UnionBanCal Corporation Announces Second Quarter Earnings from Continuing Operations of $0.97 Per Share

Second Quarter 2008 Highlights:

-- Net income of $1.02 per diluted common share; earnings from continuing operations of $0.97 per diluted common share, up 9 percent from first quarter

-- Net interest income up 11 percent versus first quarter and up 19 percent year-over-year

-- Net interest margin of 3.74 percent, up 19 basis points over prior quarter

-- Average total loans up 17 percent year-over-year

-- Average core commercial loans up 25 percent

-- Average residential mortgage loans up 15 percent

-- Average commercial real estate loans up 26 percent

-- Average noninterest bearing deposits comprised 29.8 percent of average total deposits

-- Average core deposits comprised 74.7 percent of average total deposits

-- Average all-in cost of funds was 1.56 percent

-- Total provision for credit losses was $100 million; net charge-offs were $31 million

-- Nonperforming assets were 0.37 percent of total assets at quarter-end

-- Tangible common equity ratio was 7.22 percent at quarter-end

Other Highlights:

-- The Company completed the sale of its insurance brokerage business to BB&T Insurance Services on June 2, 2008

-- Earnings from continuing operations forecast of $1.10 to $1.20 per share for third quarter; increasing full year forecast to $4.20 to $4.45 per share

SAN FRANCISCO--(BUSINESS WIRE)--July 21, 2008--UnionBanCal Corporation (NYSE:UB) today reported second quarter 2008 net income of $141.3 million, or $1.02 per diluted common share. This compares with $165.4 million, or $1.19 per diluted common share, a year earlier, and $108.6 million, or $0.79 per diluted common share, in first quarter 2008. 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. Net income for first quarter 2008 included a $14.1 million after-tax, or $0.10 per diluted common share, write-down of goodwill related to the assessment of the valuation of the insurance brokerage business; an $8.7 million after-tax, or $0.06 per diluted common share, gain on the partial redemption of Visa Inc. common stock; and a $3.1 million after-tax, or $0.02 per diluted common share, reversal of Visa-related litigation reserves.

Earnings from continuing operations for second quarter 2008 were $0.97 per diluted common share, compared with $1.19 per diluted common share a year earlier, and $0.89 per diluted common share in first quarter 2008.

Pre-tax, pre-provision income from continuing operations for second quarter 2008 was $298 million, up 13.3 percent compared with first quarter 2008, and up 19.4 percent compared with second quarter 2007. Excluding the Visa and MasterCard items from both quarters, pre-tax, pre-provision income from continuing operations improved 19.3 percent in second quarter, as compared with first quarter.

First half 2008 earnings from continuing operations were $1.86 per diluted common share. This compares with earnings from continuing operations for first half 2007 of $2.25 per diluted common share.

“I am pleased with the positive financial results we posted in the second quarter,” said Masaaki Tanaka, President and Chief Executive Officer. “Our strong core earnings growth, even in this difficult operating environment, validates our balanced, lower-risk business model. I am particularly pleased with our strong organic loan growth and deposit growth. Average loans increased over 6 percent compared with first quarter, and core deposit growth was 2 percent for the same period. Net interest margin was 3.74 percent, a significant improvement of 19 basis points over prior quarter. While total revenue expanded 8.2 percent over first quarter, noninterest expense increased only 4.0 percent, providing strong operating leverage.”

Mr. Tanaka continued: “Our second quarter provision for credit losses increased to $100 million, however, net charge-offs were only $31 million, or 28 basis points of total loans. While charge-offs have been relatively modest in recent quarters, our provision levels continue to reflect our cautious view regarding the economy and the global financial markets.

“Our liquidity position is strong and we continue to internally generate capital at a rate sufficient to support our growing balance sheet. As a result, we have not had to issue any type of capital in more than two years. Our tangible common equity ratio at June 30 was a strong 7.22 percent. Our full-year projected dividend payout ratio remains below 50 percent, and we are confident that our dividend is secure going forward,” concluded Mr. Tanaka.

“Union Bank is in an enviable position of having both the capital base and funding capacity that allows us to continue recording high quality robust loan growth across our commercial, residential and consumer portfolios. As can be seen by the relatively low level of charge-offs and nonaccruals, Union Bank’s portfolios continue to outperform others in this challenging economic environment. With charge-offs over the last three quarters totaling only $48 million, and provisioning of $240 million over the same time frame, Union Bank is well-positioned to withstand these stressful financial times,” said Philip Flynn, Chief Operating Officer.

For second quarter 2008, total revenue (taxable-equivalent net interest income plus noninterest income) was $713 million, up 12.6 percent compared with second quarter 2007. Net interest income increased 19 percent and noninterest income decreased 1.0 percent. Compared with first quarter 2008, total revenue was up 8.2 percent, with net interest income up 10.8 percent and noninterest income up 2.2 percent.

Net interest income was $513 million in second quarter 2008, up $82 million, or 19 percent, from the same quarter a year ago, primarily due to strong loan growth and lower rates paid on interest bearing liabilities, partially offset by lower yields on earning assets and a deposit mix shift from noninterest bearing and low-cost deposits into higher-cost deposits.

Average earning assets in second quarter 2008 increased $6.5 billion, or 13.4 percent, compared to second quarter 2007, primarily due to a $6.7 billion, or 17.1 percent, increase in average loans. Average commercial loans increased $2.1 billion, or 14.5 percent, with average core commercial loans, which exclude title and escrow loans, up $3.3 billion, or 24.9 percent. Title and escrow loans, which are highly rate-advantaged to the borrower and more volatile than other commercial loans, decreased $1.1 billion, or 76.6 percent. Average residential mortgage loans increased $1.9 billion, or 15.1 percent; average commercial mortgage loans increased $1.6 billion, or 25.9 percent; and average construction loans increased $0.3 billion, or 11.8 percent, year over year.

Compared to second quarter 2007, average interest bearing deposits increased $2.8 billion, or 10.0 percent, while average noninterest bearing deposits decreased $2.1 billion, or 14.1 percent. The decline in noninterest bearing deposits was due to a $1.1 billion, or 52.8 percent, decrease in average title and escrow deposits; a $0.8 billion, or 8.0 percent, decrease in average other commercial noninterest bearing deposits; and a $0.2 billion, or 8.1 percent, decrease in average consumer noninterest bearing deposits. Average other commercial and average consumer noninterest bearing deposits both declined primarily due to a mix shift toward interest-paying deposit accounts, and average title and escrow deposits decreased due to reduced residential real estate activity.

Average noninterest bearing deposits represented 29.8 percent of average total deposits in second quarter 2008. The annualized average all-in cost of funds improved to 1.56 percent, compared with 2.62 percent in second quarter 2007, and 2.26 percent in first quarter 2008. The Company’s average core deposit-to-loan ratio was 70.9 percent.

