UnionBanCal Corporation Reports Third Quarter Results

SAN FRANCISCO, Oct 29, 2009 (BUSINESS WIRE) -- UnionBanCal Corporation: Highlights: -- Third quarter net loss was $17 million. Results included after-tax net expenses of $11 million related to the November 2008 privatization of UnionBanCal Corporation.

-- Third quarter revenue was up 4 percent year-over-year and up 2 percent compared with second quarter 2009.

-- Third quarter net interest income was up 8 percent year-over-year and up 2 percent compared with second quarter 2009.

-- Third quarter average total loans increased 3 percent year-over-year and decreased 2 percent versus second quarter 2009.

-- Third quarter average core deposits were up 64 percent year-over-year and 9 percent versus second quarter 2009.

-- Third quarter net interest margin was 3.31 percent, down 36 basis points year-over-year and down 10 basis points versus second quarter 2009.

-- Third quarter annualized average all-in cost of funds was 0.79 percent.

-- Third quarter asset quality metrics: -- Total provision for credit losses was $320 million, while net loans charged-off were $136 million, or 1.11 percent annualized of average total loans.

-- Net loans charged-off on the $16.4 billion residential mortgage portfolio were $14 million, or 0.34 percent annualized, in third quarter 2009.

-- Nonperforming assets were $1.4 billion, or 1.75 percent of total assets, at quarter-end.

-- Allowance for credit losses to nonaccrual loans was 108 percent at quarter-end. Allowance for credit losses to total loans was 2.97 percent at quarter-end.

-- Total provision for credit losses was 240 percent of net loans charged-off during the first nine months of the year, resulting in an increase to the allowance for credit losses of $565 million.

-- Capital: -- Total stockholder's equity was $9.5 billion at September 30, 2009.

-- Tangible common equity ratio was 8.94 percent at September 30, 2009, versus 6.56 percent at June 30, 2009.

-- Tier 1 common capital ratio was 11.58 percent at September 30, 2009, versus 8.66 percent at June 30, 2009.

-- On September 29, 2009, the Company received a $2 billion capital contribution from its sole shareholder, The Bank of Tokyo-Mitsubishi UFJ, Ltd.

UnionBanCal Corporation (the Company or UB) today reported third quarter 2009 net loss of $17 million, compared with net income of $105 million a year earlier, and net loss of $80 million in second quarter 2009. Total provision for credit losses was $320 million in third quarter 2009, compared with $125 million a year earlier, and $375 million in second quarter 2009. Third quarter 2009 net loss included after-tax net expenses of $11 million due to the privatization transaction. Second quarter 2009 net loss included after-tax net expenses of $13 million due to the privatization transaction and a one-time FDIC assessment of $21 million (after-tax). Mitsubishi UFJ Financial Group, Inc. (MUFG), through its wholly-owned subsidiary, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), completed its acquisition of all of the outstanding shares of the Company's common stock (the "privatization transaction"), on November 4, 2008.

For the first nine months of 2009, net loss was $107 million, compared with net income of $355 million for the first nine months of 2008. Total provision for credit losses was $970 million for the first nine months of 2009, compared with $305 million for the first nine months of 2008. Net loss for the first nine months of 2009 included after-tax net expenses of $46 million due to the privatization transaction and a one-time FDIC assessment of $21 million (after-tax).

Summary of Third Quarter Results Third Quarter Total Revenue For third quarter 2009, total revenue (taxable-equivalent net interest income plus noninterest income) was $748 million, up 4 percent compared with third quarter 2008. Net interest income increased 8 percent and noninterest income decreased 7 percent. Third quarter 2009 net interest income included $23 million of accretion related to fair value adjustments due to the privatization transaction. Average total loans increased $1.6 billion, or 3 percent; average interest bearing deposits increased $15.7 billion, or 54 percent; and average noninterest bearing deposits increased $2.1 billion, or 17 percent. The strong growth in total deposits reflects successful deposit-gathering marketing initiatives in both the retail and commercial lines of business, as well as significant increases in money market account deposits from institutional escrow clients. The net interest margin in third quarter 2009 was 3.31 percent, a decrease of 36 basis points compared with third quarter 2008, primarily due to lower yields on earning assets.

Average noninterest bearing deposits represented 24.3 percent of average total deposits in third quarter 2009. The annualized average all-in cost of funds was 0.79 percent, compared with 1.60 percent in third quarter 2008. The Company's average core deposit-to-loan ratio was 106.7 percent in third quarter 2009.

Compared with second quarter 2009, total revenue increased 2 percent, with net interest income up 2 percent and noninterest income flat. Average total loans decreased $0.8 billion, or 2 percent; average interest bearing deposits increased $4.5 billion, or 11 percent; and average noninterest bearing deposits increased $0.6 billion, or 4 percent. The net interest margin decreased 10 basis points compared with second quarter 2009.

Third Quarter Noninterest Income and Noninterest Expense For third quarter 2009, noninterest income was $184 million, down $15 million, or 7 percent, from the same quarter a year ago, primarily due to lower trust and investment management fees, lower gains on private capital investments, a write down of a loan held for sale recorded in third quarter 2009, and a gain on the sale of real estate recorded in third quarter 2008. These decreases were partially offset by a gain on the sale of U.S. Treasury securities in third quarter 2009.

Noninterest income was flat compared with second quarter 2009. A gain on the sale of U.S. Treasury securities was offset by lower merchant banking fees and lower trading account activities.

Noninterest expense for third quarter 2009 was $506 million, an increase of $62 million, or 14 percent, compared with third quarter 2008. The increase was primarily due to an increase in expenses related to the privatization transaction of $43 million, primarily classified in privatization-related expense and intangible asset amortization expense; and an increase in regulatory agencies expense of $22 million, primarily due to an industry-wide increase in the FDIC assessment rate, effective January 1, 2009. Excluding these two items, noninterest expense was flat.

Noninterest expense for third quarter 2009 decreased $26 million, or 5 percent, compared with second quarter 2009. Regulatory agencies expense decreased $22 million, primarily due to a one-time FDIC assessment of $34 million recorded in second quarter 2009. Expenses associated with the privatization transaction, primarily classified in privatization-related expense and intangible asset amortization expense, were flat. The provision for off-balance sheet losses decreased $9 million, compared with second quarter 2009.

