________________________________________________________________________________

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15() OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15() OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number 0-28118

UNIONBANCAL CORPORATION
(Exact name of registrant as specified in its charter)

CALIFORNIA 94-1234979
(State of Incorporation) (I.R.S. Employer Identification No.)

400 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104-1302
(Address of principal executive offices)

Registrant's telephone number (415) 765-2969

Securities registered pursuant to Section 12(b) of the Act:
Common Stock

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
___ ___

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

As of January 31, 2002, the aggregate market value of voting and
non-voting common equity held by non-affiliates of the registrant was
$1,810,760,335. The aggregate market value was computed by reference to the last
sales price of such stock.

As of January 31, 2002, the number of shares outstanding of the
registrant's Common Stock was 156,227,205.

DOCUMENTS INCORPORATED BY REFERENCE

INCORPORATED DOCUMENT LOCATION IN FORM 10-K

Portions of the Proxy Statement for the
April 24, 2002 Annual Meeting of Shareholders Part III

________________________________________________________________________________

INDEX

PAGE

PART I
Item 1. Business................................................. 2
General........................................................ 2
Banking........................................................ 2
Employees...................................................... 3
Competition.................................................... 3
Monetary Policy................................................ 4
Supervision and Regulation..................................... 4
Item 2. Properties............................................... 6
Item 3. Legal Proceedings........................................ 6
Item 4. Submission of Matters to a Vote of Security Holders...... 7
Item 4A. Executive Officers of the Registrant.................... 7
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters...................................... 9
Item 6. Selected Financial Data.................................. 10, F-1
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 10, F-1
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk............................................. 10, F-35
Item 8. Financial Statements and Supplementary Data.............. 10, F-45
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure...................... 10
PART III
Item 10. Directors and Executive Officers of the Registrant...... 10
Item 11. Executive Compensation.................................. 10
Item 12. Security Ownership of Certain Beneficial Owners
and Management.......................................... 10
Item 13. Certain Relationships and Related Transactions.......... 11
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K..................................... 11
Signatures......................................................... II-1

PART I

ITEM 1. BUSINESS

THIS DOCUMENT INCLUDES FORWARD-LOOKING INFORMATION, WHICH IS SUBJECT TO
THE "SAFE HARBOR" CREATED BY SECTION 27A OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. OUR
MANAGEMENT MAY MAKE FORWARD-LOOKING STATEMENTS IN OTHER SECURITIES AND EXCHANGE
COMMISSION FILINGS, PRESS RELEASES, NEWS ARTICLES, CONFERENCE CALLS WITH WALL
STREET ANALYSTS AND SHAREHOLDERS AND WHEN WE ARE SPEAKING ON BEHALF OF
UNIONBANCAL CORPORATION. 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," "EXPECT," "ANTICIPATE," "INTEND," "PLAN,"
"ESTIMATE," "PROJECT," OR WORDS OF SIMILAR MEANING, OR FUTURE OR CONDITIONAL
VERBS SUCH AS "WILL," "WOULD," "SHOULD," "COULD," OR "MAY." THESE
FORWARD-LOOKING STATEMENTS ARE INTENDED TO PROVIDE INVESTORS WITH ADDITIONAL
INFORMATION WITH WHICH THEY MAY ASSESS OUR FUTURE POTENTIAL. ALL OF THESE
FORWARD-LOOKING STATEMENTS ARE BASED ON ASSUMPTIONS ABOUT AN UNCERTAIN FUTURE
AND ARE BASED ON INFORMATION AVAILABLE AT THE DATE SUCH STATEMENTS ARE ISSUED.

THERE ARE NUMEROUS RISKS AND UNCERTAINTIES THAT COULD AND WILL CAUSE
ACTUAL RESULTS TO DIFFER FROM THOSE DISCUSSED IN OUR FORWARD-LOOKING STATEMENTS.
MANY OF THESE FACTORS ARE BEYOND OUR ABILITY TO CONTROL OR PREDICT AND COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR STOCK PRICE, FINANCIAL CONDITION, RESULTS
OF OPERATIONS OR PROSPECTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT
LIMITED TO, THE FOLLOWING FACTORS: ADVERSE ECONOMIC CONDITIONS IN CALIFORNIA
(INCLUDING PROBLEMS ARISING FROM THE CALIFORNIA ENERGY CRISIS), GLOBAL POLITICAL
AND GENERAL ECONOMIC CONDITIONS RELATED TO THE TERRORIST ATTACKS ON SEPTEMBER
11, 2001 AND THEIR AFTERMATH, ADVERSE ECONOMIC CONDITIONS AFFECTING CERTAIN
INDUSTRIES, FLUCTUATIONS IN INTEREST RATES, THE CONTROLLING INTEREST IN US BY
THE BANK OF TOKYO-MITSUBISHI, LTD., COMPETITION IN THE BANKING INDUSTRY,
RESTRICTIONS ON DIVIDENDS, ADVERSE EFFECTS OF CURRENT AND FUTURE BANKING RULES,
REGULATIONS AND LEGISLATION, AND RISKS ASSOCIATED WITH VARIOUS STRATEGIES WE MAY
PURSUE, INCLUDING POTENTIAL ACQUISITIONS, DIVESTITURES AND RESTRUCTURINGS. SEE
ALSO THE SECTION ENTITLED "CERTAIN BUSINESS RISK FACTORS" LOCATED NEAR THE END
OF THE NARRATIVE COMMENTS UNDER THE CAPTION "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION" (MD&A).

GENERAL

UnionBanCal Corporation and its banking subsidiary, Union Bank of
California, N.A., was created on April 1, 1996 by the combination of Union Bank
with BanCal Tri-State Corporation and its banking subsidiary, The Bank of
California, N.A. The combination was accounted for as a reorganization of
entities under common control, similar to a pooling of interests.

In November 1999, July 2000 and April 2001, we announced stock
repurchase plans of $100 million each. We repurchased $17 million of common
stock in 1999, $130 million in 2000 and $108 million in 2001. As of December 31,
2001, $45 million of common stock is authorized for repurchase. At December 31,
2001, The Bank of Tokyo-Mitsubishi, Ltd. (BTM), which is a wholly-owned
subsidiary of Mitsubishi Tokyo Financial Group, Inc., owned approximately 67
percent of UnionBanCal Corporation.

We provide a wide range of financial services to consumers, small
businesses, middle-market companies and major corporations, primarily in
California, Oregon, and Washington, but nationally and internationally as well.

BANKING

Our operations are divided into four primary segments, which are
described more fully in our MD&A and Note 22 to our Consolidated Financial
Statements included in this Form 10-K.

THE COMMUNITY BANKING AND INVESTMENT SERVICES GROUP. This group offers
its customers a complete spectrum of financial needs under one convenient
umbrella. With a full line of checking and savings, investment, loan and
fee-based banking products, individual and business clients, including
not-for-profit, small and institutional investors, can each have their specific
needs met. These products are offered in 245

full-service branches, primarily in California, as well as in Oregon and
Washington. In addition, the group offers international and settlement services,
e-banking through our web site, check cashing services at our Cash & Save(R)
locations and tailored loan investment products to our high net worth consumer
customers through the Private Bank. Institutional customers are offered employee
benefit, 401(k) administration, corporate trust, securities lending and custody
(global and domestic) services. The group also includes a registered
broker-dealer and a registered investment advisor, which provide investment
advisory services and manage a proprietary fund family.

In the fourth quarter, we acquired the Fullerton, California-based
Armstrong/Robitaille Business and Insurance Services. This regional insurance
broker, founded in 1979, is one of the top 100 insurance brokers in the United
States. With offices in California and Oregon, this relationship will allow us
to offer an extensive array of cost-effective risk management services and
insurance products to business and retail customers.

Additionally in the fourth quarter, we announced our proposed
acquisition of First Western Bank. Headquartered in Simi Valley, First Western
Bank has $213 million in assets and 139 employees, at December 31, 2001, and
operates 7 branches in Ventura and Los Angeles counties. The integration of
First Western will expand our geographic footprint in the greater Los Angeles
area and provide us the opportunity to both increase our prospect opportunities
and offer our existing consumer and commercial customer relationships a fuller
range of financial services. This acquisition is expected to close in the second
quarter of 2002. Both deals are examples of our commitment to expansion through
targeted acquisitions, and are consistent with our strategies to diversify
earnings and broaden our branch network.

THE COMMERCIAL FINANCIAL SERVICES GROUP. This group offers a variety of
commercial financial services, including commercial loans and project financing,
real estate financing, asset-based financing, trade finance and letters of
credit, lease financing, customized cash management services and selected
capital markets products. The group's customers include middle-market companies,
large corporations, real estate companies and other more specialized industry
customers. In addition, specialized depository services are offered to title and
escrow companies, retailers, domestic financial institutions, bankruptcy
trustees and other customers with significant deposit volumes.

THE INTERNATIONAL BANKING GROUP. This group primarily provides corres-
pondent banking and trade finance-related products and services to financial
institutions worldwide, primarily in Asia. The group also serves selected
foreign firms and U.S. corporate clients in selected countries worldwide,
particularly in Asia. This group has a long and stable history of providing
correspondent and trade-related services to international financial
institutions.

THE GLOBAL MARKETS GROUP. This group, in collaboration with our other
business groups, offers customers a broad range of products. They include a
variety of foreign exchange products and risk management products, such as
interest rate swaps and options. The group trades money market and fixed income
securities in the secondary market and serves institutional investment needs.
The group manages the market-related risks for us as part of its
responsibilities for asset/liability management, including funding our own
liquidity needs and addressing our interest rate risk.

EMPLOYEES

At January 31, 2002, we had 9,232 full-time equivalent employees.

COMPETITION

Banking is a highly competitive business. We compete actively for loan,
deposit, and other financial services business in California, Oregon, and
Washington, as well as nationally and internationally. Our competitors include a
large number of state and national banks and major foreign-affiliated or foreign
banks, as well as many financial and nonfinancial firms, which offer services
similar to those offered by our subsidiaries or us.

We believe that continued emphasis on enhanced services and
distribution systems, an expanded customer base, increased productivity and
strong credit quality, together with an established capital base, will position
us to meet the challenges provided by this competition.

MONETARY POLICY

The operations of bank holding companies and their subsidiaries are
affected by the credit and monetary policies of the Federal Reserve Board (FRB).
The FRB influences the financial performance of bank holding companies and their
subsidiaries through its management of the discount rate, the money supply, and
reserve requirements on bank deposits. Monetary policies of the FRB have had,
and will continue to have, a significant effect on the operating results of
financial institutions, including us.

SUPERVISION AND REGULATION

We and The Bank of Tokyo-Mitsubishi, Ltd. are subject to regulation
under the Bank Holding Company Act of 1956 (BHCA), as amended, which subjects us
to FRB reporting and examination requirements. Generally, the BHCA restricts any
investment that we may make to no more than 5 percent of the voting shares of
any non-banking entity, and we may not acquire more than 5 percent of the voting
shares of any domestic bank without the prior approval of the FRB. Our
activities are limited, with some exceptions, to banking, the business of
managing or controlling banks, and other activities which the regulatory
authorities deem to be so closely related to banking as to be a "proper incident
thereto".

Union Bank of California, N.A. and most of its subsidiaries are
regulated by the Office of the Comptroller of the Currency (OCC). Our
subsidiaries are also subject to extensive regulation, supervision, and
examination by various other federal and state regulatory agencies. In addition,
Union Bank of California, N.A. and its subsidiaries are subject to certain
restrictions under the Federal Reserve Act, including restrictions on affiliate
transactions. Dividends payable by Union Bank of California, N.A. to us are
subject to a formula imposed by the OCC unless express approval is given to
deviate from the formula. For more information regarding restrictions on loans
and dividends by Union Bank of California, N.A. to its affiliates and on
transactions with affiliates, see Notes 16 and 21 to our Consolidated Financial
Statements included in this Form 10-K.

The Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) requires federal bank regulatory authorities to take "prompt corrective
action" in dealing with inadequately capitalized banks. FDICIA established five
tiers of capital measurement ranging from "well-capitalized" to "critically
undercapitalized". It is our policy to maintain capital ratios above the
regulatory requirements of "well-capitalized" institutions for both Union Bank
of California, N.A. and us. Management believes Union Bank of California, N.A.
and we met the requirements of "well-capitalized" institutions, at December 31,
2001.

Furthermore, the activities of HighMark Capital Management, Inc. and
UBOC Investment Services, Inc. are subject to the rules and regulations of the
Securities and Exchange Commission as well as state securities regulators. UBOC
Investment Services, Inc. is also subject to the rules and regulations of the
National Association of Securities Dealers (NASD).

Armstrong/Robitaille, Inc., an indirect subsidiary of Union Bank of
California, N.A., is subject to the rules and regulations of the California
Department of Insurance as well as insurance regulators of other states.

Deposits of Union Bank of California, N.A. are insured up to regulatory
limits by the Federal Deposit Insurance Corporation (FDIC), and, accordingly,
are subject to deposit insurance assessments to maintain the Bank Insurance Fund
(BIF) administered by the FDIC. Union Bank of California, N.A. currently pays no
insurance assessments on these deposits under the FDIC's risk-related assessment
system. Although there are no definite plans to raise assessment rates in the
second half of 2002, we can give no assurances as to the future level of such
insurance premiums.

There are additional requirements and restrictions in the laws of the
United States and the states of California, Oregon, and Washington, as well as
other states in which Union Bank of California, N.A. and its subsidiaries may
conduct operations. These include restrictions on the amount of loans and the
nature

and amount of investments, as well as activities as an underwriter of
securities, the opening and closing of branches and the acquisition of other
financial institutions. Union Bank of California, N.A. is subject to certain
fair lending requirements and reporting obligations involving home mortgage
lending operations and is also subject to the Community Reinvestment Act (CRA)
activities. The CRA generally requires the federal banking agencies to evaluate
the record of a financial institution in meeting the credit needs of their local
communities, including low and moderate-income neighborhoods. In addition to
substantive penalties and corrective measures that may be required for a
violation of certain fair lending laws, the federal banking agencies may take
compliance with such laws and CRA into account when regulating and supervising
other activities.

The international activities of Union Bank of California, N.A. are
subject to the laws and regulations of the jurisdiction where business is being
conducted, which may change from time to time and affect Union Bank of
California, N.A.'s business opportunities and competitiveness in these
jurisdictions. Furthermore, due to the controlling ownership of us by The Bank
of Tokyo-Mitsubishi, Ltd., regulatory requirements adopted or enforced by the
Government of Japan may have an effect on the activities and investments of
Union Bank of California, N.A. and us in the future.

The Gramm-Leach-Bliley (GLB) Act allows "financial holding companies"
(FHC) to offer banking, insurance, securities and other financial products.
Specifically, the GLB Act amends section 4 of the BHCA in order to provide a
framework for the engagement in new financial activities. Bank holding companies
(BHC) such as we may elect to become a financial holding company if all of their
subsidiary depository institutions are well-capitalized and well-managed. Under
current FRB interpretations, a foreign bank, such as The Bank of
Tokyo-Mitsubishi Ltd., which owns a subsidiary U.S. bank holding company, must
make the election on behalf of itself and its U.S. holding company. In addition,
the foreign bank must be well-capitalized and well managed in accordance with
standards comparable to those required of U.S. banks as determined by the FRB
and must have a satisfactory or better CRA rating. We do not expect that The
Bank of Tokyo-Mitsubishi, Ltd. will make a financial holding company election in
the immediate future. Under the GLB Act, "financial subsidiaries" of banks may
engage in some types of activities beyond those permitted to banks themselves,
provided certain conditions are met.

In 2000, Union Bank of California, N.A. filed a "Financial Subsidiary
Certification" with the OCC indicating that the applicable conditions were met
at that time. Although Union Bank of California N.A. does not presently have any
"financial subsidiaries", this certification would expedite the process for the
Bank to form or acquire "financial subsidiaries", if it decided to do so. Under
the GLB Act, national banks (as well as FDIC-insured state banks, subject to
various requirements), such as Union Bank of California, N.A., are permitted to
engage, through these "financial subsidiaries", in certain financial activities
permissible for affiliates of FHCs. However, to be able to engage in such
activities, the national bank must also be well-capitalized and well-managed and
receive at least a "satisfactory" rating in its most recent CRA examination. In
addition, if the national bank ranks as one of the 50 largest insured banks in
the United States, as we do, it must have an issue of outstanding long-term debt
rated in one of the 3 highest rating categories by an independent rating agency,
which we presently do not. If the national bank falls within the next group of
50, it must either meet the debt rating test described above or satisfy a
comparable test jointly agreed to by the FRB and the Treasury Department. No
debt rating is required for a national bank not within the top 100 largest
insured banks in the United States.

The terrorist attacks in September, 2001, have impacted the financial
services industry and have already led to federal legislation that attempts to
address certain issues involving financial institutions. On October 26, 2001,
President Bush signed into law the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (the "USA Patriot Act").

Part of the USA Patriot Act is the International Money Laundering
Abatement and Financial Anti-Terrorism Act of 2001 ("IMLAFATA"). IMLAFATA
authorizes the Secretary of the Treasury, in consultation with the heads of
other government agencies, to adopt special measures applicable to banks, bank
holding companies, and/or other financial institutions. These measures may
include enhanced

recordkeeping and reporting requirements for certain financial transactions that
are of primary money laundering concern, due diligence requirements concerning
the beneficial ownership of certain types of accounts, and restrictions or
prohibitions on certain types of accounts with foreign financial institutions.

Among its other provisions, IMLAFATA requires each financial
institution to: (i) establish an anti-money laundering program; (ii) establish
due diligence policies, procedures and controls with respect to its private
banking accounts and correspondent banking accounts involving foreign
individuals and certain foreign banks; and (iii) avoid establishing,
maintaining, administering, or managing correspondent accounts in the United
States for, or on behalf of, a foreign bank that does not have a physical
presence in any country. In addition, IMLAFATA contains a provision encouraging
cooperation among financial institutions, regulatory authorities and law
enforcement authorities with respect to individuals, entities and organizations
engaged in, or reasonably suspected of engaging in, terrorist acts or money
laundering activities. IMLAFATA expands the circumstances under which funds in a
bank account may be forfeited and requires covered financial institutions to
respond under certain circumstances to requests for information from federal
banking agencies within 120 hours. IMLAFATA also amends the Bank Holding Company
Act and the Bank Merger Act to require the federal banking agencies to consider
the effectiveness of a financial institution's anti-money laundering activities
when reviewing an application under these acts.

Treasury regulations implementing the due diligence requirements must
be issued no later than April 24, 2002. Whether or not regulations are adopted,
IMLAFATA becomes effective during 2002. Additional regulations are to be adopted
during 2002 to implement minimum standards to verify customer identity, to
encourage cooperation among financial institutions, federal banking agencies,
and law enforcement authorities regarding possible money laundering or terrorist
activities, to prohibit the anonymous use of "concentration accounts," and to
require all covered financial institutions to have in place a Bank Secrecy Act
compliance program.

UnionBanCal Corporation and Union Bank of California, N.A. cannot be
certain of the effect, if any, of the foregoing legislation on their business.
Changes in the laws, regulations, or policies that impact Union Bank of
California, N.A. and us cannot necessarily be predicted and may have a material
effect on our business and earnings.

See Consolidated Financial Statements starting on page F-45 for
specific financial information on UnionBanCal Corporation and its subsidiaries.

ITEM 2. PROPERTIES

At December 31, 2001, we operated 245 full service branches in
California, six full service branches in Oregon and Washington, and 16
international facilities. In addition, we have another 41 limited service
branches, including five Cash & Save(R) facilities, and three Private Bank
offices. We own the property occupied by 87 of the domestic offices and lease
the remaining properties for periods of five to twenty years.

We own two administrative facilities in San Francisco, one in the Los
Angeles area, and three in San Diego. Other administrative offices in San
Francisco, Los Angeles, Portland, Seattle, and New York operate under long-term
leases expiring in one to twenty-six years.

Rental expense for branches and administrative premises is described in
Note 4 to our Consolidated Financial Statements.

ITEM 3. LEGAL PROCEEDINGS

We are subject to various pending and threatened legal actions that
arise in the normal course of business. We maintain reserves for losses from
legal actions that are both probable and estimable. In the opinion of
management, the disposition of claims currently pending will not have a material
adverse effect on our financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the
fourth quarter of 2001.

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

The following information pertains to our executive officers:

EXECUTIVE OFFICER AGE PRINCIPAL OCCUPATIONS FOR THE PAST
FIVE YEARS
__________________________________ ___ ______________________________________
Kaoru Hayama...................... 67 Mr. Hayama has served as Chairman of
UnionBanCal Corporation and Union Bank
of California, N.A. since September
1998. He served as Deputy President of
The Bank of Tokyo-Mitsubishi, Ltd.
from April 1996 to June 1998. Mr.
Hayama has served as a Director of
UnionBanCal Corporation and Union Bank
of California, N.A. since September
1998.
Norimichi Kanari.................. 55 Mr. Kanari has served as President and
Chief Executive Officer of UnionBanCal
Corporation and Union Bank of
California, N.A. since July 2001 and
served as Vice Chairman of UnionBanCal
Corporation and Union Bank of
California, N.A. from July 2000 to
July 2001. From May 1999 to July 2000,
he served as General Manager of the
Corporate Banking Division in the
Osaka Branch of The Bank of
Tokyo-Mitsubishi, Ltd., after serving
from August 1997 to May 1999 as
General Manager of The Bank of
Tokyo-Mitsubishi, Ltd.'s New York
Branch and Cayman Branch. From April
1996 to June 1997, he was General
Manager of The Bank of
Tokyo-Mitsubishi, Ltd.'s Shimbashi
Branch. He has served as a Director of
The Bank of Tokyo-Mitsubishi, Ltd.
since June 1997. Mr. Kanari has been a
Director of UnionBanCal Corporation
and Union Bank of California, N.A.
since July 2000.
Takaharu Saegusa.................. 49 Mr. Saegusa has served as Deputy
Chairman of UnionBanCal Corporation
and Union Bank of California, N.A.
since March 2001 and served as
Executive Vice President of
UnionBanCal Corporation and Union Bank
of California, N.A. from February 2001
to March 2001. He served as Deputy
General Manager, Japanese Corporate
Banking Group at The Bank of
Tokyo-Mitsubishi, Ltd.'s New York
Branch from June 1998 to February
2001. From January 1997 to May 1998,
he served as General Manager of The
Bank of Tokyo-Mitsubishi, Ltd.'s
Shirno-Akatsuka Branch. Mr. Saegusa
has been a Director of UnionBanCal
Corporation and Union Bank of
California, N.A. since March 2001.
Richard C. Hartnack............... 56 Mr. Hartnack has served as Vice
Chairman and head of the Community
Banking and Investment Services Group
for UnionBanCal Corporation and Union
Bank of California, N.A. since
September 1999, and from April 1996 to
September 1999 as head of the
Community Banking Group. Mr. Hartnack
has served as a Director of
UnionBanCal Corporation since June
1991.

EXECUTIVE OFFICER AGE PRINCIPAL OCCUPATIONS FOR THE PAST
FIVE YEARS
__________________________________ ___ ______________________________________
Robert M. Walker.................. 60 Mr. Walker has served as Vice Chairman
and head of the Commercial Financial
Services Group for UnionBanCal
Corporation and Union Bank of
California, N.A. since April 1996. Mr.
Walker has served as a Director of
UnionBanCal Corporation since July
1992.
Linda Betzer...................... 55 Ms. Betzer has served as Executive
Vice President and head of the
Operations and Customer Services Group
for UnionBanCal Corporation and Union
Bank of California, N.A. since January
2000. She served as Executive Vice
President of Commercial Customer
Services from April 1996 to January
2000.
Paul E. Fearer.................... 58 Mr. Fearer has served as Executive
Vice President and Director of Human
Resources for UnionBanCal Corporation
and Union Bank of California, N.A.
since April 1996.
Philip B. Flynn................... 44 Mr. Flynn has served as Executive Vice
President and Chief Credit Officer of
UnionBanCal Corporation and Union Bank
of California, N.A. since September
2000. He served as Executive Vice
President and head of Specialized
Lending from May 2000 to September
2000 and as Executive Vice President
and head of the Commercial Banking
Group from June 1998 to May 2000. He
served as Executive Vice President and
head of Energy Capital Services from
September 1996 to April 2000.
Katsuyoshi Hamahashi.............. 53 Mr. Hamahashi has served as head of
Global Markets Group for UnionBanCal
Corporation and Union Bank of
California, N.A. since October 1998
and as Executive Vice President and
Treasurer of UnionBanCal Corporation
and Union Bank of California, N.A.
since April 1996.
Ronald H. Kendrick................ 60 Mr. Kendrick has served as Executive
Vice President and head of the
Community Banking Group for
UnionBanCal Corporation and Union Bank
of California, N.A. since December
2000. He served as Executive Vice
President and San Diego Area Executive
for Union Bank of California, N.A.
from March 1994 to December 2000.
David I. Matson................... 57 Mr. Matson has served as Executive
Vice President and Chief Financial
Officer of UnionBanCal Corporation and
Union Bank of California, N.A. since
July 1998. He served as Executive Vice
President and Director of Finance of
UnionBanCal Corporation and Union Bank
of California, N.A. from August 1997
to July 1998. He served as Executive
Vice President and head of the
Institutional and Deposit Markets
Division from April 1996 until July
1997.
John H. McGuckin, Jr.............. 55 Mr. McGuckin has served as Executive
Vice President, General Counsel and
Secretary for UnionBanCal Corporation
and Union Bank of California, N.A.
since September 2000. He served as
Executive Vice President and General
Counsel of UnionBanCal Corporation
from January 1998 to September 2000
and served as Executive Vice President
and General Counsel of Union Bank of
California, N.A. from April 1996 until
September 2000.