The average yield on earning assets of $54.9 billion was 5.24 percent, down 87 basis points from second quarter 2007, with the average loan yield decreasing 94 basis points. The average rate on interest bearing liabilities of $40.2 billion was 2.06 percent, down 178 basis points compared with second quarter 2007, primarily reflecting decreases in short-term interest rates. The net interest margin in second quarter 2008 was 3.74 percent, an increase of 18 basis points compared with second quarter 2007.

Second quarter 2008 net interest income increased 10.8 percent from first quarter 2008. Average loans increased $2.8 billion, or 6.5 percent. Average commercial loans increased $1.2 billion, or 7.5 percent, which was comprised of an increase in core commercial loans of $1.3 billion, or 8.7 percent, offset by a decrease in title and escrow loans of $146 million, or 29.4 percent. Average commercial mortgage loans increased $571 million, or 7.9 percent; average residential mortgage loans increased $502 million, or 3.6 percent; and average construction loans increased $92 million, or 3.7 percent. Average noninterest bearing deposits increased $0.3 billion, or 2.1 percent, while average interest bearing deposits decreased $0.7 billion, or 2.2 percent. The average yield on earning assets decreased 48 basis points and the average rate on interest bearing liabilities decreased 95 basis points. The net interest margin increased 19 basis points to 3.74 percent.

In second quarter 2008, noninterest income was $199.6 million, down $2.0 million, or 1.0 percent, from the same quarter a year ago. Service charges on deposit accounts were flat with higher account analysis fees offset by lower overdraft fees. Trust and investment management fees increased $4.1 million, or 10.5 percent, primarily due to an increase in trust assets. Trading account revenue increased $2.8 million, or 20.6 percent, primarily due to higher foreign exchange and securities trading income. Gains on private capital investments, net, were $1.3 million, compared with $20.2 million in the same quarter a year ago. The Company recorded a $7.1 million pre-tax gain on the redemption of approximately 23,000 shares of MasterCard Inc. common stock in second quarter 2008. The Company held approximately 59,000 shares of MasterCard Inc. common stock at June 30, 2008. Excluding gains on private capital investments, which were unusually large a year ago, and the gain on the redemption of MasterCard stock, noninterest income increased 5.4 percent from the same quarter a year ago.

Second quarter 2008 noninterest income increased $4.2 million, or 2.2 percent, compared with first quarter 2008. Service charges on deposit accounts were $77.7 million, up $3.0 million, or 4.0 percent, primarily due to higher account analysis fees resulting from a decrease in the earnings credit rate. Trading account revenue increased $5.7 million, or 51.5 percent, primarily due to higher foreign exchange trading income and downward valuation adjustments for interest rate derivatives and losses on distressed debt recorded in first quarter 2008. The Company recorded a $7.1 million pre-tax gain on the redemption of MasterCard Inc. common stock in second quarter 2008. In first quarter 2008, the Company recorded a $14.2 million pre-tax gain on the redemption of approximately 332,000 shares of Visa Inc. common stock. The Company held approximately 527,000 shares of Visa Inc. common stock at June 30, 2008.

Noninterest expense for second quarter 2008 was $419.3 million, an increase of $36.3 million, or 9.5 percent, compared with second quarter 2007. Salaries and employee benefits expense increased $11.4 million, or 4.9 percent, primarily due to annual merit increases and higher accruals for performance-related incentive expense, partially offset by lower pension expense. The provision for losses on off-balance sheet commitments was $5 million in second quarter 2008, compared to zero in second quarter 2007. Other noninterest expense increased $5.4 million, or 17.2 percent, primarily due to higher regulatory agency fees in second quarter 2008 as credits available from prior quarters were exhausted.

Noninterest expense increased $16.1 million, or 4.0 percent, compared with first quarter 2008. Salaries and other compensation expense increased $12.1 million, or 6.3 percent, primarily due to annual merit increases and higher accruals for performance-related incentive expense. Employee benefits expense decreased $10.4 million, or 21.0 percent, primarily due to annual seasonal factors that result in lower payroll taxes and 401(k) matching contributions. Advertising and public relations expense increased $4.8 million, or 58.8 percent, primarily due to timing of marketing promotions. The provision for losses on off-balance sheet commitments was $5 million, compared to $8 million in first quarter 2008. Other noninterest expense increased $6.2 million, or 20.6 percent, primarily due to the reversal of a portion of legal reserves relative to the Company’s proportionate share of Visa litigation charges recorded in first quarter 2008, and higher regulatory agency fees in second quarter 2008 as credits available from prior quarters were exhausted.

Income tax expense for second quarter 2008 was $61.6 million. The effective tax rate for second quarter 2008 was 31.4 percent, compared with an effective tax rate of 31.6 percent for second quarter 2007. The effective tax rate for first quarter 2008 was 32.3 percent.

The effective tax rate for the first half of 2008 was 31.8 percent, compared with an effective tax rate of 32.5 percent for the first half of 2007.

Total revenue for the first half of 2008 was $1.37 billion, an increase of $117 million, or 9.3 percent, compared with total revenue of $1.25 billion in the same period of 2007. Net interest income increased $114 million, or 13.3 percent, and noninterest income increased $3 million, or 0.7 percent.

Net interest income was $976 million in the first half of 2008, a $114 million increase from prior year, primarily due to strong loan growth and lower rates paid on interest bearing liabilities, partially offset by lower yields on earning assets and a deposit mix shift from noninterest bearing and low-cost deposits into higher-cost deposits. Average loans increased $5.4 billion, or 14.1 percent, while average total deposits increased $1.4 billion, or 3.4 percent. A $3.7 billion, or 13.9 percent, increase in average interest bearing deposits was partially offset by a $2.3 billion, or 15.3 percent, decrease in average noninterest bearing deposits. The net interest margin was 3.65 percent, up 9 basis points.

Noninterest income in the first half of 2008 was $395 million, an increase of $3 million, or 0.7 percent, over 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. Trust and investment management fees increased $11 million, or 13.9 percent, primarily due to higher assets under management. Merchant banking fees increased $5 million, or 27.9 percent, primarily due to higher referral fees. Gains on private capital investments, net, were $2.4 million, compared with $29.3 million in the same period last year. The Company recorded a $14.2 million pre-tax gain on the partial redemption of Visa Inc. common stock and a $7.1 million pre-tax gain on the partial redemption of MasterCard Inc. common stock in first half 2008.

For the first half of 2008, noninterest expense increased $46.8 million, or 6.0 percent, over the first half of 2007. Salaries and other compensation expense increased $15 million, or 4.0 percent, primarily due to annual merit increases and higher accruals for performance-related incentive expense. Employee benefits expense was flat. The provision for off-balance sheet commitments was $13 million in the first half of 2008, compared with $1 million in the first half of 2007.