Year-to-Date Results For the first nine months of 2009, net loss was $107 million, compared with net income of $355 million for the first nine months of 2008. The decline in net income was primarily due to an increase in total provision for credit losses of $404 million after-tax, an increase in net expenses related to the privatization transaction of $39 million after-tax, and an increase in regulatory agencies expense of $52 million after-tax, which included a one-time FDIC assessment of $21 million after-tax.

Total revenue for the first nine months of 2009 was $2.2 billion, an increase of $130 million, or 6 percent, over the first nine months of 2008. Net interest income increased $182 million, or 12 percent, and noninterest income decreased $52 million, or 9 percent. Net interest income for the first nine months of 2009 included $85.6 million of accretion related to fair value adjustments due to the privatization transaction. Noninterest expense increased $293 million, or 23 percent, primarily due to $162 million increase in expense related to the privatization transaction, classified in privatization-related expense and intangible asset amortization expense. In addition, regulatory agencies expense increased $85 million, primarily due to a one-time FDIC assessment of $34 million, recorded in second quarter 2009, and an industry-wide increase in the FDIC assessment rate, effective January 1, 2009. The provision for off-balance sheet losses was $47 million for the first nine months of 2009, compared with $21 million for the first nine months of 2008.

Balance Sheet At September 30, 2009, the Company had total assets of $78.2 billion, up $15.6 billion, or 25 percent, compared with September 30, 2008. Total loans were $48.2 billion, down $137 million, or 0.3 percent, compared with September 30, 2008. At September 30, 2009, the Company had goodwill and intangibles of $3.0 billion, up $2.6 billion compared with September 30, 2008, due to the privatization transaction, which closed during fourth quarter 2008.

At September 30, 2009, the Company had total liabilities of $68.7 billion, up $10.8 billion, or 19 percent, compared with September 30, 2008. Total deposits were $60.7 billion, up $18.3 billion, or 43 percent. Core deposits at period-end were $52.7 billion, resulting in a core deposit-to-loan ratio of 109 percent.

Credit Quality Nonperforming assets at September 30, 2009, were $1.4 billion, or 1.75 percent of total assets. This compares with $1.1 billion, or 1.55 percent of total assets, at June 30, 2009, and $304 million, or 0.49 percent of total assets, at September 30, 2008. The increase in nonperforming assets compared with third quarter 2008 was primarily due to higher levels of nonaccrual loans in all categories, reflecting weak economic conditions, and a previously-disclosed change in accounting policy for residential and home equity loans 90 days or more past due, which accounted for $195 million of the increase. The increase in nonperforming assets compared with June 30, 2009, was primarily due to higher levels of nonaccrual loans in the commercial mortgage and construction categories, reflecting weak income property market conditions.

For third quarter 2009, the total provision for credit losses was $320 million, down from $375 million for second quarter 2009. Net loans charged-off were $136 million, or 1.11 percent of average total loans annualized, down from $151 million, or 1.23 percent of average total loans annualized, for second quarter 2009. For third quarter 2008, the total provision for credit losses was $125 million and net loans charged-off were $63 million, or 0.53 percent of average total loans annualized. For the first nine months of 2009, the total provision for credit losses was $970 million and net loans charged-off were $405 million, or 1.10 percent of average total loans annualized.

For the first nine months of 2009, net loans charged-off on the commercial, financial and industrial portfolio were $252 million; net loans charged-off on the construction portfolio were $39 million; net loans charged-off on the commercial mortgage portfolio were $54 million; and net loans charged-off on the consumer portfolio were $31 million. Net loans charged-off on the residential mortgage portfolio, which averaged over $16 billion outstanding in the first nine months of 2009, were only $29 million.

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. In third quarter 2009, the provision for loan losses was $314 million, the provision for losses on off-balance sheet commitments was $6 million, and the total provision for credit losses was $320 million.

At September 30, 2009, the allowance for credit losses as a percent of total loans and as a percent of nonaccrual loans was 2.97 percent and 108 percent, respectively. Since January 1, 2009, the allowance for credit losses has increased from $863 million to $1,433 million, as total provision for credit losses has exceeded net loans charged-off by $565 million during the first nine months of the year.

Capital Total stockholder's equity was $9.5 billion at September 30, 2009, up $4.8 billion compared with September 30, 2008, primarily due to a $2 billion increase in goodwill related to the privatization transaction, a $1 billion capital contribution from BTMU in fourth quarter 2008, and a $2 billion capital contribution from BTMU in third quarter 2009. The Company's tangible common equity ratio was 8.94 percent at September 30, 2009, compared with 6.56 percent at June 30, 2009. The Tier 1 common capital ratio at September 30, 2009, was 11.58 percent, compared with 8.66 percent at June 30, 2009. The Company's Tier 1 and total risk-based capital ratios at September 30, 2009, were 11.60 percent and 14.42 percent, respectively.

Non-GAAP Financial Measures This press release contains certain references to financial measures identified as excluding privatization transaction expenses and regulatory agencies expense, 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, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Because these items are unusual and substantial costs, 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 core business results. 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 San Francisco, UnionBanCal Corporation is a financial holding company with assets of $78.2 billion at September 30, 2009. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank has 337 banking offices in California, Oregon, Washington and Texas and two international offices.

UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world's largest financial organizations. Visit www.unionbank.com for more information.

UnionBanCal Corporation and Subsidiaries

Financial Highlights (Unaudited)

Exhibit 1

As of and for the Three Months Ended Percent Change to

September 30, 2009 from

September 30,

June 30, September 30, September 30, June 30, (Dollars in thousands) 2008

2009 (1) 2009 (1) 2008 2009 Results of operations:

Net interest income (2) $ 522,296

$ 553,094 $ 564,296 8.04 % 2.03 % Noninterest income 198,721

183,213 183,929 (7.44 %) 0.39 % Total revenue 721,017

736,307 748,225 3.77 % 1.62 % Noninterest expense 443,812

532,058 505,815 13.97 % (4.93 %) Provision for loan losses 117,000

360,000 314,000 nm (12.78 %) Income (loss) from continuing operations before income taxes (2) 160,205

(155,751 ) (71,590 ) nm 54.04 % Taxable-equivalent adjustment 2,550

2,748 3,260 27.84 % 18.63 % Income tax expense (benefit) 47,549

(78,492 ) (57,821 ) nm 26.34 % Income (loss) from continuing operations 110,106

(80,007 ) (17,029 ) nm 78.72 % Loss from discontinued operations (5,276

) - - (100.00 %) - Net income (loss) $ 104,830

$ (80,007 ) $ (17,029 ) nm 78.72 %

Balance sheet (end of period):