EXECUTIVE OFFICER AGE PRINCIPAL OCCUPATIONS FOR THE PAST
FIVE YEARS
__________________________________ ___ ______________________________________
Magan C. Patel.................... 64 Mr. Patel has served as Executive Vice
President and head of the
International Banking Group for
UnionBanCal Corporation and Union Bank
of California, N.A. since April 1996.
Charles L. Pedersen............... 58 Mr. Pedersen has served as Executive
Vice President and head of the Systems
Technology and Item Processing Group
for UnionBanCal Corporation and Union
Bank of California, N.A. since April
1996.
Osamu Uno......................... 49 Mr. Uno has served as Executive Vice
President and head of the Pacific Rim
Corporate Group of UnionBanCal
Corporation and Union Bank of
California, N.A. and General Manager
of the Los Angeles Branch of The Bank
of Tokyo-Mitsubishi, Ltd. since March
2001. He served as General Manager,
Corporate Banking Credit Division of
The Bank of Tokyo-Mitsubishi, Ltd.
from July 2000 to February 2001 and
Co-General Manager, Credit Supervision
Division No. 2 of The Bank of
Tokyo-Mitsubishi, Ltd. from April 1996
to June 2000.

The term of office of the executive officer extends until the officer
resigns, is removed, retires, or is otherwise disqualified for service. There is
no family relationship among any such officers.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Our common stock is traded on the New York Stock Exchange under the
symbol UB. As of January 31, 2002, our common stock was held by approximately
1,755 registered shareholders. At December 31, 2001, The Bank of
Tokyo-Mitsubishi, Ltd. held approximately 67 percent of our common stock. During
2000 and 2001, the average daily trading volume of our common stock was
approximately 445,221 shares and 418,531 shares, respectively. At December 31,
1999, 2000 and 2001, our common stock closed at $39.44 per share, $24.06 per
share, and $38.00 per share, respectively. The following table presents stock
quotations for each quarterly period for the two years ended December 31, 2001.

2000 2001
----------------- -----------------
HIGH LOW HIGH LOW
------ ------ ------ ------
First quarter........... $37.25 $24.75 $30.26 $24.81
Second quarter.......... 35.25 18.52 34.67 26.38
Third quarter........... 25.69 18.38 38.70 32.15
Fourth quarter.......... 24.25 18.88 39.14 28.92

The following table presents quarterly per share cash dividends
declared for 2000 and 2001:

2000 2001
----- -----
First quarter.............................. $0.25 $0.25
Second quarter............................. 0.25 0.25
Third quarter.............................. 0.25 0.25
Fourth quarter............................. 0.25 0.25

On October 24, 2001, our Board of Directors approved a quarterly common
stock dividend of $0.25 per share for the fourth quarter of 2001. Future
dividends will depend upon our earnings, financial condition, capital
requirements and other factors as our Board of Directors may deem relevant.

We offer a dividend reinvestment and stock purchase plan that allows
shareholders to reinvest dividends in our common stock at 5 percent below the
market price. The Bank of Tokyo-Mitsubishi, Ltd. did not participate in the plan
during 2000 and 2001. For further information about these plans, see Note 12 to
our Consolidated Financial Statements included in this Form 10-K.

The availability of our retained earnings for the payment of dividends
is affected by certain legal restrictions. See Note 16 to our Consolidated
Financial Statements included in this Form 10-K.

ITEM 6. SELECTED FINANCIAL DATA

See page F-1 of this Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

See pages F-1 through F-43 of this Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See pages F-35 through F-38 of this Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See pages F-44 through F-91 of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Reference is made to our Proxy Statement for the April 24, 2002 Annual
Meeting of Shareholders for incorporation by reference of information concerning
directors and persons nominated to become directors of UnionBanCal Corporation.
Information concerning our executive officers as of December 31, 2001 is
included in Part I above in accordance with Instruction 3 to Item 401(b) of
Regulation S-K.

ITEM 11. EXECUTIVE COMPENSATION

Information concerning executive compensation is incorporated by
reference from the text under the caption "Compensation and Other Transactions
with Management and Others" in the Proxy Statement for the April 24, 2002 Annual
Meeting of Shareholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning ownership of the equity stock of UnionBanCal
Corporation by certain beneficial owners and management is incorporated by
reference from page 1 and the text under the caption "Election of Directors" in
the Proxy Statement for the April 24, 2002 Annual Meeting of Shareholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions
with officers, directors, and The Bank of Tokyo-Mitsubishi, Ltd. is incorporated
by reference from the text under the caption "Transactions with Management and
Others" in the Proxy Statement for the April 24, 2002 Annual Meeting of
Shareholders.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) Financial Statements

Our Consolidated Financial Statements, the Management Statement, and
the independent auditors' report are set forth on pages F-45 through F-93. (See
index on page F-44).

(a)(2) Financial Statement Schedules

All schedules to our Consolidated Financial Statements are omitted
because of the absence of the conditions under which they are required or
because the required information is included in our Consolidated Financial
Statements or accompanying notes.

(a)(3) Exhibits

NO. DESCRIPTION
______ _______________________________________________________________________
3.1. Restated Articles of Incorporation of the Registrant, as amended(1)
3.2. By-laws of the Registrant, as amended January 27, 1999(2)
10.1. UnionBanCal Corporation Management Stock Plan. (As restated effective
June 1, 1997)*(3)
10.2. Union Bank of California Deferred Compensation Plan.(January 1, 1997,
Restatement, as amended November 21, 1996)*(4)
10.3. Union Bank of California Senior Management Bonus Plan. (Effective
January 1, 2000)*(5)
10.4. Richard C. Hartnack Employment Agreement. (Effective January 1,
1998)*(6)
10.5. Robert M. Walker Employment Agreement.(Effective January 1, 1998)*(6)
10.6. Union Bank of California, N.A. Supplemental Executive Retirement
Plan. (Effective January 1, 1988) (Amended and restated as of
January 1, 1997)*(3)
10.7. Union Bank Financial Services Reimbursement Program. (Effective
January 1, 1996)*(7)
10.8. 1997 UnionBanCal Corporation Performance Share Plan, as amended.
(As amended, effective January 1, 2001)*(5)
10.9. Service Agreement Between Union Bank of California and The Bank of
Tokyo-Mitsubishi Ltd. (Effective October 1, 1997)*(3)
10.10. Year 2000 UnionBanCal Corporation Management Stock Plan. (As restated
effective January 1, 2000)*(8)
10.11. Union Bank of California, N.A. Supplemental Retirement Plan for
Policy Making Officers (Effective November 1, 1999)(9)
10.12. Philip B. Flynn Employment Agreement (Effective September 21, 2000)
(10)
12.1. Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements(10)
21.1. Subsidiaries of the Registrant(10)
23.1. Consent of Deloitte & Touche LLP(10)
24.1. Power of Attorney(10)
24.2. Resolution of Board of Directors(10)

__________________

(1) Incorporated by reference to Form 10-K for the year ended December 31, 1998.
(2) Incorporated by reference to Form 10-Q for the quarter ended March 31, 1999.
(3) Incorporated by reference to Form 10-K for the year ended December 31, 1997.
(4) Incorporated by reference to Form 10-K for the year ended December 31, 1996.
(5) Incorporated by reference to Form DEF-14A dated March 28, 2001.
(6) Incorporated by reference to Form 10-Q for the quarter ended September 30,
1998.
(7) Incorporated by reference to Form 8-K dated April 1, 1996.
(8) Incorporated by reference to form 10-Q for the quarter ended June 30, 1999.
(9) Incorporated by reference to form 10-Q for the quarter ended June 30, 2000.
(10)Filed herewith.
* Management contract or compensatory plan, contract or arrangement.

(b) Reports on Form 8-K

We filed a report on Form 8-K on November 27, 2001 under Item 5 to report the
underwriting agreement associated with the issuance of $200 million in debt in
the fourth quarter of 2001.

We filed a report on Form 8-K on November 28, 2001 under Item 5 to report the
issuance of $200 million in debt in the fourth quarter of 2001.

UNIONBANCAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

AS OF AND FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1997 1998 1999 2000 2001
- --------------------------------------------- ----------- ----------- ----------- ----------- -----------

RESULTS OF OPERATIONS:
Net interest income(1)..................... $ 1,237,010 $ 1,322,655 $ 1,419,019 $ 1,587,008 $ 1,526,099
Provision for credit losses................ - 45,000 65,000 440,000 285,000
Noninterest income......................... 463,001 533,531 586,759 647,180 716,404
Noninterest expense........................ 1,044,665 1,135,218 1,281,973 1,130,185 1,240,174
----------- ----------- ----------- ----------- -----------
Income before income taxes(1).............. 655,346 675,968 658,805 664,003 717,329
Taxable-equivalent adjustment.............. 5,328 4,432 3,186 2,568 2,057
Income tax expense......................... 238,722 205,075 213,888 221,535 233,844
----------- ----------- ----------- ----------- -----------
Net income................................. $ 411,296 $ 466,461 $ 441,731 $ 439,900 $ 481,428
=========== =========== =========== =========== ===========
NET INCOME APPLICABLE TO COMMON STOCK........ $ 403,696 $ 466,461 $ 441,731 $ 439,900 $ 481,428
=========== =========== =========== =========== ===========
PER COMMON SHARE:
Net income (basic)......................... $ 2.31 $ 2.66 $ 2.65 $ 2.72 $ 3.05
Net income (diluted)....................... 2.30 2.65 2.64 2.72 3.04
Dividends.................................. 0.51 0.61 0.82 1.00 1.00
Book value (end of period)................. 15.32 17.45 18.18 20.17 22.66
Common shares outstanding (end of period).. 174,917,674 175,259,919 164,282,622 159,234,454 156,483,511
Weighted average common shares outstanding
(basic).................................. 174,683,338 175,127,487 166,382,074 161,604,648 157,844,745
Weighted average common shares outstanding
(diluted)................................ 175,189,078 175,737,303 167,149,207 161,989,388 158,623,454
BALANCE SHEET (END OF PERIOD):
Total assets............................... $30,585,265 $32,276,316 $33,684,776 $35,162,475 $36,039,089
Total loans................................ 22,741,408 24,296,111 25,912,958 26,010,398 24,994,030
Nonperforming assets....................... 129,809 89,850 169,780 408,304 492,482
Total deposits............................. 23,296,374 24,507,879 26,256,607 27,283,183 28,556,199
Medium and long-term debt.................. 348,000 298,000 298,000 200,000 400,000
Trust preferred securities................. - - 350,000 350,000 363,928
Common equity.............................. 2,679,299 3,058,244 2,987,468 3,211,565 3,546,242
BALANCE SHEET (PERIOD AVERAGE):
Total assets............................... $29,692,992 $30,523,806 $32,141,497 $33,672,058 $34,619,222
Total loans................................ 21,855,911 23,215,504 25,024,777 26,310,420 25,951,021
Earning assets............................. 26,291,822 27,487,390 29,017,122 30,379,730 31,291,782
Total deposits............................. 22,067,155 22,654,714 23,893,045 25,527,547 26,542,312
Common equity.............................. 2,514,610 2,845,964 2,939,591 3,139,844 3,467,719
FINANCIAL RATIOS:
Return on average assets................... 1.39% 1.53% 1.37% 1.31% 1.39%
Return on average common equity............ 16.05 16.39 15.03 14.01 13.88
Efficiency ratio(2)........................ 61.53 61.31 63.98 50.59 55.30
Net interest margin(1)..................... 4.70 4.81 4.89 5.22 4.87
Dividend payout ratio...................... 22.08 22.93 30.94 36.76 32.79
Tangible equity ratio...................... 8.54 9.30 8.70 9.01 9.62
Tier 1 risk-based capital ratio............ 8.96 9.64 9.94 10.24 11.47
Total risk-based capital ratio............. 11.05 11.61 11.79 12.07 13.35
Leverage ratio............................. 8.53 9.38 10.10 10.19 10.53
Allowance for credit losses to total loans. 1.99 1.89 1.82 2.36 2.54
Allowance for credit losses to nonaccrual
loans.................................... 413.12 585.50 281.00 153.48 129.00
Net loans charged off to average total
loans.................................... 0.33 0.15 0.22 1.13 1.02
Nonperforming assets to total loans,
distressed loans held for sale, and
foreclosed assets........................ 0.57 0.37 0.66 1.57 1.97
Nonperforming assets to total assets....... 0.42 0.28 0.50 1.16 1.37
__________________
<FN>
(1) Amounts are on a taxable-equivalent basis using the federal statutory tax rate of 35 percent.

(2) The efficiency ratio is noninterest expense, excluding foreclosed asset expense (income), as a percentage of net interest
income (taxable-equivalent) and noninterest income. Foreclosed asset expense (income) was $(1.3) million, $(2.8) million,
$(1.3) million, $(0.1) million, and $(0.0) million for 1997 through 2001, respectively.
</FN>

F-1

THERE ARE NUMEROUS RISKS AND UNCERTAINTIES THAT COULD AND WILL CAUSE
ACTUAL RESULTS TO DIFFER FROM THOSE DISCUSSED IN OUR FORWARD-LOOKING STATEMENTS.
MANY OF THESE FACTORS ARE BEYOND OUR ABILITY TO CONTROL OR PREDICT AND COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR STOCK PRICE, FINANCIAL CONDITION, RESULTS
OF OPERATIONS OR PROSPECTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT
LIMITED TO, THE FOLLOWING FACTORS: ADVERSE ECONOMIC CONDITIONS IN CALIFORNIA
(INCLUDING PROBLEMS ARISING FROM THE CALIFORNIA ENERGY CRISIS), GLOBAL POLITICAL
AND GENERAL ECONOMIC CONDITIONS RELATED TO THE TERRORIST ATTACKS ON SEPTEMBER
11, 2001 AND THEIR AFTERMATH, ADVERSE ECONOMIC CONDITIONS AFFECTING CERTAIN
INDUSTRIES, FLUCTUATIONS IN INTEREST RATES, THE CONTROLLING INTEREST IN US BY
THE BANK OF TOKYO-MITSUBISHI, LTD., WHICH IS A WHOLLY-OWNED SUBSIDIARY OF
MITSUBISHI TOKYO FINANCIAL GROUP, INC., COMPETITION IN THE BANKING INDUSTRY,
RESTRICTIONS ON DIVIDENDS, ADVERSE EFFECTS OF CURRENT AND FUTURE BANKING RULES,
REGULATIONS AND LEGISLATION, AND RISKS ASSOCIATED WITH VARIOUS STRATEGIES WE MAY
PURSUE, INCLUDING POTENTIAL ACQUISITIONS, DIVESTITURES AND RESTRUCTURINGS. SEE
ALSO THE SECTION ENTITLED "CERTAIN BUSINESS RISK FACTORS" LOCATED NEAR THE END
OF THIS SECTION, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION".

You should read the following discussion and analysis of our
consolidated financial position and the results of our operations for the years
ended December 31, 1999, 2000 and 2001 together with our Consolidated Financial
Statements and the Notes to Consolidated Financial Statements included in this
Form 10-K. Averages, as presented in the following tables, are substantially all
based upon daily average balances.

INTRODUCTION

We are a California-based, commercial bank holding company with
consolidated assets of $36.0 billion at December 31, 2001. At year-end 2001,
Union Bank of California, N.A. was the third largest commercial bank in
California, based on total assets and total deposits in California.

On March 3, 1999, we completed a secondary offering of 28.75 million
shares of our Common Stock owned by our majority shareholder, The Bank of
Tokyo-Mitsubishi, Ltd. We received no proceeds from this transaction. Concurrent
with the secondary offering, we repurchased 8.6 million shares of our
outstanding Common Stock from The Bank of Tokyo-Mitsubishi, Ltd. and 2.1 million
shares owned by Meiji Life Insurance Company with $311 million of the net
proceeds from the issuance of $350 million of 7 3/8 percent capital securities.
After the secondary offering and the repurchase, The Bank of Tokyo-Mitsubishi,
Ltd. owned 64 percent of our stock, or 105.6 million shares, compared with 82
percent prior to the transaction.

Under stock repurchase plans authorized in November 1999, July 2000,
and April 2001 of $100 million each, we repurchased $17 million of common stock
in 1999, $130 million in 2000 and $108 in 2001. As of

F-2

December 31, 2001, $45 million of common stock is authorized for repurchase. At
December 31, 2001, The Bank of Tokyo-Mitsubishi, Ltd. owned approximately 67
percent of the UnionBanCal Corporation.

CRITICAL ACCOUNTING POLICIES

GENERAL

UnionBanCal Corporation's financial statements are prepared in
accordance with accounting principles generally accepted in the United States of
America (US GAAP). The financial information contained within our statements is,
to a significant extent, financial information that is based on approximate
measures of the financial effects of transactions and events that have already
occurred. A variety of factors could affect the ultimate value that is obtained
either when earning income, recognizing an expense, recovering an asset or
relieving a liability. In many instances, we use a discount factor to determine
the present value of assets and liabilities. A change in the discount factor
could increase or decrease the values of those assets and liabilities. That
change would result in either a beneficial or adverse impact to our financial
results. We use historical loss factors to determine the inherent loss that may
be present in our loan and lease portfolio. Actual losses could differ
significantly from the historical factors that we use. Other estimates that we
use are employee turnover factors, market value of residuals in automobile
leasing, fair value of our derivatives and securities and expected useful lives
of our depreciable assets. We enter into derivative contracts that are
classified as trading activity to accommodate our customers and our own risk
management purposes. The derivative contracts are generally foreign exchange,
interest swap and interest rate option contracts, although we could enter into
other types of derivative contracts. We value these contracts at fair value,
using readily available, market quoted prices. We have not historically entered
into derivative contracts for our customers or for ourselves, which relate to
credit, equity, commodity, energy, or weather-related indices. US GAAP itself
may change from one previously acceptable method to another method. Although the
economics of our transactions would be the same, the timing of events that would
impact our transactions could change.

Our most significant estimates are approved by our Chief Executive
Officer Forum, which is comprised of our most senior officers. At each financial
reporting period, a review of these estimates is then presented to the Audit
Committee of our Board of Directors.

As of December 31, 2001, we have not created any special purpose
entities to securitize assets or to obtain off-balance sheet funding. Although
we have sold a number of loans in the past two years, those loans have been sold
to third parties without recourse, subject to the customary representations and
warranties. Please see our disclosure regarding contractual obligations and
commitments on page F-38.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is an estimate of the losses that may
be sustained in our loan and lease portfolio. The allowance is based on two
principles of accounting: (1) Statement of Financial Accounting Standards (SFAS)
No. 5, "Accounting for Contingencies", which requires that losses be accrued
when they are probable of occurring and estimable; and (2) SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan" and SFAS No. 118, "Accounting
by Creditors for Impairment of a Loan-Income Recognition and Disclosures," which
requires that losses be accrued based on the differences between the value of
collateral, present value of future cash flows or values that are observable in
the secondary market and the loan balance.

Our allowance for credit losses has three components: the formula
allowance, the specific allowance and the unallocated allowance. Each of these
components is determined based upon estimates that can and do change when the
actual events occur. The formula allowance uses a model based on historical
losses as an indicator of future losses and as a result could differ from the
loss incurred in the future. However, since this history is updated with the
most recent loss information, the differences that might otherwise occur are
mitigated. The specific allowance uses various techniques to arrive at an
estimate of loss. Historical loss information, discounted cash flows, fair
market value of collateral and secondary

F-3

market information are all used to estimate those losses. The use of these
values is inherently subjective and our actual losses could be greater or less
than the estimates. The unallocated allowance captures losses that are
attributable to various economic events, industry or geographic sectors whose
impact on the portfolio have occurred but have yet to be recognized in either
the formula or specific allowances. For further information regarding our
allowance for credit losses, see page F-22.

SELECTED SUPPLEMENTAL PRO FORMA FINANCIAL DATA

To facilitate the discussion of the results of operations, the
following table includes certain pro forma earnings disclosures and ratios.
These presentations supplement the Consolidated Statements of Income on page
F-45, which are prepared in accordance with US GAAP, by excluding the effects of
the restructuring charge, which was recorded in the third quarter of 1999, and
of the restructuring credits recorded in the first and second quarters of 2000.
Management believes that it is meaningful to understand the operating results
and trends excluding these items and, therefore, has included information in
this table and in the management's discussion and analysis which follows, that
presents income excluding these items and related pro forma ratio and per share
calculations.

AS OF AND FOR THE YEARS ENDED
DECEMBER 31,
------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 2000 2001
- ---------------------------------------------------------------------- ---------- --------- ---------

INCOME BEFORE INCOME TAXES (TAXABLE-EQUIVALENT BASIS)................. $658,805 $664,003 $717,329
Restructuring charge (credit)....................................... 85,000 (19,000) -
Taxable equivalent adjustment....................................... (3,186) (2,568) (2,057)
Income tax expense(1)............................................... (243,704) (214,376) (233,844)
________ ________ ________
PRO FORMA EARNINGS(1)................................................. $496,915 $428,059 $481,428
======== ======== ========

Per common share, excluding restructuring charge (credit) and
certain income taxes
Pro forma earnings (basic)(1)....................................... $2.99 $2.65 $3.05
Pro forma earnings (diluted)(1)..................................... 2.97 2.64 3.04
Selected financial ratios, excluding restructuring charge (credit)
and certain income taxes
Pro forma return on average assets(1)............................... 1.55% 1.27% 1.39%
Pro forma return on average common equity(1)........................ 16.83% 13.63% 13.88%
Pro forma efficiency ratio(2)....................................... 59.74% 51.44% 55.30%
Pro forma dividend payout ratio..................................... 27.42% 37.74% 32.79%
__________________
<FN>
(1) Excludes an income tax benefit of $29.816 million related to the
restructuring charge recorded in 1999 and an income tax expense of $7.159
million related to the restructuring credit in 2000.

(2) The pro forma efficiency ratio is noninterest expense, excluding foreclosed
asset expense (income), as a percentage of net interest income (taxable-
equivalent) and noninterest income. Foreclosed asset expense (income) was
($1.3) million in 1999, ($0.1) million in 2000, and ($0.0) million in 2001.
</FN>

Reported net income was $481.4 million, or $3.04 per diluted common
share, in 2001, compared with $439.9 million, or $2.72 per diluted common share,
in 2000. There were no pro forma earnings adjustments for 2001. Pro forma
earnings were $428.1 million, or $2.64 per diluted common share, in 2000, which
excluded the effects of the $19 million of restructuring credits ($11.8 million
net of tax) recorded in 2000. The increase in 2001 pro forma diluted earnings
per share of 15 percent above the prior year was mainly attributed to a $155.0
million, or 35 percent, decrease in the provision for credit losses and a $69.2
million, or 11 percent, increase in noninterest income, partially offset by a
$91.0 million, or 8 percent, increase in noninterest expense and a $60.9
million, or 4 percent, decrease in net interest income (on a taxable-equivalent
basis). Other highlights of 2001 include:

o Net interest income, on a taxable-equivalent basis, was $1.5
billion in 2001, a decrease of $60.9 million, or 4 percent, from
the prior year. Net interest margin in 2001 was 4.87 percent, a
decrease of 35 basis points from the prior year reflecting the
compression caused by lower interest rates.

F-4

o A provision for credit losses of $285.0 million was recorded in
2001, compared with $440.0 million in the prior year. This
resulted from management's regular assessment of overall credit
quality, loan portfolio composition and business and economic
conditions in relation to the level of the allowance for credit
losses.

o Noninterest income was $716.4 million in 2001, an increase of
$69.2 million, or 11 percent, over the prior year.

o Noninterest expense was $1.2 billion in 2001, an increase of $91.0
million, or 8 percent, over the prior year, excluding the
restructuring credits in 2000.

o Income tax expense in 2001 was $233.8 million, representing a 33
percent effective income tax rate. For 2000, the effective income
tax rate was also 33 percent.

o Reported return on average assets increased to 1.39 percent from a
pro forma 1.27 percent a year earlier, and reported return on
average common equity increased to 13.88 percent from a pro forma
13.63 percent a year earlier.

BUSINESS SEGMENTS

We segregate our operations into four primary business units for the
purpose of management reporting, as shown in the table on the following pages.
The results show the financial performance of our major business units.

The Risk Adjusted Return on Capital (RAROC) methodology used seeks to
attribute economic capital to business units consistent with the level of risk
they assume. These risks are primarily credit risk, market risk and operational
risk. Credit risk is the potential loss in economic value due to the likelihood
that the obligor will not perform as agreed. Market risk is the potential loss
in fair value due to changes in interest rates, currency rates and volatilities.
Operational risk is the potential loss due to failures in internal control,
system failures, or external events.