Nonperforming assets at June 30, 2008, were $225 million, or 0.37 percent of total assets. This compares with $132 million, or 0.23 percent of total assets, at March 31, 2008, and $30 million, or 0.06 percent of total assets, at June 30, 2007.

In second quarter 2008, the total provision for credit losses was $100 million, compared with a total provision for credit losses of $80 million in first quarter 2008, and a total provision for credit losses of $5 million in second 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. The increase in provision expense in second quarter was primarily due to increased criticized assets, charge-offs and loan growth. At quarter-end, the Company maintained approximately $115 million in reserves against the homebuilder portfolio, which had approximately $700 million outstanding at June 30, 2008. In second quarter 2008, there were $13 million in net charge-offs for the homebuilder portfolio.

Net loans charged-off for second quarter 2008 were $31 million, or 0.28 percent of average total loans. This compares with net loans charged-off of $12 million, or 0.11 percent of average total loans, in first quarter 2008, and net loans charged-off of $2 million, or 0.02 percent of average total loans, in second quarter 2007.

At June 30, 2008, the allowance for credit losses as a percent of total loans and as a percent of nonaccrual loans was 1.37 percent and 291 percent, respectively. These ratios were 1.29 percent and 445 percent, respectively, at March 31, 2008, and 1.11 percent and 1457 percent, respectively, at June 30, 2007.

At June 30, 2008, the Company had total assets of $60.6 billion. Total loans were $46.0 billion and total deposits were $42.6 billion, resulting in a period-end deposit-to-loan ratio of 92.5 percent. Core deposits at period-end were $32.4 billion, resulting in a core deposit-to-loan ratio of 70.4 percent. At period-end, total stockholders’ equity was $4.7 billion and the tangible common equity ratio was 7.22 percent. The Company’s Tier I and total risk-based capital ratios at period-end were 7.96 percent and 10.84 percent, respectively.

During second quarter 2008, the Company repurchased approximately 35,000 shares of common stock at a total price of $1.8 million, or an average of $50.85 per repurchased share. During the first half of 2008, the Company repurchased approximately 37,000 shares of common stock at a total price of $1.9 million, or an average of $50.73 per repurchased share. All first half repurchases were in conjunction with the vesting of restricted stock grants. At June 30, 2008, the Company had remaining repurchase authority of $510 million.

Common shares outstanding at June 30, 2008, were 138 million, a decrease of 0.3 million shares, or 0.2 percent, from one year earlier.

The Company currently estimates that third quarter 2008 earnings from continuing operations will be in the range of $1.10 to $1.20 per diluted common share, including a total provision for credit losses of $65 million to $85 million.

The Company currently estimates that full year 2008 earnings from continuing operations will be in the range of $4.20 to $4.45 per diluted common share, including a total provision for credit losses of $290 million to $340 million.

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.

Income from discontinued operations in second quarter was $7 million, primarily due to an after-tax gain of $11.5 million on the sale of the insurance brokerage business.

This press release contains certain references to financial measures identified as being stated on an “adjusted basis” or that adjust for or exclude provision for credit losses, gains on the partial redemption of MasterCard Inc. common stock and Visa Inc. common stock, and Visa-related credits and reversals, 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 and their impact on the Company’s performance are difficult to predict, 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 by investors. 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.

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 Company's earnings forecasts, provision for credit losses, dividends, liquidity position, capital, loan portfolio, credit quality, competitive positioning, future performance and earnings power.

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, 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 The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a wholly-owned subsidiary of Mitsubishi UFJ Financial Group, Inc.; 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, including the previously disclosed agreements with regulatory and governmental authorities related to the Company’s Bank Secrecy Act/Anti-Money Laundering compliance program; effects of governmental fiscal or monetary policies; legal or regulatory proceedings or investigations; declines or disruptions in the stock, bond, or credit markets which may adversely affect the Company or the Company’s borrowers or other customers; 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.

The Company will conduct a conference call to review second quarter 2008 results at 8:30 AM Pacific Time (11:30 AM Eastern Time) on July 21, 2008. Interested parties calling from locations within the United States should call 888-428-4480 (651-291-0900 from outside the United States) 10 minutes prior to the beginning of the conference.

A live webcast of the call will be available at http://www.unionbank.com. You may access the Investor Relations section of the website via the “About Union Bank” link from the homepage. The webcast replay will be available on the website within 24 hours after the conclusion of the call, and will remain on the website for a period of one year.

A recorded playback of the conference call will be available by calling 800-475-6701, (320-365-3844 from outside the United States) from approximately 12:00 PM Pacific Time (3:00 PM Eastern Time), July 21, 2008, through 11:59 PM Pacific Time, July 28, 2008 (2:59 AM Eastern Time, July 29, 2008). The reservation number for this playback is 952997.

Based in San Francisco, UnionBanCal Corporation is a bank holding company with assets of $60.6 billion at June 30, 2008. Its primary subsidiary, Union Bank of California, N.A., had 337 banking offices in California, Oregon and Washington, and 2 international offices at June 30, 2008.

UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
										Percent Change to
	As of and for the Three Months Ended									June 30, 2008 from
	June 30,			March 31,			June 30,			June 30,		March 31,
(Dollars in thousands, except per share data)		2007			2008			2008		2007		2008
Results of operations:
Net interest income ⁽¹⁾	$	431,039		$	463,104		$	512,887		18.99	%	10.75	%
Noninterest income		201,661			195,396			199,626		(1.01	%)	2.16	%
Total revenue		632,700			658,500			712,513		12.61	%	8.20	%
Noninterest expense		383,051			403,206			419,312		9.47	%	3.99	%
Provision for loan losses		5,000			72,000			95,000		nm		31.94	%
Income from continuing operations
before income taxes ⁽¹⁾		244,649			183,294			198,201		(18.99	%)	8.13	%
Taxable-equivalent adjustment		2,251			2,526			2,329		3.47	%	(7.80	%)
Income tax expense		76,658			58,370			61,574		(19.68	%)	5.49	%
Income from continuing operations		165,740			122,398			134,298		(18.97	%)	9.72	%
Income (loss) from discontinued operations		(386	)		(13,808	)		7,047		nm		nm
Net income	$	165,354		$	108,590		$	141,345		(14.52	%)	30.16	%

