans held for investment
75,795 73,353 71,104 69,293 67,619 3 12 Earning assets 101,430
98,933 97,405 96,100 94,707 3 7 Total deposits 84,036 82,239 81,221
80,433 79,747 2 5 MUAH stockholder's equity 15,202 14,969 14,657
14,390 12,604 2 21
Performance ratios: Return on
average assets (3) 0.55 % 0.90 % 0.92 % 0.66 % 0.68 % Return on
average MUAH stockholder's equity (3) 4.06 6.57 6.80 4.87 5.66
Return on average assets excluding the
impact of privatization transaction and merger costs related to
acquisitions (3) (4)
0.62 0.94 0.97 0.72 0.75
Return on average MUAH stockholder's
equity excluding the impact of privatization transaction and merger
costs related to acquisitions (3) (4)
5.27 7.84 8.19 6.11 7.41 Efficiency ratio (5) 76.12 73.51 67.23
76.38 76.89 Adjusted efficiency ratio (6) 67.24 63.42 60.30 67.95
67.08 Net interest margin (3) (7) 2.81 2.87 3.15 2.87 2.99
Capital ratios: Regulatory: U.S. Basel
I U.S. Basel III U.S. Basel I
Common Equity Tier 1 risk-based capital ratio(8) (9) n/a
12.66 % 12.58 % 12.59 % n/a Tier 1 risk-based capital ratio (8) (9)
12.79 % 12.70 12.62 12.62 12.41 % Total risk-based capital ratio
(8) (9) 14.73 14.60 14.57 14.75 14.61 Tier 1 leverage ratio (8) (9)
11.25 11.43 11.35 11.26 11.27
Other: Tangible common
equity ratio (11) 10.54 % 10.79 % 10.84 % 10.65 % 10.54 % Tier 1
common capital ratio (8) (9) (10) 12.73 n/a n/a n/a 12.34 Common
Equity Tier 1 risk-based capital ratio (U.S. Basel III
standardized; transitional) (8) (12) 12.85 n/a n/a n/a n/a
Common Equity Tier 1 risk-based capital
ratio (U.S. Basel III standardized approach; fully phased in) (8)
(13)
12.57 12.47 12.13 11.98 11.51
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries
Financial Highlights (Unaudited) Exhibit 2
As of and for the Year Ended
Percent Change
December 31,
December 31,
to December 31, 2014
(Dollars in millions) 2014 2013
from December 31, 2013
Results of operations: Net interest income $ 2,862 $ 2,716 5
% Noninterest income 1,123 876 28 Total revenue 3,985
3,592 11 Noninterest expense 2,921 2,793 5 Pre-tax,
pre-provision income (1) 1,064 799 33 (Reversal of) provision for
loan losses (16 ) (45 ) 64 Income before income taxes and including
noncontrolling interests 1,080 844 28 Income tax expense 274
195 41 Net income including noncontrolling interests 806 649
24 Deduct: Net loss from noncontrolling interests 19 18
6 Net income attributable to MUAH $ 825 $ 667
24
Balance sheet (end of period): Total assets $
113,678 $ 105,894 7 Total securities 22,015 22,326 (1 ) Total loans
held for investment 76,804 68,312 12 Core deposits (2) 76,666
69,155 11 Total deposits 86,004 80,101 7 Long-term debt 6,972 6,547
6 MUAH stockholder's equity 14,985 14,215 5
Balance sheet
(period average): Total assets $ 109,186 $ 100,355 9 Total
securities 22,559 22,552 — Total loans held for investment 72,406
64,638 12 Earning assets 98,482 90,797 8 Total deposits 81,988
76,714 7 MUAH stockholder's equity 14,808 12,499 18
Performance ratios: Return on average assets (3) 0.76 % 0.66
% Return on average MUAH stockholder's equity (3) 5.57 5.33 Return
on average assets excluding the impact of privatization transaction
and merger costs related to acquisitions (3) (4) 0.81 0.74 Return
on average MUAH stockholders' equity excluding the impact of
privatization transaction and merger costs related to acquisitions
(3) (4) 6.84 7.06 Efficiency ratio (5) 73.31 77.74 Adjusted
efficiency ratio (6) 64.63 67.85 Net interest margin (3) (7) 2.93
3.01
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries Credit Quality (Unaudited) Exhibit 3
Percent Change to As of and
for the Three Months Ended December 31, 2014 from
(Dollars in millions)
December 31,2014
September 30,2014
June 30,2014
March 31,2014
December 31,2013
September 30,2014
December 31,2013
Credit Data:
(Reversal of) provision for loan losses,
excluding purchased credit-impaired loans
$ 9 $ (18 ) $ 9 $ (18 ) $ (22 ) 150 % 141 %
(Reversal of) provision for purchased
credit-impaired loan losses not subject to FDIC indemnification
— — — 2 (1 ) - 100 (Reversal of) provision for losses on unfunded
credit commitments (10 ) 19 (3 ) 16 2
(153 ) nm Total (reversal of) provision for credit losses $ (1 ) $
