UnionBanCal Corporation Announces Third Quarter Earnings From Continuing Operations of $110 Million or $0.79 Per Share

UnionBanCal Corporation (NYSE:UB) today reported third quarter 2008 net income of $104.8 million, or $0.75 per diluted common share. This compares with $127.5 million, or $0.92 per diluted common share, a year earlier, and $141.3 million, or $1.02 per diluted common share, in second quarter 2008. Net income for third quarter 2008 included a net loss from discontinued operations of $5.3 million, or $0.04 per diluted common share. Net income for third quarter 2007 included a net loss from discontinued operations of $22.8 million, or $0.16 per diluted common share. Net income for second quarter 2008 included an $11.5 million after-tax, or $0.08 per diluted common share, net gain on the sale of the insurance brokerage business, and a $4.4 million after-tax, or $0.03 per diluted common share, gain on the partial redemption of MasterCard Inc. common stock.

Earnings from continuing operations for third quarter 2008 were $110.1 million, or $0.79 per diluted common share, compared with $150.2 million, or $1.08 per diluted common share, a year earlier, and $134.3 million, or $0.97 per diluted common share, in second quarter 2008.

For the first nine months of 2008, earnings from continuing operations were $366.8 million, or $2.65 per diluted common share. This compares with earnings from continuing operations for the first nine months of 2007 of $464.1 million, or $3.33 per diluted common share.

Summary of Third Quarter Results From Continuing Operations

Third Quarter Total Revenue

For third quarter 2008, total revenue (taxable-equivalent net interest income plus noninterest income) was $721 million, up 13 percent compared with third quarter 2007. Net interest income increased 22 percent and noninterest income decreased 4.6 percent. Compared with second quarter 2008, total revenue was up 1.2 percent, with net interest income up 1.8 percent and noninterest income down 0.5 percent.

Third Quarter Net Interest Income (Taxable-equivalent)

Net interest income was $522 million in third quarter 2008, up $93 million, or 22 percent, from the same quarter a year ago, primarily due to lower rates paid on interest bearing liabilities and strong loan growth, partially offset by lower yields on earning assets. Average earning assets in third quarter 2008 increased $8 billion, or 16.4 percent, compared to third quarter 2007, primarily due to a $7.7 billion, or 19.5 percent, increase in average loans.

Compared to third quarter 2007, average interest bearing deposits increased $1.1 billion, or 4 percent, while average noninterest bearing deposits decreased $1.4 billion, or 10.3 percent.

Average noninterest bearing deposits represented 29.7 percent of average total deposits in third quarter 2008. The annualized average all-in cost of funds was 1.60 percent, compared with 2.78 percent in third quarter 2007, and 1.56 percent in second quarter 2008. The Company’s average core deposit-to-loan ratio was 67.4 percent.

The net interest margin in third quarter 2008 was 3.67 percent, an increase of 16 basis points compared with third quarter 2007.

Third quarter 2008 net interest income increased 1.8 percent from second quarter 2008. Average loans increased $1.7 billion, or 3.7 percent. Average noninterest bearing deposits decreased $0.5 billion, or 4 percent. Average interest bearing deposits decreased $1.0 billion, or 3.4 percent, primarily due to a decrease in large time deposits, offset by increased borrowings from the Federal Reserve Bank and the Federal Home Loan Bank, a more stable source of funding. The net interest margin decreased 7 basis points to 3.67 percent.

Third Quarter Noninterest Income

In third quarter 2008, noninterest income was $198.7 million, down $9.5 million, or 4.6 percent, from the same quarter a year ago. Service charges on deposit accounts and trust and investment management fees were both flat, while trading account revenues declined $9.4 million.

Third quarter 2008 noninterest income decreased $0.9 million, or 0.5 percent, compared with second quarter 2008. Service charges on deposit accounts were flat, with lower account analysis fees offset by higher overdraft fees.

Third Quarter Noninterest Expense

Noninterest expense for third quarter 2008 was $443.8 million, an increase of $63.0 million, or 16.5 percent, compared with third quarter 2007. Salaries and employee benefits expense increased $21.3 million, or 9.8 percent, primarily due to annual merit increases and higher staff levels. The provision for losses on off-balance sheet commitments was $8 million in third quarter 2008, compared to $4 million in third quarter 2007.

Noninterest expense increased $24.5 million, or 5.8 percent, compared with second quarter 2008. Salaries and other compensation expense was flat. The provision for losses on off-balance sheet commitments was $8 million, compared to $5 million in second quarter 2008. Other noninterest expense increased $19.2 million, or 52.7 percent, primarily due to losses related to the securities lending program, higher regulatory agency fees and higher expense related to low income housing projects.

Year-to-Date Results

Total revenue for the first nine months of 2008 was $2.1 billion, an increase of $201 million, or 10.6 percent, compared with total revenue of $1.9 billion in the same period of 2007. Net interest income increased $208 million, or 16.1 percent, and noninterest income decreased $7 million, or 1.1 percent.

Noninterest income in the first nine months of 2008 was $594 million, a decrease of $7 million, or 1.1 percent, compared with the same period in 2007. Service charges on deposit accounts were flat, with higher account analysis fees related to lower earnings credit rates offset by lower overdraft fees on lower deposit balances.

For the first nine months of 2008, noninterest expense increased $110 million, or 9.5 percent, over the first nine months of 2007. Salaries and other compensation expense increased $32 million, or 5.7 percent, primarily due to annual merit increases, higher staff levels and higher accruals for performance-related incentive expense. The provision for off-balance sheet commitments was $21 million in the first nine months of 2008, compared with $5 million in the first nine months of 2007. Other noninterest expense increased $34.6 million, or 39.4 percent, primarily due to losses related to the securities lending program, higher expense related to low income housing projects and higher regulatory agency fees.

Credit Quality

Nonperforming assets at September 30, 2008, were $304 million, or 0.49 percent of total assets. This compares with $225 million, or 0.37 percent of total assets, at June 30, 2008, and $53 million, or 0.10 percent of total assets, at September 30, 2007.

