UnionBanCal's Profits Fall in 1Q

UnionBanCal reported that first-quarter net income totaled $195 million, down 17% from a year earlier, as fee income declined and it recorded a smaller gain from the reversal of its provision for credit losses.

The $92.3 billion-asset parent of Union Bank in San Francisco said that it gained $3 million from its credit loss provision, compared with a benefit of $115 million a year earlier.

Overall, the company’s total revenue was relatively flat year over year at $855 million. Lower gains on the sale of securities led to the bank’s noninterest income falling 16%, to $202 million, year over year.

Net interest income was rose 6%, to $653 million, because of loan growth. This was partially offset by pressure on the net interest margin. UnionBanCal’s net interest margin declined 22 basis points, to 3.27%, from a year earlier, as yields on loans fell.

Growth in commercial and industrial loans and residential mortgages led to total loans, excluding Federal Deposit Insurance Corp. covered loans, increasing more than 13%, to $53 billion, year over year.

Noninterest expense totaled $614 million, which was flat from the same period last year.  UnionBanCal is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, which is a subsidiary of Mitsubishi UFJ Financial Group, Inc.