Total assets (3) $ 62,599,753 $ 73,984,788 $ 78,153,207 24.85 % 5.63

% Total loans 48,306,118 48,896,520 48,169,508 (0.28 %) (1.49

%) Nonperforming assets 304,246

1,144,602 1,367,691 nm 19.49 % Total deposits 42,355,853 58,338,959 60,691,368 43.29 % 4.03

% Medium- and long-term debt 3,827,164

5,131,068 5,121,553 33.82 % (0.19 %) Stockholder's equity 4,692,648

7,429,500 9,475,004 nm 27.53 %

Balance sheet (period average):

Total assets $ 61,145,251 $ 71,495,226 $ 74,352,649 21.60 % 4.00

% Total loans 47,196,204 49,556,222 48,764,826 3.32 % (1.60

%) Earning assets 56,920,548 65,008,223 68,235,083 19.88 % 4.96

% Total deposits 41,661,224 54,352,412 59,453,936 42.71 % 9.39

% Stockholder's equity 4,588,441

7,303,050 7,358,773 60.38 % 0.76 %

Financial ratios (4):

Return on average assets (5):

From continuing operations 0.72

% (0.45 %) (0.09 %) Net income (loss) 0.68

% (0.45 %) (0.09 %) Return on average stockholder's equity (5):

From continuing operations 9.55

% (4.39 %) (0.92 %) Net income (loss) 9.09

% (4.39 %) (0.92 %) Efficiency ratio (6) 58.76

% 68.28 % 65.07 % Net interest margin (2) 3.67

% 3.41 % 3.31 % Tangible common equity ratio (7) 6.96

% 6.56 % 8.94 % Tier 1 common capital ratio (8) (9) 8.00

% 8.66 % 11.58 % Tier 1 risk-based capital ratio (3) (9) 8.02

% 8.68 % 11.60 % Total risk-based capital ratio (3) (9) 10.94

% 11.54 % 14.42 % Leverage ratio (3) (9) 7.97

% 7.89 % 10.40 % Allowance for loan losses to:

Total loans 1.20

% 2.21 % 2.62 % Nonaccrual loans 200.94

% 98.14 % 95.15 % Allowances for credit losses to (10) :

Total loans 1.43

% 2.55 % 2.97 % Nonaccrual loans 239.50

% 113.24 % 108.16 % Net loans charged off to average total loans (5) 0.53

% 1.23 % 1.11 % Nonperforming assets to total loans, foreclosed assets and 0.63

% 2.34 % 2.84 % distressed loans held for sale

Nonperforming assets to total assets (3) 0.49

% 1.55 % 1.75 % Selected financial ratios excluding impact of privatization

transaction (1) (4) (15):

From continuing operations:

Return on average assets (5) 0.76 % (0.39 %) (0.03 %)

Return on average stockholder's equity (5) 10.08 % (5.48 %) (0.45 %)

Efficiency ratio (6) 57.90 % 63.97 % 60.36 %

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Financial Highlights (Unaudited)

Exhibit 2

As of and for the Nine Months Ended Percent Change to

September 30, 2009 from

September 30,

September 30, September 30, (Dollars in thousands, except per share data) 2008

2009 (1) 2008 Results of operations:

Net interest income (2) $ 1,498,287 $ 1,680,010 12.13% Noninterest income 593,743

541,858 (8.74%) Total revenue 2,092,030 2,221,868 6.21% Noninterest expense 1,266,330 1,559,256 23.13% Provision for loan losses 284,000

923,000 nm Income (loss) from continuing operations before income taxes (2) 541,700

(260,388 ) nm Taxable-equivalent adjustment 7,405

8,625 16.48% Income tax expense (benefit) 167,493

(162,169 ) nm Income (loss) from continuing operations 366,802

(106,844 ) nm Loss from discontinued operations (12,037

) - (100.00%) Net income (loss) $ 354,765

$ (106,844 ) nm

Balance sheet (end of period):

Total assets (3) $ 62,599,753 $ 78,153,207 24.85% Total loans 48,306,118 48,169,508 (0.28%) Nonperforming assets 304,246

1,367,691 nm Total deposits 42,355,853 60,691,368 43.29% Medium- and long-term debt 3,827,164 5,121,553 33.82% Stockholder's equity 4,692,648 9,475,004 nm

Balance sheet (period average):

Total assets $ 59,023,615 $ 71,000,250 20.29% Total loans 45,138,144 49,366,280 9.37% Earning assets 54,689,402 64,593,827 18.11% Total deposits 42,821,802 53,526,802 25.00% Stockholder's equity 4,640,908 7,332,747 58.00%

Financial ratios (4):

Return on average assets (5):

From continuing operations 0.83

% (0.20 %) Net income (loss) 0.80

% (0.20 %) Return on average stockholder's equity (5):

From continuing operations 10.56

% (1.95 %) Net income (loss) 10.21

% (1.95 %) Efficiency ratio (6) 58.10

% 66.34 % Net interest margin (2) 3.65

% 3.47 % Tangible common capital ratio (7) 6.96

% 8.94 % Tier 1 common capital ratio (8) (9) 8.00

% 11.58 % Tier 1 risk-based capital ratio (3) (9) 8.02

% 11.60 % Total risk-based capital ratio (3) (9) 10.94

% 14.42 % Leverage ratio (3) (9) 7.97

% 10.40 % Allowance for loan losses to:

Total loans 1.20

% 2.62 % Nonaccrual loans 200.94

% 95.15 % Allowances for credit losses to (10):

Total loans 1.43

% 2.97 % Nonaccrual loans 239.50

% 108.16 % Net loans charged off to average total loans (5) 0.31

% 1.10 % Nonperforming assets to total loans, foreclosed assets and 0.63

% 2.84 % distressed loans held for sale

Nonperforming assets to total assets (3) 0.49

% 1.75 % Selected financial ratios excluding impact of privatization

transaction (1) (4) (15):

From continuing operations:

Return on average assets (5) 0.84 % (0.12 %) Return on average stockholder's equity (5) 10.74 % (1.67 %) Efficiency ratio (6) 57.80 % 61.14 %

Refer to Exhibit 12 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

September 30, June 30, September 30, September 30, (Amounts in thousands) 2008

2009 (1) 2009 (1) 2008 2009 (1) Interest Income (2)