1 $ 6 $ — $ (21 ) (200 ) 95 Net
loans charged-off (recovered) $ (1 ) $ 12 $ 7 $ (6 ) $ 11 (108 )
(109 ) Nonperforming assets 411 428 547 506 499 (4 ) (18 )
Criticized loans held for investment (14) 1,141 1,245 1,450 1,317
1,274 (8 ) (10 )
Credit Ratios: Allowance for loan
losses to: Total loans held for investment 0.70 % 0.71 % 0.77 %
0.80 % 0.83 % Nonaccrual loans 143.35 131.28 108.90 119.58 128.42
Allowance for credit losses to (15): Total loans held for
investment 0.90 0.92 0.97 1.01 1.02 Nonaccrual loans 183.80 171.42
137.13 151.35 158.30
Net loans charged-off (recovered) to
average total loans held for investment (3)
— 0.06 0.04 (0.04 ) 0.07 Nonperforming assets to total loans held
for investment and
Other Real Estate Owned (OREO)
0.53 0.57 0.75 0.72 0.74 Nonperforming assets to total assets 0.36
0.39 0.50 0.47 0.48 Nonaccrual loans to total loans held for
investment 0.49 0.54 0.71 0.67 0.65
As of and for
the Year Ended Percent Change December 31,
December 31, to December 31, 2014 (Dollars in
millions) 2014 2013 from
December 31, 2013 Credit Data:
(Reversal of) provision for loan losses,
excluding purchased credit-impaired loans
$ (18 ) $ (44 ) 59 %
(Reversal of) provision for purchased
credit-impaired loan losses not subject to FDIC indemnification
2 (1 ) 300 (Reversal of) provision for losses on unfunded credit
commitments 22 16 38 Total (reversal of) provision
for credit losses $ 6 $ (29 ) 121 Net loans
charged-off $ 12 $ 32 (63 ) Nonperforming assets 411 499 (18 )
Credit Ratios: Net loans charged-off to average total loans
held for investment 0.02 % 0.05 % Nonperforming assets to total
assets 0.36 0.48
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries Consolidated Statements of Income
(Unaudited) Exhibit 4 For the
Three Months Ended December 31,
September 30, June 30,
March 31, December 31, (Dollars in
millions) 2014 2014 2014
2014 2013 Interest Income
Loans $ 696 $ 693 $ 749 $ 667 $ 695 Securities 109 113 115 115 115
Other 3 2 3 5 6 Total interest
income 808 808 867 787 816
Interest Expense Deposits 57 58 61 62 64 Commercial
paper and other short-term borrowings 1 1 2 1 1 Long-term debt 41
42 41 41 45 Total interest
expense 99 101 104 104 110
Net Interest Income 709 707 763 683 706 (Reversal of)
provision for loan losses 9 (18 ) 9 (16 ) (23 ) Net
interest income after (reversal of) provision for loan losses 700
725 754 699 729
Noninterest Income Service charges on deposit accounts 50 52
50 51 51 Trust and investment management fees 26 26 26 26 28
Trading account activities 8 33 14 16 20 Securities gains, net 2 13
1 2 8 Credit facility fees 33 30 31 28 28 Merchant banking fees 35
38 27 24 25 Brokerage commissions and fees 13 14 13 13 12 Card
processing fees, net 9 8 9 8 8 Fees from affiliates (16) 168 151 —
— — Other, net 8 23 31 13 10
Total noninterest income 352 388 202 181
190
Noninterest Expense Salaries and
employee benefits 527 492 378 388 406 Net occupancy and equipment
76 74 75 71 70 Professional and outside services 72 66 63 55 64
Intangible asset amortization 13 13 13 13 16 Regulatory assessments
13 13 16 15 14 (Reversal of) provision for losses on unfunded
credit commitments (10 ) 19 (3 ) 16 2 Other 116 128
107 102 117 Total noninterest expense 807
805 649 660 689 Income
before income taxes and including noncontrolling interests 245 308
307 220 230 Income tax expense 95 67 62 50
55
Net Income including Noncontrolling
Interests 150 241 245 170 175 Deduct: Net loss from
noncontrolling interests 5 5 4 5 4
Net Income attributable to MUAH $ 155 $ 246
$ 249 $ 175 $ 179
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited) Exhibit
5 For the Years Ended December 31,
December 31, (Dollars in millions)
2014 2013 Interest Income Loans
$ 2,805 $ 2,641 Securities 452 469 Other 13 13 Total
interest income 3,270 3,123
Interest
Expense Deposits 238 248 Commercial paper and other short-term
borrowings 5 5 Long-term debt 165 154 Total interest
expense 408 407
Net Interest Income
2,862 2,716 (Reversal of) provision for loan losses (16 ) (45 ) Net
interest income after (reversal of) provision for loan losses 2,878
2,761
Noninterest Income Service
