Datatreasury Corporation v. Wells Fargo & Company et al

Filing 526

RESPONSE to Motion re #83 MOTION to Dismiss Plaintiff's Complaint Pursuant to Fed. R. Civ. P. 12(b)(2) and Brief in Support Thereof Plaintiff's Amended Response to Defendant UnionBanCal's Motion to Dismiss for Lack of Personal Jurisdiction Under Rule 12b2 filed by Datatreasury Corporation. (Attachments: #1 Exhibit A#2 Exhibit B#3 Exhibit C#4 Exhibit D#5 Exhibit E#6 Exhibit F#7 Exhibit G#8 Exhibit H#9 Exhibit I#10 Exhibit J#11 Exhibit K#12 Exhibit L#13 Text of Proposed Order)(King, Richard)

Datatreasury Corporation v. Wells Fargo & Company et al

Financial Highlights

F o r the Year Ended: (Amounts in thousands, except per share data)

20 04

20 05

focus + execution = growth

Income from Continuing Operations Income from Continuing Operations per common share--basic Income from Continuing Operations per common share--diluted Net income Net income per common share--basic Net income per common share--diluted Dividends per common share Weighted average common shares outstanding--basic Weighted average common shares outstanding--diluted Return on average assets: Income from continuing operations Net Income Return on average common equity: Income from continuing operations Net Income Net interest margin Efficiency ratio
At Year End:
1

$ 710,074 4.81 4.72 732,534 4.96 4.87 1.39 147,767 150,303 1.65% 1.70% 17.53% 18.09% 4.17% 57.95%

$ 730,640 5.04 4.94 862,933 5.95 5.84 1.59 145,109 147,792 1.53% 1.81% 17.07% 20.16% 4.31% 60.75%

Tot al loans (gross) Allowance for credit losses 2 Tot al assets Tot al deposits Stockholder 's equity Book value per common share Risk-based capital ratios Tier 1 Tot al Tangible common equity to assets Nonperforming assets to total assets

$ 29,109,415 4 81,531 4 8,098,021 38,719,506 4,292,244 28.93 9.71% 12.17% 7.94% 0.31%

$ 33,095,595 437,907 4 9 , 4 16 , 0 0 2 40,082,239 4,559,70 0 31.62 9 . 17 % 11.10% 8.31% 0 . 12 %

1

Taxable-equivalent Includes allowance for credit losses related to off­balance sheet commitments.

2

UnionBanCal Corporation 2 0 0 5 Annual Report

Dockets.Justia.com

Doc. 526 Att. 2

2005 Annual Report UnionBanCal Corporation 1

2 U n i o n B a n C a l Corporation 2 0 0 5 Annual Report

Dear stockholders, customers, and employees,
I f any one word could sum up our guiding principle in 2005, that word would be "focus." T h r o u g h o u t 2005, we continued to focus our e f f o r t s on core activities, and execute toward a proven strategic plan. Focusing primarily on the dynamic California marketplace, our vision is to make Union Bank of California the premier regional bank for consumers and for large, mid-sized, and small businesses. We offer particular expertise in cash management, real estate and energy industry lending, wealth management and investment services. In a fiercely competitive marketplace, we see ourselves as an attractive alternative to major national banks as well as smaller banks in our

We a r e gratified by the increased value of our stockholders' investment in our company. O v e r the course of the year, the total return of an investment in UnionBanCal was 9 percent, outperforming the S&P BIX and the KBW Banks Index. Over the past five years, t h e total return of an investment in UB stock was 222 percent. In comparison, the total a v e r a g e return from the KBW Banks Index and S&P BIX was 33 percent and the S&P 500 I n d e x , 3 percent.

W e r e t u r n e d more than $600 million to our stockholders in 2005: stock repurchases of $ 3 8 9 million and $230 million in dividends (including an increase in April of our quarterly dividend by 14 percent).