Loans $ 638,862 $ 586,890 $ 578,514 $ 1,889,732 $ 1,769,471 Securities 100,659 98,754 110,170 305,042 312,205 Interest bearing deposits in banks 147

3,550 4,956 503 9,406 Federal funds sold and securities purchased under resale agreements 1,787

97 110 5,573 348 Trading account assets 1,364

231 271 5,287 660 Total interest income 742,819 689,522 694,021 2,206,137 2,092,090

Interest Expense

Deposits 135,736 100,186 101,374 500,905 306,598 Federal funds purchased and securities sold under repurchase 15,630

19 41 44,402 113 agreements

Commercial paper 8,056

954 355 26,127 2,901 Medium- and long-term debt 25,989

29,415 27,112 65,138 84,056 Trust notes 239

238 239 715 715 Other borrowed funds 34,873

5,616 604 70,563 17,697 Total interest expense 220,523 136,428 129,725 707,850 412,080

Net Interest Income (2) 522,296 553,094 564,296 1,498,287 1,680,010 Provision for loan losses 117,000 360,000 314,000 284,000 923,000 Net interest income after provision for loan losses 405,296 193,094 250,296 1,214,287 757,010

Noninterest Income

Service charges on deposit accounts 77,079

71,843 74,888 229,521 218,053 Trust and investment management fees 40,638

34,130 34,506 127,828 102,543 Trading account activities 12,397

16,251 10,513 40,096 49,456 Merchant banking fees 12,789

19,924 14,601 35,667 48,357 Brokerage commissions and fees 9,520

8,506 8,611 30,014 25,424 Card processing fees, net 8,129

8,124 8,559 24,060 24,219 Securities gains (losses), net 50

(172 ) 12,694 48 12,522 Other 38,119

24,607 19,557 106,509 61,284 Total noninterest income 198,721 183,213 183,929 593,743 541,858

Noninterest Expense

Salaries and employee benefits 238,129 233,057 233,981 723,098 710,601 Net occupancy 38,574

43,222 43,146 113,008 128,289 Intangible asset amortization 671

40,281 40,641 2,011 121,809 Regulatory agencies 8,572

52,836 30,739 16,078 101,513 Outside services 20,741

22,948 22,219 58,045 64,001 Professional services 17,236

19,489 17,647 47,764 53,074 Equipment 14,437

16,602 17,838 44,925 49,853 Software 14,812

14,205 16,502 44,016 45,745 Foreclosed asset expense (income) 524

3,282 (144 ) 696 4,024 Provision for losses on off-balance sheet commitments 8,000

15,000 6,000 21,000 47,000 Privatization-related expense 6,193

7,433 6,649 6,193 40,901 Other 75,923

63,703 70,597 189,496 192,446 Total noninterest expense 443,812 532,058 505,815 1,266,330 1,559,256

Income (loss) from continuing operations before income taxes (2) 160,205 (155,751 ) (71,590 ) 541,700 (260,388 ) Taxable-equivalent adjustment 2,550

2,748 3,260 7,405 8,625 Income tax expense (benefit) 47,549

(78,492 ) (57,821 ) 167,493 (162,169 )

Income (Loss) from Continuing Operations 110,106 (80,007 ) (17,029 ) 366,802 (106,844 )

Loss from discontinued operations before income taxes (8,175 ) -

- (22,692 ) - Income tax benefit (2,899 ) -

- (10,655 ) - Loss from Discontinued Operations (5,276 ) -

- (12,037 ) - Net Income (Loss) $ 104,830 $ (80,007 ) $ (17,029 ) $ 354,765 $ (106,844 )

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Consolidated Balance Sheets

Exhibit 4

(Unaudited) December 31, (Unaudited)

September 30, September 30, (Dollars in thousands) 2008

2008 (1) 2009 (1) Assets

Cash and due from banks $ 1,959,484 $ 1,568,578 $ 1,155,497 Interest bearing deposits in banks 16,029 2,872,698 2,659,460 Federal funds sold and securities purchased under resale agreements 488,014 63,069 437,328 Total cash and cash equivalents 2,463,527 4,504,345 4,252,285 Trading account assets:

Pledged as collateral 18,124 6,283 60,816 Held in portfolio 711,293 1,210,496 879,734 Securities available for sale:

Pledged as collateral 1,404,463 54,525 - Held in portfolio 6,890,891 8,140,013 18,210,574 Securities held to maturity (Fair value: September 30, 2009, -

- 1,193,337 $1,269,934)

Loans (net of allowance for loan losses: September 30, 2008, 47,725,644 48,847,783 46,909,201 $580,474; December 31, 2008, $737,767; September 30, 2009,

$1,260,307)

Due from customers on acceptances 21,562 23,131 12,842 Premises and equipment, net 474,519 680,004 667,005 Intangible assets, net 4,447

713,485 601,140 Goodwill 355,287 2,369,326 2,369,326 Other assets 2,524,839 3,571,995 2,996,947 Assets of discontinued operations to be disposed or sold 5,157

4 - Total assets $ 62,599,753 $ 70,121,390 $ 78,153,207

Liabilities

Noninterest bearing $ 13,694,272 $ 13,566,873 $ 14,472,375 Interest bearing 28,661,581 32,482,896 46,218,993 Total deposits 42,355,853 46,049,769 60,691,368 Federal funds purchased and securities sold under repurchase 1,760,442 172,758 229,268 agreements

Commercial paper 1,659,935 1,164,327 423,499 Other borrowed funds 6,718,935 8,196,597 164,861 Trading account liabilities 506,890 1,034,663 715,075 Acceptances outstanding 21,562 23,131 12,842 Other liabilities 1,020,085 1,685,412 1,306,097 Medium- and long-term debt 3,827,164 4,288,488 5,121,553 Junior subordinated debt payable to subsidiary grantor trust 14,093 13,980 13,640 Liabilities of discontinued operations to be extinguished or assumed 22,146 7,960 - Total liabilities 57,907,105 62,637,085 68,678,203

Stockholder's Equity

Preferred stock:

Authorized 5,000,000 shares; no shares issued or outstanding as of -

- - September 30, 2008, December 31, 2007 and September 30, 2009

Common stock, par value $1 per share:

Authorized 300,000,000 shares; issued 159,834,897 shares as of 159,835 136,331 136,331 September 30, 2008, 136,330,829 shares as of December 31, 2008 and