charges on deposit accounts 203 209 Trust and investment management
fees 104 135 Trading account activities 71 61 Securities gains, net
18 178 Credit facility fees 122 111 Merchant banking fees 124 93
Brokerage commissions and fees 53 46 Card processing fees, net 34
34 Fees from affiliates (16) 319 — Other, net 75 9
Total noninterest income 1,123 876
Noninterest Expense Salaries and employee benefits 1,785
1,631 Net occupancy and equipment 296 306 Professional and outside
services 256 250 Intangible asset amortization 52 65 Regulatory
assessments 57 74 (Reversal of) provision for losses on unfunded
credit commitments 22 16 Other 453 451 Total
noninterest expense 2,921 2,793 Income before
income taxes and including noncontrolling interests 1,080 844
Income tax expense 274 195
Net Income including
Noncontrolling Interests 806 649 Deduct: Net loss from
noncontrolling interests 19 18
Net Income
attributable to MUAH $ 825 $ 667
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries Consolidated Balance Sheets (Unaudited)
Exhibit 6 December 31,
September 30, June 30,
March 31, December 31,
(Dollars in millions except for per share amount)
2014 2014 2014 2014 2013
Assets Cash and due from banks $ 1,759 $ 1,593 $ 1,911 $
1,792 $ 1,863 Interest bearing deposits in banks 3,930 2,772 2,353
2,883 4,329 Federal funds sold and securities purchased under
resale agreements 62 154 65 32 11
Total cash and cash equivalents 5,751 4,519 4,329 4,707
6,203 Trading account assets 1,114 883 941 841 851 Securities
available for sale 13,724 14,064 14,670 15,366 15,817 Securities
held to maturity: Securities held to maturity 8,291 8,458 8,177
7,826 6,509 Loans held for investment 76,804 74,635 72,369 69,933
68,312 Allowance for loan losses (537 ) (529 ) (559 ) (557 ) (568 )
Loans held for investment, net 76,267 74,106 71,810 69,376 67,744
Premises and equipment, net 621 617 632 641 688 Goodwill 3,225
3,227 3,227 3,227 3,228 Other assets 4,685 5,005
5,034 5,253 4,854 Total assets $ 113,678
$ 110,879 $ 108,820 $ 107,237 $ 105,894
Liabilities Deposits: Noninterest bearing $
30,534 $ 28,676 $ 27,446 $ 26,881 $ 26,495 Interest bearing 55,470
53,680 54,120 54,298 53,606
Total deposits
86,004 82,356 81,566 81,179 80,101 Commercial paper and other
short-term borrowings 2,704 3,876 2,870 2,660 2,563 Long-term debt
6,972 6,984 6,995 6,545 6,547 Trading account liabilities 894 596
664 531 540 Other liabilities 1,889 1,777 1,666
1,611 1,675 Total liabilities 98,463
95,589 93,761 92,526 91,426
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 December 31, 2014 and September 30, 2014; and
136,330,830 as of June 30, 2014, March 31, 2014, and December 31,
2013 respectively 136 136 136 136 136 Additional paid-in capital
7,232 7,223 7,184 7,196 7,191 Retained earnings 8,346 8,191 7,936
7,687 7,512 Accumulated other comprehensive loss (729 ) (499 ) (441
) (559 ) (624 ) Total MUAH stockholder's equity 14,985 15,051
14,815 14,460 14,215 Noncontrolling interests 230 239
244 251 253 Total equity 15,215 15,290
15,059 14,711 14,468 Total liabilities
and equity $ 113,678 $ 110,879 $ 108,820 $
107,237 $ 105,894
MUFG Americas
Holdings Corporation and Subsidiaries Net Interest Income
(Unaudited) Exhibit 7 For the
Three Months Ended December 31, 2014
September 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 $ 27,138 $ 228 3.33
%
$ 25,746 $ 220 3.39 % Commercial mortgage 13,833 117 3.39 13,643
122 3.57 Construction 1,557 12 3.00 1,336 10 3.12 Lease financing
810 10 4.97 811 12 5.69 Residential mortgage 28,738 253 3.52 27,967
250 3.58 Home equity and other consumer loans 3,137 33
4.20 3,164 32 4.08 Loans, before purchased
credit-impaired loans 75,213 653 3.46 72,667 646 3.54 Purchased
credit-impaired loans 582 44 30.08 686 48
27.70 Total loans held for investment 75,795 697 3.67 73,353
694 3.77 Securities 22,171 113 2.04 22,592 117 2.08 Interest
bearing deposits in banks 2,788 2 0.26 2,380 2 0.26
Federal funds sold and securities
purchased under resale agreements
149 — 0.05 106 — — Trading account assets 196 — 0.72 164 — 0.66
Other earning assets 331 1 0.68 338 1
0.73 Total earning assets 101,430 813 3.20 98,933 814
3.28 Allowance for loan losses (533 ) (566 ) Cash and due from