In third quarter 2008, the total provision for credit losses was $125 million, compared with a total provision for credit losses of $100 million in second quarter 2008, and a total provision for credit losses of $20 million in third quarter 2007. The total provision for credit losses is comprised of the provision for loan losses and the provision for losses on off-balance sheet commitments, which is classified in noninterest expense.

Net loans charged-off for third quarter 2008 were $63 million, or 0.53 percent of average total loans. This compares with net loans charged-off of $31 million, or 0.28 percent of average total loans, in second quarter 2008, and net loans charged-off of $2 million, or 0.02 percent of average total loans, in third quarter 2007.

At September 30, 2008, the allowance for credit losses as a percent of total loans and as a percent of nonaccrual loans was 1.43 percent and 240 percent, respectively. These ratios were 1.37 percent and 291 percent, respectively, at June 30, 2008, and 1.10 percent and 853 percent, respectively, at September 30, 2007.

Balance Sheet and Capital Ratios

At September 30, 2008, the Company had total assets of $62.6 billion. Total loans were $48.3 billion and total deposits were $42.4 billion, resulting in a period-end deposit-to-loan ratio of 87.7 percent. Core deposits at period-end were $33.3 billion, resulting in a core deposit-to-loan ratio of 68.9 percent. At period-end, total stockholders’ equity was $4.7 billion and the tangible common equity ratio was 6.96 percent. The Company’s Tier I and total risk-based capital ratios at period-end were 8.03 percent and 10.94 percent, respectively.

Discontinued Operations

Commencing with second quarter 2008, the results of the insurance brokerage business have been reported in discontinued operations and all prior periods have been restated to reflect this accounting treatment.

Commencing with fourth quarter 2007, the results of the retirement recordkeeping business have been reported in discontinued operations and all prior periods have been restated to reflect this accounting treatment.

Status of Merger with The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Mitsubishi UFJ Financial Group, Inc. ("MUFG") (NYSE:MTU), its wholly owned subsidiary, The Bank of Tokyo-Mitsubishi UFJ, Ltd. ("BTMU"), and UnionBanCal Corporation ("UNBC”) announced on September 28, 2008, the successful completion of the cash tender offer by MUFG and BTMU to purchase all of the outstanding shares of UNBC that MUFG and its affiliates do not already own. The offer expired at 12:00 midnight EDT on Friday, September 26, 2008.

On September 28, 2008, BTMU accepted for payment a total of 46,119,880 shares tendered pursuant to the offer and not withdrawn at a price of $73.50 per share. Payment for the shares accepted for purchase under the offer was made on October 1, 2008, in cash, without interest, by the depositary. Following completion of the offer, BTMU owned approximately 136,337,188 shares of UNBC common stock outstanding as of October 1, 2008. Together, MUFG, BTMU and their affiliates owned approximately 97% of our outstanding Common Stock as of such date.

In accordance with the merger agreement between BTMU and UNBC announced on August 18, 2008, BTMU and UNBC will carry out a second-step merger as a result of which UNBC will become a wholly owned indirect subsidiary of MUFG. In the merger, each share of UNBC common stock not previously purchased in the tender offer will be converted, subject to appraisal rights, into the right to receive $73.50 per share in cash. On October 3, 2008, BTMU executed a written consent approving and adopting the merger agreement and approving the merger. Consummation of the merger is expected to occur as soon as reasonably practicable.

Forward-Looking Statements

The following appears in accordance with the Private Securities Litigation Reform Act. This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include the words "believe,” ”continue,” "expect,” "target,” "anticipate,” "intend,” "plan,” "estimate,” "potential,” "project,” or words of similar meaning, or future or conditional verbs such as "will,” "would,” "should,” "could,” or "may.” They may also consist of annualized amounts based on historical interim period results. Forward-looking statements in this press release include those related to the anticipated consummation of the merger.

There are numerous risks and uncertainties that could and will cause actual results to differ materially from those discussed in the Company’s forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict and could have a material adverse effect on the Company’s stock price, financial condition, and results of operations or prospects. Such risks and uncertainties include, but are not limited to, declines or disruptions in the stock, bond, or credit markets which may adversely affect the Company or the Company’s borrowers or other customers; adverse economic conditions in the United States; adverse economic and fiscal conditions in California; increased energy costs; global political and general economic conditions related to the war on terrorism and other hostilities; fluctuations in interest rates; the controlling interest in UnionBanCal Corporation of BTMU, which is a wholly-owned subsidiary of MUFG; the effects of filing taxes on the worldwide unitary basis; competition in the banking and financial services industries; deposit pricing pressures; the levels of commercial and residential real estate activity in our market; adverse effects of current and future banking laws, rules and regulations and their enforcement; effects of governmental fiscal or monetary policies; legal or regulatory proceedings or investigations; changes in accounting practices or requirements; and risks associated with various strategies the Company may pursue, including potential acquisitions, divestitures and restructurings.

A complete description of the Company, including related risk factors, is discussed in the Company’s public filings with the Securities and Exchange Commission, which are available by calling (415) 765-2969 or online at http://www.sec.gov. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

Based in San Francisco, UnionBanCal Corporation is a bank holding company with assets of $62.6 billion at September 30, 2008. Its primary subsidiary, Union Bank of California, N.A., had 336 banking offices in California, Oregon and Washington, and 2 international offices at September 30, 2008.

UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 1
										Percent Change to
	As of and for the Three Months Ended									Sept. 30, 2008 from
	Sept. 30,			June 30,			Sept. 30,			Sept. 30,			June 30,
(Dollars in thousands, except per share data)	2007			2008			2008			2007			2008
Results of operations:
Net interest income (1)	$428,952			$512,887			$522,296			21.76	%		1.83	%
Noninterest income	208,187			199,626			198,721			(4.55	%)		(0.45	%)
Total revenue	637,139			712,513			721,017			13.16	%		1.19	%
Noninterest expense	380,847			419,312			443,812			16.53	%		5.84	%
Provision for loan losses	16,000			95,000			117,000			nm			23.16	%
Income from continuing operations before income taxes (1)	240,292			198,201			160,205			(33.33	%)		(19.17	%)
Taxable-equivalent adjustment	2,389			2,329			2,550			6.74	%		9.49	%
Income tax expense	87,664			61,574			47,549			(45.76	%)		(22.78	%)
Income from continuing operations	150,239			134,298			110,106			(26.71	%)		(18.01	%)
Income (loss) from discontinued operations	(22,780	)		7,047			(5,276	)		76.84	%		nm
Net income	$127,459			$141,345			$104,830			(17.75	%)		(25.83	%)
Per common share:
Basic earnings:
From continuing operations	$1.09			$0.98			$0.80			(26.61	%)		(18.37	%)
Net income	0.93			1.03			0.76			(18.28	%)		(26.21	%)
Diluted earnings:
From continuing operations	1.08			0.97			0.79			(26.85	%)		(18.56	%)
Net income	0.92			1.02			0.75			(18.48	%)		(26.47	%)
Dividends (2)	0.52			0.52			0.52			0.00	%		0.00	%
Book value (end of period)	33.71			34.11			33.50			(0.62	%)		(1.79	%)
Common shares outstanding (end of period) (3)	138,523,666			138,050,671			140,069,898			1.12	%		1.46	%
Weighted average common shares outstanding - basic (3)	137,667,976			137,208,620			138,197,446			0.38	%		0.72	%
Weighted average common shares outstanding - diluted (3)	139,067,952			137,899,057			139,969,419			0.65	%		1.50	%
Balance sheet (end of period):
Total assets (4)	$54,343,045			$60,593,921			$62,599,753			15.19	%		3.31	%
Total loans	39,745,341			46,041,358			48,306,118			21.54	%		4.92	%
Nonperforming assets	52,562			224,944			304,246			nm			35.25	%
Total deposits	42,242,889			42,604,419			42,355,853			0.27	%		(0.58	%)
Medium and long-term debt	1,871,726			2,809,329			3,827,164			nm			36.23	%
Stockholders' equity	4,669,454			4,708,790			4,692,648			0.50	%		(0.34	%)
Balance sheet (period average):
Total assets	$53,367,191			$59,269,965			$61,145,251			14.57	%		3.16	%
Total loans	39,484,785			45,494,161			47,196,204			19.53	%		3.74	%
Earning assets	48,901,494			54,935,058			56,920,548			16.40	%		3.61	%
Total deposits	41,962,726			43,203,180			41,661,224			(0.72	%)		(3.57	%)
Stockholders' equity	4,664,229			4,616,596			4,588,441			(1.62	%)		(0.61	%)
Financial ratios (5):
Return on average assets (6):
From continuing operations	1.12	%		0.91	%		0.72	%
Net income	0.95	%		0.96	%		0.68	%
Return on average stockholders' equity (6):
From continuing operations	12.78	%		11.70	%		9.55	%
Net income	10.84	%		12.31	%		9.09	%
Efficiency ratio (7)	59.14	%		58.14	%		60.37	%
Net interest margin (1)	3.51	%		3.74	%		3.67	%
Dividend payout ratio	47.71	%		53.06	%		65.00	%
Tangible common equity ratio	7.79	%		7.22	%		6.96	%
Tier 1 risk-based capital ratio (4) (8)	8.40	%		7.96	%		8.03	%
Total risk-based capital ratio (4) (8)	11.28	%		10.84	%		10.94	%
Leverage ratio (4) (8)	8.39	%		7.95	%		7.97	%
Allowance for loan losses to:
Total loans	0.88	%		1.14	%		1.20	%
Nonaccrual loans	683.96	%		243.59	%		200.94	%
Allowances for credit losses to (9) :
Total loans	1.10	%		1.37	%		1.43	%
Nonaccrual loans	852.52	%		291.42	%		239.50	%
Net loans charged off to average total loans (6)	0.02	%		0.28	%		0.53	%
Nonperforming assets to total loans and foreclosed assets	0.13	%		0.49	%		0.63	%
Nonperforming assets to total assets (4)	0.10	%		0.37	%		0.49	%
Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 2
										Percent Change to
		As of and for the Nine Months Ended								Sept. 30, 2008 from
		Sept. 30,				Sept. 30,				Sept. 30,
(Dollars in thousands, except per share data)			2007				2008			2007
Results of operations:
Net interest income (1)		$	1,290,535			$	1,498,287			16.10	%
Noninterest income			600,590				593,743			(1.14	%)
Total revenue			1,891,125				2,092,030			10.62	%
Noninterest expense			1,156,517				1,266,330			9.50	%
(Reversal of) provision for loan losses			25,000				284,000			nm
Income from continuing operations before income taxes (1)			709,608				541,700			(23.66	%)
Taxable-equivalent adjustment			6,755				7,405			9.62	%
Income tax expense			238,727				167,493			(29.84	%)
Income from continuing operations			464,126				366,802			(20.97	%)
Income (loss) from discontinued operations			(21,702	)			(12,037	)		44.54	%
Net income		$	442,424			$	354,765			(19.81	%)
Per common share:
Basic earnings:
From continuing operations		$	3.37			$	2.67			(20.77	%)
Net income			3.21				2.58			(19.63	%)
Diluted earnings:
From continuing operations			3.33				2.65			(20.42	%)
Net income			3.18				2.56			(19.50	%)
Dividends (2)			1.51				1.56			3.31	%
Book value (end of period)			33.71				33.50			(0.62	%)
Common shares outstanding (end of period) (3)			138,523,666				140,069,898			1.12	%
Weighted average common shares outstanding - basic (3)			137,694,682				137,473,242			(0.16	%)
Weighted average common shares outstanding - diluted (3)			139,291,920				138,584,608			(0.51	%)
Balance sheet (end of period):
Total assets (4)		$	54,343,045			$	62,599,753			15.19	%
Total loans			39,745,341				48,306,118			21.54	%
Nonperforming assets			52,562				304,246			nm
Total deposits			42,242,889				42,355,853			0.27	%
Medium and long-term debt			1,871,726				3,827,164			nm
Stockholders' equity			4,669,454				4,692,648			0.50	%
Balance sheet (period average):
Total assets		$	53,065,919			$	59,023,615			11.23	%
Total loans			38,931,283				45,138,144			15.94	%
Earning assets			48,568,556				54,689,402			12.60	%
Total deposits			41,966,403				42,821,802			2.04	%
Stockholders' equity			4,588,063				4,640,908			1.15	%
Financial ratios (5):
Return on average assets (6):
From continuing operations			1.17	%			0.83	%
Net income			1.11	%			0.80	%
Return on average stockholders' equity (6):
From continuing operations			13.52	%			10.56	%
Net income			12.89	%			10.21	%
Efficiency ratio (7)			60.89	%			59.49	%
Net interest margin (1)			3.54	%			3.65	%
Dividend payout ratio			44.81	%			58.43	%
Tangible common equity ratio			7.79	%			6.96	%
Tier 1 risk-based capital ratio (4) (8)			8.40	%			8.03	%
Total risk-based capital ratio (4) (8)			11.28	%			10.94	%
Leverage ratio (4) (8)			8.39	%			7.97	%
Allowance for loan losses to:
Total loans			0.88	%			1.20	%
Nonaccrual loans			683.96	%			200.94	%
Allowances for credit losses to (9) :
Total loans			1.10	%			1.43	%
Nonaccrual loans			852.52	%			239.50	%
Net loans charged off to average total loans (6)			0.02	%			0.31	%
Nonperforming assets to total loans and foreclosed assets			0.13	%			0.63	%
Nonperforming assets to total assets (4)			0.10	%			0.49	%
Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(Taxable-Equivalent Basis)
Exhibit 3
				For the Three Months Ended												For the Nine Months Ended
				Sept. 30,				June 30,				Sept. 30,				Sept. 30,
(Amounts in thousands, except per share data)					2007				2008				2008				2007				2008
Interest Income (1)
	Loans			$	640,511			$	617,508			$	638,862			$	1,862,217			$	1,889,732