September 30, 2009

Additional paid-in capital 1,299,045 3,195,023 5,195,023 Treasury stock - 18,748,501 shares as of September 30, 2008, no (1,204,759 ) - - shares as of December 31, 2008 and September 30, 2009

Retained earnings 5,050,682 4,964,802 4,857,958 Accumulated other comprehensive loss (612,155 ) (811,851 ) (714,308 ) Total stockholder's equity 4,692,648 7,484,305 9,475,004 Total liabilities and stockholder's equity $ 62,599,753 $ 70,121,390 $ 78,153,207

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Loans and Allowance for Credit Losses (Unaudited)

Exhibit 5

Three Months Ended

Percent Change to

September 30, 2009 from

September 30, June 30, September 30, September 30, June 30, (Dollars in millions) 2008 2009 (1) 2009 (1) 2008 2009

Loans (period average)

Commercial, financial and industrial $ 17,153 $ 17,917 $ 16,804 (2.04%) (6.21%) Construction 2,613 2,789 2,773 6.12% (0.58%) Mortgage - Commercial 8,009 8,255 8,261 3.15% 0.07% Mortgage - Residential 15,281 16,083 16,372 7.14% 1.80% Consumer 3,421 3,841 3,883 13.50% 1.09% Lease financing 639 661

662 3.67% 0.22%

Total loans held to maturity 47,116 49,546 48,755 3.48% (1.60%) Total loans held for sale 80 10

10 (87.68%) -

Total loans $ 47,196 $ 49,556 $ 48,765 3.32% (1.60%)

Nonperforming Assets (period end)

Nonaccrual loans:

Commercial, financial and industrial $ 162 $ 370

$ 380 nm 2.70% Construction 93 314

388 nm 23.57% Mortgage - Commercial 34 265

355 nm 33.96% Mortgage - Residential (11) - 133

165 nm 24.06% Consumer (11) - 20

21 nm 5.00% Restructured - nonaccrual (11) - -

16 nm nm Total nonaccrual loans 289 1,102 1,325 nm 20.24%

Restructured loans - nonperforming 1 10

- (100.00%) (100.00%) Distressed loans held for sale - -

9 nm nm Foreclosed assets 14 33

34 nm 3.03% Total nonperforming assets $ 304 $ 1,145 $ 1,368 nm 19.48% Loans 90 days or more past due and still accruing $ 50 $ 4

$ 5 (90.00%) 25.00% Restructured loans that are still accruing $ - $ 1

$ 2 nm 100.00%

Analysis of Allowances for Credit Losses

Beginning balance $ 527 $ 870

$ 1,082

Provision for loan losses 117 360

314

Loans charged off:

Commercial, financial and industrial (42 ) (86

) (78 ) Construction (16 ) (23

) (14 ) Mortgage - Commercial - (23

) (26 ) Mortgage - Residential (3 ) (9

) (14 ) Consumer (4 ) (12

) (11 ) Total loans charged off (65 ) (153 ) (143 )

Loans recovered:

Commercial, financial and industrial 2 1

6 Consumer - 1

1 Total loans recovered 2 2

7 Net loans recovered (charged off) (63 ) (151 ) (136 )

Adjustment for impaired loans related to privatization - 2

- Foreign translation adjustment - 1

1 Ending balance of allowance for loan losses 581 1,082 1,261 Allowance for off-balance sheet commitment losses 111 166 172

$ - Allowances for credit losses $ 692 $ 1,248 $ 1,433

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Net Interest Income (Unaudited)

Exhibit 6

For the Three Months Ended

September 30, 2008 September 30, 2009 (1)

(Dollars in thousands) Average

Interest Average Average Interest

Average

Balance

Income/ Yield/ Balance Income/

Yield/

Expense (2) Rate (2)(5) Expense (2)

Rate (2)(5) Assets

Loans: (12)

Commercial, financial and industrial $ 17,262,407 $ 229,377 5.29 % $ 16,805,449 $

188,974 4.46 % Construction 2,579,582 30,352 4.68 2,772,804

20,828 2.98 Mortgage - Residential 15,285,171 211,965 5.55 16,380,014

230,210 5.62 Mortgage - Commercial 8,008,618 111,816 5.58 8,261,161

88,998 4.31 Consumer 3,421,338 49,286 5.73 3,882,929

44,042 4.50 Lease financing 639,088

6,066 3.80 662,469 5,462

3.30 Total loans 47,196,204 638,862 5.40 48,764,826

578,514 4.73 Securities - taxable 8,348,785 99,614 4.77 10,590,200

107,171 4.05 Securities - tax-exempt 51,831

1,045 8.06 184,772 2,999

6.49 Interest bearing deposits in banks 13,642

147 4.27 7,496,380 4,956

0.26 Federal funds sold and securities purchased under resale agreements 361,361

1,787 1.97 282,457 110

0.15 Trading account assets 948,725

1,364 0.57 916,448 271

0.12 Total earning assets 56,920,548 742,819 5.21 68,235,083

694,021 4.06 Allowance for loan losses (506,452 ) (1,044,533 )

Cash and due from banks 1,606,632 1,135,794

Premises and equipment, net 475,408

668,699

Other assets 2,649,115 5,357,606

Total assets $ 61,145,251 $ 74,352,649

Liabilities

Deposits:

Transaction accounts $ 15,552,783 61,636 1.58 $ 33,064,944

72,837 0.87 Savings and consumer time 3,899,687 13,237 1.35 4,486,545

12,572 1.11 Large time 9,847,584 60,863 2.46 7,430,960

15,965 0.85 Total interest bearing deposits 29,300,054 135,736 1.84 44,982,449

101,374 0.89 Federal funds purchased and securities sold under repurchase 3,496,184 15,365 1.75 169,267

41 0.09 agreements

Net funding allocated from (to) discontinued operations (13) 55,121

265 1.91 - -

- Commercial paper 1,432,207 8,056 2.24 472,246

355 0.30 Other borrowed funds (14) 4,886,263 34,873 2.84 262,441

604 0.91 Medium- and long-term debt 3,300,675 25,989 3.13 5,098,821

27,112 2.11 Trust notes 14,148

239 6.73 13,696 239

6.96 Total borrowed funds 13,184,598 84,787 2.56 6,016,471

28,351 1.87 Total interest bearing liabilities 42,484,652 220,523 2.06 50,998,920