banks 1,727 1,597 Premises and equipment, net 614 626 Other assets
9,351 9,149 Total assets $ 112,589 $ 109,739
Liabilities Interest bearing deposits: Transaction
and money market accounts $ 39,762 33 0.33 $ 39,128 33 0.34 Savings
5,555 1 0.08 5,574 2 0.08 Time 9,133 23 0.97 9,766
23 0.96 Total interest bearing deposits 54,450
57 0.41 54,468 58 0.42 Commercial paper and
other short-term borrowings (18) 3,257 1 0.19 2,820 1 0.17
Long-term debt 6,983 41 2.36 6,994 42
2.38 Total borrowed funds 10,240 42 1.67 9,814
43 1.75 Total interest bearing liabilities 64,690 99
0.61 64,282 101 0.63 Noninterest bearing deposits 29,586
27,771 Other liabilities 2,873 2,474 Total
liabilities 97,149 94,527
Equity MUAH Stockholder's equity
15,202 14,969 Noncontrolling interests 238 243 Total
equity 15,440 15,212 Total liabilities and equity $
112,589 $ 109,739 Net interest income/spread
(taxable-equivalent basis) 714 2.59
%
713 2.65 % Impact of noninterest bearing deposits 0.19 0.19 Impact
of other noninterest bearing sources 0.03 0.03 Net interest margin
2.81 2.87 Less: taxable-equivalent adjustment 5 6 Net
interest income $ 709 $ 707
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries Net Interest Income (Unaudited) Exhibit
8 For the Three Months Ended
December 31, 2014 December 31, 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 $ 27,138
$ 228 3.33 % $ 23,176 $ 196 3.35 % Commercial mortgage 13,833 117
3.39 12,984 123 3.78 Construction 1,557 12 3.00 868 7 3.46 Lease
financing 810 10 4.97 981 8 3.43 Residential mortgage 28,738 253
3.52 25,143 231 3.67 Home equity and other consumer loans 3,137
33 4.20 3,305 35 4.13 Loans, before
purchased credit-impaired loans 75,213 653 3.46 66,457 600 3.60
Purchased credit-impaired loans 582 44 30.08 1,162
96 32.75 Total loans held for investment 75,795 697
3.67 67,619 696 4.10 Securities 22,171 113 2.04 22,282 118 2.12
Interest bearing deposits in banks 2,788 2 0.26 4,242 3 0.26
Federal funds sold and securities
purchased under resale agreements
149 — 0.05 138 — 0.09 Trading account assets 196 — 0.72 203 2 4.36
Other earning assets 331 1 0.68 223 1
1.89 Total earning assets 101,430 813 3.20 94,707 820
3.45 Allowance for loan losses (533 ) (618 ) Cash and due from
banks 1,727 1,553 Premises and equipment, net 614 678 Other assets
9,351 8,104 Total assets $ 112,589 $ 104,424
Liabilities Interest bearing deposits: Transaction
and money market accounts $ 39,762 33 0.33 $ 36,636 35 0.38 Savings
5,555 1 0.08 5,576 1 0.13 Time 9,133 23 0.97 11,431
28 0.96 Total interest bearing deposits 54,450
57 0.41 53,643 64 0.48 Commercial paper and
other short-term borrowings (18) 3,257 1 0.19 2,562 1 0.22
Long-term debt 6,983 41 2.36 7,094 45
2.52 Total borrowed funds 10,240 42 1.67 9,656
46 1.91 Total interest bearing liabilities 64,690 99
0.61 63,299 110 0.69 Noninterest bearing deposits 29,586
26,104 Other liabilities 2,873 2,160 Total
liabilities 97,149 91,563
Equity MUAH Stockholder's equity
15,202 12,604 Noncontrolling interests 238 257 Total
equity 15,440 12,861 Total liabilities and equity $
112,589 $ 104,424 Net interest income/spread
(taxable-equivalent basis) 714 2.59 % 710 2.76 % Impact of
noninterest bearing deposits 0.19 0.20 Impact of other noninterest
bearing sources 0.03 0.30 Net interest margin 2.81 2.99 Less:
taxable-equivalent adjustment 5 4 Net interest income
$ 709 $ 706
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and Subsidiaries
Net Interest Income (Unaudited) Exhibit 9
For the Year Ended December 31, 2014
December 31, 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 $ 25,321 $ 848 3.35 % $ 22,294 $ 750 3.36 % Commercial
mortgage 13,560 482 3.56 11,928 453 3.80 Construction 1,256 40 3.20
787 29 3.74 Lease financing 827 47 5.71 1,018 36 3.57 Residential
mortgage 27,449 988 3.60 23,903 898 3.76 Home equity and other
consumer loans 3,181 129 4.08 3,447 135 3.92 Loans,
before purchased credit-impaired loans 71,594 2,534 3.54 63,377
2,301 3.63 Purchased credit-impaired loans 812 273 33.54
1,261 341 27.03 Total loans held for investment 72,406 2,807
3.88 64,638 2,642 4.09 Securities 22,559 470 2.09 22,552 483 2.14
Interest bearing deposits in banks 2,898 8 0.25 3,067 8 0.25