The following table reflects the condensed income statements, selected
average balance sheet items and selected financial ratios for each of our
primary business units. The information presented does not necessarily represent
the business units' financial condition and results of operations as if they
were independent entities. Unlike financial accounting, there is no
authoritative body of guidance for management accounting equivalent to US GAAP.
Consequently, reported results are not necessarily comparable with those
presented by other companies.

The RAROC measurement methodology recognizes credit expense for
expected losses arising from credit risk and attributes economic capital related
to unexpected losses arising from credit, market and operational risks. As a
result of the methodology used by the RAROC model to calculate expected losses,
differences between the provision for credit losses and credit expense in any
one period could be significant. However, over an economic cycle, the cumulative
provision for credit losses and credit expense for expected losses should be
substantially the same. Business unit results are based on an internal
management reporting system used by management to measure the performance of the
units and UnionBanCal Corporation as a whole. Our management reporting system
identifies balance sheet and income statement items to each business unit based
on internal management accounting policies. Net interest income is determined
using our internal funds transfer pricing system, which assigns a cost of funds
to assets or a credit for funds to liabilities and capital, based on their type,
maturity or repricing characteristics. Noninterest income and expense directly
or indirectly attributable to a business unit are assigned to that business. The
business units are assigned the costs of products and services directly
attributed to their business activity through standard unit cost accounting
based on volume of usage. All other corporate expenses (overhead) are assigned
to the business units based on a predetermined percentage of usage.

F-5

We have restated the business units' results for the prior periods to
reflect any reorganization changes that may have occurred.

COMMUNITY BANKING
AND INVESTMENT COMMERCIAL FINANCIAL INTERNATIONAL
SERVICES GROUP SERVICES GROUP BANKING GROUP
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------------------------- ------------------------------ ----------------------------
1999 2000 2001 1999 2000 2001 1999 2000 2001
---------- ---------- ---------- -------- -------- -------- ------- ------- -------

RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS):
Net interest income............. $ 697,113 $ 729,807 $ 694,715 $596,082 $743,346 $675,898 $43,824 $34,971 $39,479
Noninterest income.............. 370,917 412,197 432,009 133,994 173,141 158,462 56,201 60,114 59,022
---------- ---------- ---------- -------- -------- -------- ------- ------- -------
Total revenue................... 1,068,030 1,142,004 1,126,724 730,076 916,487 834,360 100,025 95,085 98,501
Noninterest expense(1).......... 760,163 722,013 749,851 284,680 303,211 316,164 52,275 54,299 57,364
Credit expense (income)......... 53,410 48,582 41,555 98,916 120,874 149,713 13,948 7,008 4,424
---------- ---------- ---------- -------- -------- -------- ------- ------- -------
Income (loss) before income tax
expense (benefit)............. 254,457 371,409 335,318 346,480 492,402 368,483 33,802 33,778 36,713
Income tax expense (benefit).... 98,375 142,064 128,259 127,175 176,053 123,495 12,927 12,920 14,043
---------- ---------- ---------- -------- -------- -------- ------- ------- -------
Net income...................... $ 156,082 $ 229,345 $ 207,059 $219,305 $316,349 $244,988 $20,875 $20,858 $22,670
========== ========== ========== ======== ======== ======== ======= ======= =======

AVERAGE BALANCES
(DOLLARS IN MILLIONS):
Total loans(2).................. $8,320 $8,094 $8,871 $14,729 $16,798 $15,664 $1,050 $959 $987
Total assets.................... 9,315 9,020 9,833 16,127 18,597 17,510 1,589 1,489 1,342
Total deposits(2)............... 14,201 14,155 14,256 5,888 6,394 7,173 815 1,029 1,419
FINANCIAL RATIOS:
Risk adjusted return on capital. 26% 41% 36% 18% 20% 14% 18% 22% 27%
Return on average assets........ 1.68 2.54 2.11 1.36 1.70 1.40 1.31 1.40 1.69
Efficiency ratio(3)............. 71.2 63.2 66.6 39.0 33.1 37.9 52.3 57.1 58.2

GLOBAL UNIONBANCAL
MARKETS GROUP OTHER CORPORATION
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------------------- ------------------------------ ----------------------------------
1999 2000 2001 1999 2000 2001 1999 2000 2001
------- ------- ------- -------- -------- -------- ---------- ---------- -----------

RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS):
Net interest income............. $60,884 $21,186 $47,793 $17,930 $55,130 $66,157 $1,415,833 $1,584,440 $1,524,042
Noninterest income.............. 15,954 (7,083) 19,633 9,693 8,811 47,278 586,759 647,180 716,404
------- ------- ------- -------- --------- -------- ---------- ---------- ----------
Total revenue................... 76,838 14,103 67,426 27,623 63,941 113,435 2,002,592 2,231,620 2,240,446
Noninterest expense(1).......... 20,826 15,757 24,064 164,029 34,905 92,731 1,281,973 1,130,185 1,240,174
Credit expense (income)......... - - 200 (101,274) 263,536 89,108 65,000 440,000 285,000
------- ------- ------- -------- --------- -------- ---------- ---------- ----------
Income (loss) before income tax
expense (benefit)............. 56,012 (1,654) 43,162 (35,132) (234,500) (68,404) 655,619 661,435 715,272
Income tax expense (benefit).... 21,517 (633) 16,510 (46,106) (108,869) (48,463) 213,888 221,535 233,844
------- ------- ------- -------- --------- -------- ---------- ---------- ----------
Net income...................... $34,495 $(1,021) $26,652 $10,974 $(125,631) $(19,941) $441,731 $439,900 $481,428
======= ======= ======= ======= ========= ======== ========== ========== ==========

AVERAGE BALANCES
(DOLLARS IN MILLIONS):
Total loans(2).................. $ - $ - $ 80 $ 926 $459 $349 $25,025 $26,310 $25,951
Total assets.................... 3,887 3,740 5,210 1,223 826 724 32,141 33,672 34,619
Total deposits(2)............... 3,053 3,235 2,928 (63) 715 766 23,893 25,528 26,542
FINANCIAL RATIOS:
Risk adjusted return on capital. 21% (1)% 8% na na na na na na
Return on average assets........ 0.89 (0.03) 0.51 na na na 1.37% 1.31% 1.39%
Efficiency ratio(3)............. 27.1 111.7 35.7 na na na 64.0 50.6 55.3
_________________
<FN>
(1) "Other" includes the 3rd quarter 1999 restructuring charge of $85 million ($55.2 million, net of tax)
and 2000 restructuring credits of $19.0 million ($11.8 million, net of taxes).
(2) Represents loans and deposits for each business segment after allocation between the segments of loans and
deposits originated in one segment but managed by another segment.
(3) The efficiency ratio is noninterest expense, excluding foreclosed asset expense (income), as a percentage
of net interest income and noninterest income. Foreclosed asset expense (income) was $(1.3) million in 1999,
$(0.1) million in 2000 and ($0.0) million for 2001.
na = not applicable
</FN>

COMMUNITY BANKING AND INVESTMENT SERVICES GROUP

The Community Banking and Investment Services Group strives to provide
the best possible financial products to individuals and small businesses
including a broad set of credit, deposit, trust products, and risk management
and insurance products delivered through branches, relationship managers,
private bankers, trust administrators, and insurance agents. The Community
Banking and Investment Services

F-6

Group provides its customers with high quality customer service executed through
a number of responsive and efficient delivery channels.

In 2001, net income decreased $22.3 million, or 10 percent, compared to
the prior year. Total revenue decreased $15.3 million, or 1 percent, compared to
a year earlier. Despite increased asset and deposit volumes, net interest income
decreased $35.1 million over the prior year primarily due to the declining
interest rate environment. Noninterest income was $19.8 million higher than the
prior year. Excluding auto lease residual writedowns of $33.5 million and $28.3
million, in 2000 and 2001, respectively, noninterest income increased 3 percent
compared to a year earlier mainly due to higher deposit-related service fees and
a $10.9 million gain on the sale of our Guam and Saipan branches. Noninterest
expense increased $27.8 million, or 4 percent, compared to a year earlier with
the majority of that increase being attributable to higher salaries and employee
benefits and an increase in advertising expense mainly related to deposit
gathering, small business growth, and residential loan growth year-over-year.

In 2001, the Community Banking and Investment Services Group has been
emphasizing growth in the consumer asset portfolio, expanding wealth management
services, extending the small business franchise and expanding the branch
network. The strategy for growing the consumer asset portfolio primarily focuses
on mortgage and home equity products, originated through the branch network, as
well as through channels such as wholesalers, correspondents, and whole loan
purchases. Residential loans have grown by $1.5 billion, or 45 percent, since
the same period last year. The Wealth Management division is focused on becoming
the preferred provider of banking and investment products for affluent
individuals in geographic areas already served by us. We expect to achieve this
distinction by providing superior service, offering a broad product suite,
increasing the number of banking locations convenient to the targeted clientele
and improving our cross-selling programs. Our acquisition of Copper Mountain
Trust Company in January 2001 is expected to enhance our growing custody and
401(k) administration businesses. Core elements of the initiative to extend our
small business franchise include enhancing the sales force, increasing marketing
activities, introducing new insurance and trade finance products, adding new
locations, and developing online capabilities to complement physical
distribution. Expansion of the distribution network will be achieved through
acquisitions and de novo branching. Expansion opportunities exist in both
Southern California, where we have a particularly strong presence, and Northern
California.

In addition to our traditional network channels, the Community Banking
and Investment Services Group has an established alliance with Navicert
Financial Corporation, doing business as NIX Check Cashing and Operation Hope.
This alliance has allowed our small business and consumer clients access to a
unique blend of financial services combining the NIX Check Cashing services,
Union Bank of California Banking Services and Operation Hope small business
education services. ATM and other account services are available today through
selected NIX Check Cashing locations with future services planned to include
applications for consumer loans, credit cards, new and used car loans, home
equity loans and residential mortgages. The NIX Check Cashing alliance
complements our current network of 15 Cash and Save(R) outlets located
throughout Southern and Central California.

The Community Banking and Investment Services Group is comprised of
five major divisions: Community Banking, Wealth Management, Institutional
Services and Asset Management, Government and Not-For-Profit Markets, and
Insurance Services.

COMMUNITY BANKING serves over one million consumer households and
businesses through its 245 full-service branches in California, six full-service
branches in Oregon and Washington, and its network of 471 proprietary ATMs.
Customers may also access our services 24 hours a day by telephone or through
our Bank@Home product at www.UBOC.com. In addition, the division offers
automated teller and point-of-sale debit services through our membership in the
STAR System, the largest shared ATM network in the Western United States. As
previously announced, Union Bank of California's branch offices in Guam and
Saipan were sold to First Hawaiian Bank on November 9, 2001.

F-7

This division is organized by service delivery method, by markets and
by geography. We serve our customers in the following ways:

o through community banking branches, which serve consumers and
businesses with checking and deposit services, as well as various
types of consumer financing;

o through on-line access to our internet banking services, which
augment our physical delivery channels by providing a wide array
of customer transaction, bill payment and loan payment services;

o through business banking centers, which serve businesses with
sales up to $5 million; and

o through in-store branches, which also serve consumers and
businesses.

WEALTH MANAGEMENT provides private banking services to our affluent
clientele as well as brokerage products and services.

o The Private Bank focuses primarily on delivering integrated and
customized financial services to high net worth individuals with
sophisticated financial needs as well as to professional service
firms. Specific products and services include trust and estate
services, investment account management services, and customized
deposit and credit products. The Private Bank's strategy is to
expand its business by leveraging existing Bank client
relationships, increasing its geographic market coverage and the
breadth of its products and services. Through 12 existing
locations, the Private Bank relationship managers offer all of our
available products and services.

o Our brokerage products and services are provided through UBOC
Investment Services, Inc., a registered broker/dealer offering a
full line of investment products to individuals and institutional
clients. Its primary strategy is to further penetrate our existing
client base.

INSTITUTIONAL SERVICES AND ASSET MANAGEMENT provides investment manage-
ment and administration services for a broad range of individuals and
institutions.

o HighMark Capital Management, Inc., a registered investment
advisor, provides investment advisory services to affiliated
domestic and offshore mutual funds, including the HighMark Funds.
It also provides advisory services to Union Bank of California
trust clients, including corporations, pension funds and
individuals. HighMark Capital Management also provides mutual fund
support services. HighMark Capital Management's strategy is to
increase assets under management by broadening its client base and
helping to expand the distribution of shares of its mutual fund
clients.

o Business Trust provides retirement services, which includes
trustee services, investment management, and 401(k) administration
and record keeping, to businesses, professional corporations,
government agencies, unions and non-profit organizations. Business
Trust's strategy is to leverage the Bank's existing commercial
relationships and third-party distribution network, which includes
attorneys, certified public accountants and third party
administration firms.

o Securities Services is engaged in domestic and multi-currency
custody, safekeeping, mutual fund accounting, securities lending,
and corporate trust services. Its client base includes financial
institutions, businesses, government agencies, unions, insurance
companies, mutual funds, investment managers and non-profit
organizations. Securities Services is the only West Coast based,
in-house provider of a full range of institutional trust services.

GOVERNMENT AND NOT-FOR-PROFIT MARKETS provides a full range of treasury
management, investment, and trust services to government entities and not-for-
profit organizations.

o The group, which primarily focuses on local, state, and federal
agencies, includes an expanding product offering to the Native
American government market. Niche markets have been developed that
service colleges, universities, trade associations, cultural
institutions, and religious non-profit organizations. The group's
strategy is to expand its market presence by continued delivery of

F-8

innovative cash management products, internet based technology
solutions, and expanding its tax-exempt lending capabilities to
meet existing clients' needs.

INSURANCE SERVICES provides a full range of cost-effective risk manage-
ment services and insurance products to business and retail customers.

o The group, which includes our fourth quarter acquisition of
Armstrong/Robitaille Business and Insurance Services, a regional
insurance broker, offers its risk management and insurance
products through offices in California and Oregon.

Through alliances with other financial institutions, the Community
Banking and Investment Services Group offers additional products and services,
such as credit cards, leasing, and asset-based and leveraged financing.

The group competes with larger banks by providing service quality
superior to that of its major competitors. The group's primary means of
competing with community banks include its large and convenient branch network
and its reputation for innovative use of technology to deliver banking services.
At December 31, 2001, we have the fifth largest branch network among depository
institutions in California. We also offer convenient banking hours to consumers
through our drive-through banking locations and selected branches that are open
seven days a week.

The group competes with a number of commercial banks, internet banks,
savings associations and credit unions, as well as more specialized financial
service providers such as investment brokerage companies, consumer finance
companies, and residential real estate lenders. The group's primary competitors
are other major depository institutions such as Bank of America, California
Federal, Washington Mutual and Wells Fargo, as well as smaller community banks
in the markets in which we operate.

COMMERCIAL FINANCIAL SERVICES GROUP

The Commercial Financial Services Group offers customized financing and
cash management services to middle market and large corporate businesses
primarily headquartered in the western United States. The Commercial Financial
Services Group has continued to focus on customer segmentation, allowing the
group to provide specialized financing expertise to specific geographic markets
and industry segments such as Energy, Entertainment, Real Estate and Retail.
Relationship managers and credit executives in the Commercial Financial Services
Group provide credit services including commercial loans, accounts receivable
and inventory financing, project financing, lease financing, trade financing and
real estate financing. In addition to credit services, the group offers its
customers access to high quality cash management services delivered through
specialized deposit managers with extensive experience in cash management
solutions for businesses.

In 2001, net income decreased $71.4 million, or 23 percent, compared to
the prior year. Net interest income decreased $67.4 million primarily due to
lower asset volume and the declining rate environment. Noninterest income
decreased $14.7 million due to net gains of $22.5 million in the Private Capital
Portfolio from venture capital and equity investments in the prior year compared
with net losses of $15.2 million sustained in 2001, partly offset by a 15
percent growth in all other noninterest income. This 15 percent growth was
mainly due to higher deposit-related service fees and no lease residual
writedowns in 2001 compared to $5.9 million in 2000. Noninterest expense
increased $13.0 million, or 4 percent, compared to a year earlier due to higher
expenses to support increased product sales and deposit volume. Credit expense
increased $28.8 million due to higher historical losses in the portfolio.

The group's initiatives during 2001 included expanding wholesale
deposit activities, increasing domestic trade financing and expanding the item
processing business. Loan growth strategies include originating, underwriting
and syndicating loans in core competency markets, such as the California middle
market, commercial real estate, energy, entertainment, equipment leasing and
commercial finance. The Commercial Financial Services Group operates a strong
processing business, including services such as check

F-9

processing, front-end item processing, cash vault services and digital imaging.
Opportunities for outsourcing these capabilities for correspondent banks, and
credit unions are significant. In the processing business, Commercial Financial
Services Group intends to build new capabilities, in addition to leveraging
existing capabilities. Some new initiatives underway include cash management
products with internet delivery, check truncation at point-of-sale, digital
certificates and e-bill payment and presentment. The combination of expanded
products and an emphasis on core competencies are expected to contribute to
growth in operating earnings in 2002.

The Commercial Financial Services Group is comprised of the following
business units:

o the Commercial Banking Division, which serves California
middle-market and large corporate companies with traditional
commercial lending, trade financing, and asset-based loans;

o the Corporate Deposit Services Division, which provides deposit
and cash management expertise to clients in the middle market,
large corporate market and specialized industries;

o the Institutional and Deposit Services Division, which provides
deposit and cash management expertise to clients in specific
deposit-intensive industries;

o the Corporate Capital Markets Division, which provides merchant
and investment banking related products and services.

o the National Banking Division, which provides credit services to a
variety of specialized industries including retailers, finance
companies and insurance companies, as well as large corporate
clients headquartered outside the United States;

o the Real Estate Industries Division, which provides real estate
lending products such as construction loans, commercial mortgages
and bridge financing;

o the Energy Capital Services Division, which provides custom
financing and project financing to oil and gas companies, as well
as power and utility companies, in California and Texas; and

o the Communications, Media and Entertainment Division, which
provides custom financing to middle market and large corporate
clients in their defined industries.

The group competes with other banks primarily on the basis of its
reputation as a "business bank," the quality of its relationship managers, and
the delivery of superior customer service. We are recognized in California as
having a superior "business banking" reputation relative to other large banks.
We are also highly rated among financial institutions for our cash management
services and systems.

The group's main strategy is to target industries and companies for
which the group can reasonably expect to be one of a customer's primary banks.
Consistent with its strategy, the group attempts to serve a large part of its
targeted customers' credit and depository needs.

The group competes with a variety of other financial services
companies. Competitors include other major California banks, as well as
regional, national and international banks. In addition, we compete with
investment banks, commercial finance companies, leasing companies, and insurance
companies.

INTERNATIONAL BANKING GROUP

The International Banking Group focuses on providing correspondent
banking and trade finance related products and services to international
financial institutions worldwide, primarily in Asia. This focus includes
products and services such as letters of credit, international payments,
collections and financing of mostly short-term transactions. The group also
serves certain foreign firms and U.S. corporate clients in selected countries
where we have branches, including Hong Kong, Japan, Korea, the Philippines and
Taiwan. In the U.S., the group serves subsidiaries and affiliates of
non-Japanese Asian companies and U.S.

F-10

branches/agencies of foreign banks. The majority of the revenue generated by the
International Banking Group is from customers domiciled outside of the U.S.

In 2001, net income increased $1.8 million, or 9 percent, compared to
the prior year. Total revenue increased $3.4 million, or 4 percent, compared to
a year earlier. Despite decreased assets, net interest income increased $4.5
million over the prior year primarily due to higher deposit volumes and wider
spreads. Noninterest income was $1.1 million lower than the prior year mainly
attributed to higher gains from the sale of securities in the prior year.
Noninterest expense increased $3.1 million, or 6 percent, compared to a year
earlier with the majority of that increase being attributable to higher systems
development and maintenance charges. And lastly, contributing to the group's
overall increase in net income was lower portfolio exposure resulting in a $2.6
million reduction in credit expense compared to the prior year. The nature of
the International Banking Group's business revolves around short-term, trade
financing mostly to banks and service-related income, which tends to result in
significantly lower credit risk when compared to other lending activities.

The group has a long and stable history of providing correspondent
banking and trade-related products and services to international financial
institutions. We believe the group continues to be a market leader, achieving
strong customer loyalty in the correspondent banking market by providing high
quality products and services at competitive prices. The International Banking
Group, headquartered in San Francisco, also maintains representative offices in
other parts of Asia and Latin America and an international banking subsidiary in
New York.

GLOBAL MARKETS GROUP

The Global Markets Group conducts business activities primarily to
support the previously described business groups and their customers. This group
offers a broad range of risk management products, such as foreign exchange
contracts and interest rate swaps and options. It trades money market,
government, agency, and other securities to meet investment needs of
institutional and business clients of UnionBanCal Corporation. Another primary
area of the group is treasury management for UnionBanCal Corporation, which
encompasses wholesale funding, liquidity management, interest rate risk
management, including securities portfolio management, and hedging activities.

In 2001, net income was $26.7 million compared to a loss of $1.0
million in the prior year. Total revenue increased $53.3 million, or 378
percent, compared to a year earlier primarily resulting from a 126 percent
increase in net interest income and a 377 percent increase in noninterest
income. Net interest income increased $26.6 million compared to the prior year
mainly due to an increase in hedge income that offsets our asset sensitivity in
a declining rate environment and growth in earning assets as part of our
asset/liability management strategy. Noninterest income increased $26.7 million
compared to the prior year mainly due to current year gains of $9.8 million on
the sale of securities in our securities available for sale portfolio compared
to losses of $18.5 million in the prior year. These transactions were enacted as
part of our asset/liability management strategy. Noninterest expense increased
$8.3 million, or 53 percent, compared to a year earlier, primarily as a result
of the effects of adoption of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities".

OTHER

"Other" includes the following items:

o corporate activities that are not directly attributable to one of
the four major business units. Included in this category are
goodwill and certain other nonrecurring items such as
restructuring charges and credits, merger and integration expense,
certain parent company non-bank subsidiaries, and the elimination
of the fully taxable-equivalent amounts;

F-11

o the adjustment between the credit expense under RAROC and the
provision for credit losses under US GAAP and earnings associated
with unallocated equity capital;

o the Credit Management Group, containing the Special Assets
Division, which includes $408.3 million and $492.5 million of
nonperforming assets for 2000 and 2001, respectively;

o the Pacific Rim Corporate Group, which offers a range of credit,
deposit, and investment management products and services to
companies in the U.S., which are affiliated with companies
headquartered outside the U.S., mostly in Japan; and

o the residual costs of support groups.

Net loss for "other" in 2001 was $19.9 million. The results were
impacted by the following factors:

o Credit expense of $89.1 million due to the difference between the
$285.0 million in provision for credit losses calculated under our
US GAAP methodology and the $195.9 million in expected losses for
the reportable business segments, which utilizes the RAROC
methodology, offset by

o Net interest income of $66.2 million, which resulted from the
differences between the credit for equity for the reportable
segments under RAROC and the net interest income earned by
UnionBanCal Corporation, and a credit for demand deposits in the
Pacific Rim Group.

o Noninterest income of $47.3 million, which included a $20.7
million gain recognized when our stock holding in STAR System was
exchanged for Concord EFS stock, a net gain of $13.9 million in
securities, and a $6.1 million gain on the sale of a distressed
loan held for sale.

o Noninterest expense of $92.7 million.

Net loss for "other" in 2000 was $125.6 million. The results were
impacted by the following factors:

o Credit expense of $263.5 million due to the difference between the
$440 million in provision for credit losses calculated under our
US GAAP methodology and the $176.5 million in expected losses for
the reportable business segments, which utilizes the RAROC
methodology, offset by

o Net interest income of $55.1 million, which resulted from the
differences between the credit for equity for the reportable
segments under RAROC and the net interest income earned by
UnionBanCal Corporation, and a credit for demand deposits in the
Pacific Rim Group.

o Noninterest expense of $35 million, which included $19 million in
restructuring credits.

FINANCIAL PERFORMANCE GOALS

In connection with our strategic initiatives, we have established
long-term financial performance goals which serve as a tool for measuring
long-term success of our operating strategies. Presently, these long-term
financial performance goals include:

PERFORMANCE RATIO GOAL
- ------------------------------------------------------------------ ------------
o Return on average common equity................................ 15% to 17%
o Earnings per share growth...................................... 10% to 12%
o Efficiency ratio............................................... 54% to 56%
o Tangible common equity to assets............................... 7.5% to 8.5%

Achievement of our long-term financial performance goals is subject to
many risks and uncertainties, including those described under "Certain Business
Risk Factors" beginning on page F-39.

We periodically re-evaluate the various elements of our strategic plan,
including our long-term financial performance goals. We expect to engage in such
re-evaluation of these goals over the course of 2002 and continuing into 2003 as
we develop the next phase of our strategic plan. Accordingly, such goals could
well change as a result of this process and may change from time to time
thereafter.

F-12

NET INTEREST INCOME

The table below shows the major components of net interest income and
net interest margin for the periods presented.

YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1999 2000
------------------------------------------- -------------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
(DOLLARS IN THOUSANDS) BALANCE EXPENSE(1) RATE(1) BALANCE EXPENSE(1) RATE(1)
- -------------------------------------

ASSETS
Loans:(2)
Domestic........................ $23,931,438 $1,862,037 7.78% $25,260,924 $2,170,653 8.59%
Foreign(3)...................... 1,093,339 69,593 6.37 1,049,496 71,812 6.84
Securities-taxable................ 3,287,983 205,899 6.26 3,426,164 221,606 6.47
Securities-tax-exempt............. 78,289 7,852 10.03 68,759 6,772 9.85
Interest bearing deposits in banks 203,752 12,174 5.97 174,769 9,126 5.22
Federal funds sold and securities
purchased under resale agreements 156,839 8,108 5.17 131,449 8,160 6.21
Trading account assets............ 265,482 12,293 4.63 268,169 15,519 5.79
----------- ---------- ----------- ----------
Total earning assets............ 29,017,122 2,177,956 7.51 30,379,730 2,503,648 8.24

Allowance for credit losses....... (453,126) (509,653)
Cash and due from banks........... 2,026,730 2,140,369
Premises and equipment, net....... 434,313 429,668
Other assets...................... 1,116,458 1,231,944
----------- -----------
Total assets.................... $32,141,497 $33,672,058
=========== ===========

LIABILITIES
Domestic deposits:
Interest bearing................ $5,704,138 143,334 2.51 $6,039,773 163,446 2.71
Savings and consumer time....... 3,368,328 107,974 3.21 3,371,948 119,910 3.56
Large time...................... 4,107,360 205,587 5.01 4,550,938 274,052 6.02
Foreign deposits(3)............... 1,600,047 73,829 4.61 1,924,839 107,183 5.57
----------- ---------- ----------- ----------
Total interest bearing deposits 14,779,873 530,724 3.59 15,887,498 664,591 4.18
----------- ---------- ----------- ----------
Federal funds purchased and
securities sold under repurchase
agreements...................... 1,489,214 72,083 4.84 1,548,730 96,606 6.24
Commercial paper.................. 1,529,814 77,041 5.04 1,521,614 94,905 6.24
Other borrowed funds.............. 708,625 37,420 5.28 314,425 16,709 5.31
Medium and long-term debt......... 298,000 17,100 5.74 255,426 17,617 6.90
UnionBanCal Corporation-obligated
mandatorily redeemable preferred
securities of subsidiary grantor
trust........................... 303,014 24,569 8.11 350,000 26,212 7.49
----------- ---------- ----------- ----------
Total borrowed funds............ 4,328,667 228,213 5.27 3,990,195 252,049 6.32
----------- ---------- ----------- ----------
Total interest bearing liabilities 19,108,540 758,937 3.97 19,877,693 916,640 4.61
---------- ----------
Noninterest bearing deposits...... 9,113,172 9,640,049
Other liabilities................. 980,194 1,014,472
----------- -----------
Total liabilities............... 29,201,906 30,532,214
SHAREHOLDERS' EQUITY
Common equity..................... 2,939,591 3,139,844
----------- -----------
Total shareholders' equity...... 2,939,591 3,139,844
----------- -----------
Total liabilities and shareholders' $32,141,497 $33,672,058
equity =========== ===========

Net interest income/margin
(taxable-equivalent basis)...... 1,419,019 4.89% 1,587,008 5.22%
Less: taxable-equivalent adjustment 3,186 2,568
---------- ----------
Net interest income............. $1,415,833 $1,584,440
========== ==========

YEAR ENDED DECEMBER 31,
-----------------------------------------
2001
-----------------------------------------
INTEREST AVERAGE
AVERAGE INCOME/ YIELD/
(DOLLARS IN THOUSANDS) BALANCE EXPENSE(1) RATE(1)
- ---------------------- ------- ---------- -------

ASSETS
Loans:(2)
Domestic........................ $24,898,011 $1,828,004 7.34%
Foreign(3)...................... 1,053,010 56,030 5.32
Securities-taxable................ 4,669,695 290,019 6.21
Securities-tax-exempt............. 53,334 5,768 10.81
Interest bearing deposits in banks 70,510 2,850 4.04
Federal funds sold and securities
purchased under resale agreements 217,369 6,844 3.15
Trading account assets............ 329,853 7,853 2.38
----------- ----------
Total earning assets............ 31,291,782 2,197,368 7.02
----------
Allowance for credit losses....... (635,063)
Cash and due from banks........... 2,203,075
Premises and equipment, net....... 487,842
Other assets...................... 1,271,586
-----------
Total assets.................... $34,619,222
===========

LIABILITIES
Domestic deposits:
Interest bearing................ $6,211,821 138,457 2.23
Savings and consumer time....... 3,421,933 106,177 3.10
Large time...................... 4,432,365 200,852 4.53
Foreign deposits(3)............... 1,931,190 69,830 3.62
----------- ----------
Total interest bearing deposits 15,997,309 515,316 3.22
----------- ----------
Federal funds purchased and
securities sold under repurchase
agreements...................... 1,243,933 52,153 4.19
Commercial paper.................. 1,287,603 52,439 4.07
Other borrowed funds.............. 464,033 20,180 4.35
Medium and long-term debt......... 217,534 10,445 4.80
UnionBanCal Corporation-obligated
mandatorily redeemable preferred
securities of subsidiary grantor
trust........................... 352,345 20,736 5.88
----------- ----------
Total borrowed funds............ 3,565,448 155,953 4.37
----------- ----------
Total interest bearing liabilities 19,562,757 671,269 3.43
----------
Noninterest bearing deposits...... 10,545,003
Other liabilities................. 1,043,743
-----------
Total liabilities............... 31,151,503
SHAREHOLDERS' EQUITY
Common equity..................... 3,467,719
-----------
Total shareholders' equity...... 3,467,719
-----------
Total liabilities and shareholders' $34,619,222
equity ===========

Net interest income/margin
(taxable-equivalent basis)...... 1,526,099 4.87%
Less: taxable-equivalent adjustment 2,057
----------
Net interest income............. $1,524,042
==========
_________________
<FN>
(1) Yields and interest income are presented on a taxable-equivalent basis
using the federal statutory tax rate of 35 percent.

(2) Average balances on loans outstanding include all nonperforming loans.
The amortized portion of net loan origination fees (costs) is included
in interest income on loans, representing an adjustment to the yield.

(3) Foreign loans and deposits are those loans and deposits originated in
foreign branches.

</FN>

F-13

Net interest income, on a taxable-equivalent basis, was $1.5 billion in
2001, compared with $1.6 billion in the prior year. This decrease of $60.9
million, or 4 percent, was attributable primarily to a lower net interest
margin, which was unfavorably impacted by the declining interest rate
environment and a strategic shift in our loan portfolio to increase the mix of
less volatile, yet lower yielding residential real estate loans. The declining
interest environment contributed to lower yields on loans and other interest
bearing assets and lower rates on most interest bearing liabilities. The overall
lower interest rate environment resulted in lower yields on average earning
assets of 122 basis points, coupled with lower rates paid on average interest
bearing liabilities of 118 basis points. The net interest margin decreased 35
basis points to 4.87 percent.

Average earning assets were $31.3 billion in 2001, compared with $30.4
billion in the prior year. This growth was attributable to a $1.2 billion, or 35
percent, increase in average securities. The increase in average securities,
which was comprised primarily of fixed rate available for sale securities,
reflected liquidity and interest rate risk management actions. While average
loans decreased by a modest $359.4 million, or 1 percent, over the prior year,
our loan mix has substantially changed. Average residential mortgages were
higher by $1.3 billion and commercial loans were lower by $1.4 billion, both of
which resulted from a strategic portfolio shift from more volatile commercial
loans. In addition, average real estate construction loans increased $209.1
million, average consumer loans decreased $309.5 million primarily due to the
exiting of the automobile dealer lending business, which was announced in the
third quarter of 2000, average lease financing decreased $105.8 million, and
average commercial mortgages decreased $65.7 million.

Deposit growth, especially in our title and escrow industries, has been
a continued strength for us benefiting our lower cost of funds year-over-year.
Average noninterest bearing deposits were $905.0 million, or 9 percent, higher
over the prior year.

F-14

ANALYSIS OF CHANGES IN NET INTEREST INCOME

The following table shows the changes in the components of net interest
income on a taxable-equivalent basis for 2000 and 2001. The changes in net
interest income between periods have been reflected as attributable either to
volume or to rate changes. For purposes of this table, changes that are not
solely due to volume or rate changes are allocated to rate.

YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------
2000 VERSUS 1999 2001 VERSUS 2000
----------------------------------- ------------------------------------------
INCREASE (DECREASE) DUE TO INCREASE (DECREASE) DUE TO
CHANGE IN CHANGE IN
----------------------------------- ------------------------------------------
AVERAGE AVERAGE NET AVERAGE AVERAGE NET
(DOLLARS IN THOUSANDS) VOLUME RATE CHANGE VOLUME RATE CHANGE
- ---------------------- -------- -------- -------- --------- ---------- ----------

CHANGES IN INTEREST INCOME
Loans:
Domestic................................. $103,434 $205,182 $308,616 $ (31,174) $(311,475) $(342,649)
Foreign(1)............................... (2,793) 5,012 2,219 240 (16,022) (15,782)
Securities-taxable......................... 8,650 7,057 15,707 80,456 (12,043) 68,413
Securities-tax-exempt...................... (956) (124) (1,080) (1,519) 515 (1,004)
Interest bearing deposits in banks......... (1,730) (1,318) (3,048) (5,442) (834) (6,276)
Federal funds sold and securities purchased
under resale agreements.................. (1,313) 1,365 52 5,336 (6,652) (1,316)
Trading account assets..................... 124 3,102 3,226 3,572 (11,238) (7,666)
-------- -------- -------- --------- --------- ---------
Total earning assets..................... 105,416 220,276 325,692 51,469 (357,749) (306,280)
-------- -------- -------- --------- --------- ---------
CHANGES IN INTEREST EXPENSE
Domestic deposits:
Interest bearing......................... $ 8,424 $ 11,688 $ 20,112 $ 4,663 $ (29,652) $ (24,989)
Savings and consumer time................ 116 11,820 11,936 1,779 (15,512) (13,733)
Large time............................... 22,223 46,242 68,465 (7,138) (66,062) (73,200)
Foreign deposits(1)........................ 14,973 18,381 33,354 354 (37,707) (37,353)
-------- -------- -------- --------- --------- ---------
Total interest bearing deposits.......... 45,736 88,131 133,867 (342) (148,933) (149,275)
-------- -------- -------- --------- --------- ---------
Federal funds purchased and securities sold
under repurchase agreements.............. 2,881 21,642 24,523 (19,019) (25,434) (44,453)
Commercial paper........................... (413) 18,277 17,864 (14,602) (27,864) (42,466)
Other borrowed funds....................... (20,814) 103 (20,711) 7,944 (4,473) 3,471
Medium and long-term debt.................. (2,444) 2,961 517 (2,615) (4,557) (7,172)
UnionBanCal Corporation-obligated
mandatorily redeemable preferred
securities of subsidiary grantor trust... 3,811 (2,168) 1,643 176 (5,652) (5,476)
-------- -------- -------- --------- --------- ---------
Total borrowed funds..................... (16,979) 40,815 23,836 (28,116) (67,980) (96,096)
-------- -------- -------- --------- --------- ---------
Total interest bearing liabilities....... 28,757 128,946 157,703 (28,458) (216,913) (245,371)
-------- -------- -------- --------- --------- ---------
Changes in net interest income........... $ 76,659 $ 91,330 $167,989 $ 79,927 $(140,836) $ (60,909)
======== ======== ======== ========= ========= =========
__________________
<FN>
(1) Foreign loans and deposits are those loans and deposits originated in foreign branches.
</FN>

NONINTEREST INCOME

INCREASE (DECREASE)
----------------------------------------------
YEARS ENDED DECEMBER 31,
----------------------------------------------
YEARS ENDED DECEMBER 31, 2000 VERSUS 1999 2001 VERSUS 2000
----------------------------------- ------------------- -------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001 AMOUNT PERCENT AMOUNT PERCENT
- --------------------------------------- -------- -------- -------- ------- ------- ------- -------

Service charges on deposit accounts.... $172,700 $210,257 $245,116 $37,557 22% $34,859 17%
Trust and investment management fees... 140,878 154,387 154,092 13,509 10 (295) -
Merchant transaction processing fees... 68,037 73,521 80,384 5,484 8 6,863 9
International commissions and fees..... 70,801 71,189 71,337 388 1 148 -
Brokerage commissions and fees......... 27,038 35,755 36,317 8,717 32 562 2
Merchant banking fees.................. 38,036 48,985 33,532 10,949 29 (15,453) (32)
Foreign exchange trading gains, net.... 20,430 28,057 26,565 7,627 37 (1,492) (5)
Gain on exchange of STAR System stock.. - - 20,700 - - 20,700 nm
Securities gains, net.................. 7,941 8,784 8,654 843 11 (130) (1)
Other.................................. 40,898 16,245 39,707 (24,653) (60) 23,462 144
-------- -------- -------- ------- -------
Total noninterest income............. $586,759 $647,180 $716,404 $60,421 10% $69,224 11%
======== ======== ======== ======= =======
__________________
<FN>
nm = not meaningful
</FN>

F-15

In 2001, noninterest income was $716.4 million, an increase of $69.2
million, or 11 percent, over the prior year. This increase was primarily due to
a $34.9 million increase in service charges on deposit accounts, a $20.7 million
gain recognized when our stock holding in STAR System was exchanged for Concord
EFS stock, a $10.9 million gain on the sale of our Guam and Saipan branches,
lower auto lease residual writedowns of $10.2 million in the current year, and a
$6.9 million increase in merchant transaction processing fees, partially offset
by a $15.5 million decrease in merchant banking fees, and a $4.1 million gain on
the sale of a building in the prior year.

o Revenue from service charges on deposit accounts was $245.1
million, an increase of 17 percent over the prior year. The
increase was primarily attributable to a 4 percent increase in
average deposits, lower earnings credits on customer deposit
balances, and higher overdraft fees due to a change in fee
structures in 2000.

o Trust and investment management fees were $154.1 million for 2001,
a decrease of less than 1 percent over the prior year. This
decrease included $6.3 million in incremental revenue resulting
from the acquisition of Copper Mountain Trust Company, which
occurred on January 31, 2001. Excluding Copper Mountain Trust
Company, fees from pre-existing businesses were lower
year-over-year primarily due to market conditions in 2001 compared
to 2000 and their impact on transaction and asset-based fees.
Overall assets under administration, including those administered
by Copper Mountain Trust Company, grew to $140.4 billion at
year-end, an increase of 3 percent over 2000.

o Merchant transaction processing fees were $80.4 million, an
increase of 9 percent over the prior year. The increase was
primarily due to an increase in the volume of merchant credit card
drafts and the introduction of the enhanced Gold and Platinum
version of our standard Master Money Card (debit card) aimed at
stimulating consumer usage for higher dollar purchases.

o Merchant banking fees were $33.5 million, a decrease of 32 percent
from the prior year. The decrease was primarily due to lower
demand for syndication and investment banking activities as a
result of market conditions in 2001.

o Securities gains, net, were $8.7 million, a decrease of 1 percent
from the prior year. In the current year, we had realized gains of
$29.9 million including gains of $9.8 million on the securities in
our securities available for sale portfolio, which were sold as
part of our asset/liability management strategy, a $9.5 million
gain on the sale of our Concord EFS stock, and $6.0 million in
realized gains on venture capital and equity investments, which
were partially offset by permanent writedowns on venture capital
and equity investments of $21.3 million.

o All other categories of noninterest income totaled $194.6 million,
an increase of 29 percent over the prior year. This increase was
mainly due to a $20.7 million gain recognized when our stock
holding in STAR System was exchanged for Concord EFS stock in the
current year, a $10.9 million gain on the sale of our Guam and
Saipan branches in the current year, and lower auto lease residual
writedowns of $10.2 million in the current year, partially offset
by a $4.1 million gain on the sale of a building in the prior
year.

F-16

NONINTEREST EXPENSE

INCREASE (DECREASE)
--------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------
YEARS ENDED DECEMBER 31, 2000 VERSUS 1999 2001 VERSUS 2000
----------------------------------- ------------------- -----------------
(DOLLARS IN THOUSANDS) 1999 2000 2001 AMOUNT PERCENT AMOUNT PERCENT
- ----------------------------------------- ---------- ---------- ---------- --------- ------- -------- -------

Salaries and other compensation.......... $ 539,056 $ 517,459 $ 547,549 $ (21,597) (4)% $ 30,090 6%
Employee benefits........................ 122,288 83,003 112,291 (39,285) (32) 29,288 35
---------- ---------- ---------- --------- --------
Salaries and employee benefits......... 661,344 600,462 659,840 (60,882) (9) 59,378 10
Net occupancy............................ 90,162 92,567 95,152 2,405 3 2,585 3
Equipment................................ 67,095 63,290 64,357 (3,805) (6) 1,067 2
Merchant transaction processing.......... 49,435 49,609 52,789 174 - 3,180 6
Communications........................... 43,179 43,744 50,439 565 1 6,695 15
Professional services.................... 38,399 42,042 38,480 3,643 9 (3,562) (8)
Advertising and public relations......... 27,163 29,125 37,710 1,962 7 8,585 29
Data processing.......................... 31,811 34,803 35,732 2,992 9 929 3
Software................................. 24,519 24,037 31,766 (482) (2) 7,729 32
Intangible asset amortization............ 13,980 13,352 14,340 (628) (4) 988 7
Foreclosed asset income.................. (1,344) (80) (13) 1,264 nm 67 nm
Restructuring charge (credit)............ 85,000 (19,000) - (104,000) nm 19,000 nm
Other.................................... 151,230 156,234 159,582 5,004 3 3,348 2
---------- ---------- ---------- --------- --------
Total noninterest expense.............. $1,281,973 $1,130,185 $1,240,174 $(151,788) (12)% $109,989 10%
========== ========== ========== ========= ========
________________
<FN>
nm = not meaningful
</FN>

In 2001, noninterest expense was $1.2 billion, an increase of $91.0
million, or 8 percent, over the prior year, after excluding the restructuring
credits recognized in 2000. This increase was mostly due to a $59.4 million
increase in salaries and employee benefits, an $8.6 million increase in
advertising and public relations expense, a $7.7 million increase in software
expense, and a $15.3 million increase in all of the other noninterest expense
categories.

o Salaries and employee benefits were $659.8 million, an increase of
10 percent over the prior year. This increase was primarily due to
an increase in salaries and employee benefits necessary to achieve
our strategic goals to expand key businesses, annual merit
increases, higher 401(k) plan and health insurance expenses in the
current year, and a one-time credit for an accounting methodology
change in recognizing pension expense of $16.0 million in the
first quarter of 2000.

o Advertising and public relations expense was $37.7 million, an
increase of 29 percent over the prior year. This increase was
primarily attributed to higher marketing expenditures on programs
targeted toward increasing growth in deposits, small business
relationships, and residential mortgages.

o Software expense was $31.8 million, an increase of 32 percent,
over prior year. This increase was primarily from higher software
depreciation and software maintenance contract expenses related to
the implementation of ebusiness and automation initiatives.

o All other categories of noninterest expense totaled $510.9
million, an increase of 3 percent over the prior year, after
excluding the restructuring credits recognized in 2000. This
increase was mainly due to the recognition of a loss of $6.2
million at adoption of SFAS No. 133, higher operating losses of
$7.0 million including higher legal settlements and forgery losses
in 2001, and higher derivative-related expenses of $3.7 million
due to changes in the value of a portion of the interest rate
options that were excluded from hedge accounting under SFAS No.
133.

F-17

INCOME TAX EXPENSE

YEARS ENDED DECEMBER 31,
-----------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- --------------------------------------- -------- -------- --------
Income before income taxes............. $655,619 $661,435 $715,272
Income tax expense..................... 213,888 221,535 233,844
Effective tax rate..................... 33% 33% 33%

The effective tax rate was 33 percent for 1999, 2000, and 2001. During
1999, we recognized a net tax benefit of $10.7 million as a result of various
tax refunds. Excluding this tax benefit, our effective tax rate would have been
34 percent. We filed our 1999 and 2000, and intend to file our 2001, California
franchise tax returns on a worldwide unitary basis, incorporating the financial
results of BTM and its worldwide affiliates. For additional information
regarding 2000 and 2001 income tax expense, see Note 8 to our Consolidated
Financial Statements included in this Form 10-K.

CREDIT RISK MANAGEMENT

Our principal business activity is the extension of credit in the form
of loans and credit substitutes to individuals and businesses. Our policies and
applicable laws and regulations governing the extension of credit require risk
analysis including an extensive evaluation of the purpose of the request and the
borrower's ability and willingness to repay us as scheduled. Our evaluation also
includes ongoing portfolio and credit management through portfolio
diversification, lending limit constraints, credit review and approval policies,
and extensive internal monitoring.

We manage and control credit risk through diversification of the
portfolio by type of loan, industry concentration, dollar limits on multiple
loans to the same borrower, geographic distribution and type of borrower.
Geographic diversification of loans originated through our branch network is
generally within California, Oregon and Washington, which we consider to be our
principal markets. In addition, we originate and participate in lending
activities outside these states, as well as internationally.

In analyzing our existing loan portfolios, we apply specific monitoring
policies and procedures that vary according to the relative risk profile and
other characteristics of the loans within the various portfolios. Our
residential and consumer loans and leases are relatively homogeneous and no
single loan is individually significant in terms of its size or potential risk
of loss. Therefore, we review our residential and consumer portfolios by
analyzing their performance as a pool of loans. In contrast, our monitoring
process for the commercial, financial and industrial, construction, commercial
mortgage, leases, and foreign loan portfolios includes a periodic review of
individual loans. Loans that are performing but have shown some signs of
weakness are subjected to more stringent reporting and oversight. We review
these loans to assess the ability of the borrowing entity to continue to service
all of its interest and principal obligations and as a result may adjust the
risk grade accordingly. In the event that we believe that full collection of
principal and interest is not reasonably assured, the loan will be appropriately
downgraded and, if warranted, placed on nonaccrual status, even though the loan
may be current as to principal and interest payments.

We have a Credit Review and Management Committee chaired by the Chief
Credit Officer and composed of the Chief Executive Officer and other executive
officers that establishes overall risk appetite, portfolio concentration limits,
and credit risk rating methodology. This committee is supported by the Credit
Policy Forum, composed of lending group Senior Credit Officers that have
responsibility for establishing credit policy, credit underwriting criteria, and
other risk management controls including the approval of business strategies.
Credit Administration under the direction of the Senior Credit Officers has
responsibility for administering the credit approval process and related
policies. Policies require an extensive evaluation of credit requests and
continuing review of existing credit in order to promptly identify, monitor, and
quantify evidence of deterioration in asset credit quality or potential loss.

F-18

As another part of the control process, an internal credit examination
function provides the Board of Directors with an independent assessment of both
the level of portfolio quality and the effectiveness of the Bank's credit
management process. At the portfolio level, the Credit Examination Group reviews
existing and proposed credit policies, underwriting guidelines, and portfolio
management practices to determine that credit risks are appropriately defined
and controlled. In addition, this group routinely reviews the accuracy and
timeliness of risk grades assigned to individual borrowers to ensure that the
line driven credit risk identification and grading process is functioning
properly. The Credit Examination Group summarizes its significant findings on a
regular basis and provides recommendations for corrective action when credit
management or control deficiencies are identified.

LOANS

The following table shows loans outstanding by loan type and as a
percentage of total loans for 1997 through 2001.

DECEMBER 31,
----------------------------------------------------------------------------------
(DOLLARS IN MILLIONS) 1997 1998 1999 2000 2001
- ---------------------------------------- -------------- -------------- -------------- -------------- --------------

Domestic:
Commercial, financial and industrial.. $10,747 47% $13,120 54% $14,177 55% $13,749 53% $11,476 46%
Construction.......................... 293 1 440 2 648 3 939 4 1,060 4
Mortgage:
Residential.......................... 2,961 13 2,628 11 2,581 10 3,295 13 4,788 19
Commercial........................... 2,952 13 2,975 12 3,572 14 3,348 13 3,591 15
------- ------- ------- ------- -------
Total mortgage..................... 5,913 26 5,603 23 6,153 24 6,643 26 8,379 34
Consumer:
Installment.......................... 2,091 9 1,985 8 1,922 7 1,656 6 1,200 5
Home equity.......................... 993 5 818 4 728 3 755 3 859 3
Credit card and other lines of
credit.............................. 270 1 - - - - - - - -
------- ------- ------- ------- -------
Total consumer..................... 3,354 15 2,803 12 2,650 10 2,411 9 2,059 8
Lease financing....................... 875 4 1,032 4 1,149 4 1,134 4 979 4
------- ------- ------- ------- -------
Total loans in domestic offices.... 21,182 93 22,998 95 24,777 96 24,876 96 23,953 96
Loans originated in foreign branches.... 1,559 7 1,298 5 1,136 4 1,134 4 1,041 4
------- ------- ------- ------- -------
Total loans........................ $22,741 100% $24,296 100% $25,913 100% $26,010 100% $24,994 100%
======= ======= ======= ======= =======

Our lending activities are predominantly domestic, with such loans
comprising 96 percent of the total loan portfolio at December 31, 2001. Total
loans at December 31, 2001 were $25.0 billion, a decrease of $1.0 billion, or 4
percent, from December 31, 2000. The decrease was attributable to declines in
the commercial, financial and industrial loan portfolio, which decreased $2.3
billion and the consumer loan portfolio, which decreased $352 million, partially
offset by the growth in the residential mortgage loan portfolio, which increased
$1.5 billion, and the commercial mortgage loan portfolio, which increased $243
million.