Per common share:
Basic earnings:
From continuing operations	$	1.21		$	0.89		$	0.98		(19.01	%)	10.11	%
Net income		1.20			0.79			1.03		(14.17	%)	30.38	%
Diluted earnings:
From continuing operations		1.19			0.89			0.97		(18.49	%)	8.99	%
Net income		1.19			0.79			1.02		(14.29	%)	29.11	%
Dividends ⁽²⁾		0.52			0.52			0.52		0.00	%	0.00	%
Book value (end of period)		33.45			34.17			34.11		1.97	%	(0.18	%)
Common shares outstanding (end of period)⁽³⁾		138,314,564			137,944,897			138,050,671		(0.19	%)	0.08	%
Weighted average common shares
outstanding - basic ⁽³⁾		137,476,765			137,005,702			137,208,620		(0.20	%)	0.15	%
Weighted average common shares
outstanding - diluted⁽³⁾		139,137,955			137,609,383			137,899,057		(0.89	%)	0.21	%

Balance sheet (end of period):
Total assets ⁽⁴⁾	$	53,173,833		$	57,933,325		$	60,593,921		13.95	%	4.59	%
Total loans		37,743,222			43,499,968			46,041,358		21.99	%	5.84	%
Nonperforming assets		29,826			131,687			224,944		nm		70.82	%
Total deposits		41,980,999			45,240,821			42,604,419		1.49	%	(5.83	%)
Medium and long-term debt		1,835,495			1,963,952			2,809,329		53.06	%	43.04	%
Stockholders' equity		4,627,147			4,713,206			4,708,790		1.76	%	(0.09	%)

Balance sheet (period average):
Total assets	$	52,986,633		$	56,632,995		$	59,269,965		11.86	%	4.66	%
Total loans		38,839,769			42,701,453			45,494,161		17.13	%	6.54	%
Earning assets		48,443,233			52,188,085			54,935,058		13.40	%	5.26	%
Total deposits		42,564,891			43,613,754			43,203,180		1.50	%	(0.94	%)
Stockholders' equity		4,588,061			4,718,409			4,616,596		0.62	%	(2.16	%)

Financial ratios ⁽⁵⁾:
Return on average assets ⁽⁶⁾:
From continuing operations		1.25	%		0.87	%		0.91	%
Net income		1.25	%		0.77	%		0.96	%
Return on average stockholders' equity ⁽⁶⁾:
From continuing operations		14.49	%		10.43	%		11.70	%
Net income		14.46	%		9.26	%		12.31	%
Efficiency ratio ⁽⁷⁾		60.54	%		60.00	%		58.14	%
Net interest margin ⁽¹⁾		3.56	%		3.55	%		3.74	%
Dividend payout ratio		42.98	%		58.43	%		53.06	%
Tangible common equity ratio		7.87	%		7.42	%		7.22	%
Tier 1 risk-based capital ratio ^{(4) (8)}		8.59	%		8.07	%		7.96	%
Total risk-based capital ratio ^{(4) (8)}		11.54	%		10.97	%		10.84	%
Leverage ratio ^{(4) (8)}		8.30	%		8.09	%		7.95	%
Allowance for loan losses to:
Total loans		0.89	%		1.06	%		1.14	%
Nonaccrual loans		1,170.08	%		367.17	%		243.59	%
Allowances for credit losses to ⁽⁹⁾:
Total loans		1.11	%		1.29	%		1.37	%
Nonaccrual loans		1,456.97	%		445.20	%		291.42	%
Net loans charged off to average
total loans ⁽⁶⁾		0.02	%		0.11	%		0.28	%
Nonperforming assets to total loans and
foreclosed assets		0.08	%		0.30	%		0.49	%
Nonperforming assets to total assets ⁽⁴⁾		0.06	%		0.23	%		0.37	%

Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)

	As of and for the Six Months Ended						Percent Change to June 30, 2008 from
	June 30,			June 30,			June 30,
(Dollars in thousands, except per share data)		2007			2008		2007
Results of operations:
Net interest income ⁽¹⁾	$	861,583		$	975,991		13.28	%
Noninterest income		392,403			395,022		0.67	%
Total revenue		1,253,986			1,371,013		9.33	%
Noninterest expense		775,670			822,518		6.04	%
(Reversal of) provision for loan losses		9,000			167,000		nm
Income from continuing operations
before income taxes ⁽¹⁾		469,316			381,495		(18.71	%)
Taxable-equivalent adjustment		4,366			4,855		11.20	%
Income tax expense		151,063			119,944		(20.60	%)
Income from continuing operations		313,887			256,696		(18.22	%)
Income (loss) from discontinued operations		1,078			(6,761	)	nm
Net income	$	314,965		$	249,935		(20.65	%)

Per common share:
Basic earnings:
From continuing operations	$	2.28		$	1.87		(17.98	%)
Net income		2.29			1.82		(20.52	%)
Diluted earnings:
From continuing operations		2.25			1.86		(17.33	%)
Net income		2.26			1.82		(19.47	%)
Dividends ⁽²⁾		0.99			1.04		5.05	%
Book value (end of period)		33.45			34.11		1.97	%
Common shares outstanding (end of period)⁽³⁾		138,314,564			138,050,671		(0.19	%)
Weighted average common shares
outstanding - basic ⁽³⁾		137,708,257			137,107,161		(0.44	%)
Weighted average common shares
outstanding - diluted ⁽³⁾		139,360,012			137,674,584		(1.21	%)

Balance sheet (end of period):
Total assets ⁽⁴⁾	$	53,173,833		$	60,593,921		13.95	%
Total loans		37,743,222			46,041,358		21.99	%
Nonperforming assets		29,826			224,944		nm
Total deposits		41,980,999			42,604,419		1.49	%
Medium and long-term debt		1,835,495			2,809,329		53.06	%
Stockholders' equity		4,627,147			4,708,790		1.76	%

Balance sheet (period average):
Total assets	$	52,913,455		$	57,951,110		9.52	%
Total loans		38,649,947			44,097,805		14.10	%
Earning assets		48,399,330			53,561,569		10.67	%
Total deposits		41,968,353			43,408,469		3.43	%
Stockholders' equity		4,549,348			4,667,429		2.60	%

Financial ratios ⁽⁵⁾:
Return on average assets⁽⁶⁾:
From continuing operations		1.20	%		0.89	%
Net income		1.20	%		0.87	%
Return on average stockholders' equity ⁽⁶⁾:
From continuing operations		13.91	%		11.06	%
Net income		13.96	%		10.77	%
Efficiency ratio⁽⁷⁾		61.78	%		59.03	%
Net interest margin⁽¹⁾		3.56	%		3.65	%
Dividend payout ratio		43.42	%		55.61	%
Tangible common equity ratio		7.87	%		7.22	%
Tier 1 risk-based capital ratio ^{(4) (8)}		8.59	%		7.96	%
Total risk-based capital ratio ^{(4) (8)}		11.54	%		10.84	%
Leverage ratio ^{(4) (8)}		8.30	%		7.95	%
Allowance for loan losses to:
Total loans		0.89	%		1.14	%
Nonaccrual loans		1,170.08	%		243.59	%
Allowances for credit losses to ⁽⁹⁾:
Total loans		1.11	%		1.37	%
Nonaccrual loans		1,456.97	%		291.42	%
Net loans charged off to average
total loans ⁽⁶⁾		0.02	%		0.20	%
Nonperforming assets to total loans and
foreclosed assets		0.08	%		0.49	%
Nonperforming assets to total assets ⁽⁴⁾		0.06	%		0.37	%

Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(Taxable-Equivalent Basis)

			For the Three Months Ended									For the Six Months Ended
			June 30,			March 31,			June 30,			June 30,
(Amounts in thousands, except per share data)				2007			2008			2008			2007		2008
Interest Income ⁽¹⁾
	Loans		$	618,204		$	633,362		$	617,508		$	1,221,706	$	1,250,870
	Securities			109,838			106,045			98,338			218,259		204,383
	Interest bearing deposits in banks			1,295			128			228			2,404		356
	Federal funds sold and securities purchased under resale agreements			7,809			2,693			1,093			18,961		3,786
	Trading account assets			1,601			2,804			1,119			3,302		3,923
		Total interest income		738,747			745,032			718,286			1,464,632		1,463,318

Interest Expense
	Deposits			246,071			220,660			144,509			468,226		365,169
	Federal funds purchased and securities sold under repurchase agreements			10,312			15,715			13,057			24,031		28,772
	Commercial paper			17,429			9,792			8,279			39,693		18,071
	Medium and long-term debt			28,973			19,457			19,692			48,668		39,149
	Trust notes			238			238			238			476		476
	Other borrowed funds			4,685			16,066			19,624			21,955		35,690
		Total interest expense		307,708			281,928			205,399			603,049		487,327

Net Interest Income ⁽¹⁾				431,039			463,104			512,887			861,583		975,991
	Provision for loan losses			5,000			72,000			95,000			9,000		167,000
		Net interest income after provision for loan losses		426,039			391,104			417,887			852,583		808,991

Noninterest Income
	Service charges on deposit accounts			77,218			74,736			77,706			152,163		152,442
	Trust and investment management fees			39,656			43,388			43,802			76,516		87,190
	Trading account activities			13,838			11,012			16,687			28,678		27,699
	Merchant banking fees			8,809			11,793			11,085			17,886		22,878
	Brokerage commissions and fees			9,533			9,859			10,635			19,193		20,494
	Card processing fees, net			7,824			7,764			8,167			14,951		15,931
	Securities gains (losses), net			230			(2	)		-			1,450		(2	)
	Other			44,553			36,846			31,544			81,566		68,390
		Total noninterest income		201,661			195,396			199,626			392,403		395,022

Noninterest Expense
	Salaries and employee benefits			231,939			241,670			243,299			469,363		484,969
	Net occupancy			33,718			36,202			38,232			67,385		74,434
	Outside services			17,150			17,009			20,295			35,119		37,304
	Professional services			11,144			14,597			15,931			27,494		30,528
	Equipment			15,804			15,347			15,141			31,814		30,488
	Software			13,959			14,795			14,409			27,273		29,204
	Communications			8,278			9,375			9,111			17,413		18,486
	Foreclosed asset expense			9			89			83			18		172
	Provision for losses on off-balance sheet commitments			-			8,000			5,000			1,000		13,000
	Other			51,050			46,122			57,811			98,791		103,933
		Total noninterest expense		383,051			403,206			419,312			775,670		822,518

	Income from continuing operations before income taxes ⁽¹⁾			244,649			183,294			198,201			469,316		381,495
	Taxable-equivalent adjustment			2,251			2,526			2,329			4,366		4,855
	Income tax expense			76,658			58,370			61,574			151,063		119,944

Income from Continuing Operations				165,740			122,398			134,298			313,887		256,696

	Income (loss) from discontinued operations before income taxes			(545	)		(17,585	)		3,068			1,882		(14,517	)
	Income tax expense (benefit)			(159	)		(3,777	)		(3,979	)		804		(7,756	)
Income (Loss) from Discontinued Operations				(386	)		(13,808	)		7,047			1,078		(6,761	)
Net Income			$	165,354		$	108,590		$	141,345		$	314,965	$	249,935

Income from continuing operations per common share - basic			$	1.21		$	0.89		$	0.98		$	2.28	$	1.87
Net income per common share - basic			$	1.20		$	0.79		$	1.03		$	2.29	$	1.82
Income from continuing operations per common share - diluted			$	1.19		$	0.89		$	0.97		$	2.25	$	1.86
Net income per common share - diluted			$	1.19		$	0.79		$	1.02		$	2.26	$	1.82
Weighted average common shares outstanding - basic				137,477			137,006			137,209			137,708		137,107
Weighted average common shares outstanding - diluted				139,138			137,609			137,899			139,360		137,675


Refer to Exhibit11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets

			(Unaudited)						(Unaudited)
			June 30,			December 31,			June 30,
(Dollars in thousands)				2007			2007			2008
Assets
	Cash and due from banks		$	1,863,479		$	2,106,927		$	1,800,313
	Interest bearing deposits in banks			100,800			104,528			65,788
	Federal funds sold and securities purchased under resale agreements			1,400,875			310,178			172,345
		Total cash and cash equivalents		3,365,154			2,521,633			2,038,446
Trading account assets				307,012			603,333			1,136,416
Securities available for sale:
	Securities pledged as collateral			112,974			685,123			1,079,491
	Held in portfolio			8,742,728			7,770,037			7,396,824
	Loans (net of allowance for loan losses: June 30, 2007, $335,952;December 31, 2007, $402,726; June 30, 2008, $526,401)			37,407,270			40,801,462			45,514,957
Due from customers on acceptances				18,969			16,482			21,272
Premises and equipment, net				482,702			486,034			480,366
Intangible assets				8,708			6,458			5,117
Goodwill				360,058			355,287			355,287
Other assets				2,236,037			2,358,915			2,559,694
Assets of discontinued operations to be disposed or sold				132,221			122,984			6,051
		Total assets	$	53,173,833		$	55,727,748		$	60,593,921

Liabilities
	Noninterest bearing		$	14,938,229		$	13,802,640		$	13,440,290
	Interest bearing			27,042,770			28,877,551			29,164,129
		Total deposits		41,980,999			42,680,191			42,604,419
Federal funds purchased and securities sold under repurchase agreements				1,281,162			1,631,602			2,296,587
Commercial paper				1,167,437			1,266,656			1,397,159
Other borrowed funds				606,572			1,875,619			4,719,809
Trading account liabilities				188,437			351,057			892,240
Acceptances outstanding				18,969			16,482			21,272
Other liabilities				1,318,212			1,108,585			1,012,403
Medium and long-term debt				1,835,495			1,913,622			2,809,329
Junior subordinated debt payable to subsidiary grantor trust				14,659			14,432			14,206
Liabilities of discontinued operations to be extinguished or assumed				134,744			131,521			117,707
		Total liabilities		48,546,686			50,989,767			55,885,131