Federal funds sold and securities
purchased under resale agreements
122 — 0.06 133 — 0.15 Trading account assets 205 3 1.54 163 3 1.62
Other earning assets 292 3 0.87 244 2 0.91 Total
earning assets 98,482 3,291 3.34 90,797 3,138 3.46 Allowance for
loan losses (559 ) (636 ) Cash and due from banks 1,566 1,405
Premises and equipment, net 632 695 Other assets 9,065 8,094
Total assets $ 109,186 $ 100,355
Liabilities Interest bearing deposits: Transaction and money
market accounts 38,517 137 0.36 33,904 114 0.34 Savings 5,573 5
0.09 5,682 7 0.13 Time 10,211 96 0.94 12,115 127 1.04
Total interest bearing deposits 54,301 238 0.44 51,701
248 0.48 Commercial paper and other short-term borrowings
(18) 2,809 5 0.19 2,751 5 0.20 Long-term debt 6,863 165 2.40
5,998 154 2.56 Total borrowed funds 9,672 170 1.76
8,749 159 1.82 Total interest bearing liabilities 63,973 408
0.64 60,450 407 0.67 Noninterest bearing deposits 27,687
25,013 Other liabilities 2,472 2,128 Total
liabilities 94,132 87,591
Equity MUAH Stockholder's equity
14,808 12,499 Noncontrolling interests 246 265 Total
equity 15,054 12,764 Total liabilities and equity $
109,186 $ 100,355 Net interest income/spread
(taxable-equivalent basis) 2,883 2.70 % 2,731 2.79 % Impact of
noninterest bearing deposits 0.19 0.19 Impact of other noninterest
bearing sources 0.04 0.03 Net interest margin 2.93 3.01 Less:
taxable-equivalent adjustment 21 15 Net interest income $ 2,862 $
2,716
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries Loans and Nonperforming Assets (Unaudited)
Exhibit 10
December 31,
September 30, June 30,
March 31, December 31,
(Dollars in millions)
2014
2014 2014 2014 2013 Loans
held for investment (period end) Loans held for investment:
Commercial and industrial $ 27,623 $ 26,429 $ 25,162 $ 23,654 $
23,528 Commercial mortgage 14,016 13,766 13,549 13,568 13,092
Construction 1,746 1,436 1,248 1,019 905 Lease financing 800 811
829 845 854 Total commercial portfolio 44,185 42,442 40,788 39,086
38,379 Residential mortgage 28,977 28,425 27,619 26,602
25,547 Home equity and other consumer loans 3,117 3,141 3,178 3,194
3,280 Total consumer portfolio 32,094 31,566 30,797 29,796 28,827
Loans held for investment, before purchased credit-impaired loans
76,279 74,008 71,585 68,882 67,206 Purchased credit-impaired loans
525 627 784 1,051 1,106 Total loans held for investment $
76,804 $ 74,635 $ 72,369 $ 69,933 $ 68,312
Nonperforming
Assets (period end) Nonaccrual loans: Commercial and industrial
$ 55 $ 71 $ 161 $ 89 $ 44 Commercial mortgage 40 34 47 46 51
Total commercial portfolio
95 105 208 135 95 Residential mortgage 231 239 243 266 286
Home equity and other consumer loans 40 46 46 49 46 Total consumer
portfolio 271 285 289 315 332 Nonaccrual loans, before
purchased credit-impaired loans 366 390 497 450 427 Purchased
credit-impaired loans 9 13 17 16 15
Total nonaccrual loans
375 403 514 466 442 OREO 12 12 14 17 20 FDIC covered OREO 24
13 19 23 37 Total nonperforming assets $ 411 $ 428 $ 547 $
506 $ 499
Total nonperforming assets, excluding
purchased credit-impaired loans and FDIC covered OREO
$ 378 $ 402 $ 511 $ 467 $ 447 Loans 90 days or more past due
and still accruing (19) $ 3 $ 4 $ 11 $ 4 $ 5
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries Allowance for Credit Losses (Unaudited)
Exhibit 11 As of and for the
Three Months Ended
December 31,
September 30,
June 30, March
31, December 31, (Dollars in
millions)
2014
2014
2014 2014 2013 Analysis of
Allowance for Credit Losses Balance, beginning of period $ 529
$ 559 $ 557 $ 568 $ 608 (Reversal of) provision for loan losses,
excluding purchased credit-impaired loans 9 (18 ) 9 (18 ) (22 )
(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 ) Other (2 ) — — (1 ) — Loans charged-off: Commercial
and industrial (8 ) (15 ) (6 ) (5 ) (18 ) Commercial mortgage (1 )
— (2 ) (1 ) (2 ) Total commercial portfolio (9 ) (15 ) (8 )
(6 ) (20 ) Residential mortgage — — (2 ) (1 ) (1 ) Home equity and
other consumer loans (2 ) (2 ) (2 ) (2 ) (4 ) Total consumer
portfolio (2 ) (2 ) (4 ) (3 ) (5 ) Purchased credit-impaired loans
— (1 ) — — — Total loans charged-off
(11 ) (18 ) (12 ) (9 ) (25 ) Recoveries of loans previously