COMMERCIAL, FINANCIAL AND INDUSTRIAL LOANS

Commercial, financial and industrial loans represent the largest
category in the loan portfolio. These loans are extended principally to major
corporations, middle market businesses, and small businesses, with no industry
concentration exceeding 10 percent of total commercial, financial and industrial
loans. This portfolio has a high degree of geographic diversification based upon
our customers' revenue bases, which we believe lowers our vulnerability to
changes in the economic outlook of any particular region of the U.S.

Our commercial market lending originates primarily through our banking
office network. These offices, which rely extensively on relationship-oriented
banking, provide many services including cash management services, lines of
credit, accounts receivable and inventory financing. Separately, we originate

F-19

or participate in a wide variety of financial services to major corporations.
These services include traditional commercial banking and specialized financing
tailored to the needs of each customer's specific industry. Presently, we are
active in the oil and gas, communications, media, entertainment, retailing and
financial services industries.

At December 31, 2001 and 2000, the commercial, financial and industrial
loan portfolio was $11.5 billion, or 46 percent of total loans, and $13.7
billion, or 53 percent of total loans, respectively. The decrease of $2.3
billion, or 17 percent, from the prior year was primarily attributable to slower
loan growth attributed to the current economic conditions, loan sales and
reductions in our exposures in nonrelationship syndicated loans. Our
nonrelationship syndicated loan portfolio, which at year-end 2001 comprised an
estimated $900 million of our total commercial, financial, and industrial loans,
has caused a disproportionate share of our credit problems. The reduction in
commercial, financial, and industrial loans is consistent with our strategy to
reduce our exposure to more volatile commercial loans and increase the
percentage of more stable assets.

CONSTRUCTION AND COMMERCIAL MORTGAGE LOANS

We engage in non-residential real estate lending that includes
commercial mortgage loans and construction loans secured by deeds of trust.
Construction loans are made primarily to commercial property developers and to
residential builders.

The construction loan portfolio totaled $1.1 billion, or 4 percent of
total loans, at December 31, 2001, compared with $939 million, or 4 percent of
total loans, at December 31, 2000. This growth of $121 million, or 13 percent,
from the prior year was primarily attributable to a reasonably stable Southern
California housing market during 2001, despite the slowdown in the economy.

Commercial mortgages were $3.6 billion, or 15 percent of total loans,
at December 31, 2001, compared with $3.3 billion or 13 percent at December 31,
2000. The commercial mortgage loan portfolio consists of loans on commercial and
industrial projects primarily in California. The increase in commercial
mortgages of $243 million, or 7 percent, from December 31, 2000, was also
primarily due to a reasonably stable Southern California real estate market.

RESIDENTIAL MORTGAGE LOANS

We originate residential mortgage loans, secured by one-to-four family
residential properties, through our multiple channel network (including
branches, mortgage brokers, and loan by phone) throughout California, Oregon and
Washington, and we periodically purchase loans in our market area.

Residential mortgages were $4.8 billion, or 19 percent of total loans,
at December 31, 2001, compared with $3.3 billion, or 13 percent of total loans,
at December 31, 2000. The increase in residential mortgages of $1.5 billion, or
45 percent, from December 31, 2000, was influenced by our strategic decision to
increase our residential mortgage portfolio utilizing additional channels such
as wholesalers and correspondents, and to a lesser extent, the bulk whole loan
purchase channel.

CONSUMER LOANS

We originate consumer loans, such as auto loans and home equity loans
and lines, through our branch network. Consumer loans totaled $2.1 billion, or 8
percent of total loans, at December 31, 2001, compared with $2.4 billion, or 9
percent of total loans, at December 31, 2000. The decrease of $352 million, or
15 percent, was primarily attributable to exiting the automobile dealer lending
business in the third quarter of 2000, partially offset by an increase in home
equity loans.

F-20

LEASE FINANCING

We enter into direct financing and leveraged leases through our
Equipment Leasing Division. Lease financing totaled $1.0 billion, or 4 percent
of total loans, at December 31, 2001, compared with $1.1 billion, or 4 percent
of total loans, at December 31, 2000. As we previously announced, effective
April 20, 2001, we discontinued our auto leasing activity. As of December 31,
2001, our remaining auto lease portfolio was $464 million, excluding a reserve
for auto lease residuals of $55 million. Included in our lease portfolio are
leveraged leases net of non-recourse debt of approximately $1.1 billion. We
utilize a number of special purpose entities for our leverage leases. These
entities serve legal and tax purposes and do not function as vehicles to shift
liabilities to other parties or to deconsolidate affiliates for financial
reporting purposes. As allowed by US GAAP and by law, the gross lease receivable
is offset by the qualifying non-recourse debt. In leveraged lease transactions,
the third-party lender may only look to the residual value of the leased assets
for repayment.

LOANS ORIGINATED IN FOREIGN BRANCHES

Our loans originated in foreign branches consist primarily of
short-term extensions of credit to financial institutions located primarily in
Asia and to corporations in Japan, Korea and Taiwan.

Loans originated in foreign branches totaled $1.0 billion, or 4 percent
of total loans, at December 31, 2001 and $1.1 billion, or 4 percent of total
loans, at December 31, 2000.

CROSS-BORDER OUTSTANDINGS

Our cross-border outstandings reflect certain additional economic and
political risks that are not reflected in domestic outstandings. These risks
include those arising from exchange rate fluctuations and restrictions on the
transfer of funds. The following table sets forth our cross-border outstandings
as of December 31, 1999, 2000 and 2001 for each country where such outstandings
exceeded 1 percent of total assets. The cross-border outstandings were compiled
based upon category and domicile of ultimate risk and are comprised of balances
with banks, trading account assets, securities available for sale, securities
purchased under resale agreements, loans, accrued interest receivable,
acceptances outstanding and investments with foreign entities. The amounts
outstanding for each country exclude local currency outstandings. For those
countries shown in the table below, we do not have significant local currency
outstandings that are not hedged or are not funded by local currency borrowings.

PUBLIC CORPORATIONS
FINANCIAL SECTOR AND OTHER TOTAL
(DOLLARS IN MILLIONS) INSTITUTIONS ENTITIES BORROWERS OUTSTANDINGS
- -------------------------------------- ------------ -------- ------------ ------------

December 31, 1999
Japan............................... $ 82 $- $339 $421
Korea............................... 422 - 53 475
December 31, 2000
Korea............................... $507 $- $ 46 $553
December 31, 2001
Korea............................... $514 $- $- $514

PROVISION FOR CREDIT LOSSES

We recorded a $440 million provision for credit losses in 2000,
compared with a $285 million provision for credit losses in 2001. Provisions for
credit losses are charged to income to bring our allowance for credit losses to
a level deemed appropriate by management based on the factors discussed under
"Allowance for Credit Losses" below.

F-21

Although our provision was significantly lower than the prior year, it
is still at a high level. Our provision for 2001, was affected by the following
factors:

o The continuing application of strict standards to the definitions
of potential and well-defined weaknesses in our loan portfolio,
resulting in high levels of criticized assets,

o The high level of charge-offs resulting from continued active
management of the portfolio through loan sales, and

o The increasing, but slowing, levels of nonaccrual loans.

ALLOWANCE FOR CREDIT LOSSES

The following table reflects the allowance allocated to each respective
loan category at period end and as a percentage of the total period end balance
of that loan category, as set forth in the "Loans" table on page F-19.

DECEMBER 31,
-------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1997 1998 1999
- ------------------------------------------------------ ----------------- ------------------ ----------------

Domestic:
Commercial, financial, and industrial............... $123,610 1.15% $145,100 1.11% $238,200 1.68%
Construction........................................ 3,221 1.10 5,500 1.25 10,000 1.54
Mortgage:
Residential........................................ 2,700 0.09 1,100 0.04 800 0.03
Commercial......................................... 60,680 2.06 17,500 0.59 21,900 0.61
-------- -------- --------
Total mortgage................................... 63,380 1.07 18,600 0.33 22,700 0.37
Consumer:
Installment........................................ 11,400 0.55 20,900 1.05 14,900 0.78
Home equity........................................ 3,600 0.36 3,800 0.46 900 0.12
Credit card and other lines of credit.............. 30,500 11.30 - - - -
-------- -------- --------
Total consumer................................... 45,500 1.36 24,700 0.88 15,800 0.60
Lease financing..................................... 4,862 0.56 3,800 0.37 4,600 0.40
-------- -------- --------
Total domestic allowance......................... 240,573 1.14 197,700 0.86 291,300 1.18
Foreign allowance..................................... 39,313 2.52 47,000 3.62 17,200 1.51
Unallocated........................................... 171,806 214,628 161,878
-------- -------- --------
Total allowance for credit losses................ $451,692 1.99% $459,328 1.89% $470,378 1.82%
======== ======== ========

DECEMBER 31,
---------------------------------------
(DOLLARS IN THOUSANDS) 2000 2001
- ------------------------------------------------------------------------------- ------------------ ----------------

Domestic:
Commercial, financial, and industrial........................................ $452,400 3.29% $399,900 3.48%
Construction................................................................. 10,200 1.09 12,300 1.16
Mortgage:
Residential.................................................................. 1,000 0.03 1,400 0.03
Commercial................................................................... 19,100 0.57 21,100 0.59
-------- --------
Total mortgage............................................................... 20,100 0.30 22,500 0.27
Consumer:
Installment.................................................................. 17,500 1.06 13,600 1.13
Home equity.................................................................. 1,000 0.13 900 0.10
Credit card and other lines of credit........................................ - -
-------- --------
Total consumer............................................................... 18,500 0.77 14,500 0.70
Lease financing.............................................................. 7,900 0.70 12,000 1.23
-------- --------
Total domestic allowance..................................................... 509,100 2.05 461,200 1.93
Foreign allowance.............................................................. 3,400 0.30 1,800 0.17
Unallocated.................................................................... 101,402 171,509
-------- --------
Total allowance for credit losses............................................ $613,902 2.36% $634,509 2.54%
======== ========

F-22

ALLOWANCE POLICY AND METHODOLOGY

We maintain an allowance for credit losses to absorb losses inherent in
the loan portfolio. The allowance is based on our regular, quarterly assessments
of the probable estimated losses inherent in the loan portfolio, and to a lesser
extent, unused commitments to provide financing. Our methodology for measuring
the appropriate level of the allowance relies on several key elements, which
include the formula allowance, specific allowances for identified problem loans
and portfolio segments and the unallocated allowance.

The formula allowance is calculated by applying loss factors to
outstanding loans and certain unused commitments, in each case based on the
internal risk grade of such loans, leases and commitments. Changes in risk
grades of both performing and nonperforming loans affect the amount of the
formula allowance. Loss factors are based on our historical loss experience and
may be adjusted for significant factors that, in management's judgment, affect
the collectibility of the portfolio as of the evaluation date. Loss factors are
developed in the following ways:

o Pass graded, for commercial, financial, and industrial loans, as
well as all problem graded loan loss factors are derived from a
migration model that tracks historical loss over a period, which
we believe captures the inherent losses on our loan portfolio,

o Pass graded loan loss factors are based on the average annual net
charge-off rate over a period for commercial real estate loans and
construction loans reflective of a full economic cycle,

o Pooled loan loss factors (not individually graded loans) are based
on expected net charge-offs for one year. Pooled loans are loans
that are homogeneous in nature, such as consumer installment, home
equity, and residential mortgage loans and automobile leases.

We believe that a business cycle is a period in which both upturns and
downturns in the economy have been reflected. The long-term nature of the recent
economic expansion has required us to extend our historical perspective to
capture the highs and lows of a more typical economic cycle.

Specific allowances are established in cases where management has
identified significant conditions or circumstances related to a credit that
management believes indicate the probability that a loss has been incurred. This
amount may be determined either by a method prescribed by SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan", or by a method which
identifies certain qualitative factors.

The unallocated allowance contains amounts that are based on
management's evaluation of conditions that are not directly measured in the
determination of the formula and specific allowances. The evaluation of the
inherent loss with respect to these conditions is subject to a higher degree of
uncertainty because they are not identified with specific problem credits or
portfolio segments. The conditions evaluated in connection with the unallocated
allowance include the following, which existed at the balance sheet date:

o General economic and business conditions affecting our key lending
areas,

o Credit quality trends (including trends in nonperforming loans
expected to result from existing conditions),

o Collateral values,

o Loan volumes and concentrations,

o Seasoning of the loan portfolio,

o Specific industry conditions within portfolio segments,

o Recent loss experience in particular segments of the portfolio,

o Duration of the current business cycle,

F-23

o Bank regulatory examination results, and

o Findings of our internal credit examiners.

Executive management reviews these conditions quarterly in discussion
with our senior credit officers. To the extent that any of these conditions is
evidenced by a specifically identifiable problem credit or portfolio segment as
of the evaluation date, management's estimate of the effect of such condition
may be reflected as a specific allowance, applicable to such credit or portfolio
segment. Where any of these conditions is not evidenced by a specifically
identifiable problem credit or portfolio segment as of the evaluation date,
management's evaluation of the probable loss related to such condition is
reflected in the unallocated allowance.

The allowance for credit losses is based upon estimates of probable
losses inherent in the loan portfolio. The actual losses can vary from the
estimated amounts. Our methodology includes several features that are intended
to reduce the differences between estimated and actual losses. The loss
migration model that is used to establish the loan loss factors for problem
graded loans and pass graded commercial, financial, and industrial loans is
designed to be self-correcting by taking into account our loss experience over
prescribed periods. Similarly, by basing the pass graded loan loss factors over
a period reflective of a business cycle, the methodology is designed to take our
recent loss experience for commercial real estate mortgages and construction
loans into account. Pooled loan loss factors are adjusted quarterly based upon
the level of net charge-offs expected by management in the next twelve months.
Furthermore, based on management's judgement, our methodology permits
adjustments to any loss factor used in the computation of the formula allowance
for significant factors, which affect the collectibility of the portfolio as of
the evaluation date, but are not reflected in the loss factors. By assessing the
probable estimated losses inherent in the loan portfolio on a quarterly basis,
we are able to adjust specific and inherent loss estimates based upon the most
recent information that has become available.

COMPARISON OF THE TOTAL ALLOWANCE AND RELATED PROVISION FOR CREDIT LOSSES

At December 31, 1999, our total allowance for credit losses was $470
million, or 1.82 percent of the total loan portfolio and 281 percent of total
nonaccrual loans. At December 31, 2000, our total allowance for credit losses
was $614 million, or 2.36 percent of the total loan portfolio and 153 percent of
total nonaccruals. At December 31, 2001, our total allowance for credit losses
was $635 million or 2.54 percent of the total loan portfolio and 129 percent of
total nonaccrual loans. In addition, the allowance incorporates the results of
measuring impaired loans as provided in SFAS No. 114 and SFAS No. 118. These
accounting standards prescribe the measurement methods, income recognition and
disclosures related to impaired loans. At December 31, 1999, total impaired
loans were $167 million, and the associated impairment allowance was $42 million
compared with $400 million and $118 million, respectively, at December 31, 2000
and $492 million and $98 million, respectively, at December 31, 2001.

Prior to 2000, our credit policy prescribed that our unallocated
allowance include a component in respect of model and estimation risk equal to
20% to 25% of the allocated allowance. The primary reason for this component of
the unallocated allowance was the dissimilarity of the loss histories of our
predecessor institutions, Union Bank and Bank of California, prior to their
combination in 1996. As part of our ongoing effort to refine our allowance
methodology, we conducted a review of model imprecision for our pass and problem
graded loans, which was completed in 2000, thereby eliminating the need for a
separate model imprecision component.

During 1999, 2000 and 2001, there were no changes in estimation methods
or assumptions that affected our methodology for assessing the appropriateness
of the formula and specific allowances for credit losses, except that we
adjusted the periods contained within the model to what we believe reflects a
business cycle. The impact of this adjustment in the formula allowance for 1999
increased the formula allowance by $28 million. There was no material impact on
the formula allowance for these adjustments in 2000 or 2001. Changes in
estimates and assumptions regarding the effects of economic and business

F-24

conditions on borrowers and other factors, which are described below, also
affected the assessment of the unallocated allowance. Estimation risk, which
continues to be present in the allowance for credit losses, is included as part
of our attributed factors within the unallocated allowance for credit losses for
the years 2000 and 2001.

We recorded a $65 million provision in 1999, a $440 million provision
in 2000 and a $285 million provision in 2001. Although the level of net
charge-offs and the decline of nonperforming loans during 1998 favorably
impacted our asset quality ratios, losses in certain sectors of our commercial,
financial and industrial loans have been steadily increasing since then. Losses
inherent in these types of credits are more difficult to assess because
historically these have been more volatile than losses from other credits.

The following table sets forth the allowance for credit losses.

DECEMBER 31,
----------------------
(DOLLARS IN MILLIONS) 1999 2000 2001
- ------------------------------------------------------ ------ ------ ------
Allocated allowance:
Formula............................................. $257 $380 $325
Specific............................................ 51 133 138
------ ------ ------
Total allocated allowance........................ 308 513 463
Unallocated allowance................................. 162 101 172
------ ------ ------
Total allowance for credit losses..................... $470 $614 $635
====== ====== ======

CHANGES IN THE FORMULA AND SPECIFIC ALLOWANCES

At December 31, 2000, the formula allowance increased by $123 million
from the prior year, primarily due to the dramatic rise in criticized credits
and the downward migration of loans within the criticized range. At December 31,
2001, the formula allowance declined by $55 million from the prior year,
primarily due to a higher level of charge-offs, improving migration within the
criticized range, and lower default loss rates.

At December 31, 2000, the specific allowance increased by $82 million,
due to the significant rise in our impaired loans. At December 31, 2001, the
specific allowance increased by $5 million from the prior year as impaired loans
continued to rise.

At December 31, 1999, the allocated portion of the allowance for credit
losses included $145 million related to special mention and classified credits,
compared to $346 million at December 31, 2000 and $345 million at December 31,
2001. Special mention and classified credits are those that are internally risk
graded as "special mention", "substandard" or "doubtful". Special mention
credits are potentially weak, as the borrower has begun to exhibit deteriorating
trends which, if not corrected, could jeopardize repayment of the loan and
result in further downgrade. Substandard credits have well-defined weaknesses
which, if not corrected, could jeopardize the full satisfaction of the debt. A
credit classified as "doubtful" has critical weaknesses that make full
collection improbable.

Our problem credits continue to be centered in the commercial loan
portfolio and mostly within syndicated loan purchases. Within our commercial
loan portfolio, we are seeing a higher incidence of problem credits outside our
primary areas of industry expertise. We continue to see no significant
deterioration in the real estate or consumer loan portfolios, although there is
a specific deterioration in Northern California real estate markets, which is
being impacted by the slow down in the technology sector.

CHANGES IN THE UNALLOCATED ALLOWANCE

At December 31, 2000, the unallocated allowance was $101 million,
compared to $162 million at December 31, 1999, a decrease of $61 million. During
the third quarter 2000, we refined our reserve

F-25

methodology to eliminate the prescribed component of the unallocated allowance
in respect of model and estimation risk. In light of the elimination of this
mandatory component of the unallocated reserve, we increased the remaining
component of the unallocated allowance to reflect the estimation risk that
management believes exists in the formula and specific allowances, primarily in
respect of the probable downward regradings of loans in certain identified
sectors of our portfolio.

At December 31, 2001, the unallocated allowance was $172 million
compared to $101 million at December 31, 2000, an increase of $71 million. This
increase reflects the uncertainties in our current economic environment and the
impact it will have on our borrowers. As discussed previously, during the third
quarter of 2000 we refined our reserve methodology to eliminate the prescribed
component of the unallocated allowance in respect of model and estimation risk.
In light of the elimination of this component of the unallocated reserve, we
have increased the remaining component of the unallocated allowance to reflect
the estimation risk that management believes exists in the formula and specific
allowances, primarily in respect of the probable downward regradings of loans in
certain identified sectors of our portfolio. Management believes that other
inherent losses related to certain conditions previously considered in its
evaluation of the unallocated allowance have been recognized in the formula
allowance or eliminated by year-end December 31, 2001.

The following table identifies the components of the attribution of the
unallocated allowance and the range of inherent loss.

December 31, 1999 December 31, 2000 December 31, 2001
(DOLLARS IN MILLIONS) ------------------------------ ----------------------------- ------------------------------
CONCENTRATION COMMITMENTS(1) LOW HIGH COMMITMENTS(1) LOW HIGH COMMITMENTS(1) LOW HIGH
- ---------------------------------- -------------- ----- ----- -------------- ----- ----- -------------- ----- -----

Communications/Media.............. $na $ - $ - $2,713 $21 $ 35 $2,006 $20 $ 46
Retail............................ na - - 1,906 6 13 1,719 17 34
Real Estate....................... na - - na - - 5,086 16 32
Foreign........................... 1,630 22 46 823 5 10 1,347 10 19
Utilities......................... na - - 3,401 17 31 3,767 4 10
Technology........................ 1,696 15 22 1,547 4 7 1,169 5 9
Machinery......................... na - - na - - 930 5 9
Other............................. 10,204 18 39 2,451 5 12 2,311 11 25
Model Imprecision................. 62 77 - - - -
---- ---- --- ---- --- ----
Total Attributed.................. $117 $184 $58 $108 $88 $184
==== ==== === ==== === ====
_____________
<FN>
(1) Includes loans outstanding and unused commitments.
na = not applicable to this assessment
</FN>

In our assessment as of December 31, 1999, management focused, in
particular, on the following factors:

o With respect to the margin for model and estimation risk, which
could be in the range of $62 million to $77 million.

o With respect to cross-border loans and acceptances to certain
foreign countries, management considered the improving but
continuing effects of the global financial turmoil, which could be
in the range of $22 million to $46 million.

o With respect to the technology industry, management considered the
improvements in export market conditions and the reduction in the
cyclical over-capacity on borrowers in the chip and semiconductor
industries, which could be in the range of $15 million to $22
million.

o With respect to oil and gas, management considered the effects of
rising oil prices and the improvement in the cash flows of
borrowers in the oil and gas industry, which no longer required an
attribution of the unallocated allowance.

F-26

In our assessment as of December 31, 2000, management focused, in
particular, on the following factors:

o With respect to model and estimation risk, as formerly required by
our credit policy, management determined that this amount was no
longer necessary.

o With respect to the communications/media industry, management
considered the adverse effects of changes in the economic,
regulatory and technology environments, which could be in the
range of $21 million to $35 million.

o With respect to the utilities industry, management considered the
adverse effects of rising fuel prices and government regulation,
which could be in the range of $17 million to $31 million.

o With respect to the retailing industry, management considered the
adverse effects of recent slowing trends in same-store sales and
softening consumer confidence, which could be in the range of $6
million to $13 million.

o With respect to cross-border loans and acceptances to certain
foreign countries, management considered the lingering effects of
the financial crisis, which could be in the range of $5 million to
$10 million.

o With respect to the technology industry, management considered the
adverse effects of export market conditions and cyclical
over-capacity, which could be in the range of $4 million to $7
million.

In our assessment as of December 31, 2001, management focused, in
particular, on the following factors:

o With respect to the communications/media industry, management
considered the continued adverse effects of changes in the
economic, regulatory and technology environments, which could be
in the range of $20 million to $46 million.

o With respect to the retail sector, management considered the
adverse effects of the economic recession and slowing trends in
consumer spending, which could be in the range of $17 million to
$34 million.

o With respect to the real estate sector, management considered the
general weakening in real estate markets as well as the specific
deterioration in Northern California, which could be in the range
of $16 million to $32 million.

o With respect to cross-border loans and acceptances to certain
Asia/Pacific Rim countries, management considered the weakening
economic conditions in that region and the reduced strength of
Japanese corporate parents, which could be in the range of $10
million to $19 million.

o With respect to utilities, management considered the
well-publicized problems of the large public utilities and the
independent power producers in California, which, although
improving, could be in the range of $4 million to $10 million.

o With respect to the technology industry, management considered the
adverse effects of declining product life cycles and a slowing
demand for personal computers, which could be in the range of $5
million to $9 million.

o With respect to machinery manufacturing, management considered the
adverse effects of the cyclical nature of the industry and the
downgrades that are expected in a recessionary environment, which
could be in the range of $5 to $9 million.

There can be no assurance that the adverse impact of any of these
conditions on us will not be in excess of the range set forth above. See
paragraph on forward-looking statements on page F-2.

F-27

Although in certain instances the downgrading of a loan resulting from
these effects was reflected in the formula allowance, management believed that
in most instances the impact of these events on the collectibility of the
applicable loans may not have been reflected in the level of nonperforming loans
or in the internal risk grading process with respect of such loans. Accordingly,
our evaluation of the probable losses related to these factors was reflected in
the unallocated allowance. The evaluations of the inherent losses with respect
to these factors were subject to higher degrees of uncertainty because they were
not identified with specific problem credits.

CHANGE IN THE TOTAL ALLOWANCE FOR CREDIT LOSSES

The following table sets forth a reconciliation of changes in our
allowance for credit losses.

YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1997 1998 1999 2000 2001
- -------------------------------------------------------------- -------- -------- -------- -------- --------

Balance, beginning of period.................................. $523,946 $451,692 $459,328 $470,378 $613,902
Loans charged off:
Commercial, financial and industrial........................ 58,664 38,219 48,597 302,152 300,521
Construction................................................ 120 3 - - 567
Mortgage.................................................... 5,058 6,547 747 174 5,113
Consumer.................................................... 55,336 29,312 15,009 11,760 12,667
Lease financing............................................. 3,601 2,709 3,232 2,925 3,601
Foreign(1).................................................. - - 14,100 5,352 -
-------- -------- -------- -------- --------
Total loans charged off.................................. 122,779 76,790 81,685 322,363 322,469
Recoveries of loans previously charged off:
Commercial, financial and industrial........................ 23,371 23,762 17,851 16,440 48,321
Construction................................................ 9,054 3 - - -
Mortgage.................................................... 3,292 2,857 521 2,394 32
Consumer.................................................... 14,946 14,021 8,356 6,882 4,289
Lease financing............................................. 351 501 811 581 754
Foreign(1).................................................. - - - - 4,974
-------- -------- -------- -------- --------
Total recoveries of loans previously charged off......... 51,014 41,144 27,539 26,297 58,370
Net loans charged off................................. 71,765 35,646 54,146 296,066 264,099
Provision for credit losses................................... - 45,000 65,000 440,000 285,000
Transfer of reserve for trading account assets................ - (1,911) - - -
Foreign translation adjustment and other net additions
(deductions)................................................ (489) 193 196 (410) (294)
-------- -------- -------- -------- --------
Balance, end of period........................................ $451,692 $459,328 $470,378 $613,902 $634,509
======== ======== ======== ======== ========
Allowance for credit losses to total loans.................... 1.99% 1.89% 1.82% 2.36% 2.54%
Provision for credit losses to net loans charged off.......... nm 126.24 120.05 148.62 107.91
Net loans charged off to average total loans.................. 0.33 0.15 0.22 1.13 1.02
_____________
<FN>
(1) Foreign loans are those loans originated in foreign branches.
nm = not meaningful
</FN>

Loans charged off in 2000 increased by $241 million over 1999,
primarily due to losses on distressed loans held for accelerated disposition, as
well as reductions in the carrying value on impaired loans. Total loans charged
off in 2001 remained almost unchanged from 2000. Charge-offs reflect the
realization of losses in the portfolio that were recognized previously through
provisions for credit losses. Recoveries of loans previously charged off in 2000
decreased by $1 million over 1999. Recoveries of loans previously charged off in
2001 increased by $32 million over 2000. At December 31, 2001, the allowance for
credit losses exceeded the net loans charged off during 2001, reflecting
management's belief, based on the foregoing analysis, that there are additional
losses inherent in the portfolio.

At December 31, 1999, our average annual net charge-offs for the past
five years were $59 million, compared with $106 million at December 31, 2000 and
$144 million at December 31, 2001. These net charge-offs represent 8.0 years,
5.8 years and 4.4 years of losses based on the level of the allowance for credit
losses at December 31, 1999, 2000 and 2001, respectively. Historical net
charge-offs are not necessarily indicative of the amount of net charge-offs that
we will realize in the future.

F-28

NONPERFORMING ASSETS

Nonperforming assets consist of nonaccrual loans, distressed loans held
for sale, and foreclosed assets. Nonaccrual loans are those for which management
has discontinued accrual of interest because there exists significant
uncertainty as to the full and timely collection of either principal or interest
or such loans have become contractually past due 90 days with respect to
principal or interest. For a more detailed discussion of the accounting for
nonaccrual loans, see Note 1 to our Consolidated Financial Statements.

Distressed loans held for sale are loans, which would otherwise be
included in nonaccrual loans, but that have been identified for accelerated
disposition. Disposition of these assets is contemplated within a short period
of time, not to exceed one year.

Foreclosed assets include property where we acquired title through
foreclosure or "deed in lieu" of foreclosure.

The following table sets forth an analysis of nonperforming assets.

DECEMBER 31,
--------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1997 1998 1999 2000 2001
- -------------------------------------------------------------- -------- -------- -------- -------- --------

Commercial, financial and industrial.......................... $ 46,392 $ 60,703 $159,479 $385,263 $471,509
Construction.................................................. 4,071 4,359 4,286 3,967 -
Mortgage:
Residential................................................. 954 - - - -
Commercial.................................................. 57,921 8,254 3,629 10,769 17,430
-------- -------- -------- -------- --------
Total mortgage........................................... 58,875 8,254 3,629 10,769 17,430
Lease financing............................................... - - - - 2,946
Other......................................................... - 5,134 - - -
-------- -------- -------- -------- --------
Total nonaccrual loans................................... 109,338 78,450 167,394 399,999 491,885
Foreclosed assets............................................. 20,471 11,400 2,386 1,181 597
Distressed loans held for sale................................ - - - 7,124 -
-------- -------- -------- -------- --------
Total nonperforming assets............................... 129,809 89,850 169,780 408,304 492,482
-------- -------- -------- -------- --------
Allowance for credit losses................................... $451,692 $459,328 $470,378 $613,902 $634,509
======== ======== ======== ======== ========
Nonaccrual loans to total loans............................... 0.48% 0.32% 0.65% 1.54% 1.97%
Allowance for credit losses to nonaccrual loans............... 413.12 585.50 281.00 153.48 129.00
Nonperforming assets to total loans, distressed loans held for
sale, and foreclosed assets................................. 0.57 0.37 0.66 1.57 1.97
Nonperforming assets to total assets.......................... 0.42 0.28 0.50 1.16 1.37

At December 31, 2001, nonaccrual loans totaled $492 million, an
increase of $92 million, or 23 percent, from year-end 2000. Our nonperforming
assets are concentrated in our non-agented syndicated loan portfolio and
approximately 66 percent of our total nonaccrual loans are syndicated loans. At
December 31, 2001, there were no distressed loans that are being held for
accelerated disposition. During 2001, we sold $424.9 million of loans with
discounts related to credit quality.

Nonaccrual loans as a percentage of total loans were 1.97 percent at
December 31, 2001 compared with 1.54 percent at December 31, 2000. Nonperforming
assets as a percentage of total loans, distressed loans held for sale, and
foreclosed assets increased to 1.97 percent at year-end 2001 from 1.57 percent
at December 31, 2000. At December 31, 2001, approximately 96 percent of
nonaccrual loans were related to commercial, financial and industrial.

F-29

The following table sets forth an analysis of loans contractually past
due 90 days or more as to interest or principal and still accruing, but not
included in nonaccrual loans above.

DECEMBER 31,
------------------------------------------------------
(DOLLARS IN THOUSANDS) 1997 1998 1999 2000 2001
- ----------------------------------------------------------------- ------- ------- ------- ------ -------

Commercial, financial and industrial............................. $450 $913 $2,729 $1,713 $3,071
Construction..................................................... - - - - -
Mortgage:
Residential.................................................... 10,170 9,338 5,830 2,699 4,854
Commercial..................................................... 1,660 13,955 442 - 2,356
------- ------- ------- ------ -------
Total mortgage.............................................. 11,830 23,293 6,272 2,699 7,210
Consumer and other............................................... 7,712 7,292 2,932 2,921 2,579
------- ------- ------- ------ -------
Total loans 90 days or more past due and still accruing..... $19,992 $31,498 $11,933 $7,333 $12,860
======= ======= ======= ====== =======

CASH-BASIS INTEREST ON NONACCRUAL LOANS

After designation as nonaccrual, we recognized interest income on a
cash basis of $1.2 million and $5.4 million for loans that were on nonaccrual
status at December 31, 2000 and December 31, 2001, respectively.

SECURITIES

The following tables summarize the composition of the securities
portfolio and the gross unrealized gains and losses within the portfolio.
Substantially all of our equity securities represent investments in venture
capital activities, with no single company holding exceeding 5% of that
company's shares outstanding. We also have commitments to invest additional
funds. The amount unfunded as of December 31, 2001, was approximately $55
million. At January 1, 2001, all of our securities held to maturity were
transferred to securities available for sale in conjunction with the adoption of
SFAS No. 133, and therefore, no information is provided for December 31, 2001 in
the securities held to maturity table.

SECURITIES AVAILABLE FOR SALE

DECEMBER 31,
-----------------------------------------------------------------------------------------------------
1999 2000 2001
---------- ------------------------------------------- -------------------------------------------
GROSS GROSS GROSS GROSS
FAIR AMORTIZED UNREALIZED UNREALIZED FAIR AMORTIZED UNREALIZED UNREALIZED FAIR
(DOLLARS IN THOUSANDS) VALUE COST GAINS LOSSES VALUE COST GAINS LOSSES VALUE
- ---------------------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------

U.S. Treasury................ $ 450,628 $ 433,703 $ 6,394 $ - $ 440,097 $ 214,249 $ 7,957 $ - $ 222,206
Other U.S. government........ 960,884 1,233,908 40,441 594 1,273,755 1,902,001 91,315 303 1,993,013
Mortgage-backed securities... 1,616,285 2,138,101 19,447 6,516 2,151,032 3,293,857 48,138 14,127 3,327,868
State and municipal.......... 63,282 52,881 8,908 - 61,789 40,116 5,897 80 45,933
Corporate debt securities.... 50,032 99,003 10 290 98,723 129,314 - 4,152 125,162
Equity securities............ 52,291 95,685 268 306 95,647 78,810 133 - 78,943
Foreign securities........... 16,697 6,570 69 12 6,627 5,883 92 18 5,957
---------- ---------- -------- ------ ---------- ---------- -------- ------- ----------
Total securities available
for sale................. $3,210,099 $4,059,851 $75,537 $7,718 $4,127,670 $5,664,230 $153,532 $18,680 $5,799,082
========== ========== ======= ====== ========== ========== ======== ======= ==========

F-30

SECURITIES HELD TO MATURITY

DECEMBER 31,
--------------------------------------------------------------------
1999 2000
---------- -----------------------------------------------------
GROSS GROSS
AMORTIZED AMORTIZED UNREALIZED UNREALIZED FAIR
(DOLLARS IN THOUSANDS) COST COST GAINS LOSSES VALUE
- --------------------------------------------------- --------- --------- ---------- ---------- --------

Other U.S. government.............................. $20,031 $- $- $- $-
Mortgage-backed securities......................... 11,876 8,521 437 1 8,957
State and municipal................................ 13,469 15,008 - 663 14,345
-------- -------- -------- -------- --------
Total securities held to maturity................ $45,376 $23,529 $437 $664 $23,302
======== ======== ======== ======== ========

Management of the securities portfolio involves the maximization of
return while maintaining prudent levels of quality and liquidity. At December
31, 2001, approximately 96 percent of total securities were investment grade.

ANALYSIS OF SECURITIES AVAILABLE FOR SALE

The following table shows the remaining contractual maturities and
expected yields of the securities available for sale at December 31, 2001.

SECURITIES AVAILABLE FOR SALE

MATURITY
-------------------------------------------------------------------------------
OVER ONE YEAR OVER FIVE YEARS
ONE YEAR THROUGH THROUGH OVER TOTAL
OR LESS FIVE YEARS TEN YEARS TEN YEARS AMORTIZED COST
------------------ ------------------ ------------------ ------------------- -----------------
(DOLLARS IN THOUSANDS) AMOUNT YIELD(4) AMOUNT YIELD(4) AMOUNT YIELD(4) AMOUNT YIELD(4) AMOUNT YIELD(4)
- ---------------------- -------- -------- --------- -------- --------- -------- ---------- -------- --------- --------

U.S. Treasury................... $109,936 6.62% $ 104,313 6.67% $ - -% $ - -% $ 214,249 6.64%
Other U.S. government........... 22,393 6.01 1,879,608 6.15 - - - - 1,902,001 6.15
Mortgage-backed securities(1)... 48,641 6.23 336,009 6.43 1,260,294 5.36 1,648,913 6.25 3,293,857 5.93
State and municipal(2).......... 4,052 9.45 9,294 9.87 10,618 10.56 16,152 10.76 40,116 10.37
Corporate debt securities....... - - 35,854 6.95 32,711 8.25 60,749 8.25 129,314 7.89
Equity securities(3)............ - - - - - - - - 78,810 -
Foreign securities.............. - - 5,883 1.60 - - - - 5,883 1.60
-------- ---------- ---------- ---------- ----------
Total securities available for
sale.......................... $185,022 6.51% $2,370,961 6.23% $1,303,623 5.47% $1,725,814 6.36% $5,664,230 6.10%
======== ========== ========== ========== ==========
_______________
<FN>
(1) The remaining contractual maturities of mortgage-backed securities were
allocated assuming no prepayments. The contractual maturity of these
securities is not a reliable indicator of their expected life because
borrowers have the right to repay their obligations at any time.

(2) Yields on tax-exempt municipal securities are presented on a
taxable-equivalent basis using the current federal statutory rate of 35
percent.

(3) Equity securities do not have a stated maturity and are included in the total column only.

(4) For the purposes of the analysis of the securities portfolio, yields are based on amortized cost.
</FN>

F-31

LOAN MATURITIES

The following table presents our loans by maturity.

DECEMBER 31, 2001
------------------------------------------------------------
OVER
ONE YEAR
ONE YEAR THROUGH OVER
(DOLLARS IN THOUSANDS) OR LESS FIVE YEARS FIVE YEARS TOTAL
- -------------------------------------------------------------- ---------- ---------- ---------- -----------

Domestic:
Commercial, financial and industrial........................ $3,882,609 $5,918,873 $1,674,879 $11,476,361
Construction................................................ 672,169 370,540 17,138 1,059,847
Mortgage:
Residential................................................ 199 7,568 4,780,452 4,788,219
Commercial................................................. 250,870 1,353,519 1,985,929 3,590,318
---------- ---------- ---------- -----------
Total mortgage........................................... 251,069 1,361,087 6,766,381 8,378,537
Consumer:
Installment................................................ 33,834 187,972 978,241 1,200,047
Home equity................................................ 778,408 80,613 - 859,021
---------- ---------- ---------- -----------
Total consumer........................................... 812,242 268,585 978,241 2,059,068
Lease financing............................................. 122,599 370,898 485,745 979,242
---------- ---------- ---------- -----------
Total loans in domestic offices.......................... 5,740,688 8,289,983 9,922,384 23,953,055
Loans originated in foreign branches.......................... 1,039,491 76 1,408 1,040,975
---------- ---------- ---------- -----------
Total loans.............................................. $6,780,179 $8,290,059 $9,923,792 $24,994,030
========== ========== ==========
Allowance for credit losses.......................... 634,509
-----------
Loans, net............................................... $24,359,521
===========
Total fixed rate loans due after one year..................... $ 7,467,679
Total variable rate loans due after one year.................. 10,746,172
-----------
Total loans due after one year........................... $18,213,851
===========

CERTIFICATES OF DEPOSIT OF $100,000 AND OVER

The following table presents domestic certificates of deposit of
$100,000 and over by maturity.

DECEMBER 31,
(DOLLARS IN THOUSANDS) 2001
- --------------------------------------------------------------------------- ------------

Three months or less....................................................... $2,127,109
Over three months through six months....................................... 1,021,989
Over six months through twelve months...................................... 204,310
Over twelve months......................................................... 129,040
------------
Total domestic certificates of deposit of $100,000 and over................ $3,482,448
============

We offer certificates of deposit of $100,000 and over at market rates
of interest. Many of these certificates are issued to customers, both public and
private, who have done business with us for an extended period. Based on our
historical experience, we expect that as these deposits come due, the majority
will continue to be renewed at market rates of interest.

All of our deposits in foreign branches are certificates of deposit of
$100,000 and over and mature in less than one year.

F-32

BORROWED FUNDS

The following table presents information on our borrowed funds.

DECEMBER 31,
-------------------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- --------------------------------------------------------------------------------- ----------- ---------- ----------

Federal funds purchased and securities sold under repurchase agreements with
weighted average interest rates of 5.09%, 6.52% and 1.41% at December 31,
1999, 2000 and 2001, respectively.............................................. $1,156,799 $1,387,667 $ 418,814
Commercial paper, with weighted average interest rates of 5.45%, 6.49% and 1.89%
at December 31, 1999, 2000 and 2001, respectively.............................. 1,108,258 1,385,771 830,657
Other borrowed funds, with weighted average interest rates of 5.91%, 5.64% and
2.96% at December 31, 1999, 2000 and 2001, respectively........................ 540,496 249,469 700,403
---------- ---------- ----------
Total borrowed funds............................................................. $2,805,553 $3,022,907 $1,949,874
========== ========== ==========
Federal funds purchased and securities sold under repurchase agreements:
Maximum outstanding at any month end........................................... $1,786,594 $2,095,868 $1,575,938
Average balance during the year................................................ 1,489,214 1,548,730 1,243,933
Weighted average interest rate during the year................................. 4.84% 6.24% 4.19%
Commercial paper:
Maximum outstanding at any month end........................................... $1,737,265 $1,525,932 $1,572,029
Average balance during the year................................................ 1,529,814 1,521,614 1,287,603
Weighted average interest rate during the year................................. 5.04% 6.24% 4.07%
Other borrowed funds:
Maximum outstanding at any month end........................................... $993,550 $507,782 $702,511
Average balance during the year................................................ 708,625 314,425 464,033
Weighted average interest rate during the year................................. 5.28% 5.31% 4.35%

CAPITAL ADEQUACY AND DIVIDENDS

Our principal capital objectives are to support future growth, to
protect depositors, to absorb any unanticipated losses and to comply with
various regulatory requirements. Under the stock repurchase plans authorized in
November 1999, July 2000, and April 2001 of $100 million each, we repurchased
$17 million of common stock in 1999, $130 million in 2000 and $108 million in
2001. As of December 31, 2001, $45 million of common stock is authorized for
repurchase.

Total shareholders' equity was $3.5 billion at December 31, 2001, an
increase of $335 million from year-end 2000. This change was primarily a result
of $481 million of net income for 2001, net unrealized gains on cash flow hedges
of $63 million, and net unrealized gains on securities available for sale of $41
million, partially offset by dividends on our common stock of $158 million and
repurchases of our common stock of $107 million.

We offer a dividend reinvestment plan that allows shareholders to
reinvest dividends in our common stock at 5 percent below the market price.
During 2000 and 2001, The Bank of Tokyo-Mitsubishi, Ltd. did not participate in
this plan.

Capital adequacy depends on a variety of factors including asset
quality and risk profile, liquidity, earnings stability, competitive and
economic conditions, and management. We believe that the current

F-33

level of profitability, coupled with a prudent dividend policy, is adequate to
support normal growth in operations while meeting regulatory capital guidelines.

The following table summarizes our risk-based capital, risk-weighted
assets, and risk-based capital ratios.

DECEMBER 31,
---------------------------------------------------------------------------------
MINIMUM
REGULATORY
(DOLLARS IN THOUSANDS) 1997 1998 1999 2000 2001 REQUIREMENT
- ------------------------- ----------- ----------- ----------- ----------- ----------- -----------

CAPITAL COMPONENTS
Tier 1 capital.......... $ 2,587,071 $ 2,965,865 $ 3,308,912 $ 3,471,289 $ 3,661,231
Tier 2 capital.......... 601,102 604,938 616,772 620,102 598,812
----------- ----------- ----------- ----------- -----------
Total risk-based capital $ 3,188,173 $ 3,570,803 $ 3,925,684 $ 4,091,391 $ 4,260,043
=========== =========== =========== =========== ===========
Risk-weighted assets.... $28,862,340 $30,753,030 $33,288,167 $33,900,404 $31,906,438
=========== =========== =========== =========== ===========
Quarterly average assets $30,334,507 $31,627,022 $32,765,347 $34,075,813 $34,760,203
=========== =========== =========== =========== ===========
CAPITAL RATIOS
Total risk-based capital 11.05% 11.61% 11.79% 12.07% 13.35% 8.0%
Tier 1 risk-based capital 8.96 9.64 9.94 10.24 11.47 4.0
Leverage ratio(1)....... 8.53 9.38 10.10 10.19 10.53 4.0

________________
<FN>
(1) Tier 1 capital divided by quarterly average assets (excluding certain intangible assets).
</FN>

We and Union Bank of California, N.A. are subject to various
regulations of the federal banking agencies, including minimum capital
requirements. We and Union Bank of California, N.A. are required to maintain
minimum ratios of Total and Tier 1 capital to risk-weighted assets and of Tier 1
capital to quarterly average assets (the leverage ratio).

Compared with December 31, 2000, our Tier 1 risk-based capital ratio at
December 31, 2001 increased 123 basis points to 11.47 percent, our total
risk-based capital ratio increased 128 basis points to 13.35 percent, and our
leverage ratio increased 34 basis points to 10.53 percent. The increase in our
capital ratios was primarily attributable to retained earnings growth and a
reduction in risk-weighted assets. Although average assets grew during the year,
risk-weighted assets declined, as we decreased our asset mix of commercial,
financial and industrial loans and increased our mix of residential mortgages
and securities available for sale, which carry a lower risk-based conversion
factor.

As of December 31, 2001, management believes the capital ratios of
Union Bank of California, N.A. met all regulatory requirements of
"well-capitalized" institutions, which are 10 percent for the total risk-based
capital ratio, 6.0 percent for the Tier 1 risk-based capital ratio and 5 percent
for the leverage ratio.

COMPARISON OF FINANCIAL RESULTS OF 1999 TO 2000

Reported net income was $441.7 million, or $2.64 per diluted common
share in 1999, compared with $439.9 million, or $2.72 per diluted common share
in 2000. Excluding the effects of the $85 million restructuring charge ($55.2
million net of tax), which was recorded in the third quarter of 1999, and the
effects of the $19.0 million in restructuring credits ($11.8 million net of
taxes) recorded in 2000, pro forma net earnings were $496.9 million, or $2.97
per diluted common share in 1999, compared to $428.1 million, or $2.64 per
diluted common share in 2000. This decrease in pro forma diluted earnings per
share of 11 percent in 2000 was due to an increase of $375.0 million, or 577
percent in the provision for credit losses, offset by a $168.0 million, or 12
percent, increase in net interest income on a taxable equivalent

F-34

basis, a $60.4 million, or 10 percent, increase in noninterest income, and a
$47.8 million, or 4 percent, decrease in noninterest expense. Other highlights
in 2000 include:

o Net interest income, on a taxable-equivalent basis, was $1.6
billion in 2000, an increase of $168.0 million, or 12 percent from
1999. Net interest margin for 2000 was 5.22 percent, or 33 basis
points higher than 1999.

o The provision for credit losses was $440.0 million in 2000,
compared with $65.0 million in 1999.

o Noninterest income was $647.2 million in 2000, an increase of
$60.4 million, or 10 percent from 1999.

o Noninterest expense, excluding the restructuring charge and
credits, was $1.1 billion in 2000, a decrease of $47.8 million, or
4 percent over 1999.

o Reported return on average assets in 2000 was 1.31 percent, while
reported return on average common equity for the same period was
14.01 percent. Our pro forma return on average assets in 2000
decreased to 1.27 percent, compared to 1.55 percent in 1999. Our
pro forma return on average common equity in 2000 decreased to
13.63 percent, compared to 16.83 percent in 1999.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

GENERAL

Market risk is the risk of loss to future earnings, to fair values, or
to future cash flows that may result from changes in the price of a financial
instrument. The value of a financial instrument may change as a result of
changes in interest rates, foreign currency exchange rates, commodity prices,
equity prices, and other market changes that affect market risk sensitive
instruments. Market risk is attributed to all market risk sensitive financial
instruments, including securities, loans, deposits, and borrowings, as well as
derivative instruments. Our exposure to market risk is a function of our asset
and liability management activities, our trading activities for our own account,
and our role as a financial intermediary in customer-related transactions. The
objective of market risk management is to avoid excessive exposure of our
earnings and equity to loss and to reduce the volatility inherent in certain
financial instruments.

The management of market risk is governed by policies reviewed and
approved annually by our Board of Directors (Board). The Board assigns
responsibility for market risk management to the Asset & Liability Management
Committee (ALCO), which is composed of bank senior executives. ALCO meets
monthly and reports quarterly to the Finance and Capital Committee of the Board
on activities related to the management of market risk. As part of the
management of our market risk, ALCO may direct changes in the mix of assets and
liabilities and the use of derivative instruments such as interest rate swaps,
caps and floors. ALCO also reviews and approves market risk-management programs
and market risk limits. The ALCO Chairman is responsible for the company-wide
management of market risk. The Treasurer is responsible for implementing
funding, investing, and hedging strategies designed to manage this risk. On a
day-to-day basis, the oversight of market risk management takes place at a
centralized level within the Market Risk Monitoring unit (MRM). MRM is
responsible for measuring risks to ensure compliance with all market risk limits
and guidelines incorporated within the policies and procedures established by
ALCO. MRM reports quarterly to ALCO on the effectiveness of our hedging
activities, on trading risk exposures, and on compliance with policy limits. In
addition, periodic reviews by internal audit, regulators and independent
accountants provide further evaluation of controls over the risk management
process.

F-35

We have separate and distinct methods for managing the market risk
associated with our trading activities and our asset and liability management
activities, as described below.