	Securities				113,083				98,338				100,659				331,342				305,042
	Interest bearing deposits in banks				709				228				147				3,113				503
	Federal funds sold and securities purchased under resale agreements				4,683				1,093				1,787				23,644				5,573
	Trading account assets				1,898				1,119				1,364				5,200				5,287
		Total interest income			760,884				718,286				742,819				2,225,516				2,206,137
Interest Expense
	Deposits				259,406				144,509				135,736				727,632				500,905
	Federal funds purchased and securities sold under repurchase agreements				14,259				13,057				15,630				38,290				44,402
	Commercial paper				19,753				8,279				8,056				59,446				26,127
	Medium and long-term debt				26,957				19,692				25,989				75,625				65,138
	Trust notes				239				238				239				715				715
	Other borrowed funds				11,318				19,624				34,873				33,273				70,563
		Total interest expense			331,932				205,399				220,523				934,981				707,850
Net Interest Income (1)					428,952				512,887				522,296				1,290,535				1,498,287
	Provision for loan losses				16,000				95,000				117,000				25,000				284,000
		Net interest income after provision for loan losses			412,952				417,887				405,296				1,265,535				1,214,287
Noninterest Income
	Service charges on deposit accounts				76,210				77,706				77,079				228,373				229,521
	Trust and investment management fees				39,546				43,802				40,638				116,062				127,828
	Trading account activities				21,795				16,687				12,397				50,473				40,096
	Merchant banking fees				10,031				11,085				12,789				27,917				35,667
	Brokerage commissions and fees				10,476				10,635				9,520				29,669				30,014
	Card processing fees, net				7,785				8,167				8,129				22,736				24,060
	Securities gains, net				171				-				50				1,621				48
	Other				42,173				31,544				38,119				123,739				106,509
		Total noninterest income			208,187				199,626				198,721				600,590				593,743
Noninterest Expense
	Salaries and employee benefits				216,812				243,299				238,129				686,175				723,098
	Net occupancy				37,534				38,232				38,574				104,919				113,008
	Outside services				19,868				20,295				20,777				54,987				58,081
	Professional services				17,669				15,931				21,397				45,163				51,925
	Equipment				15,426				15,141				14,437				47,240				44,925
	Software				14,278				14,409				14,812				41,551				44,016
	Communications				9,421				9,111				9,204				26,834				27,690
	Foreclosed asset expense				37				83				524				55				696
	Provision for losses on off-balance sheet commitments				4,000				5,000				8,000				5,000				21,000
	Other				45,802				57,811				77,958				144,593				181,891
		Total noninterest expense			380,847				419,312				443,812				1,156,517				1,266,330
	Income from continuing operations before income taxes (1)				240,292				198,201				160,205				709,608				541,700
	Taxable-equivalent adjustment				2,389				2,329				2,550				6,755				7,405
	Income tax expense				87,664				61,574				47,549				238,727				167,493
Income from Continuing Operations					150,239				134,298				110,106				464,126				366,802
	Income (loss) from discontinued operations before income taxes				(23,443	)			3,068				(8,175	)			(21,561	)			(22,692	)
	Income tax expense (benefit)				(663	)			(3,979	)			(2,899	)			141				(10,655	)
Income (Loss) from Discontinued Operations					(22,780	)			7,047				(5,276	)			(21,702	)			(12,037	)
Net Income				$	127,459			$	141,345			$	104,830			$	442,424			$	354,765
Income from continuing operations per common share - basic				$	1.09			$	0.98			$	0.80			$	3.37			$	2.67
Net income per common share - basic				$	0.93			$	1.03			$	0.76			$	3.21			$	2.58
Income from continuing operations per common share - diluted				$	1.08			$	0.97			$	0.79			$	3.33			$	2.65
Net income per common share - diluted				$	0.92			$	1.02			$	0.75			$	3.18			$	2.56
Weighted average common shares outstanding - basic					137,668				137,209				138,197				137,695				137,473
Weighted average common shares outstanding - diluted					139,068				137,899				139,969				139,292				138,585
Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets
Exhibit 4
				(Unaudited)								(Unaudited)
				Sept, 30,				Dec. 31,				Sept. 30,
(Dollars in thousands)					2007				2007				2008
Assets
	Cash and due from banks			$	1,715,742			$	2,106,927			$	1,959,484
	Interest bearing deposits in banks				151,000				104,528				16,029
	Federal funds sold and securities purchased under resale agreements				381,604				310,178				488,014
		Total cash and cash equivalents			2,248,346				2,521,633				2,463,527
Trading account assets:
	Pledged as collateral				-				-				18,124
	Held in portfolio				507,961				603,333				711,293
Securities available for sale:
	Pledged as collateral				77,732				685,123				1,404,463
	Held in portfolio				8,427,764				7,770,037				6,890,891
Loans (net of allowance for loan losses: September 30, 2007, $350,491; December 31, 2007, $402,726; September 30, 2008, $580,474)					39,394,850				40,801,462				47,725,644
Due from customers on acceptances					18,648				16,482				21,562
Premises and equipment, net					477,697				486,034				474,519
Intangible assets					7,583				6,458				4,447
Goodwill					360,058				355,287				355,287
Other assets					2,698,377				2,358,915				2,524,839
Assets of discontinued operations to be disposed or sold					124,029				122,984				5,157
		Total assets		$	54,343,045			$	55,727,748			$	62,599,753
Liabilities
	Noninterest bearing			$	13,675,884			$	13,802,640			$	13,694,272
	Interest bearing				28,567,005				28,877,551				28,661,581
		Total deposits			42,242,889				42,680,191				42,355,853
Federal funds purchased and securities sold under repurchase agreements					1,823,872				1,631,602				1,760,442
Commercial paper					1,706,135				1,266,656				1,659,935
Other borrowed funds					298,548				1,875,619				6,718,935
Trading account liabilities					251,051				351,057				506,890
Acceptances outstanding					18,648				16,482				21,562
Other liabilities					1,322,416				1,108,585				1,020,085
Medium- and long-term debt					1,871,726				1,913,622				3,827,164
Junior subordinated debt payable to subsidiary grantor trust					14,546				14,432				14,093
Liabilities of discontinued operations to be extinguished or assumed					123,760				131,521				22,146
		Total liabilities			49,673,591				50,989,767				57,907,105
Stockholders' Equity
Preferred stock:
	Authorized 5,000,000 shares; no shares issued or outstanding as of September 30, 2007, December 31, 2007 and September 30, 2008				-				-				-
Common stock, par value $1 per share:
	Authorized 300,000,000 shares; issued 157,272,167 shares as of September 30, 2007, 157,559,521 shares as of December 31, 2007 and 159,834,897 shares as of September 30, 2008
					157,272				157,559				159,835
Additional paid-in capital					1,144,971				1,153,737				1,299,045
	Treasury stock - 18,748,501 shares as of September 30, 2007, 19,723,453 shares as of December 31, 2007 and 19,764,999 shares as of September 30, 2008
					(1,152,157	)			(1,202,584	)			(1,204,759	)
Retained earnings					4,818,477				4,912,392				5,050,682
Accumulated other comprehensive loss					(299,109	)			(283,123	)			(612,155	)
		Total stockholders' equity			4,669,454				4,737,981				4,692,648
		Total liabilities and stockholders' equity		$	54,343,045			$	55,727,748			$	62,599,753