Even after returning nearly 85 percent of income from continuing operations in 2005, we maintained a strong tangible equity ratio. We believe that allows sufficient flexibility in our

from left to right:

L. Dale Crandall Retired President and Chief Operating Officer Kaiser Foundation Health Plan Board Committees: Chair, Audit, Executive Compensation & Benefits, Finance & Capital

interaction

markets, offering a full menu of business and consumer bank products and services delivered by professionals who are committed to enhancing their customers' banking experience.
Takashi Morimura

Richard D. Farman Chairman Emeritus, Sempra Energy Lead Director Board Committees: Chair, Executive Compensation & Benefits, Corporate Governance

Michael J. Gillfillan Partner, Meriturn Partners, LLC Board Committees: Audit, Finance & Capital, Executive Compensation & Benefits

President, Chief Executive Officer, and Director

2005 Annual Report U n i o n B a n C a l Corporation 3

4 U n i o n B a n C a l Corporation 2 0 0 5 Annual Report

capital management strategy going forward to continue to invest in our core businesses and pursue strategic acquisitions, while continuing to return capital to stockholders.

t o expand our net interest margin in 2005 by 14 basis points, to 4.31 percent, in a period w h e n most banks' margins were squeezed. Average core deposits grew by m o r e than $3.5 billion. While the Federal Reserve Board's discount

Key factors that influenced our results in 2005 included:

r a t e was raised 325 basis points in the years 2 0 0 4 and 2005, our a l l - i n cost of funds increased by only 44 basis points.

Focus on credit quality--Nonperforming assets as a percenta g e of total loans amounted to 0.19 percent at year end. The a v e r a g e of our peer group was more than twice as high at 0 . 4 0 percent.

U n i o n B a n C a l finished the year with the lowest annualized all-in c o s t of funds in our peer group.

I n addition to the beneficial effects on our all-in cost of funds a n d net interest margin, we believe that our success at

C o n t i n u e d growth of core deposits -- O u r focused, long-term commitment to non-interest bearing deposit generation enabled us

g a t h e r i n g deposits provides us with flexibility in loan pricing and, a t the same time, reduces the pressures that lead to aggressive l e n d i n g practices.

Philip B. Flynn

David I. Matson

Vice Chairman, Chief Operating Officer, and Director

Vice Chairman and Chief Financial Officer

Stock Performance Comparison

Operating Earnings per Share from Continuing Operations

2

Dollars

0

focus

J 05

F

M

A

M

J

J

A

S

O

N

D

· UBOC Common Stock · S&P Banks Index · S&P 500 Index

2001

2.75

2002

3.21

1

2003

3.70

2004

4.36

2005

4.94

2005 Annual Report U n i o n B a n C a l Corporation 5

6 U n i o n B a n C a l Corporation 2 0 0 5 Annual Report

Balanced growth of portfolio--Average loans grew by $5.4 billion, 18 percent year over year. Reflecting our determination to maintain a less volatile balance sheet, at year-end, 34 percent of our portfolio consisted of residential mortgages. On average, our home loans represent j u s t over 60 percent of property value. Commercial and industrial loans accounted for 34 percent of our loan portfolio. The remaining third was spread over other asset classes.

F i n a n c i a l Officer David Matson advanced to vice chairman and assumed additional respons i b i l i t i e s for Treasury and Corporate Services. And Masashi Oka joined the company as vice chairman and head of the Administration and Support Group. His group was expanded to i n c l u d e the newly created Enterprise-Wide Risk Analysis and Reporting Division, which p r o v i d e s a universal focus on monitoring many areas of risk. Each vice chairman reports directly to me.

C o n t i n u e d focus on core strengths--We sold our international correspondent banking business in 2005. We believe the sale enables us to sharpen our focus on core businesses a n d deploy the transaction proceeds into other growth opportunities. S o o n after our reorganization, we launched an initiative to create a consistent culture throughout the organization that encourages all of us to look at enterprise-wide opportunities, a d d r e s s key strategic issues, and optimize our efforts. Through this project, we expect I n the spring and summer of 2005, we implemented a new executive management organization. I advanced from vice chairman to president and chief executive officer. Vice Chairman Philip B. Flynn was elected to the new position of chief operating officer. Chief t o reduce horizontal, vertical, and geographical boundaries; improve information flow; t r a n s f e r expertise between commercial and personal finance disciplines; and leverage c o m p a n y synergies.

commitment resolve
opposite page from left to right:

David R. Andrews Retired Senior Vice President, Government Affairs, General Counsel and Secretary, PepsiCo, Inc. Board Committees: Chair, Corporate Governance, Audit

Carl W. Robertson Managing Director, Warland Investment Company UBOC Director Board Committees: Trust, Public Policy

Aida M. Alvarez Former Administrator, Small Business Administration Board Committees: Corporate Governance, Public Policy, Trust

t h i s page from left to right:

Ronald L. Havner, Jr. Vice Chairman and CEO Public Storage, Inc. Board Committees: Chair, Finance & Capital, Corporate Governance
this page from left to right:

Stanley F. Farrar Of Counsel, Sullivan and Cromwell Board Committees: Finance & Capital, Trust

Norimichi Kanari Deputy President and Chief Executive, Global Corporate Banking Business Unit, The Bank of TokyoMitsubishi UFJ, Ltd.

J. Fernando Niebla President, International Technology Partners Board Committees: Chair, Trust, Public Policy, Executive Compensation & Benefits

Mary S. Metz Retired President and CEO SH Cowell Foundation Board Committees: Chair, Public Policy, Audit

2005 Annual Report U n i o n B a n C a l Corporation 7

8 U n i o n B a n C a l Corporation 2 0 0 5 Annual Report

I n July 2005, we sharpened our focus on the needs of local markets with a new, 10-year commitment to our communities. It increases o u r investment to 6.5 percent from 4.5 percent, focusing p r i m a r i l y on affordable housing, economic development, and e d u c a t i o n . We continued to fund the arts, health and human s e r v i c e s , and aided communities recovering from disasters, like the Indian Ocean tsunami and Hurricane Katrina. Our new c o m m u n i t y development commitment includes annual Union Bank of California Foundation grants of 2 percent of net income. Our renewal came early as our initial 10-year commitment was due to expire in April 2006.

of people representing the full diversity of our markets. Our CAB members have played a key role in the success of our first community commitment and in the creation of our second 10-year commitment. On behalf of the Board of Directors and executive management, I express my appreciation to them for their continued guidance and support.

Norimichi Kanari, who served our company as president, chief executive officer, and director of both the bank and its holding company, returned to Japan in 2005. We continue to benefit from his guidance as a director of UnionBanCal Corporation.

O n behalf of our stockholders, Board of Directors, employees, and customers, I express appreciation to Mr. Kanari for his contributions. I am also pleased to extend a warm welcome to two new directors to our Board. They are Masashi Oka, who joined the company as vice

Essential to our community commitment is the contribution of our Community Advisory Board, composed
Masashi Oka

chairman, and Mr. Dean A. Yoost, a 32-year veteran of PricewaterhouseCoopers.

Vice Chairman, Administration and Support, and Director

Operating Return on Average Common Equity from Continuing Operations

2001

2002

2003

2004

2005

c onsensus

achievement

Percent

12.58

13.41

14.55

16.18

17.07

2005 Annual Report U n i o n B a n C a l Corporation 9

Corporate Information

C o m m o n Stock

Finally, I would like to express great appreciation to the men and women of our company who focus every day on serving our customers. Together we will face many challenges and, with their continued support, I believe we can continue to enhance stockholder value for many years to come.

Stock Exchange Listing: NYSE: UB Transfer Agent: ComputerShare Investor Services LLC 2 North LaSalle Street Chicago, IL 60602 [phone]

Also, financial information and a link to the company's disclosure documents filed with the SEC are available in the Investor Relations section of Union Bank of California's home page at www.uboc.com. Additional copies of this publication, Form 10-K and Form 10-Q are available without charge and will be mailed upon request. Direct requests to: John A. Rice, Jr., Senior Vice President and Manager, Investor Relations Department

Thank you.