charged-off: Commercial and industrial 10 3 3 11 6 Commercial
mortgage — 2 1 — — Construction — — — 3 — Lease financing —
— — — 1 Total commercial portfolio 10 5
4 14 7 Home equity and other consumer loans 2 — 1
1 — Total consumer portfolio 2 —
1 1 — Purchased credit-impaired loans —
1 — — 7 Total recoveries of loans
previously charged-off 12 6 5 15 14
Net loans recovered (charged-off) 1 (12 ) (7 ) 6
(11 ) Ending balance of allowance for loan losses 537
529 559 557 568 Allowance for losses on unfunded credit commitments
152 162 145 148 132 Total
allowance for credit losses $ 689 $ 691 $ 704
$ 705 $ 700 Components of allowance for loan
losses and credit losses:
Allowance for loan losses, excluding
allowance on purchased credit-impaired loans
$ 534 $ 526 $ 556 $ 554 $ 567 Allowance for loan losses on
purchased credit-impaired loans 3 3 3 3
1 Total allowance for loan losses $ 537 $ 529
$ 559 $ 557 $ 568
MUFG
Americas Holdings Corporation and Subsidiaries Securities
(Unaudited) Exhibit 12
Securities Available for Sale
Fair Value Fair Value
December 31, 2014
September 30, 2014
Change from % Change from
Amortized
Fair
Amortized
Fair
September 30, September 30, (Dollars in
millions) Cost Value Cost
Value 2014 2014
Asset Liability Management securities: U.S. Treasury $ — $ — $ 70 $
70 $ (70 ) 100 % Residential mortgage-backed securities: U.S.
government agency and government-sponsored agencies 7,649 7,560
7,886 7,739 (179 ) (2 ) Privately issued 166 168 175 177 (9 ) (5 )
Privately issued - commercial mortgage-backed securities 1,689
1,691 1,770 1,745 (54 ) (3 ) Collateralized loan obligations 2,527
2,494 2,438 2,422 72 3 Asset-backed and other 8 9 13
14 (5 ) (36 ) Asset Liability Management securities
12,039 11,922 12,352 12,167 (245 ) (2 ) Other debt securities:
Direct bank purchase bonds 1,719 1,741 1,819 1,833 (92 ) (5 ) Other
53 52 54 52 — — Equity securities 8 9 10 12
(3 ) (25 ) Total securities available for sale $ 13,819
$ 13,724 $ 14,235 $ 14,064 $ (340 ) (2
)%
Securities Held to Maturity December 31,
2014 September 30, 2014 Carrying Amount
Carrying Amount Carrying Fair Carrying
Fair Change from % Change from (Dollars in
millions) Amount (20) Value
Amount (20) Value September
30, 2014 September 30, 2014 U.S. Treasury
$ 486 $ 489 $ 485 $ 484 $ 1 — % U.S. government-sponsored agencies
125 125 125 125 — —
U.S. government agency and
government-sponsored agencies - residential mortgage-backed
securities
5,942 6,013 6,102 6,107 (160 ) (3 )
U.S. government agency and
government-sponsored agencies - commercial mortgage-backed
securities
1,738 1,785 1,746 1,775 (8 ) — Total
securities held to maturity $ 8,291 $ 8,412 $ 8,458
$ 8,491 $ (167 ) (2 )%
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
Exhibit 13
The following table presents a reconciliation between certain
Generally Accepted Accounting Principles (GAAP) amounts and
specific non-GAAP measures as used to compute selected non-GAAP
financial ratios.
As of and for the Three Months Ended
(Dollars in millions)
December 31,2014
September 30,2014
June 30,2014
March 31,2014
December 31,2013
Net income attributable to MUAH $ 155 $ 246 $ 249 $ 175 $ 179 Net
adjustments for merger costs related to acquisitions, net of tax 12
13 15 11 12 Net adjustments for privatization transaction, net of
tax 6 (8 ) (9 ) 1 2
Net income attributable to MUAH, excluding
impact of privatization transaction and merger costs related to
acquisitions
$ 173 $ 251 $ 255 $ 187 $ 193
Average total assets $ 112,589 $ 109,739 $ 107,871 $ 106,491
$ 104,424 Less: Net adjustments related to privatization
transaction 2,244 2,255 2,260 2,272
2,297 Average total assets, excluding impact of
privatization transaction $ 110,345 $ 107,484 $
105,611 $ 104,219 $ 102,127 Return on average
assets (3) 0.55 % 0.90 % 0.92 % 0.66 % 0.68 %
Return on average assets, excluding impact
of privatization transaction and merger costs related to
acquisitions (3) (4)
0.62 0.94 0.97 0.72 0.75 Average MUAH stockholder's equity $
15,202 $ 14,969 $ 14,657 $ 14,390 $ 12,604 Less: Adjustments for
merger costs related to acquisitions (157 ) (147 ) (132 ) (118 )
(105 ) Less: Net adjustments for privatization transaction 2,279