UnionBanCal Corporation and Subsidiaries
Loans (Unaudited)
Exhibit 5
																		Percent Change to
						Three Months Ended												Sept. 30, 2008 from
						Sept. 30,				June 30,				Sept. 30,				Sept. 30,			June 30,
(Dollars in millions)						2007				2008				2008				2007			2008
Loans (period average)
	Commercial, financial and industrial					$	14,258			$	16,729			$	17,153			20.30	%		2.53	%
	Construction						2,372				2,566				2,613			10.16	%		1.83	%
	Mortgage - Commercial						6,387				7,822				8,009			25.40	%		2.39	%
	Mortgage - Residential						13,193				14,490				15,281			15.83	%		5.46	%
	Consumer						2,570				2,978				3,421			33.11	%		14.88	%
	Lease financing						617				645				639			3.57	%		(0.93	%)
		Total loans held to maturity					39,397				45,230				47,116			19.59	%		4.17	%
		Total loans held for sale					88				264				80			(9.09	%)		(69.70	%)
			Total loans			$	39,485			$	45,494			$	47,196			19.53	%		3.74	%
Nonperforming Assets (period end)
	Nonaccrual loans:
		Commercial, financial and industrial				$	37			$	82			$	162			nm			97.56	%
		Construction					-				95				93			nm			(2.11	%)
		Mortgage - Commercial					15				39				34			nm			(12.82	%)
				Total nonaccrual loans			52				216				289			nm			33.80	%
	Restructured loans
		Mortgage - Residential					-				2				1			nm			(50.00	%)
	Foreclosed assets						1				7				14			nm			100.00	%
				Total nonperforming assets		$	53			$	225			$	304			nm			35.11	%
	Loans 90 days or more past due and still accruing
						$	18			$	51			$	50			nm			(1.96	%)
Analysis of Allowances for Credit Losses
	Beginning balance					$	336			$	463			$	527
	Provision for loan losses						16				95				117
	Loans charged off:
		Commercial, financial and industrial					(3	)			(18	)			(42	)
		Construction					-				(10	)			(16	)
		Mortgage - Residential					-				(2	)			(3	)
		Consumer					(2	)			(3	)			(4	)
			Total loans charged off				(5	)			(33	)			(65	)
	Loans recovered:
		Commercial, financial and industrial					2				1				2
		Consumer					1				1				-
			Total loans recovered				3				2				2
				Net loans recovered (charged off)			(2	)			(31	)			(63	)
	Ending balance of allowance for loan losses						350				527				581
	Allowance for off-balance sheet commitment losses
							86				103				111
														$	-
	Allowances for credit losses					$	436			$	630			$	692

UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 6
				For the Three Months Ended
				September 30, 2007											September 30, 2008
								Interest				Average							Interest				Average
				Average				Income/				Yield/			Average				Income/				Yield/
(Dollars in thousands)				Balance				Expense (10)				Rate (6)(10)			Balance				Expense (10)				Rate (6)(10)
Assets
Loans (11)
	Commercial, financial and industrial			$	14,342,095			$	246,275			6.81	%		$	17,262,407			$	229,377			5.29	%
	Construction				2,371,833				46,043			7.70				2,579,582				30,352			4.68
	Residential mortgage				13,196,677				178,589			5.41				15,285,171				211,965			5.55
	Commercial mortgage				6,386,963				112,743			7.00				8,008,618				111,816			5.58
	Consumer				2,570,234				50,601			7.81				3,421,338				49,286			5.73
	Lease financing				616,983				6,260			4.06				639,088				6,066			3.80
		Total loans			39,484,785				640,511			6.45				47,196,204				638,862			5.40
Securities - taxable					8,593,945				111,933			5.21				8,348,785				99,614			4.77
Securities - tax-exempt					55,236				1,150			8.33				51,831				1,045			8.06
Interest bearing deposits in banks					44,185				709			6.37				13,642				147			4.27
Federal funds sold and securities purchased under resale agreements
					355,111				4,683			5.23				361,361				1,787			1.97
Trading account assets					368,232				1,898			2.04				948,725				1,364			0.57
		Total earning assets			48,901,494				760,884			6.20				56,920,548				742,819			5.21
Allowance for loan losses					(335,932	)										(506,452	)
Cash and due from banks					1,845,328											1,606,632
Premises and equipment, net					480,054											475,408
Other assets					2,476,247											2,649,115
		Total assets		$	53,367,191										$	61,145,251
Liabilities
Deposits:
	Transaction accounts			$	14,288,967				108,653			3.02			$	15,552,783				61,636			1.58
	Savings and consumer time				4,371,913				30,362			2.76				3,899,687				13,237			1.35
	Large time				9,515,315				120,391			5.02				9,847,584				60,863			2.46
		Total interest bearing deposits			28,176,195				259,406			3.65				29,300,054				135,736			1.84
Federal funds purchased and securities sold under repurchase agreements
					1,130,404				14,284			5.01				3,496,184				15,365			1.75
Net funding allocated from (to) discontinued operations (12)
					(1,912	)			(25	)		5.19				55,121				265			1.91
Commercial paper					1,559,098				19,753			5.03				1,432,207				8,056			2.24
Other borrowed funds (13)					828,448				11,318			5.42				4,886,263				34,873			2.84
Medium and long-term debt					1,846,674				26,957			5.79				3,300,675				25,989			3.13
Trust notes					14,601				239			6.53				14,148				239			6.73
		Total borrowed funds			5,377,313				72,526			5.35				13,184,598				84,787			2.56
		Total interest bearing liabilities			33,553,508				331,932			3.92				42,484,652				220,523			2.06
Noninterest bearing deposits					13,786,531											12,361,170
Other liabilities					1,362,923											1,710,988
		Total liabilities			48,702,962											56,556,810
Stockholders' Equity
Common equity					4,664,229											4,588,441
		Total stockholders' equity			4,664,229											4,588,441
		Total liabilities and stockholders' equity
				$	53,367,191										$	61,145,251
Reported Net Interest Income/Margin
Net interest income/margin (taxable-equivalent basis)
									428,952			3.51	%							522,296			3.67	%
Less: taxable-equivalent adjustment									2,389											2,550
		Net interest income						$	426,563										$	519,746
		Average Assets and Liabilities of Discontinued Operations for Period Ended:
								September 30, 2007											September 30, 2008
		Assets						$	128,494										$	5,738
		Liabilities						$	126,582										$	60,859
		Net Assets (Liabilities)						$	1,912										$	(55,121	)
Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 7
				For the Three Months Ended
				June 30, 2008											September 30, 2008
								Interest				Average							Interest				Average
				Average				Income/				Yield/			Average				Income/				Yield/
(Dollars in thousands)				Balance				Expense (10)				Rate (6)(10)			Balance				Expense (10)				Rate (6)(10)
Assets
Loans: (11)
	Commercial, financial and industrial			$	16,987,504			$	229,612			5.44	%		$	17,262,407			$	229,377			5.29	%
	Construction				2,566,207				30,794			4.83				2,579,582				30,352			4.68
	Residential mortgage				14,495,754				199,756			5.51				15,285,171				211,965			5.55
	Commercial mortgage				7,822,056				111,722			5.71				8,008,618				111,816			5.58
	Consumer				2,977,852				44,453			6.00				3,421,338				49,286			5.73
	Lease financing				644,788				1,171			0.73				639,088				6,066			3.80
		Total loans			45,494,161				617,508			5.44				47,196,204				638,862			5.40
Securities - taxable					8,293,036				97,233			4.69				8,348,785				99,614			4.77
Securities - tax-exempt					52,742				1,105			8.38				51,831				1,045			8.06
Interest bearing deposits in banks					67,553				228			1.36				13,642				147			4.27
Federal funds sold and securities purchased under resale agreements
					213,292				1,093			2.06				361,361				1,787			1.97
Trading account assets					814,274				1,119			0.55				948,725				1,364			0.57
		Total earning assets			54,935,058				718,286			5.24				56,920,548				742,819			5.21
Allowance for loan losses					(456,191	)										(506,452	)
Cash and due from banks					1,662,638											1,606,632
Premises and equipment, net					482,950											475,408
Other assets					2,645,510											2,649,115
		Total assets		$	59,269,965										$	61,145,251
Liabilities
Deposits:
	Transaction accounts			$	15,550,970				59,513			1.54			$	15,552,783				61,636			1.58
	Savings and consumer time				3,846,404				13,918			1.46				3,899,687				13,237			1.35
	Large time				10,929,983				71,078			2.62				9,847,584				60,863			2.46
		Total interest bearing deposits			30,327,357				144,509			1.92				29,300,054				135,736			1.84
Federal funds purchased and securities sold under repurchase agreements
					2,428,357				12,697			2.10				3,496,184				15,365			1.75
Net funding allocated from (to) discontinued operations (12)
					64,945				360			2.23				55,121				265			1.91
Commercial paper					1,487,032				8,279			2.24				1,432,207				8,056			2.24
Other borrowed funds (13)					3,201,612				19,624			2.47				4,886,263				34,873			2.84
Medium and long-term debt					2,629,308				19,692			3.01				3,300,675				25,989			3.13
Trust notes					14,261				238			6.68				14,148				239			6.73
		Total borrowed funds			9,825,515				60,890			2.49				13,184,598				84,787			2.56
		Total interest bearing liabilities			40,152,872				205,399			2.06				42,484,652				220,523			2.06
Noninterest bearing deposits					12,875,823											12,361,170
Other liabilities					1,624,674											1,710,988
		Total liabilities			54,653,369											56,556,810
Stockholders' Equity
Common equity					4,616,596											4,588,441
		Total stockholders' equity			4,616,596											4,588,441
		Total liabilities and stockholders' equity
				$	59,269,965										$	61,145,251
Reported Net Interest Income/Margin
Net interest income/margin (taxable-equivalent basis)
									512,887			3.74	%							522,296			3.67	%
Less: taxable-equivalent adjustment									2,329											2,550
		Net interest income						$	510,558										$	519,746
		Average Assets and Liabilities of Discontinued Operations for Period Ended:
								June 30, 2008											September 30, 2008
		Assets						$	95,415										$	5,738
		Liabilities						$	160,360										$	60,859
		Net Liabilities						$	(64,945	)									$	(55,121	)
Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 8
				For the Nine Months Ended
				September 30, 2007											September 30, 2008
								Interest				Average							Interest				Average
				Average				Income/				Yield/			Average				Income/				Yield/
(Dollars in thousands)				Balance				Expense (10)				Rate (6)(10)			Balance				Expense (10)				Rate (6)(10)
Assets
Loans: (11)
	Commercial, financial and industrial			$	14,544,388			$	721,728			6.63	%		$	16,623,490			$	697,292			5.60	%
	Construction				2,300,862				132,865			7.72				2,551,348				97,763			5.12
	Residential mortgage				12,728,651				509,697			5.34				14,593,755				604,506			5.52
	Commercial mortgage				6,222,590				331,429			7.12				7,694,956				336,508			5.83
	Consumer				2,556,710				149,159			7.80				3,030,042				140,129			6.18
	Lease financing				578,082				17,339			4.00				644,553				13,534			2.80
		Total loans			38,931,283				1,862,217			6.39				45,138,144				1,889,732			5.59
Securities - taxable					8,574,149				327,874			5.10				8,332,647				301,810			4.83
Securities - tax-exempt					56,316				3,468			8.21				52,641				3,232			8.19
Interest bearing deposits in banks					70,650				3,113			5.89				36,936				503			1.82
Federal funds sold and securities purchased under resale agreements
					596,492				23,644			5.30				301,153				5,573			2.47
Trading account assets					339,666				5,200			2.05				827,881				5,287			0.85
		Total earning assets			48,568,556				2,225,516			6.12				54,689,402				2,206,137			5.38
Allowance for loan losses					(332,690	)										(454,191	)
Cash and due from banks					1,931,368											1,675,293
Premises and equipment, net					482,373											480,705
Other assets					2,416,312											2,632,406
		Total assets		$	53,065,919										$	59,023,615
Liabilities
Deposits:
	Transaction accounts			$	13,969,058				302,991			2.90			$	15,323,611				204,064			1.78
	Savings and consumer time				4,332,052				86,075			2.66				3,974,976				50,684			1.70
	Large time				9,045,417				338,566			5.00				10,909,525				246,157			3.01
		Total interest bearing deposits			27,346,527				727,632			3.56				30,208,112				500,905			2.21
Federal funds purchased and securities sold under repurchase agreements
					986,589				37,928			5.14				2,628,257				43,628			2.22
Net funding allocated from (to) discontinued operations (12)
					9,310				362			5.20				45,520				774			2.27
Commercial paper					1,576,745				59,446			5.04				1,375,789				26,127			2.54
Other borrowed funds (13)					821,270				33,273			5.42				3,224,146				70,563			2.92
Medium and long-term debt					1,752,240				75,625			5.77				2,594,875				65,138			3.35
Trust notes					14,713				715			6.48				14,261				715			6.68
		Total borrowed funds			5,160,867				207,349			5.37				9,882,848				206,945			2.80
		Total interest bearing liabilities			32,507,394				934,981			3.85				40,090,960				707,850			2.36
Noninterest bearing deposits					14,619,876											12,613,690
Other liabilities					1,350,586											1,678,057
		Total liabilities			48,477,856											54,382,707
Stockholders' Equity
Common equity					4,588,063											4,640,908
		Total stockholders' equity			4,588,063											4,640,908
		Total liabilities and stockholders' equity
				$	53,065,919										$	59,023,615
Reported Net Interest Income/Margin
Net interest income/margin (taxable-equivalent basis)
									1,290,535			3.54	%							1,498,287			3.65	%
Less: taxable-equivalent adjustment									6,755											7,405
		Net interest income						$	1,283,780										$	1,490,882
		Average Assets and Liabilities of Discontinued Operations for Period Ended:
								September 30, 2007											September 30, 2008
		Assets						$	130,672										$	74,723
		Liabilities						$	139,982										$	120,243
		Net Liabilities						$	(9,310	)									$	(45,520	)
Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Noninterest income (Unaudited)
Exhibit 9
												Percentage Change to
			For the Three Months Ended									Sept. 30, 2008 from
			Sept. 30,			June 30,			Sept. 30,			Sept. 30,				June 30,
(Dollars in thousands)			2007			2008			2008			2007				2008
Service charges on deposit accounts			$	76,210		$	77,706		$	77,079		1.14		%		(0.81	)	%
Trust and investment management fees				39,546			43,802			40,638		2.76				(7.22	)
Merchant banking fees				10,031			11,085			12,789		27.49				15.37
Trading account activities				21,795			16,687			12,397		(43.12	)			(25.71	)
Brokerage commissions and fees				10,476			10,635			9,520		(9.13	)			(10.48	)
Card processing fees, net				7,785			8,167			8,129		4.42				(0.47	)
Securities gains, net				171			-			50		(70.76	)			nm
Gains on private capital investments, net				12,203			1,282			5,597		(54.13	)			nm
Other				29,970			30,262			32,522		8.52				7.47
	Total noninterest income		$	208,187		$	199,626		$	198,721		(4.55	)	%		(0.45	)	%
Noninterest expense (Unaudited)
												Percentage Change to
			For the Three Months Ended									Sept. 30, 2008 from
			Sept. 30,			June 30,			Sept. 30,			Sept. 30,				June 30,
(Dollars in thousands)			2007			2008			2008			2007				2008
Salaries and other compensation			$	187,359		$	204,077		$	204,389		9.09		%		0.15		%
Employee benefits				29,453			39,222			33,740		14.56				(13.98	)
	Salaries and employee benefits			216,812			243,299			238,129		9.83				(2.13	)
Net occupancy				37,534			38,232			38,574		2.77				0.89
Professional services				17,669			15,931			21,397		21.10				34.31
Outside services				19,868			20,295			20,777		4.58				2.38
Software				14,278			14,409			14,812		3.74				2.80
Equipment				15,426			15,141			14,437		(6.41	)			(4.65	)
Advertising and public relations				10,145			12,857			12,624		24.44				(1.81	)
Communications				9,421			9,111			9,204		(2.30	)			1.02
Data processing				8,086			7,784			8,945		10.62				14.92
Intangible asset amortization				1,126			670			670		(40.50	)			0.00
Foreclosed asset expense				37			83			524		nm				nm
Provision for losses on off-balance sheet commitments
				4,000			5,000			8,000		100.00				60.00
Other				26,445			36,500			55,719		nm				52.65
	Total noninterest expense		$	380,847		$	419,312		$	443,812		16.53		%		5.84		%