INTEREST RATE RISK MANAGEMENT (OTHER THAN TRADING)

We engage in asset and liability management activities with the
objective of reducing adverse changes in earnings as a result of changes in
interest rates. The management of interest rate risk relates to the timing and
magnitude of the repricing of assets compared to liabilities and has, as its
objective, the control of risks associated with movements in interest rates.

The Asset & Liability Management (ALM) Policy approved by the Board
requires monthly monitoring of interest rate risk by ALCO. As part of the
management of our interest rate risk, ALCO may direct changes in the composition
of the balance sheet and the extent to which we utilize off-balance sheet
derivative instruments such as interest rate swaps, floors, and caps.

Our unhedged balance sheet is inherently "asset-sensitive", which means
that assets generally reprice more often than liabilities. Since an
asset-sensitive balance sheet tends to reduce net interest income when interest
rates decline and to increase net interest income when interest rates rise,
off-balance sheet hedges and the securities portfolio are used to manage this
interest rate risk.

To quantify the impact of changing interest rates on net interest
income (NII) we use a simulation model. A frequency distribution of simulated
12-month NII outcomes based on rate scenarios produced through a Monte Carlo
rate generation process is prepared monthly to statistically determine the mean
NII. The amount of Earnings at Risk (EaR), defined as the potential negative
change in NII, is measured at a 97.5 percent confidence level and is managed
within the limit established in the Board's ALM Policy at 5 percent of mean NII.
The following table summarizes our EaR and EaR as a percentage of mean NII.

DECEMBER 31,
------------------
(DOLLARS IN MILLIONS) 2000 2001
- ------------------------------------------------------- ------ ------
EaR.................................................... $30.9 $12.6
EaR as a percentage of mean NII........................ 2.02% 0.86%

An additional limit established by the Board's ALM Policy is that under
single interest rate shock scenarios, up or down 200 basis points, the
difference between the lower simulated NII and the flat rate scenario NII must
be no more than 8 percent of the flat rate scenario NII. The following table
sets forth the change in simulated NII for both the upward and downward shock
scenarios of 200 basis points.

DECEMBER 31,
------------------
(DOLLARS IN MILLIONS) 2000 2001
- ------------------------------------------------------- ------ ------
+200 basis points...................................... $49.6 $15.0
as a percentage of mean NII............................ 3.25% 0.99%
- -200 basis points...................................... $(50.3) $(81.1)
as a percentage of mean NII............................ 3.30% 5.35%

Asset sensitivity, as measured by the shock scenarios, increased during
2001 primarily as a result of the strong growth in our core deposit balances,
especially in the latter part of the year, and the faster prepayment speeds for
mortgage-related instruments associated with the steep drop in market rates.

With federal funds and LIBOR rates at year-end 2001 already below two
percent, a downward shock scenario of 200 basis points would result in
short-term rate levels below zero percent. As a result, we believe that a
downward shock scenario of 100 basis points provides a more reasonable measure
of asset sensitivity in a falling rate environment. As of December 31, 2001, the
difference between flat rate NII and NII after a 100 basis point downward shock
was $(20.3) million, or (1.3) percent of flat rate NII.

F-36

A third measure that ALCO uses to monitor the Company's risk profile is
Economic Value of Equity (EVE). EVE is an estimate of the net present value of
the future cash flows associated with all of the Company's assets, liabilities
and derivatives. EVE-at-Risk is defined as the negative change in the value of
these cash flows resulting from either a +200 basis point or a -200 basis point
shock scenario. Although ALCO has identified prototype guidelines for measuring
EVE-at-Risk, no official policy limits have been established for EVE by the
Board. The Company will continue to improve and refine its EVE methodology in
2002.

TRADING ACTIVITIES

We enter into trading account activities primarily as a financial
intermediary for customers, and, to a lesser extent, for our own account. By
acting as a financial intermediary, we are able to provide our customers with
access to a wide range of products from the securities, foreign exchange, and
derivatives markets. In acting for our own account, we may take positions in
some of these instruments with the objective of generating trading profits.
These activities expose us to two primary types of market risk: interest rate
and foreign currency exchange risk.

In order to manage interest rate and foreign currency exchange risk
associated with our trading activities, we utilize a variety of non-statistical
methods including: position limits for each trading activity, daily marking of
all positions to market, daily profit and loss statements, position reports, and
independent verification of all inventory pricing. Additionally, MRM reports
positions and profits and losses daily to the Treasurer and trading managers and
weekly to the ALCO Chairman. ALCO is provided reports on a monthly basis. We
believe that these procedures, which stress timely communication between MRM and
senior management, are the most important elements of the risk management
process.

We use a form of Value at Risk (VaR) methodology to measure the overall
market risk inherent in our trading account activities. Under this methodology,
management statistically calculates, with 97.5 percent confidence, the potential
loss in fair value that we might experience if an adverse shift in market prices
or rates were to occur within a period of 5 business days. The amount of VaR is
managed within limits well below the maximum limit established by Board policy
at 0.5 percent of shareholders' equity. The VaR model incorporates a number of
key assumptions, including assumed holding period and historical volatility
based on 3 years of historical market data updated quarterly. The following
table sets forth the average, high and low VaR during the year for our trading
activities.

DECEMBER 31,
-------------------------------------------------
2000 2001
----------------------- ----------------------
AVERAGE HIGH LOW AVERAGE HIGH LOW
(DOLLARS IN THOUSANDS) VAR VAR VAR VAR VAR VAR
- ------------------------------------ ------- ----- ----- ------- ---- ---

Foreign exchange.................... $355 $850 $109 $205 $552 $70
Securities.......................... 156 280 63 292 556 108

Our foreign exchange business continues to derive the bulk of its
revenue from customer-related transactions. We take inter-bank trading positions
only on a limited basis and we do not take any large or long term strategic
positions in the market for the bank's own book. In 2001, we continued to grow
our customer-related foreign exchange business while lowering our inter-bank
trading risk profile as measured under our VaR methodology.

The Securities Trading & Institutional Sales group serves the fixed
income needs of our large institutional clients and acts as the fixed income
wholesaler for the Company's broker/dealer subsidiary, UBOC Investment Services,
Inc. Due to significant growth in the number of clients using our services in
2001 and given the favorable market environment for fixed income securities
investments, we elected to carry a slightly higher inventory position compared
to the previous year to meet increased demand. As a result, securities VaR was
slightly higher in 2001 than 2000, but still well below the policy limits for
trading

F-37

risk. As with our foreign exchange business, we continue to generate the vast
majority of our securities income from client related transactions.

Our interest rate derivative contracts include $4.2 billion of
derivative contracts entered into as an accommodation for customers. We act as
an intermediary and match these contracts at a profit with contracts with The
Bank of Tokyo-Mitsubishi, Ltd. or other dealers, thus neutralizing the related
market risk. We maintain responsibility for the credit risk associated with
these contracts.

LIQUIDITY RISK

Liquidity risk represents the potential for loss as a result of
limitations on our ability to adjust our future cash flows to meet the needs of
depositors and borrowers and to fund operations on a timely and cost-effective
basis. The ALM Policy approved by the Board requires quarterly reviews of our
liquidity by ALCO. Our liquidity management draws upon the strengths of our
extensive retail and commercial market business franchise, coupled with the
ability to obtain funds for various terms in a variety of domestic and
international money markets. Liquidity is managed through the funding and
investment functions of the Global Markets Group.

Core deposits provide us with a sizable source of relatively stable and
low-cost funds. Our average core deposits, which include demand deposits, money
market demand accounts, and savings and consumer time deposits, combined with
average common shareholders' equity, funded 68 percent of average total assets
of $34.6 billion for the year ended December 31, 2001. Most of the remaining
funding was provided by short-term borrowings in the form of negotiable
certificates of deposit, foreign deposits, federal funds purchased and
securities sold under repurchase agreements, commercial paper and other
borrowings.

Liquidity may also be provided by the sale or maturity of assets. Such
assets include interest bearing deposits in banks, federal funds sold and
securities purchased under resale agreements, and trading account securities.
The aggregate of these assets averaged $0.6 billion during 2001. Additional
liquidity may be provided by securities available for sale that amounted to $5.8
billion at December 31, 2001, and by loan maturities. At December 31, 2001, $6.8
billion of loans were scheduled to mature within one year.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The following table presents our longer term, non-deposit related,
contractual obligations and our commitments to extend credit to our borrowers,
in aggregate and by payment due dates.

DECEMBER 31, 2001
----------------------------------------------------------------------------
LESS THAN ONE THROUGH FOUR TO AFTER FIVE
(DOLLARS IN THOUSANDS) ONE YEAR THREE YEARS FIVE YEARS YEARS TOTAL
- ----------------------------------------------- ----------- ----------- ---------- ------------ -----------

Medium and long-term debt...................... $ - $ - $ - $ 400,000 $ 400,000
UnionBanCal Corporation-obligated mandatorily
redeemable preferred securities of subsidiary
grantor trust................................ $ 350,000 $ 350,000
Operating leases (premises).................... 51,991 91,398 65,140 92,473 301,002
----------- ----------- ---------- ------------ -----------
Total long-term debt and operating leases.... $ 51,991 $ 91,398 $ 65,140 $ 842,473 $1,051,002
=========== =========== ========== ============
Commitments to extend credit................... 13,038,761
Standby letters of credit...................... 2,410,535
Other letters of credit........................ 271,083
===========

Total contractual obligations and commitments $16,771,381
===========

F-38

CERTAIN BUSINESS RISKS FACTORS

ADVERSE CALIFORNIA ECONOMIC CONDITIONS COULD ADVERSELY AFFECT OUR BUSINESS

A substantial majority of our assets and deposits are generated in
California. As a result, poor economic conditions in California may cause us to
incur losses associated with higher default rates and decreased collateral
values in our loan portfolio. In the early 1990's, the California economy
experienced an economic recession that resulted in increases in the level of
delinquencies and losses for us and many of the state's other financial
institutions. Economic conditions in California are subject to various
uncertainties at this time, including the long-term impact of the California
energy crisis and the decline in the technology sector. If economic conditions
in California continue to decline, we expect that our level of problem assets
could increase accordingly.

ADVERSE ECONOMIC FACTORS AFFECTING CERTAIN INDUSTRIES COULD ADVERSELY AFFECT
OUR BUSINESS

We are subject to certain industry-specific economic factors. For
example, a portion of our total loan portfolio is related to real estate.
Accordingly, a downturn in the real estate industry in California could have an
adverse effect on our operations. Similarly, a portion of our total loan
portfolio is to borrowers in the agricultural industry. Adverse weather
conditions, combined with low commodity prices, may adversely affect the
agricultural industry and, consequently, may impact our business negatively. In
addition, auto leases comprise a portion of our total loan portfolio. We ceased
originating auto leases in April 2001; however, continued deterioration in the
used car market may result in additional losses on the valuation of auto lease
residuals on our existing auto leases. We provide loans to businesses in a
number of other industries that may be particularly vulnerable to
industry-specific economic factors, including the communications/media industry,
the retailing industry, and the technology industry. Industry-specific risks are
beyond our control and could adversely affect our portfolio of loans,
potentially resulting in an increase in nonperforming loans or charge-offs.

THE TRAGIC EVENTS OF SEPTEMBER 11 HAVE RESULTED IN INCREASED UNCERTAINTY
REGARDING THE OUTLOOK FOR ECONOMIC CONDITIONS

The terrorist attacks on the World Trade Center and the Pentagon on
September 11, 2001 have resulted in increased uncertainty regarding the economic
outlook. Past experience suggests that shocks to American society of far lesser
severity have resulted in a temporary loss in consumer and business confidence
and a reduction in the rate of economic growth. With the U.S. economy already on
the edge of recession before the attacks, a downturn in California's economy
remains a distinct possibility. It is not possible at this time to project the
economic impact of these events. However, any deterioration in either the U.S.
or the California economy could adversely affect our financial condition and
results of operations.

RISKS ASSOCIATED WITH THE CALIFORNIA ENERGY CRISIS COULD ADVERSELY AFFECT OUR
BUSINESS

Due to problems associated with the deregulation of the electrical
power industry in California, California utilities and other energy industry
participants have experienced difficulties with the supply and price of
electricity and natural gas. For example, in 2001, two California utilities
publicly announced that their financial situation was grave and that they had
defaulted on certain payment obligations. The California energy situation
continues to be fluid and subject to many uncertainties and a number of lawsuits
and regulatory proceedings have been commenced concerning various aspects of the
current energy situation. As a lender to segments of the utility industry, we
face the risk that energy-industry participants could sustain continuing
defaults on payments or seek bankruptcy protection.

In addition, although the situation has stabilized recently, customers
of the utilities were faced at times in 2001 with increased gas and electric
prices, power shortages and, in some cases, rolling blackouts. The long-term
impact of the energy crisis in California on our markets and our business cannot
be predicted but could result in an economic slow-down. This could have an
adverse effect on the demand for

F-39

new loans, the ability of borrowers to repay outstanding loans, the value of
real estate and other collateral securing loans and, as a result, on our
financial condition and results of operations.

FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR BUSINESS

Significant increases in market interest rates, or the perception that
an increase may occur, could adversely affect both our ability to originate new
loans and our ability to grow. Conversely, a decrease in interest rates could
result in an acceleration in the prepayment of loans. An increase in market
interest rates could also adversely affect the ability of our floating-rate
borrowers to meet their higher payment obligations. If this occurred, it could
cause an increase in nonperforming assets and charge-offs, which could adversely
affect our business.

FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR MARGIN SPREAD

Changes in market interest rates, including changes in the relationship
between short-term and long-term market interest rates or between different
interest rate indices, can impact our margin spread, that is, the difference
between the interest rates we charge on interest earning assets, such as loans,
and the interest rates we pay on interest bearing liabilities, such as deposits.
The impact, particularly in a falling interest rate environment, which is
currently the case, could result in an increase in our interest expense relative
to interest income.

SHAREHOLDER VOTES ARE CONTROLLED BY THE BANK OF TOKYO-MITSUBISHI, LTD.;
OUR INTERESTS MAY NOT BE THE SAME AS THE BANK OF TOKYO-MITSUBISHI'S
INTERESTS

The Bank of Tokyo-Mitsubishi, Ltd., a wholly owned subsidiary of
Mitsubishi Tokyo Financial Group, Inc., owns a majority (67 percent as of
December 31, 2001) of the outstanding shares of our common stock. As a result,
The Bank of Tokyo-Mitsubishi, Ltd. can elect all of our directors and as a
result can control the vote on all matters, including determinations such as:
approval of mergers or other business combinations; sales of all or
substantially all of our assets; any matters submitted to a vote of our
shareholders; issuance of any additional common stock or other equity
securities; incurrence of debt other than in the ordinary course of business;
the selection and tenure of our Chief Executive Officer; payment of dividends
with respect to common stock or other equity securities; and matters that might
be favorable to The Bank of Tokyo-Mitsubishi, Ltd.

A majority of our directors are not officers or employees of
UnionBanCal Corporation or any of our affiliates, including The Bank of Tokyo-
Mitsubishi, Ltd. However, because of The Bank of Tokyo-Mitsubishi, Ltd.'s
control over the election of our directors, The Bank of Tokyo- Mitsubishi, Ltd.
could change the composition of our Board of Directors so that the Board would
not have a majority of outside directors. The Bank of Tokyo- Mitsubishi, Ltd.'s
ability to prevent an unsolicited bid for us or any other change in control
could have an adverse effect on the market price for our common stock.

THE BANK OF TOKYO-MITSUBISHI, LTD.'S FINANCIAL CONDITION COULD ADVERSELY AFFECT
OUR OPERATIONS

Although we fund our operations independently of The Bank of
Tokyo-Mitsubishi, Ltd. and believe our business is not necessarily closely
related to The Bank of Tokyo-Mitsubishi, Ltd.'s business or outlook, The Bank of
Tokyo-Mitsubishi, Ltd.'s credit ratings may affect our credit ratings.
Deterioration in The Bank of Tokyo-Mitsubishi, Ltd.'s credit ratings or
financial condition could result in an increase in our borrowing costs and could
impair our access to the public and private capital markets. The Bank of
Tokyo-Mitsubishi, Ltd. is also subject to regulatory oversight and review. Our
business operations and expansion plans could be negatively affected by
regulatory concerns related to the Japanese financial system and The Bank of
Tokyo-Mitsubishi, Ltd.

F-40

POTENTIAL CONFLICTS OF INTEREST WITH THE BANK OF TOKYO-MITSUBISHI, LTD. COULD
ADVERSELY AFFECT US

As part of The Bank of Tokyo-Mitsubishi, Ltd.'s normal risk management
processes, The Bank of Tokyo-Mitsubishi, Ltd. manages global credit exposures
and concentrations on an aggregate basis, including UnionBanCal Corporation.
Therefore, at certain levels, our ability to approve certain credits and
categories of customers is subject to concurrence by The Bank of
Tokyo-Mitsubishi, Ltd. We may wish to extend credit to the same customer as The
Bank of Tokyo-Mitsubishi, Ltd. Our ability to do so may be limited for various
reasons, including The Bank of Tokyo-Mitsubishi, Ltd.'s aggregate credit
exposure and marketing policies. Certain directors' and officers' ownership
interests in The Bank of Tokyo-Mitsubishi, Ltd.'s common stock or service as a
director or officer or other employee of both us and The Bank of
Tokyo-Mitsubishi, Ltd. could create or appear to create potential conflicts of
interest, especially since both of us compete in the United States banking
industry.

SUBSTANTIAL COMPETITION IN THE CALIFORNIA BANKING MARKET COULD ADVERSELY AFFECT
US

Banking is a highly competitive business. We compete actively for loan,
deposit, and other financial services business in California, as well as
nationally and internationally. Our competitors include a large number of state
and national banks, thrift institutions and major foreign-affiliated or foreign
banks, as well as many financial and non-financial firms that offer services
similar to those offered by us. Some of our competitors are community banks that
have strong local market positions. Other competitors include large financial
institutions (such as Bank of America, California Federal, Washington Mutual,
and Wells Fargo) that have substantial capital, technology and marketing
resources. Such large financial institutions may have greater access to capital
at a lower cost than us, which may adversely affect our ability to compete
effectively.

RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS COULD LIMIT AMOUNTS PAYABLE
TO US

As a holding company, a substantial portion of our cash flow typically
comes from dividends our bank and nonbank subsidiaries pay to us. Various
statutory provisions restrict the amount of dividends our subsidiaries can pay
to us without regulatory approval. In addition, if any of our subsidiaries
liquidates, that subsidiary's creditors will be entitled to receive
distributions from the assets of that subsidiary to satisfy their claims against
it before we, as a holder of an equity interest in the subsidiary, will be
entitled to receive any of the assets of the subsidiary.

ADVERSE EFFECTS OF, OR CHANGES IN, BANKING REGULATIONS OR FISCAL OR MONETARY
POLICIES COULD ADVERSELY AFFECT US

We are subject to significant federal and state regulation and
supervision, which is primarily for the benefit and protection of our customers
and not for the benefit of investors. In the past, our business has been
materially affected by these regulations. This trend is likely to continue in
the future. Laws, regulations or policies currently affecting us and our
subsidiaries may change at any time. Regulatory authorities may also change
their interpretation of these statutes and regulations. Therefore, our business
may be adversely affected by any future changes in laws, regulations, policies
or interpretations, including legislative and regulatory reactions to the
terrorist attack on September 11, 2001, and the Enron Corporation bankruptcy.
Additionally, our international activities may be subject to the laws and
regulations of the jurisdiction where business is being conducted. International
laws, regulations and policies affecting us and our subsidiaries may change at
any time and affect our business opportunities and competitiveness in these
jurisdictions. Due to The Bank of Tokyo-Mitsubishi, Ltd.'s controlling ownership
of us, laws, regulations and policies adopted or enforced by the Government of
Japan may adversely affect our activities and investments and those of our
subsidiaries in the future. Under long-standing policy of the FRB, a bank
holding company is expected to act as a source of financial strength for its
subsidiary banks. As a result of that policy, we may be required to commit
financial and other resources to our subsidiary bank in circumstances where we
might not otherwise do so.

F-41

Additionally, our business is affected significantly by the fiscal and
monetary policies of the federal government and its agencies. We are
particularly affected by the policies of the FRB, which regulates the supply of
money and credit in the United States. Among the instruments of monetary policy
available to the FRB are (a) conducting open market operations in United States
government securities, (b) changing the discount rates of borrowings of
depository institutions, (c) imposing or changing reserve requirements against
depository institutions' deposits, and (d) imposing or changing reserve
requirements against certain borrowings by banks and their affiliates. These
methods are used in varying degrees and combinations to directly affect the
availability of bank loans and deposits, as well as the interest rates charged
on loans and paid on deposits. The policies of the FRB may have a material
effect on our business, results of operations and financial condition.

POSSIBLE FUTURE SALES OF SHARES BY THE BANK OF TOKYO-MITSUBISHI, LTD. COULD
ADVERSELY AFFECT THE MARKET FOR OUR STOCK

Although The Bank of Tokyo-Mitsubishi, Ltd. has announced it has no
plan to sell its majority ownership in us, The Bank of Tokyo- Mitsubishi, Ltd.
may sell shares of our common stock in compliance with the federal securities
laws. By virtue of The Bank of Tokyo-Mitsubishi, Ltd.'s current control of us,
The Bank of Tokyo-Mitsubishi, Ltd. could sell large amounts of shares of our
common stock by causing us to file a registration statement that would allow
them to sell shares more easily. In addition, The Bank of Tokyo-Mitsubishi, Ltd.
could sell shares of our common stock without registration. Although we can make
no prediction as to the effect, if any, that such sales would have on the market
price of our common stock, sales of substantial amounts of our common stock, or
the perception that such sales could occur, could adversely affect the market
price of our common stock. If The Bank of Tokyo-Mitsubishi, Ltd. sells or
transfers shares of our common stock as a block, another person or entity could
become our controlling shareholder.

WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR OPERATING STRATEGIES

From time to time, we develop long-term financial performance goals to
guide and measure the success of our operating strategies. We cannot assure you
that we will be successful in achieving these long-term goals or that our
operating strategies will be successful. Achieving success in these areas is
dependent on a number of factors, many of which are beyond our direct control.
Factors that may adversely affect our ability to attain our long-term financial
performance goals include:

o deterioration of our asset quality,

o our inability to control noninterest expense,

o our inability to increase noninterest income,

o our inability to decrease reliance on asset revenues,

o our ability to sustain loan growth,

o our ability to find acquisition targets at valuation levels we
find attractive,

o regulatory and other impediments associated with making
acquisitions,

o deterioration in general economic conditions, especially in our
core markets,

o decreases in net interest margins,

o increases in competition,

o adverse regulatory or legislative developments, and

o unexpected increases in costs related to potential acquisitions.

F-42

RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS OR DIVESTITURES OR RESTRUCTURING
MAY ADVERSELY AFFECT US

We may seek to acquire or invest in companies, technologies, services
or products that complement our business. There can be no assurance that we will
be successful in completing any such acquisition or investments as this will
depend on the availability of prospective target companies at valuation levels
we find attractive and the competition for such opportunities from other
bidders. In addition, we continue to evaluate the performance of all of our
businesses and business lines and may sell a business or business lines. Any
acquisitions, divestitures or restructuring may result in the potentially
dilutive issuance of equity securities, significant write-offs, including those
related to goodwill and other intangible assets and/or the incurrence of debt,
any of which could have a material adverse effect on our business, financial
condition and results of operations. Acquisitions, divestitures or restructuring
could involve numerous additional risks including difficulties in the
assimilation or separation of operations, services, products and personnel, the
diversion of management's attention from other business concerns, the disruption
of our business, and the potential loss of key employees. There can be no
assurance that we will be successful in overcoming these or any other
significant risks encountered.