2,290 2,297 2,302 2,306 Average
MUAH stockholder's equity, excluding impact of privatization
transaction and merger costs related to acquisitions $ 13,080
$ 12,826 $ 12,492 $ 12,206 $ 10,403
Return on average MUAH stockholder's equity (3) 4.06 % 6.57
% 6.80 % 4.87 % 5.66 % Return on average MUAH stockholder's equity,
excluding impact of privatization transaction and merger costs
related to acquisitions (3) (4) 5.27 7.84 8.19 6.11 7.41
Noninterest expense $ 807 $ 805 $ 649 $ 660 $ 689 Less: Staff costs
associated with fees from affiliates - support services 105 88 — —
— Less: Foreclosed asset expense and other credit costs (2 ) (1 ) 1
— 2 Less: (Reversal of) provision for losses on unfunded credit
commitments (10 ) 19 (3 ) 16 2 Less: Productivity initiative costs
2 6 4 1 20 Less: Low income housing credit (LIHC) investment
amortization expense 24 25 20 20 24 Less: Expenses of the LIHC
consolidated VIEs 8 8 8 8 6 Less: Merger and business integration
costs 20 22 25 17 25 Less: Net adjustments related to privatization
transaction 10 11 10 10 14 Less: Intangible asset amortization 3
3 3 3 3 Noninterest expense, as
adjusted (a) $ 647 $ 624 $ 581 $ 585 $
593 Total revenue $ 1,061 $ 1,095 $ 965 $ 864 $ 896
Add: Net interest income taxable-equivalent adjustment 5 6 5 5 4
Less: Fees from affiliates - support services 112 94 — — — Less:
Productivity initiative gains (1 ) — — — 6 Less: Accretion related
to privatization-related fair value adjustments (1 ) 4 9 6 8 Less:
Other credit costs (6 ) 17 (2 ) 2 1 Total
revenue, as adjusted (b) $ 962 $ 986 $ 963 $
861 $ 885 Adjusted efficiency ratio (a)/(b) (6) 67.24
% 63.42 % 60.30 % 67.95 % 67.08 %
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
Exhibit 14
The following table presents a reconciliation between certain
Generally Accepted Accounting Principles (GAAP) amounts and
specific non-GAAP measures as used to compute selected non-GAAP
financial ratios.
As of and for the Three Months Ended
December 31,
September 30,
June 30, March 31,
December 31,
(Dollars in millions)
2014
2014
2014 2014
2013
Total MUAH stockholder's equity $ 14,985 $ 15,051 $ 14,815 $ 14,460
$ 14,215 Less: Goodwill 3,225 3,227 3,227 3,227 3,228 Less:
Intangible assets, except mortgage servicing rights (MSRs) 233 249
262 275 288 Less: Deferred tax liabilities related to goodwill and
intangible assets (99 ) (20 ) (99 ) (102 ) (105 ) Tangible common
equity (c) $ 11,626 $ 11,595 $ 11,425 $ 11,060
$ 10,804 Total assets $ 113,678 $ 110,879 $ 108,820 $
107,237 $ 105,894 Less: Goodwill 3,225 3,227 3,227 3,227 3,228
Less: Intangible assets, except MSRs 233 249 262 275 288 Less:
Deferred tax liabilities related to goodwill and intangible assets
(99 ) (20 ) (99 ) (102 ) (105 ) Tangible assets (d) $ 110,319
$ 107,423 $ 105,430 $ 103,837 $ 102,483
Tangible common equity ratio (c)/(d) (11) 10.54 % 10.79 %
10.84 % 10.65 % 10.54 % Tier 1 capital, determined in
accordance with U.S. Basel I regulatory requirements $ 12,370 n/a
n/a n/a $ 11,471 Less: Junior subordinated debt payable to trusts
52 n/a n/a n/a 66 U.S. Basel I Tier 1 common capital
(e) $ 12,318 n/a n/a n/a $ 11,405 Common Equity Tier 1 capital
under U.S. Basel III (standardized transitional) (f) $ 12,453 $
12,300 $ 11,964 $ 11,750 $ 11,406 Other (9) (105 ) (121 ) (130 )
(138 ) (258 ) Common Equity Tier 1 capital estimated under U.S.
Basel III (standardized approach; fully phased-in) (g) $ 12,348
$ 12,179 $ 11,834 $ 11,612 $ 11,148
Risk-weighted assets, determined in accordance with U.S.
Basel I regulatory requirements (h) $ 96,742 n/a n/a n/a $ 92,410
Add: Adjustments 191 n/a n/a n/a n/a Risk-weighted assets,
estimated under U.S. Basel III (standardized transitional) (i)
96,933 $ 96,239 $ 94,556 $ 92,476 n/a Add: Adjustments 1,285
1,441 2,963 4,427 4,446 Total
risk-weighted assets, estimated under U.S. Basel III (standardized
approach; fully phased in) (j) $ 98,218 $ 97,680 $ 97,519 $ 96,903
$ 96,856 Tier 1 common capital ratio (e)/(h) (8) (9) (10) 12.73 %
n/a n/a n/a 12.34 % Common Equity Tier 1 risk-based capital ratio
(U.S. Basel III standardized; transitional) (f)/(i) (8) (12) 12.85
n/a n/a n/a n/a Common Equity Tier 1 risk-based capital ratio (U.S.