UnionBanCal Corporation and Subsidiaries
Noninterest income (Unaudited)
Exhibit 10
									Percentage Change to
			For the Nine Months Ended						Sept. 30, 2008 from
			Sept. 30,			Sept. 30,			Sept. 30,
(Dollars in thousands)			2007			2008			2007
Service charges on deposit accounts			$	228,373		$	229,521		0.50		%
Trust and investment management fees				116,062			127,828		10.14
Trading account activities				50,473			40,096		(20.56	)
Merchant banking fees				27,917			35,667		27.76
Brokerage commissions and fees				29,669			30,014		1.16
Card processing fees, net				22,736			24,060		5.82
Securities gains, net				1,621			48		(97.04	)
Gains on private capital investments, net				41,469			7,949		(80.83	)
Gain on the VISA IPO redemption				-			14,211		nm
Other				82,270			84,349		2.53
	Total noninterest income		$	600,590		$	593,743		(1.14	)	%
Noninterest expense (Unaudited)
									Percentage Change to
			For the Nine Months Ended						Sept. 30, 2008 from
			Sept. 30,			Sept. 30,			Sept. 30,
(Dollars in thousands)			2007			2008			2007
Salaries and other compensation			$	568,245		$	600,477		5.67		%
Employee benefits				117,930			122,621		3.98
	Salaries and employee benefits			686,175			723,098		5.38
Net occupancy				104,919			113,008		7.71
Outside services				54,987			58,081		5.63
Professional services				45,163			51,925		14.97
Equipment				47,240			44,925		(4.90	)
Software				41,551			44,016		5.93
Advertising and public relations				28,536			33,579		17.67
Communications				26,834			27,690		3.19
Data processing				24,831			23,805		(4.13	)
Intangible asset amortization				3,377			2,011		(40.45	)
Foreclosed asset expense				55			696		nm
Provision for losses on off-balance sheet commitments
				5,000			21,000		nm
Other				87,849			122,496		39.44
	Total noninterest expense		$	1,156,517		$	1,266,330		9.50		%