Stockholders' Equity
Preferred stock:
	Authorized 5,000,000 shares; no shares issued or outstanding as of
	June 30, 2007, December 31, 2007 and June 30, 2008			-			-			-
Common stock, par value $1 per share:
	Authorized 300,000,000 shares; issued 157,060,102 shares as of
	June 30, 2007, 157,559,521 shares as of December 31, 2007 and
	157,811,268 shares as of June 30, 2008			157,060			157,559			157,811
Additional paid-in capital				1,127,607			1,153,737			1,182,978
	Treasury stock - 18,745,538 shares as of June 30, 2007, 19,723,453 shares
	as of December 31, 2007 and 19,760,597 shares as of June 30, 2008			(1,151,985	)		(1,202,584	)		(1,204,469	)
Retained earnings				4,763,031			4,912,392			5,018,601
Accumulated other comprehensive loss				(268,566	)		(283,123	)		(446,131	)
	Total stockholders' equity			4,627,147			4,737,981			4,708,790
	Total liabilities and stockholders' equity		$	53,173,833		$	55,727,748		$	60,593,921

UnionBanCal Corporation and Subsidiaries
Loans (Unaudited)

														Percent Change to June 30, 2008 from
					Three Months Ended									Percent Change to June 30, 2008 from
					June 30,			March 31,			June 30,			June 30,		March 31,
(Dollars in millions)						2007			2008			2008		2007		2008

Loans (period average)
	Commercial, financial and industrial				$	14,610		$	15,569		$	16,729		14.50	%	7.45	%
	Construction					2,296			2,474			2,566		11.76	%	3.72	%
	Mortgage - Commercial					6,213			7,251			7,822		25.90	%	7.87	%
	Mortgage - Residential					12,591			13,988			14,490		15.08	%	3.59	%
	Consumer					2,557			2,686			2,978		16.46	%	10.87	%
	Lease financing					569			650			645		13.36	%	(0.77	%)

		Total loans held to maturity				38,836			42,618			45,230		16.46	%	6.13	%
		Total loans held for sale				4			83			264		nm		nm

			Total loans		$	38,840		$	42,701		$	45,494		17.13	%	6.54	%

Nonperforming Assets (period end)
	Nonaccrual loans:
		Commercial, financial and industrial			$	19		$	47		$	82		nm		74.47	%
		Construction				-			55			95		nm		72.73	%
		Mortgage - Commercial				10			24			39		nm		62.50	%

				Total nonaccrual loans		29			126			216		nm		71.43	%
	Restructured loans
		Mortgage - Residential				-			1			2		nm		100.00	%
	Foreclosed assets					1			5			7		nm		40.00	%

				Total nonperforming assets	$	30		$	132		$	225		nm		70.45	%
	Loans 90 days or more past due and
	still accruing				$	10		$	30		$	51		nm		70.00	%

Analysis of Allowances for Credit Losses
	Beginning balance				$	333		$	403		$	463

	Provision for loan losses					5			72			95

	Loans charged off:
		Commercial, financial and industrial				(3	)		(10	)		(18	)
		Construction				-			-			(10	)
		Mortgage - Residential				-			-			(2	)
		Consumer				(1	)		(3	)		(3	)
			Total loans charged off			(4	)		(13	)		(33	)

	Loans recovered:
		Commercial, financial and industrial				2			1			1
		Consumer				-			-			1
			Total loans recovered			2			1			2
				Net loans recovered (charged off)		(2	)		(12	)		(31	)

	Ending balance of allowance for loan losses					336			463			527
	Allowance for off-balance sheet commitment losses					82			98			103
	Allowances for credit losses				$	418		$	561		$	630

UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)

				For the Three Months Ended
				June 30, 2007								June 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		$	14,610,728		$	238,175		6.54	%	$	16,987,504		$	229,612		5.44	%
		Construction			2,296,098			44,047		7.69			2,566,207			30,794		4.83
		Residential mortgage			12,594,065			167,342		5.31			14,495,754			199,756		5.51
		Commercial mortgage			6,213,092			111,720		7.21			7,822,056			111,722		5.71
		Consumer			2,557,085			49,579		7.78			2,977,852			44,453		6.00
		Lease financing			568,701			7,341		5.16			644,788			1,171		0.73
			Total loans		38,839,769			618,204		6.38			45,494,161			617,508		5.44
	Securities - taxable				8,548,050			108,674		5.09			8,293,036			97,233		4.69
	Securities - tax-exempt				56,084			1,164		8.30			52,742			1,105		8.38
	Interest bearing deposits in banks				88,592			1,295		5.86			67,553			228		1.36
	Federal funds sold and securities
		purchased under resale agreements			593,718			7,809		5.28			213,292			1,093		2.06
	Trading account assets				317,020			1,601		2.03			814,274			1,119		0.55
			Total earning assets		48,443,233			738,747		6.11			54,935,058			718,286		5.24
	Allowance for loan losses				(331,820	)							(456,191	)
	Cash and due from banks				2,000,688								1,662,638
	Premises and equipment, net				480,578								482,950
	Other assets				2,393,954								2,645,510
			Total assets	$	52,986,633							$	59,269,965
	Liabilities
	Deposits:
		Transaction accounts		$	14,075,542			102,833		2.93		$	15,550,970			59,513		1.54
		Savings and consumer time			4,326,199			28,858		2.68			3,846,404			13,918		1.46
		Large time			9,173,928			114,380		5.00			10,929,983			71,078		2.62
			Total interest bearing deposits		27,575,669			246,071		3.58			30,327,357			144,509		1.92
	Federal funds purchased and securities
		sold under repurchase agreements			782,000			10,120		5.19			2,428,357			12,697		2.10
	Net funding allocated from (to)
		discontinued operations ⁽¹²⁾			14,777			192		5.21			64,945			360		2.23
	Commercial paper				1,389,847			17,429		5.03			1,487,032			8,279		2.24
	Other borrowed funds ⁽¹³⁾				333,000			4,685		5.64			3,201,612			19,624		2.47
	Medium and long-term debt				2,033,377			28,973		5.72			2,629,308			19,692		3.01
	Trust notes				14,714			238		6.48			14,261			238		6.68
			Total borrowed funds		4,567,715			61,637		5.41			9,825,515			60,890		2.49
			Total interest bearing liabilities		32,143,384			307,708		3.84			40,152,872			205,399		2.06
	Noninterest bearing deposits				14,989,222								12,875,823
	Other liabilities				1,265,966								1,624,674
			Total liabilities		48,398,572								54,653,369
	Stockholders' Equity
	Common equity				4,588,061								4,616,596
			Total stockholders' equity		4,588,061								4,616,596
			Total liabilities and stockholders'
			equity	$	52,986,633							$	59,269,965
	Reported Net Interest Income/Margin
	Net interest income/margin
		(taxable-equivalent basis)						431,039		3.56	%					512,887		3.74	%
	Less: taxable-equivalent adjustment							2,251								2,329
			Net interest income				$	428,788							$	510,558