D i v i d e n d Reinvestment and S t o c k Purchase Plan The UnionBanCal Corporation Dividend Reinvestment and Stock Purchase Plan provides holders of common stock a convenient method of investing cash dividends and cash payments to acquire shares of the company. Participants may reinvest cash dividends to purchase shares of common stock at the market price and may also make optional cash payments of not less than $25 nor more than $3,000 per quarter to purchase common stock at the current market price. For more information, contact: ComputerShare Investor Services LLC 2 North LaSalle Street Chicago, IL 60602 [phone]

UnionBanCal Corporation 400 California Street, 1-001-09 San Francisco, CA 94104 [phone] UnionBanCal Corporation also files corporate disclosure documents with the SEC electronically. Interested parties may also acquire financial information about the company from the SEC home page at www.sec.gov.

Takashi Morimura President, Chief Executive Officer and Director

C a u t i o n a r y Note Regarding Forward-Looking Information This publication includes forward-looking statements, which include statements regarding forecasts of UnionBanCal Corporation's financial results and condition, the company's vision and strategies, and the expected benefits of its strategies, the company's competitive position, ability to return capital to investors and enhance shareholder value, expectations for the company's operations and business, and assumptions for those forecasts and expectations. Do not rely unduly on forward-looking statements. Actual results might differ significantly from the company's forecasts and expectations. Please refer to item 1A "Risk Factors" in the Form 10-K for a discussion of some factors that may cause results to differ. All forward-looking information is based on information available as of the date of this report. UnionBanCal Corporation assumes no obligation to update any forward-looking information.

I n d e p e n d e n t Registered Public A c c o u n t i n g Firm Deloitte & Touche LLP San Francisco, California
from left to right:

Tetsuo Shimura Chairman of the Board

D i v i d e n d Policy The UnionBanCal Corporation Board of Directors considers dividends quarterly. The current annualized dividend rate is $1.64 per share.

Dean Yoost Retired Partner, PricewaterhouseCoopers Board Committees: Audit, Public Policy

A n n u a l Meeting The annual meeting of stockholders will be held in San Francisco in the Library Room of the Mandarin Oriental Hotel, 222 Sansome Street, on Wednesday, April 26, 2006, at 8:30 a.m.

O t h e r Information As required by Section 303A.12(a) of the New York Stock Exchange Listed Company Manual, in 2005 UnionBanCal Corporation submitted to the New York Stock Exchange a certificate of the Chief Executive Officer of UnionBanCal Corporation certifying that he is not aware of any violation by the UnionBanCal Corporation of New York Stock Exchange corporate governance listing standards. The certifications required by Section 302 of the Sarbanes-Oxley Act have been filed as exhibits to the Form 10-K.

not pictured

A d d i t i o n a l Information This publication is intended to provide stockholders, customers, and employees with a general description of UnionBanCal Corporation's results for 2005. The corporation's annual report to the Securities and Exchange Commission (SEC) on Form 10-K is also attached. Supplemental financial information is published in the corporation's quarterly report (SEC Form 10-Q).

Shigemitsu Miki Chairman, The Bank of Tokyo-Mitsubishi UFJ, Ltd.

form 10-K

U n i o n B a n C a l Corporation is a commercial bank holding company incorporated in Delaware. The company provides a comprehensive array of personal and commercial financial products and services to individuals, small businesses, middle-market companies, major corporations, government agencies, and not-for-profit organizations, and is an acknowledged leader in trust and investment management services, private banking, and consumer and business lending, with expertise in commercial, middle market, corporate, and real estate lending. As of December 31, 2005, Union Bank of California, N.A., our banking subsidiary, was among the 25 largest banks in the United States, based on assets. Other subsidiaries include HighMark Capital Management, Inc., a registered investment advisor; UnionBanc Investment Services, LLC, a registered broker/dealer offering a full line of investment products to individuals and institutional clients; and UnionBanc Insurance Services, Inc. which provides brokerage services for a full complement of property and liability insurance products. A t year-end 2005, UnionBanCal Corporation had assets (including discontinued operations) of $49.4 billion, 10 , 3 6 4 employees (full-time equivalent), and 339 domestic and foreign banking offices, including 315 branches in California, 4 in Washington and Oregon, 20 international offices, and facilities in 6 other states.

D E S I G N : A R G U S L L C , SA N F R A N C I S C O . A R G U S S F. C O M

4 0 0 California Street, San Francisco, CA 94104 . www.uboc.com
T h i s paper contains 10% post-consumer waste U n i o n B a n C a l Corporation 84900-05