129,725 1.01 Noninterest bearing deposits 12,361,170 14,471,487

Other liabilities 1,710,988 1,523,469

Total liabilities 56,556,810 66,993,876

Stockholder's Equity

Common equity 4,588,441 7,358,773

Total stockholder's equity 4,588,441 7,358,773

Total liabilities and stockholder's equity $ 61,145,251 $ 74,352,649

Reported Net Interest Income/Margin

Net interest income/margin (taxable-equivalent basis)

522,296 3.67 % 564,296 3.31 % Less: taxable-equivalent adjustment

2,550 3,260

Net interest income

$ 519,746 $ 561,036

Average Assets and Liabilities of Discontinued Operations for Period

Ended:

September 30, 2008 September 30, 2009 Assets

$ 5,738 $ -

Liabilities

$ 60,859 $ -

Net Liabilities

$ (55,121 ) $ -

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Net Interest Income (Unaudited)

Exhibit 7

For the Three Months Ended

June 30, 2009 (1) September 30, 2009 (1)

(Dollars in thousands) Average

Interest Average Average Interest Average

Balance

Income/ Yield/ Balance Income/ Yield/

Expense (2) Rate (2)(5) Expense (2) Rate (2)(5) Assets

Loans: (12)

Commercial, financial and industrial $ 17,920,408 $ 194,560 4.35 % $ 16,805,449 $ 188,974 4.46

% Construction 2,788,671 20,658 2.97 2,772,804 20,828 2.98

Mortgage - Residential 16,089,739 230,269 5.72 16,380,014 230,210 5.62

Mortgage - Commercial 8,254,595 91,689 4.44 8,261,161 88,998 4.31

Consumer 3,841,202 44,116 4.61 3,882,929 44,042 4.50

Lease financing 661,607

5,598 3.38 662,469 5,462 3.30 Total loans 49,556,222 586,890 4.74 48,764,826 578,514 4.73

Securities - taxable 8,564,355 97,738 4.56 10,590,200 107,171 4.05

Securities - tax-exempt 48,176

1,016 8.44 184,772 2,999 6.49 Interest bearing deposits in banks 5,594,318 3,550 0.25 7,496,380 4,956 0.26

Federal funds sold and securities purchased under resale agreements 203,529

97 0.19 282,457 110 0.15 Trading account assets 1,041,623 231 0.09 916,448 271 0.12

Total earning assets 65,008,223 689,522 4.25 68,235,083 694,021 4.06

Allowance for loan losses (839,115

) (1,044,533 ) Cash and due from banks 1,285,449 1,135,794

Premises and equipment, net 669,993

668,699 Other assets 5,370,676 5,357,606

Total assets $ 71,495,226 $ 74,352,649

Liabilities

Deposits:

Transaction accounts $ 29,514,913 66,549 0.90 $ 33,064,944 72,837 0.87

Savings and consumer time 4,328,326 13,546 1.26 4,486,545 12,572 1.11

Large time 6,604,845 20,091 1.22 7,430,960 15,965 0.85

Total interest bearing deposits 40,448,084 100,186 0.99 44,982,449 101,374 0.89

Federal funds purchased and securities sold under repurchase 163,381

19 0.05 169,267 41 0.09 agreements

Commercial paper 569,337

954 0.67 472,246 355 0.30 Other borrowed funds (14) 2,124,419 5,616 1.06 262,441 604 0.91

Medium- and long-term debt 5,137,901 29,415 2.30 5,098,821 27,112 2.11

Trust notes 13,809

238 6.90 13,696 239 6.96 Total borrowed funds 8,008,847 36,242 1.82 6,016,471 28,351 1.87

Total interest bearing liabilities 48,456,931 136,428 1.13 50,998,920 129,725 1.01

Noninterest bearing deposits 13,904,328 14,471,487

Other liabilities 1,830,917 1,523,469

Total liabilities 64,192,176 66,993,876

Stockholder's Equity

Common equity 7,303,050 7,358,773

Total stockholder's equity 7,303,050 7,358,773

Total liabilities and stockholder's equity $ 71,495,226 $ 74,352,649

Reported Net Interest Income/Margin

Net interest income/margin (taxable-equivalent basis)

553,094 3.41 % 564,296 3.31 % Less: taxable-equivalent adjustment

2,748 3,260 Net interest income

$ 550,346 $ 561,036

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Net Interest Income (Unaudited)

Exhibit 8

For the Nine Months Ended

September 30, 2008 September 30, 2009 (1)

(Dollars in thousands) Average

Interest Average Average Interest

Average

Balance

Income/ Yield/ Balance Income/

Yield/

Expense (2) Rate (2)(5) Expense (2)

Rate (2)(5) Assets

Loans: (12)

Commercial, financial and industrial $ 16,623,490 $ 697,292 5.60 % $ 17,737,052 $ 577,321 4.35 % Construction 2,551,348 97,763 5.12 2,765,178 60,747 2.94 Residential mortgage 14,593,755 604,506 5.52 16,132,655 694,917 5.74 Commercial mortgage 7,694,956 336,508 5.83 8,256,389 283,076 4.57 Consumer 3,030,042 140,129 6.18 3,816,050 134,697 4.72 Lease financing 644,553

13,534 2.80 658,956 18,713

3.79 Total loans 45,138,144 1,889,732 5.59 49,366,280 1,769,471 4.78 Securities - taxable 8,332,647 301,810 4.83 9,166,395 307,165 4.47 Securities - tax-exempt 52,641

3,232 8.19 94,947 5,040

7.08 Interest bearing deposits in banks 36,936

503 1.82 4,664,896 9,406

0.27 Federal funds sold and securities purchased under resale agreements 301,153

5,573 2.47 227,832 348

0.20 Trading account assets 827,881

5,287 0.85 1,073,477 660

0.08 Total earning assets 54,689,402 2,206,137 5.38 64,593,827 2,092,090 4.32 Allowance for loan losses (454,191 ) (865,208 )

Cash and due from banks 1,675,293 1,244,981

Premises and equipment, net 480,705

670,884

Other assets 2,632,406 5,355,766

Total assets $ 59,023,615 $ 71,000,250

Liabilities

Deposits:

Transaction accounts $ 15,323,611 204,064 1.78 $ 28,397,683 200,483 0.94 Savings and consumer time 3,974,976 50,684 1.70 4,394,706 42,057 1.28 Large time 10,909,525 246,157 3.01 7,090,250 64,058 1.21 Total interest bearing deposits 30,208,112 500,905 2.21 39,882,639 306,598 1.03 Federal funds purchased and securities sold under repurchase 2,628,257 43,628 2.22 194,562 113 0.08 agreements

