MUFG Americas Holdings Corporation (the Company), parent company of San Francisco-based MUFG Union Bank, N.A. (the Bank), which was formerly named Union Bank, N.A., today reported second quarter 2014 results. Net income for the quarter was $249 million, up from $175 million for the prior quarter, and up from $142 million for the year-ago quarter.
For the second quarter 2014, total revenue (net interest income plus noninterest income) was $965 million, up $101 million compared with the first quarter 2014.
Both net interest income and noninterest income increased 12 percent. Net interest income for the second quarter 2014 was $763 million, up $80 million, compared with the first quarter 2014. The increase in net interest income was largely due to higher interest income on our purchased credit-impaired (PCI) loan portfolio, mostly due to early payoffs of certain loans, as well as overall growth in loan volume, excluding PCI loans. Average total loans held for investment, excluding PCI loans, increased $2.0 billion, or 3 percent, compared with the first quarter 2014 largely due to growth in residential mortgages and commercial and industrial loans. The net interest margin was 3.15 percent, up 28 basis points from the prior quarter substantially due to higher yields in the PCI loan portfolio as described above. Excluding the impact of the PCI loan portfolio, the net interest margin would have been slightly higher primarily due to marginally higher yields on loans and lower costs of borrowed funds. Average total deposits increased $788 million, or 1 percent, during the quarter compared with the first quarter 2014, substantially due to growth in noninterest-bearing deposits.
For the second quarter 2014, noninterest income was $202 million, up $21 million, or 12 percent, compared with the first quarter 2014, largely due to higher net gains on the sale of certain investments.
Compared to the second quarter 2013, total revenue increased $92 million, with net interest income up 14 percent and noninterest income up less than 1 percent. Net interest income increased $91 million compared with the year-ago quarter substantially due to loan growth, as well as higher interest income on our PCI loan portfolio, which drove a 12 basis point increase in the net interest margin. Average total loans held for investment, excluding PCI loans, increased $7.9 billion, or 13 percent, compared with the second quarter 2013 due to organic loan growth and our PB Capital Corporation acquisition, which closed late in the second quarter of 2013. Average total deposits increased $5.9 billion compared with the second quarter of 2013, substantially due to organic growth, with average interest bearing deposits up $3.3 billion, or 7 percent, and average noninterest bearing deposits up $2.5 billion, or 10 percent.