Average Assets and Liabilities of Discontinued Operations for Period Ended:
							June 30, 2007								June 30, 2008
Assets							$	129,821							$	95,415
Liabilities							$	144,598							$	160,360
Net Liabilities							$	(14,777	)						$	(64,945	)


Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)

			For the Three Months Ended
			March 31, 2008								June 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		$	15,647,162		$	238,303		6.13	%	$	16,987,504		$	229,612		5.44	%
	Construction			2,474,323			36,617		5.95			2,566,207			30,794		4.83
	Residential mortgage			13,992,743			192,785		5.51			14,495,754			199,756		5.51
	Commercial mortgage			7,250,747			112,970		6.23			7,822,056			111,722		5.71
	Consumer			2,686,635			46,390		6.94			2,977,852			44,453		6.00
	Lease financing			649,843			6,297		3.88			644,788			1,171		0.73
		Total loans		42,701,453			633,362		5.95			45,494,161			617,508		5.44
Securities - taxable				8,355,943			104,963		5.02			8,293,036			97,233		4.69
Securities - tax-exempt				53,359			1,082		8.11			52,742			1,105		8.38
Interest bearing deposits in banks				29,869			128		1.72			67,553			228		1.36
Federal funds sold and securities
	purchased under resale agreements			328,145			2,693		3.30			213,292			1,093		2.06
Trading account assets				719,316			2,804		1.57			814,274			1,119		0.55
		Total earning assets		52,188,085			745,032		5.72			54,935,058			718,286		5.24
Allowance for loan losses				(399,280	)							(456,191	)
Cash and due from banks				1,757,362								1,662,638
Premises and equipment, net				483,815								482,950
Other assets				2,603,013								2,645,510
		Total assets	$	56,632,995							$	59,269,965
Liabilities
Deposits:
	Transaction accounts		$	14,864,561			82,915		2.24		$	15,550,970			59,513		1.54
	Savings and consumer time			4,179,663			23,529		2.26			3,846,404			13,918		1.46
	Large time			11,962,678			114,216		3.84			10,929,983			71,078		2.62
		Total interest bearing deposits		31,006,902			220,660		2.86			30,327,357			144,509		1.92
Federal funds purchased and securities
	sold under repurchase agreements			1,950,692			15,566		3.21			2,428,357			12,697		2.10
Net funding allocated from (to)
	discontinued operations ⁽¹²⁾			16,992			149		3.53			64,945			360		2.23
Commercial paper				1,207,510			9,792		3.26			1,487,032			8,279		2.24
Other borrowed funds ⁽¹³⁾				1,566,297			16,066		4.13			3,201,612			19,624		2.47
Medium and long-term debt				1,846,885			19,457		4.24			2,629,308			19,692		3.01
Trust notes				14,374			238		6.63			14,261			238		6.68
		Total borrowed funds		6,602,750			61,268		3.73			9,825,515			60,890		2.49
		Total interest bearing liabilities		37,609,652			281,928		3.01			40,152,872			205,399		2.06
Noninterest bearing deposits				12,606,852								12,875,823
Other liabilities				1,698,082								1,624,674
		Total liabilities		51,914,586								54,653,369
Stockholders' Equity
Common equity				4,718,409								4,616,596
		Total stockholders' equity		4,718,409								4,616,596
		Total liabilities and stockholders'
		equity	$	56,632,995							$	59,269,965
Reported Net Interest Income/Margin
Net interest income/margin
	(taxable-equivalent basis)						463,104		3.55	%					512,887		3.74	%
Less: taxable-equivalent adjustment							2,526								2,329
		Net interest income				$	460,578							$	510,558

Average Assets and Liabilities of Discontinued Operations for Period Ended:
						March 31, 2008								June 30, 2008
Assets						$	123,169							$	95,415
Liabilities						$	140,161							$	160,360
Net Liabilities						$	(16,992	)						$	(64,945	)


Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)

			For the Six Months Ended
			June 30, 2007								June 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		$	14,647,210		$	475,453		6.55	%	$	16,317,333		$	467,915		5.77	%
	Construction			2,264,789			86,822		7.73			2,520,265			67,411		5.38
	Residential mortgage			12,490,760			331,108		5.30			14,244,248			392,541		5.51
	Commercial mortgage			6,139,042			218,686		7.18			7,536,401			224,692		5.96
	Consumer			2,549,836			98,558		7.79			2,832,243			90,843		6.45
	Lease financing			558,310			11,079		3.97			647,315			7,468		2.31
		Total loans		38,649,947			1,221,706		6.36			44,097,805			1,250,870		5.69
Securities - taxable				8,564,087			215,941		5.04			8,324,489			202,196		4.86
Securities - tax-exempt				56,865			2,318		8.15			53,051			2,187		8.24
Interest bearing deposits in banks				84,102			2,404		5.76			48,711			356		1.47
Federal funds sold and securities
	purchased under resale agreements			719,183			18,961		5.32			270,718			3,786		2.81
Trading account assets				325,146			3,302		2.05			766,795			3,923		1.03
		Total earning assets		48,399,330			1,464,632		6.08			53,561,569			1,463,318		5.48
Allowance for loan losses				(331,042	)							(427,801	)
Cash and due from banks				1,975,101								1,710,000
Premises and equipment, net				483,551								483,383
Other assets				2,386,515								2,623,959
		Total assets	$	52,913,455							$	57,951,110
Liabilities
Deposits:
	Transaction accounts		$	13,806,452			194,338		2.84		$	15,207,766			142,428		1.88
	Savings and consumer time			4,311,874			55,713		2.61			4,013,034			37,447		1.88
	Large time			8,806,573			218,175		5.00			11,446,331			185,294		3.26
		Total interest bearing deposits		26,924,899			468,226		3.51			30,667,131			365,169		2.39
Federal funds purchased and securities
	sold under repurchase agreements			913,489			23,644		5.22			2,189,525			28,263		2.60
Net funding allocated from (to)
	discontinued operations ⁽¹²⁾			14,930			387		5.23			40,667			509		2.52
Commercial paper				1,585,714			39,693		5.05			1,347,271			18,071		2.70
Other borrowed funds ⁽¹³⁾				817,620			21,955		5.41			2,383,954			35,690		3.01
Medium and long-term debt				1,704,240			48,668		5.76			2,238,097			39,149		3.52
Trust notes				14,770			476		6.45			14,318			476		6.66
		Total borrowed funds		5,050,763			134,823		5.38			8,213,832			122,158		2.99
		Total interest bearing liabilities		31,975,662			603,049		3.80			38,880,963			487,327		2.52
Noninterest bearing deposits				15,043,454								12,741,338
Other liabilities				1,344,991								1,661,380
		Total liabilities		48,364,107								53,283,681
Stockholders' Equity
Common equity				4,549,348								4,667,429
		Total stockholders' equity		4,549,348								4,667,429
		Total liabilities and stockholders'
		equity	$	52,913,455							$	57,951,110
Reported Net Interest Income/Margin
Net interest income/margin
	(taxable-equivalent basis)						861,583		3.56	%					975,991		3.65	%
Less: taxable-equivalent adjustment							4,366								4,855
		Net interest income				$	857,217							$	971,136