Net funding allocated from (to) discontinued operations (13) 45,520

774 2.27 - -

- Commercial paper 1,375,789 26,127 2.54 586,754 2,901 0.66 Other borrowed funds (14) 3,224,146 70,563 2.92 2,472,324 17,697 0.96 Medium- and long-term debt 2,594,875 65,138 3.35 4,994,660 84,056 2.25 Trust notes 14,261

715 6.68 13,808 715

6.90 Total borrowed funds 9,882,848 206,945 2.80 8,262,108 105,482 1.71 Total interest bearing liabilities 40,090,960 707,850 2.36 48,144,747 412,080 1.14 Noninterest bearing deposits 12,613,690 13,644,163

Other liabilities 1,678,057 1,878,593

Total liabilities 54,382,707 63,667,503

Stockholder's Equity

Common equity 4,640,908 7,332,747

Total stockholder's equity 4,640,908 7,332,747

Total liabilities and stockholder's equity $ 59,023,615 $ 71,000,250

Reported Net Interest Income/Margin

Net interest income/margin (taxable-equivalent basis)

1,498,287 3.65 % 1,680,010

3.47 % Less: taxable-equivalent adjustment

7,405 8,625

Net interest income

$ 1,490,882 $ 1,671,385

Average Assets and Liabilities of Discontinued Operations for Period

Ended:

September 30, 2008 September 30, 2009

Assets

$ 74,723 $ -

Liabilities

$ 120,243 $ -

Net Liabilities

$ (45,520 ) $ -

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Noninterest income (Unaudited)

Exhibit 9

For the Three Months Ended Percentage Change to

September 30, 2009 from (Dollars in thousands) September 30, June 30,

September 30, September 30, June 30,

2008 2009 (1)

2009 (1) 2008 2009 Service charges on deposit accounts $ 77,079 $ 71,843

$ 74,888 (2.84 ) % 4.24 % Trust and investment management fees 40,638 34,130

34,506 (15.09 ) 1.10 Merchant banking fees 12,789 19,924

14,601 14.17 (26.72 ) Securities gains (losses), net 50 (172

) 12,694 nm nm Trading account activities 12,397 16,251

10,513 (15.20 ) (35.31 ) Brokerage commissions and fees 9,520 8,506

8,611 (9.55 ) 1.23 Card processing fees, net 8,129 8,124

8,559 5.29 5.35 Gains (losses) on private capital investments, net 5,597 (1,123

) (18 ) nm (98.40 ) Other 32,522 25,730

19,575 (39.81 ) (23.92 ) Total noninterest income $ 198,721 $ 183,213 $ 183,929 (7.44 ) % 0.39 %

Noninterest expense (Unaudited)

For the Three Months Ended Percentage Change to

September 30, 2009 from (Dollars in thousands) September 30, June 30,

September 30, September 30, June 30,

2008 2009 (1)

2009 (1) 2008 2009 Salaries and other compensation $ 204,389 $ 191,104 $ 198,768 (2.75 ) % 4.01 % Employee benefits 33,740 41,953

35,213 4.37 (16.07 ) Salaries and employee benefits 238,129 233,057 233,981 (1.74 ) 0.40 Net occupancy 38,574 43,222

43,146 11.85 (0.18 ) Intangible asset amortization 671 40,281

40,641 nm 0.89 Regulatory agencies 8,572 52,836

30,739 nm (41.82 ) Outside services 20,741 22,948

22,219 7.13 (3.18 ) Equipment 14,437 16,602

17,838 23.56 7.44 Professional services 17,236 19,489

17,647 2.38 (9.45 ) Software 14,812 14,205

16,502 11.41 16.17 Advertising and public relations 12,624 11,349

14,562 15.35 28.31 Low income housing credit investment amortization 11,616 11,026

13,064 12.47 18.48 Communications 9,204 9,192

9,494 3.15 3.29 Data processing 8,945 8,042

7,975 (10.84 ) (0.83 ) Foreclosed asset expense (income) 524 3,282

(144 ) nm nm Provision for losses on off-balance sheet commitments 8,000 15,000

6,000 (25.00 ) (60.00 ) Privatization-related expense 6,193 7,433

6,649 7.36 (10.55 ) Other 33,534 24,094

25,502 (23.95 ) 5.84 Total noninterest expense $ 443,812 $ 532,058 $ 505,815 13.97 % (4.93 ) %

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Noninterest income (Unaudited)

Exhibit 10

For the Nine Months Ended

Percentage Change to

September 30, 2009 from (Dollars in thousands) September 30, September 30, September 30,

2008 2009 (1)

2008 Service charges on deposit accounts $ 229,521 $ 218,053

(5.00) % Trust and investment management fees 127,828 102,543

(19.78) Trading account activities 40,096 49,456

23.34 Merchant banking fees 35,667 48,357

35.58 Brokerage commissions and fees 30,014 25,424

(15.29) Card processing fees, net 24,060 24,219

0.66 Securities losses, net 48 12,522

nm Gains (losses) on private capital investments, net 7,949 (3,262)

nm Gains on the VISA IPO redemption 14,211 -

(100.00) Other 84,349 64,546

(23.48) Total noninterest income $ 593,743 $ 541,858

(8.74) %

Noninterest expense (Unaudited)

For the Nine Months Ended

Percentage Change to

September 30, 2009 from (Dollars in thousands) September 30, September 30, September 30,

2008 2009 (1)

2008 Salaries and other compensation $ 600,477 $ 578,095

(3.73) % Employee benefits 122,621 132,506

8.06 Salaries and employee benefits 723,098 710,601

(1.73) Net occupancy 113,008 128,289

13.52 Intangible asset amortization 2,011 121,809

nm Regulatory agencies 16,078 101,513

nm Outside services 58,045 64,001

10.26 Professional services 47,764 53,074

11.12 Equipment 44,925 49,853

10.97 Software 44,016 45,745

3.93 Advertising and public relations 33,579 36,532

8.79 Low income housing credit investment amortization 29,248 34,256

17.12 Communications 27,690 27,404

(1.03) Data processing 23,805 24,592

3.31 Foreclosed asset expense (income) 696 4,024

nm Provision for losses on off-balance sheet commitments 21,000 47,000

nm Privatization-related expense 6,193 40,901

nm Other 75,174 69,662

(7.33) Total noninterest expense $ 1,266,330 $ 1,559,256 23.13 %

Refer to Exhibit 12 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

Reconciliation of Non-GAAP Measures (Unaudited)

Exhibit 11

The following table presents a reconciliation between certain

Generally Accepted Accounting Principles (GAAP) amounts and

specific non-GAAP measures as used to complete selected non-GAAP

financial ratios.