Basel III standardized approach; fully phased in) (g)/(j) (8) (13)
12.57 12.47 % 12.13 % 11.98 % 11.51
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
Exhibit 15
The following table presents a reconciliation between certain
Generally Accepted Accounting Principles (GAAP) amounts and
specific non-GAAP measures as used to compute selected non-GAAP
financial ratios.
For the Year Ended December 31,
December 31, (Dollars in millions) 2014
2013 Net income attributable to MUAH $ 825 $ 667 Net
adjustments for merger costs related to acquisitions, net of tax 51
78 Net adjustments for privatization transaction, net of tax (10 )
(21 ) Net income attributable to MUAH, excluding impact of
privatization transaction and merger costs related to acquisitions
$ 866 $ 724 Average total assets $ 109,186 $
100,355 Less: Net adjustments related to privatization transaction
2,258 2,313 Average total assets, excluding impact of
privatization transaction $ 106,928 $ 98,042 Return
on average assets (3) 0.76 % 0.66 % Return on average assets,
excluding impact of privatization transaction and merger costs
related to acquisitions (3) (4) 0.81 0.74 Average MUAH
stockholder's equity $ 14,808 $ 12,499 Less: Adjustments for merger
costs related to acquisitions (139 ) (80 ) Less: Net adjustments
for privatization transaction 2,292 2,329 Average
MUAH stockholder's equity, excluding impact of privatization
transaction and merger costs related to acquisitions $ 12,655
$ 10,250 Return on average MUAH stockholder's equity
(3) 5.57 % 5.33 % Return on average MUAH stockholder's equity,
excluding impact of privatization transaction and merger costs
related to acquisitions (3) (4) 6.84 7.06 Noninterest
expense $ 2,921 $ 2,793 Less: Staff costs associated with fees from
affiliates - support services 193 — Less: Foreclosed asset expense
and other credit costs (2 ) (4 ) Less: (Reversal of) provision for
losses on unfunded credit commitments 22 16 Less: Productivity
initiative costs 13 51 Less: Low income housing credit (LIHC)
investment amortization expense 89 76 Less: Expenses of the LIHC
consolidated VIEs 32 29 Less: Merger and business integration costs
84 134 Less: Net adjustments related to privatization transaction
41 55 Less: Intangible asset amortization 12 13
Noninterest expense, as adjusted (a) $ 2,437 $ 2,423
Total revenue $ 3,985 $ 3,592 Add: Net interest income
taxable-equivalent adjustment 21 15 Less: Fees from affiliates -
support services 206 — Less: Productivity initiative gains (1 ) 17
Less: Accretion related to privatization-related fair value
adjustments 18 24 Less: Other credit costs 11 (5 ) Total
revenue, as adjusted (b) $ 3,772 $ 3,571 Adjusted
efficiency ratio (a)/(b) (6) 64.63 % 67.85 %
Refer to Exhibit 16 for footnote
explanations.
MUFG Americas Holdings Corporation and
Subsidiaries Footnotes Exhibit 16 (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 15 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 15 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
December 31, 2014. (9) The capital ratios as of December 31, 2014
and 2013 are calculated under U.S. Basel I rules. The capital
ratios displayed as of September 30, 2014, June 30, 2014, and March
31, 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. (10) The Tier 1 common capital ratio is
the ratio of Tier 1 capital, less qualifying trust preferred
securities, to risk-weighted assets. The Tier 1 common capital
ratio, a non-GAAP financial measure, facilitates the understanding
of the Company's capital structure and may be used to assess and
compare the quality and composition of the Company's capital
structure to other financial institutions. Please refer to Exhibit
14 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 14 for a reconciliation
between certain GAAP amounts and these non-GAAP measures. (12) In
December 2014, the Federal Reserve Board approved the Company's
request to opt-out of the advanced approaches methodology under
U.S. Basel III regulatory capital rules. Common Equity Tier 1
risk-based capital is 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. 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, and the corresponding
reconciliation from Tier 1 capital (determined in accordance with
U.S. Basel I) because of current interest in such information by
market participants. Please refer to Exhibit 14 for a
reconciliation between certain GAAP amounts and these non-GAAP
measures. (13) 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, and the corresponding reconciliation from
Tier 1 capital (determined in accordance with U.S. Basel I) because
of current interest in such information by market participants.
Please refer to Exhibit 14 for a reconciliation between certain
GAAP amounts and these non-GAAP measures. (14) 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. (15) 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. (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 $47 million, $65 million, $103
million, $123 million, and $124 million that are 90 days or more
past due and still accruing at December 31, 2014, September 30,
2014, June 30, 2014, March 31, 2014, and December 31, 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. nm = not meaningful n/a = not
applicable
MUFG Americas Holdings CorporationAlan
GulickCorporate
Communications425-423-7317orDoug
LambertInvestor Relations212-782-5911
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