Average Assets and Liabilities of Discontinued Operations for Period Ended:
						June 30, 2007								June 30, 2008
Assets						$	131,783							$	109,594
Liabilities						$	146,713							$	150,261
Net Liabilities						$	(14,930	)						$	(40,667	)


Refer to Exhibit 11 for footnote explanations.

UnionBanCal Corporation and Subsidiaries

	Noninterest income (Unaudited)


				For the Three Months Ended							Percentage Change to June 30, 2008 from
				June 30,		March 31,			June 30,		June 30,			March 31,
		(Dollars in thousands)		2007			2008			2008	2007			2008
		Service charges on deposit accounts		$	77,218	$	74,736		$	77,706	0.63		%	3.97		%
		Trust and investment management fees			39,656		43,388			43,802	10.45			0.95
		Trading account activities			13,838		11,012			16,687	20.59			51.53
		Merchant banking fees			8,809		11,793			11,085	25.84			(6.00	)
		Brokerage commissions and fees			9,533		9,859			10,635	11.56			7.87
		Card processing fees, net			7,824		7,764			8,167	4.38			5.19
		Securities gains (losses), net			230		(2	)		-	(100.00	)		(100.00	)
		Gains on private capital investments, net			20,171		1,070			1,282	(93.64	)		19.81
		Gain on the VISA IPO redemption			-		14,211			-	0.00			(100.00	)
		Other			24,382		21,565			30,262	24.12			40.33
			Total noninterest income	$	201,661	$	195,396		$	199,626	(1.01	)	%	2.16		%


Noninterest expense (Unaudited)


				For the Three Months Ended							Percentage Change to June 30, 2008 from
				June 30,		March 31,			June 30,		June 30,			March 31,
		(Dollars in thousands)			2007		2008			2008	2007			2008
		Salaries and other compensation		$	189,910	$	192,011		$	204,077	7.46		%	6.28		%
		Employee benefits			42,029		49,659			39,222	(6.68	)		(21.02	)
			Salaries and employee benefits		231,939		241,670			243,299	4.90			0.67
		Net occupancy			33,718		36,202			38,232	13.39			5.61
		Outside services			17,150		17,009			20,295	18.34			19.32
		Professional services			11,144		14,597			15,931	42.96			9.14
		Equipment			15,804		15,347			15,141	(4.20	)		(1.34	)
		Software			13,959		14,795			14,409	3.22			(2.61	)
		Advertising and public relations			10,226		8,099			12,857	25.73			58.75
		Communications			8,278		9,375			9,111	10.06			(2.82	)
		Data processing			8,562		7,076			7,784	(9.09	)		10.01
		Intangible asset amortization			1,125		670			670	(40.44	)		0.00
		Foreclosed asset expense			9		89			83	nm			(6.74	)
		Provision for losses on off-balance sheet commitments			-		8,000			5,000	nm			(37.50	)
		Other			31,137		30,277			36,500	17.22			20.55
			Total noninterest expense	$	383,051	$	403,206		$	419,312	9.47		%	3.99		%

UnionBanCal Corporation and Subsidiaries

Noninterest income (Unaudited)

			For the Six Months Ended					Percentage Change to June 30, 2008 from
			June 30,		June 30,			June 30,
	(Dollars in thousands)		2007			2008		2007
	Service charges on deposit accounts		$	152,163	$	152,442		0.18		%
	Trust and investment management fees			76,516		87,190		13.95
	Trading account activities			28,678		27,699		(3.41	)
	Merchant banking fees			17,886		22,878		27.91
	Brokerage commissions and fees			19,193		20,494		6.78
	Card processing fees, net			14,951		15,931		6.55
	Securities gains (losses), net			1,450		(2	)	nm
	Gains on private capital investments, net			29,266		2,352		(91.96	)
	Gain on the VISA IPO redemption			-		14,211		nm
	Other			52,300		51,827		(0.90	)
		Total noninterest income	$	392,403	$	395,022		0.67		%

Noninterest expense (Unaudited)

			For the Six Months Ended					Percentage Change to June 30, 2008 from
			June 30,		June 30,			June 30,
	(Dollars in thousands)		2007			2008		2007
	Salaries and other compensation		$	380,887	$	396,089		3.99		%
	Employee benefits			88,476		88,880		0.46
		Salaries and employee benefits		469,363		484,969		3.32
	Net occupancy			67,385		74,434		10.46
	Outside services			35,119		37,304		6.22
	Professional services			27,494		30,528		11.04
	Equipment			31,814		30,488		(4.17	)
	Software			27,273		29,204		7.08
	Advertising and public relations			18,391		20,956		13.95
	Communications			17,413		18,486		6.16
	Data processing			16,745		14,860		(11.26	)
	Intangible asset amortization			2,251		1,340		(40.47	)
	Foreclosed asset expense			18		172		nm
	Provision for losses on
		off-balance sheet commitments		1,000		13,000		nm
	Other			61,404		66,777		8.75
		Total noninterest expense	$	775,670	$	822,518		6.04		%

UnionBanCal Corporation and Subsidiaries

Footnotes


⁽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 June 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

CONTACT:
UnionBanCal Corporation
John A. Rice, Jr., 415-765-2998 (Investor Relations)
Michelle R. Crandall, 415-765-2780 (Investor Relations)
Stephen L. Johnson, 415-765-3252 (Public Relations)

Delaware	001-15081	94-1234979
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

(c)	Exhibits:

Exhibit No.			Description
	99.1	Press release dated July 21, 2008.

Dated:	July 21, 2008


		UNIONBANCAL CORPORATION


		By:	/s/ DAVID I. MATSON
			David I. Matson
			Chief Financial Officer
			(Duly Authorized Officer)

	Exhibit No.		Description
		99.1		Press release dated July 21, 2008.