UnionBanCal Corporation and Subsidiaries
Footnotes
Exhibit 11
(1)		Taxable-equivalent basis.
(2)		Dividends per share reflect dividends declared on UnionBanCal Corporation's common stock outstanding as of the declaration date.
(3)		Common shares outstanding reflect common shares issued less treasury shares. Weighted average common shares outstanding (basic) excludes nonvested restricted shares but includes the impact of those shares in the calculation of diluted shares.
(4)		End of period total assets and assets used in calculating these ratios include those of discontinued operations.
(5)		Average balances used to calculate our financial ratios are based on continuing operations data only, unless otherwise indicated.
(6)		Annualized.
(7)		The efficiency ratio is noninterest expense, excluding foreclosed asset expense (income) and the (reversal of) provision for losses on off-balance sheet commitments, as a percentage of net interest income (taxable-equivalent basis) and noninterest income, and is calculated for continuing operations only.
(8)		Estimated as of September 30, 2008. The regulatory capital and leverage ratios include discontinued operations.
(9)		The allowance for credit losses ratios include the allowances for loan losses and losses on off-balance sheet commitments. These ratios relate to continuing operations only.
(10)		Yields and interest income are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent.
(11)		Average balances on loans outstanding include all nonperforming loans and loans held for sale. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield.
(12)		Net funding allocated from (to) discontinued operations represents the shortage (excess) of assets over liabilities of discontinued operations. The expense (earning) on funds allocated from (to) discontinued operations is calculated by taking the net balance and applying an earnings rate or a cost of funds equivalent to the corresponding period's Federal funds purchased rate.
(13)		Includes interest bearing trading liabilities.
nm = not meaningful