For the three months ended For the nine months ended (Dollars in thousands) September 30, 2008 June 30, 2009 September 30, 2009 September 30, 2008 September 30, 2009

Income (loss) from continuing operations $ 110,106 $ (80,007 ) $ (17,029 ) $ 366,802 $ (106,844 ) Privatization-related expense, net of tax 6,193 4,514 (460 ) 6,193

20,414 Net accretion and amortization related to fair value adjustments, -

8,765 11,832 -

25,115 net of tax

Income (loss) from continuing operations, excluding impact of $ 116,299 $ (66,728 ) $ (5,657 ) $ 372,995 $ (61,315 ) privatization transaction

Average total assets $ 61,145,251 $ 71,495,226 $ 74,352,649 $ 59,023,615 $ 71,000,250 Net adjustments related to privatization transaction (329

) 2,610,303 2,590,543 (111 ) 2,607,236 Average total assets, excluding impact of privatization transaction $ 61,145,580 $ 68,884,923 $ 71,762,106 $ 59,023,726 $ 68,393,014

Return on average assets from continuing operations 0.72

% (0.45 %) (0.09 %) 0.83 % (0.20 %) Effect of privatization transaction 0.04

% 0.06 % 0.06 % 0.01 % 0.08 % Return on average assets from continuing operations, excluding 0.76

% (0.39 %) (0.03 %) 0.84 % (0.12 %) impact of privatization transaction

Average stockholder's equity $ 4,588,441 $ 7,303,050 $ 7,358,773 $ 4,640,908 $ 7,332,747 Net adjustments related to privatization transaction -

2,423,392 2,418,824 -

2,410,287 Average stockholder's equity, excluding impact of privatization $ 4,588,441 $ 4,879,658 $ 4,939,949 $ 4,640,908 $ 4,922,460 transaction

Return on stockholder's equity from continuing operations 9.55

% (4.39 %) (0.92 %) 10.56 % (1.95 %) Effect of privatization transaction 0.53

% (1.09 %) 0.47 % 0.18 % 0.28 % Return on stockholder's equity, excluding impact of privatization 10.08 % (5.48 %) (0.45 %) 10.74

% (1.67 %) transaction

Noninterest expense $ 443,812 $ 532,058 $ 505,815 $ 1,266,330 $ 1,559,256 Privatization-related expense 6,193 7,433 6,649 6,193

40,901 Amortization related to fair value adjustments -

41,894 42,548 -

126,985 Noninterest expense, excluding impact of privatization transaction $ 437,619 $ 482,731 $ 456,618 $ 1,260,137 $ 1,391,370

Total revenue $ 721,017 $ 736,307 $ 748,225 $ 2,092,030 $ 2,221,868 Accretion related to fair value adjustments -

27,455 23,060 -

85,616 Total revenue, excluding impact of privatization transaction $ 721,017 $ 708,852 $ 725,165 $ 2,092,030 $ 2,136,252

Efficiency ratio 58.76 % 68.28 % 65.07 % 58.10

% 66.34 % Effect of privatization transaction (0.86 %) (4.31 %) (4.71 %) (0.30

%) (5.20 %) Efficiency ratio, excluding impact of privatization transaction 57.90 % 63.97 % 60.36 % 57.80

% 61.14 %

UnionBanCal Corporation and Subsidiaries

Footnotes Exhibit 12

(1) On November 4, 2008, Mitsubishi UFJ Financial Group, Inc. (MUFG),

through its wholly-owned subsidiary, The Bank of Tokyo -

Mitsubishi UFJ, Ltd. (BTMU), completed its acquisition of all of

the remaining outstanding shares of UnionBanCal Corporation (the

Company) common stock (the "privatization transaction"). The

Company estimated the fair value of its tangible assets and

liabilities as of October 1, 2008 and recorded fair value

adjustments to its tangible assets and liabilities equivalent to

the proportionate incremental percentage ownership acquired by

BTMU in the privatization transaction. In addition, the Company

recorded goodwill and other intangible assets. The Company's

financial condition as of December 31, 2008 and subsequent periods

reflect the impact of these fair value adjustments and other

amounts recorded. The Company's results of operations for the nine

months ended September 30, 2009 include accretion and amortization

related to the fair value adjustments. (2) Yields and interest income are presented on a taxable-equivalent

basis using the federal statutory tax rate of 35 percent. (3) End of period total assets and assets used in calculating these

ratios include those of discontinued operations. (4) Average balances used to calculate our financial ratios are based on

continuing operations data only, unless otherwise indicated. (5) Annualized. (6) The efficiency ratio is noninterest expense, excluding foreclosed

asset expense (income), the provision for losses on off-balance

sheet commitments and low income housing credit (LIHC) investment

amortization expense, as a percentage of net interest income

(taxable-equivalent basis) and noninterest income, and is

calculated for continuing operations only. (7) The tangible common equity ratio is the ratio of total equity less

intangibles (net of the corresponding deferred tax liability), as

a percentage of total assets, less intangibles. (8) The Tier 1 common capital ratio is the ratio of Tier 1 common

capital to risk weighted assets. (9) Estimated as of September 30, 2009. The regulatory capital and

leverage ratios include discontinued operations. (10) 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. (11) Reflects previously disclosed change in accounting policy for

residential and home equity loans 90 days or more past due, which

was effective January 1, 2009. (12) 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. (13) 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. (14) Includes interest bearing trading liabilities. (15) These ratios exclude the impact of the privatization transaction.

Please refer to Exhibit 11 for a reconciliation between certain

Generally Accepted Accounting Principles (GAAP) amounts and these

non-GAAP measures. nm = not meaningful

SOURCE: UnionBanCal Corporation CONTACT: UnionBanCal Corporation Stephen L. Johnson, 415-765-3252 Public Relations Michelle R. Crandall, 415-765-2780 Investor Relations Copyright Business Wire 2009 -0- KEYWORD: United States

North America

California INDUSTRY KEYWORD: Professional Services

Banking

Finance SUBJECT CODE: Earnings

Filing