F-43

UNIONBANCAL CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE

Consolidated Statements of Income for the Years Ended December 31,
1999, 2000, and 2001................................................. F-45
Consolidated Balance Sheets as of December 31, 2000 and 2001.......... F-46
Consolidated Statements of Changes in Shareholders' Equity for the
Years Ended December 31, 1999, 2000, and 2001........................ F-47
Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 2000, and 2001................................................. F-48
Notes to Consolidated Financial Statements............................ F-49
Management Statement.................................................. F-92
Independent Auditors' Report.......................................... F-93

F-44

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31,
------------------------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 2000 2001
- --------------------------------------------------------------------------------- ---------- ---------- ----------

INTEREST INCOME
Loans............................................................................ $1,931,146 $2,242,182 $1,883,835
Securities....................................................................... 211,192 226,194 294,066
Interest bearing deposits in banks............................................... 12,174 9,126 2,850
Federal funds sold and securities purchased under resale agreements.............. 8,108 8,160 6,844
Trading account assets........................................................... 12,150 15,418 7,716
---------- ---------- ----------
Total interest income.......................................................... 2,174,770 2,501,080 2,195,311
---------- ---------- ----------
INTEREST EXPENSE
Domestic deposits................................................................ 456,895 557,408 445,486
Foreign deposits................................................................. 73,829 107,183 69,830
Federal funds purchased and securities sold under repurchase agreements.......... 72,083 96,606 52,153
Commercial paper................................................................. 77,041 94,905 52,439
Medium and long-term debt........................................................ 17,100 17,617 10,445
UnionBanCal Corporation-obligated mandatorily redeemable preferred securities of
subsidiary grantor trust....................................................... 24,569 26,212 20,736
Other borrowed funds............................................................. 37,420 16,709 20,180
---------- ---------- ----------
Total interest expense......................................................... 758,937 916,640 671,269
---------- ---------- ----------
NET INTEREST INCOME.............................................................. 1,415,833 1,584,440 1,524,042
Provision for credit losses...................................................... 65,000 440,000 285,000
---------- ---------- ----------
Net interest income after provision for credit losses.......................... 1,350,833 1,144,440 1,239,042
---------- ---------- ----------
NONINTEREST INCOME
Service charges on deposit accounts.............................................. 172,700 210,257 245,116
Trust and investment management fees............................................. 140,878 154,387 154,092
Merchant transaction processing fees............................................. 68,037 73,521 80,384
International commissions and fees............................................... 70,801 71,189 71,337
Brokerage commissions and fees................................................... 27,038 35,755 36,317
Merchant banking fees............................................................ 38,036 48,985 33,532
Securities gains, net............................................................ 7,941 8,784 8,654
Other............................................................................ 61,328 44,302 86,972
---------- ---------- ----------
Total noninterest income....................................................... 586,759 647,180 716,404
---------- ---------- ----------
NONINTEREST EXPENSE
Salaries and employee benefits................................................... 661,344 600,462 659,840
Net occupancy.................................................................... 90,162 92,567 95,152
Equipment........................................................................ 67,095 63,290 64,357
Merchant transaction processing.................................................. 49,435 49,609 52,789
Communications................................................................... 43,179 43,744 50,439
Professional services............................................................ 38,399 42,042 38,480
Data processing.................................................................. 31,811 34,803 35,732
Foreclosed asset income.......................................................... (1,344) (80) (13)
Restructuring charge (credit).................................................... 85,000 (19,000) -
Other............................................................................ 216,892 222,748 243,398
---------- ---------- ----------
Total noninterest expense...................................................... 1,281,973 1,130,185 1,240,174
---------- ---------- ----------
Income before income taxes....................................................... 655,619 661,435 715,272
Income tax expense............................................................... 213,888 221,535 233,844
---------- ---------- ----------
NET INCOME....................................................................... $ 441,731 $ 439,900 $ 481,428
========== ========== ==========
NET INCOME PER COMMON SHARE-BASIC................................................ $ 2.65 $ 2.72 $ 3.05
========== ========== ==========
NET INCOME PER COMMON SHARE-DILUTED.............................................. $ 2.64 $ 2.72 $ 3.04
========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC................................. 166,382 161,605 157,845
========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED............................... 167,149 161,989 158,623
========== ========== ==========

See accompanying notes to consolidated financial statements.

F-45

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

DECEMBER 31,
-----------------------------
(DOLLARS IN THOUSANDS) 2000 2001
- ----------------------------------------------------------------------------------------- ----------- -----------

ASSETS
Cash and due from banks.................................................................. $ 2,957,103 $ 2,682,392
Interest bearing deposits in banks....................................................... 73,936 64,162
Federal funds sold and securities purchased under resale agreements...................... 291,940 918,400
----------- -----------
Total cash and cash equivalents........................................................ 3,322,979 3,664,954
Trading account assets................................................................... 339,695 229,697
Securities available for sale:
Securities pledged as collateral....................................................... 593,686 137,922
Held in portfolio...................................................................... 3,533,984 5,661,160
Securities held to maturity (fair value: 2000, $23,302).................................. 23,529 -
Loans (net of allowance for credit losses: 2000, $613,902; 2001, $634,509)............... 25,396,496 24,359,521
Due from customers on acceptances........................................................ 268,116 182,440
Premises and equipment, net.............................................................. 474,279 494,534
Other assets............................................................................. 1,209,711 1,308,861
----------- -----------
Total assets........................................................................... $35,162,475 $36,039,089
=========== ===========

LIABILITIES
Domestic deposits:
Noninterest bearing.................................................................... $10,916,710 $12,314,150
Interest bearing....................................................................... 13,986,774 14,160,113
Foreign deposits:
Noninterest bearing.................................................................... 323,783 404,708
Interest bearing....................................................................... 2,055,916 1,677,228
----------- -----------
Total deposits......................................................................... 27,283,183 28,556,199
Federal funds purchased and securities sold under repurchase agreements.................. 1,387,667 418,814
Commercial paper......................................................................... 1,385,771 830,657
Other borrowed funds..................................................................... 249,469 700,403
Acceptances outstanding.................................................................. 268,116 182,440
Other liabilities........................................................................ 826,704 1,040,406
Medium and long-term debt................................................................ 200,000 400,000
UnionBanCal Corporation-obligated mandatorily redeemable preferred securities
of subsidiary grantor trust............................................................. 350,000 363,928
----------- -----------
Total liabilities...................................................................... 31,950,910 32,492,847
----------- -----------
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock:
Authorized 5,000,000 shares, no shares issued or outstanding at December 31,
2000 or 2001.......................................................................... - -
Common stock-no stated value:
Authorized 300,000,000 shares, issued 159,234,454 shares in 2000 and
156,483,511 shares in 2001............................................................ 1,275,587 1,181,925
Retained earnings........................................................................ 1,906,093 2,231,384
Accumulated other comprehensive income................................................... 29,885 132,933
----------- -----------
Total shareholders' equity............................................................. 3,211,565 3,546,242
----------- -----------
Total liabilities and shareholders' equity............................................. $35,162,475 $36,039,089
=========== ===========

See accompanying notes to consolidated financial statements.

F-46

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 2000 2001
- --------------------------------------------- ----------------------- ----------------------- -----------------------

COMMON STOCK
Balance, beginning of year............... $1,725,619 $1,404,155 $1,275,587
Dividend reinvestment plan............... 50 52 44
Deferred compensation-restricted stock
awards................................. (221) 238 190
Stock options exercised.................. 7,369 1,784 13,733
Common stock repurchased(1).............. (328,662) (130,642) (107,629)
---------- ---------- ----------
Balance, end of year................... $1,404,155 $1,275,587 $1,181,925
---------- ---------- ----------
RETAINED EARNINGS
Balance, beginning of year............... $1,314,915 $1,625,263 $1,906,093
Net income............................... 441,731 $441,731 439,900 $439,900 481,428 $481,428
Dividends on common stock(2)............. (134,992) (161,227) (157,736)
Deferred compensation-restricted stock
awards................................. 3,609 2,157 1,599
---------- ---------- ----------
Balance, end of year................... $1,625,263 $1,906,093 $2,231,384
---------- ---------- ----------
ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS)
Balance, beginning of year............... $ 17,710 $ (41,950) $ 29,885
Cumulative effect of accounting change
(SFAS No. 133)(3), net of tax expense
of $13,754............................. - - 22,205
Unrealized net gains on cash flow hedges,
net of tax expense of $45,015 for 2001. - - 72,672
Less: reclassification adjustment for net
gains on cash flow hedges included in
net income, net of tax expense of
$19,844 for 2001. - - (32,037)
-------- -------- --------
Net unrealized gains on cash flow hedges. - - 62,840
Unrealized holding gains (losses) arising
during the year on securities available
for sale, net of tax expense (benefit)
of $(35,155) in 1999, $49,462 in 2000,
and $28,950 in 2001.................... (56,753) 79,851 46,736
Less: reclassification adjustment for gains
on securities available for sale
included in net income, net of tax
expense of $3,037 in 1999, $3,360 in
2000, and $3,310 in 2001........... (4,904) (5,424) (5,344)
-------- -------- --------
Net unrealized gains (losses) on
securities available for sale.......... (61,657) 74,427 41,392
Foreign currency translation adjustment,
net of tax expense (benefit) of $581 in
1999, $(1,535) in 2000, and $(628) in
2001................................... 938 (2,478) (1,014)
Minimum pension liability adjustment, net
of tax expense (benefit) of $427 in
1999, $(71) in 2000, and $(105) in 2001 1,059 (114) (170)
-------- -------- --------
Other comprehensive income (loss)........ (59,660) (59,660) 71,835 71,835 103,048 103,048
---------- -------- ---------- -------- ---------- --------
Total comprehensive income............... $382,071 $511,735 $584,476
======== ======== ========
Balance, end of year................... $ (41,950) $ 29,885 $ 132,933
---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY............. $2,987,468 $3,211,565 $3,546,242
========== ========== ==========
______________
<FN>
(1) Common stock repurchased includes commission costs.
(2) Dividends per share were $0.82 in 1999, $1.00 in 2000, and $1.00 in 2001.
(3) Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities".
</FN>

See accompanying notes to consolidated financial statements.

F-47

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,
-------------------------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- ------------------------------------------------------------------------- ----------- ----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................................. $ 441,731 $ 439,900 $ 481,428
Adjustments to reconcile net income to net cash provided by operating
activities:
Provision for credit losses............................................ 65,000 440,000 285,000
Depreciation, amortization and accretion............................... 79,795 72,710 81,487
Provision (benefit) for deferred income taxes.......................... (10,529) 13,709 58,655
Gain on sales of securities available for sale, net.................... (7,941) (8,784) (8,654)
Utilization (in excess of) less than restructuring charge/credit....... 69,359 (53,286) (12,919)
Net (increase) decrease in trading account assets...................... 87,783 (159,760) 109,998
Other, net............................................................. (292,064) (144,373) 94,604
----------- ----------- -----------
Total adjustments...................................................... (8,597) 160,216 608,171
----------- ----------- -----------
Net cash provided by operating activities.............................. 433,134 600,116 1,089,599
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale................... 209,920 422,881 931,479
Proceeds from matured and called securities available for sale......... 827,595 847,158 1,007,273
Purchases of securities available for sale............................. (697,023) (2,056,594) (3,510,621)
Proceeds from matured and called securities held to maturity........... 114,168 23,003 -
Purchases of premises and equipment.................................... (72,020) (163,716) (95,041)
Net decrease (increase) in loans....................................... (1,711,391) (391,672) 766,089
Other, net............................................................. (1,893) 5,433 7,313
----------- ----------- -----------
Net cash used in investing activities.................................. (1,330,644) (1,313,507) (893,508)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits............................................... 1,748,728 1,026,576 1,273,016
Net increase (decrease) in federal funds purchased and securities sold
under repurchase agreements............................................ (150,945) 230,868 (968,853)
Net increase (decrease) in commercial paper and other borrowed funds... (127,156) 34,441 (104,180)
Common stock repurchased............................................... (328,662) (130,642) (107,629)
Proceeds from issuance of medium-term debt............................. - - 200,000
Maturity and redemption of subordinated debt........................... - (98,000) -
Proceeds from issuance of trust preferred securities................... 350,000 - -
Payments of cash dividends............................................. (127,119) (162,575) (158,406)
Other, net............................................................. (3,677) (642) 25,310
----------- ----------- -----------
Net cash provided by financing activities.............................. 1,361,169 900,026 159,258
----------- ----------- -----------
Net increase in cash and cash equivalents................................ 463,659 186,635 355,349
Cash and cash equivalents at beginning of year........................... 2,678,478 3,158,133 3,322,979
Effect of exchange rate changes on cash and cash equivalents............. 15,996 (21,789) (13,374)
----------- ----------- -----------
Cash and cash equivalents at end of year................................. $ 3,158,133 $ 3,322,979 $ 3,664,954
=========== =========== ===========

CASH PAID DURING THE YEAR FOR:
Interest............................................................... $ 702,880 $ 883,706 $ 747,271
Income taxes........................................................... 145,279 260,117 99,735
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Loans transferred to foreclosed assets (OREO) and/or distressed loans
held for sale.......................................................... $ 6,979 $ 9,924 $ 1,677
Securities transferred from held to maturity to available for sale..... - - 23,529
Debt assumed in purchase of building................................... - 47,955 -

See accompanying notes to consolidated financial statements.

F-48

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS

INTRODUCTION

UnionBanCal Corporation (the Company) is a commercial bank holding
company and has, as its major subsidiary, a banking subsidiary, Union Bank of
California, N.A. (the Bank). The Company provides a wide range of financial
services to consumers, small businesses, middle market companies and major
corporations, primarily in California, Oregon, and Washington, but also
nationally and internationally.

In November 1999, July 2000 and April 2001, the Company announced stock
repurchase plans of $100 million each. The Company repurchased $17 million of
common stock in 1999, $130 million in 2000 and $108 million in 2001. As of
December 31, 2001, $45 million of common stock is authorized for repurchase. At
December 31, 2001, The Bank of Tokyo-Mitsubishi, Ltd. (BTM), which is a
wholly-owned subsidiary of Mitsubishi Tokyo Financial Group, owned approximately
67 percent of UnionBanCal Corporation.

BASIS OF FINANCIAL STATEMENT PRESENTATION

The accounting and reporting policies of the Company conform to
accounting principles generally accepted in the United States of America (US
GAAP) and general practice within the banking industry. Those policies that
materially affect the determination of financial position, results of
operations, and cash flows are summarized below.

The Consolidated Financial Statements include the accounts of the
Company. All material intercompany transactions and balances have been
eliminated. The preparation of financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. Certain amounts for prior periods have been reclassified
to conform with current financial statement presentation.

CASH AND CASH EQUIVALENTS

For purposes of reporting cash flows, cash and cash equivalents include
cash and due from banks, interest bearing deposits in banks, and federal funds
sold and securities purchased under resale agreements, substantially all of
which have maturities less than 90 days.

TRADING ACCOUNT ASSETS

Trading account assets are those financial instruments that management
acquires with the intent to hold for short periods of time in order to take
advantage of anticipated changes in market values. Substantially all of these
assets are securities with a high degree of liquidity and a readily determinable
market value. Interest earned, paid, or accrued on trading account assets is
included in interest income using a method that generally produces a level
yield. Realized gains and losses from the close out of trading account positions
and unrealized market value adjustments are recognized in noninterest income.
The reserve for derivative and foreign exchange contracts is presented as an
offset to trading account assets. Changes in the reserve as a result of changes
in the positive replacement cost of those contracts are provided as an offset to
trading gains and losses in noninterest income.

F-49

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)

SECURITIES AVAILABLE FOR SALE AND SECURITIES HELD TO MATURITY

The Company's securities portfolios consist of debt and equity
securities that are classified either as securities available for sale or
securities held to maturity.

Debt securities for which the Company has the positive intent and
ability to hold until maturity are classified as securities held to maturity and
carried at amortized cost.

Debt securities and equity securities with readily determinable market
values that are not classified as either securities held to maturity or trading
account assets are classified as securities available for sale and carried at
fair value, with the unrealized gains or losses reported net of taxes as a
component of accumulated other comprehensive income (loss) in shareholders'
equity until realized.

Realized gains and losses arising from the sale of securities are based
upon the specific identification method and included in noninterest income as
securities gains (losses), net.

Interest income on debt securities includes the amortization of
premiums and the accretion of discounts using the effective interest method and
is included in interest income on securities. Dividend income on equity
securities is included in noninterest income.

Securities available for sale that are pledged under an agreement to
repurchase and which may be sold or repledged under that agreement have been
separately identified as pledged as collateral.

LOANS

Loans are reported at the principal amounts outstanding, net of
unamortized nonrefundable loan fees and related direct loan origination costs.
Deferred net fees and costs are recognized in interest income over the loan term
using a method that generally produces a level yield on the unpaid loan balance.
Nonrefundable fees and direct loan origination costs related to loans held for
sale are deferred and recognized as a component of the gain or loss on sale.
Interest income is accrued principally on a simple interest basis.

Nonaccrual loans are those for which management has discontinued
accrual of interest because there exists significant uncertainty as to the full
and timely collection of either principal or interest or such loans have become
contractually past due 90 days with respect to principal or interest.

Interest accruals are continued for certain small business loans that
are processed centrally, consumer loans, and one-to-four family residential
mortgage loans. These loans are charged off or written down to their net
realizable value based on delinquency time frames that range from 120 to 270
days, depending on the type of credit that has been extended. Interest accruals
are also continued for loans that are both well-secured and in the process of
collection. For this purpose, loans are considered well-secured if they are
collateralized by property having a net realizable value in excess of the amount
of principal and accrued interest outstanding or are guaranteed by a financially
responsible and willing party. Loans are considered "in the process of
collection" if collection is proceeding in due course either through legal
action or other actions that are reasonably expected to result in the prompt
repayment of the debt or in its restoration to current status.

When a loan is placed on nonaccrual, all previously accrued but
uncollected interest is reversed against current period operating results. All
subsequent payments received are first applied to unpaid

F-50

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)

principal and then to uncollected interest. Interest income is accrued at such
time as the loan is brought fully current as to both principal and interest,
and, in management's judgment, such loans are considered to be fully
collectible. However, Company policy also allows management to continue the
recognition of interest income on certain loans designated as nonaccrual. This
portion of the nonaccrual portfolio is referred to as "Cash Basis Nonaccrual"
loans. This policy only applies to loans that are well secured and in
management's judgment are considered to be fully collectible. Although the
accrual of interest is suspended, any payments received may be applied to the
loan according to its contractual terms and interest income recognized when cash
is received.

Loans are considered impaired when, based on current information, it is
probable that the Company will be unable to collect all amounts due according to
the contractual terms of the loan agreement, including interest payments.
Impaired loans are carried at the lower of the recorded investment in the loan,
the estimated present value of total expected future cash flows, discounted at
the loan's effective rate, or the fair value of the collateral, if the loan is
collateral dependent. Additionally, some impaired loans with commitments of less
than $1 million are aggregated for the purpose of measuring impairment using
historical loss factors as a means of measurement. Excluded from the impairment
analysis are large groups of smaller balance homogeneous loans such as consumer
and residential mortgage loans, and automobile leases.

The Company offers primarily two types of leases to customers: 1)
direct financing leases where the assets leased are acquired without additional
financing from other sources, and 2) leveraged leases where a substantial
portion of the financing is provided by debt with no recourse to the Company.
Direct financing leases are carried net of unearned income, unamortized
nonrefundable fees and related direct costs associated with the origination or
purchase of leases. Leveraged leases are carried net of nonrecourse debt.

ALLOWANCE FOR CREDIT LOSSES

The Company maintains an allowance for credit losses to absorb losses
inherent in the loan portfolio. The allowance is based on ongoing, quarterly
assessments of the probable estimated losses inherent in the loan portfolio, and
to a lesser extent, unused commitments to provide financing. The allowance is
increased by the provision for credit losses, which is charged against current
period operating results and decreased by the amount of charge-offs, net of
recoveries. The Company's methodology for assessing the appropriateness of the
allowance consists of several key elements, which include the formula allowance,
the specific allowance and the unallocated allowance.

The formula allowance is calculated by applying loss factors to
outstanding loans and certain unused commitments. Loss factors are based on the
Company's historical loss experience and may be adjusted for significant factors
that, in management's judgement, affect the collectibility of the portfolio as
of the evaluation date. The Company derives the loss factors for all problem
graded loans, and for certain pass graded loans, from a loss migration model,
for certain other pass graded loans by using historical average net charge-offs
during a business cycle, and for pooled loans by using expected net charge-offs
for one year. Pooled loans are homogeneous in nature and include consumer and
residential mortgage loans, and automobile leases.

Specific allowances are established in cases where management has
identified significant conditions or circumstances related to a credit that
management believes indicate the probability that a loss has been incurred in
excess of the amount determined by the application of the formula allowance.

F-51

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)

The unallocated allowance is composed of attribution factors, which are
based upon management's evaluation of various conditions that are not directly
measured in the determination of the formula and specific allowances. The
conditions evaluated in connection with the unallocated allowance may include
existing general economic and business conditions affecting the key lending
areas of the Company, credit quality trends, collateral values, loan volumes and
concentrations, seasoning of the loan portfolio, specific industry conditions
within portfolio segments, recent loss experience in particular segments of the
portfolio, duration of the current business cycle, bank regulatory examination
results and findings of the Company's internal credit examiners.

The allowance also incorporates the results of measuring impaired loans
as provided in Statement of Financial Accounting Standards (SFAS) No. 114,
"Accounting by Creditors for Impairment of a Loan" and SFAS No. 118, "Accounting
by Creditors for Impairment of a Loan-Income Recognition and Disclosures". These
accounting standards prescribe the measurement methods, income recognition and
disclosures related to impaired loans. A loan is considered impaired when
management determines that it is probable that the Company will be unable to
collect all amounts due according to the original contractual terms of the loan
agreement. Impairment is measured by the difference between the recorded
investment in the loan (including accrued interest, net deferred loan fees or
costs and unamortized premium or discount) and the estimated present value of
total expected future cash flows, discounted at the loan's effective rate, or
the fair value of the collateral, if the loan is collateral dependent.
Additionally, some impaired loans with commitments of less than $1 million are
aggregated for the purpose of measuring impairment using historical loss factors
as a means of measurement. In addition, the impairment allowance may include
amounts related to certain qualitative factors that have yet to manifest
themselves in the other measurements. Impairment is recognized by adjusting an
allocation of the existing allowance for credit losses.

PREMISES AND EQUIPMENT

Premises and equipment are carried at cost, less accumulated
depreciation and amortization. Depreciation and amortization are calculated
using the straight-line method over the estimated useful life of each asset.
Lives of premises range from ten to forty years; lives of furniture, fixtures
and equipment range from three to eight years. Leasehold improvements are
amortized over the term of the respective lease or 10 years, whichever is
shorter.

Long-lived assets that are held or that are to be disposed of and
certain intangibles are evaluated periodically for impairment when events or
changes in circumstances indicate that the carrying amount may not be
recoverable. The impairment is calculated as the difference between the expected
undiscounted future cash flows of a long-lived asset, if lower, and its carrying
value. In event of an impairment, the Company recognizes a loss for the
difference between the carrying amount and the estimated value of the asset as
measured using a quoted market price or, in the absence of a quoted market
price, a discounted cash flow analysis. The impairment loss is reflected in
noninterest expense.

OTHER ASSETS

Goodwill represents the excess of purchase price over the fair value of
identifiable net assets of acquired companies and is reported as intangible
assets. Goodwill is amortized using the straight-line method, generally over 15
years.

F-52

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)

Other real estate owned (OREO) represents the collateral acquired
through foreclosure in full or partial satisfaction of the related loan. OREO is
recorded at the lower of the loan's unpaid principal balance or its fair value
as established by a current appraisal, adjusted for disposition costs. Any
write-down at the date of transfer is charged to the allowance for credit
losses. OREO values, recorded in other assets, are reviewed on an ongoing basis
and any decline in value is recognized as foreclosed asset expense in the
current period. The net operating results from these assets are included in the
current period in noninterest expense as foreclosed asset expense (income).

Distressed loans held for sale are included in other assets in the
consolidated financial statements and are those loans that the Company has
identified as available for accelerated disposition. These are loans that would
otherwise be included in nonaccrual loans. Distressed loans are recorded at the
lower of the loan's unpaid principal balance or their fair value. Any write-down
at the date of transfer is charged to the allowance for credit losses.
Distressed loans' values, recorded in other assets, are reviewed on a quarterly
basis and any decline in value is recognized in other noninterest income during
the period in which the decline occurs.

DERIVATIVE INSTRUMENTS HELD FOR TRADING OR CUSTOMER ACCOMMODATION

The Company enters into a variety of interest rate derivative
contracts, primarily swaps and options, and foreign exchange contracts, either
for trading purposes, based on management's intent at inception, or as an
accommodation to customers.

Derivatives held or issued for trading or customer accommodation are
carried at fair value, with realized and unrealized changes in fair values on
contracts included in noninterest income in the period in which the changes
occur. Unrealized gains and losses are reported gross and included in trading
account assets and other liabilities, respectively. Cash flows are reported net
as operating activities.

DERIVATIVE INSTRUMENTS HELD FOR PURPOSES OTHER THAN TRADING

The Company enters into a variety of derivative contracts as a means of
reducing the Company's interest rate and foreign exchange exposures. At
inception these contracts, i.e., hedging instruments, are evaluated in order to
determine if they qualify for hedge accounting. With the adoption of SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," on January
1, 2001, the hedging instrument must be highly effective in achieving offsetting
changes in the hedge instrument and hedged item attributable to the risk being
hedged. Any ineffectiveness, which arises during the hedging relationship, is
recognized in noninterest expense in the period in which it arises. All
qualifying hedges are valued at fair value and included in other assets or other
liabilities. For fair value hedges of interest bearing assets or liabilities,
the change in the fair value of the hedged item and the hedging instrument to
the extent effective is recognized in net interest income. For all other fair
value hedges, the changes in the fair value of the hedged item and changes in
fair value of the derivative are recognized in noninterest income. For cash flow
hedges, the unrealized changes in fair value to the extent effective are
recognized in other comprehensive income. Amounts realized on cash flow hedges
related to variable rate loans are recognized in net interest income in the
period when the cash flow from the hedged item is realized. The fair value of
cash flow hedges related to forecasted transactions is recognized in noninterest
expense in the period when the forecasted transaction occurs.

F-53

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)

Prior to the adoption of SFAS No. 133, net interest settlements on
interest rate swap and option agreements were recognized on an accrual basis as
interest income or interest expense of the related asset or liability over the
lives of the agreements. The fair value of the agreements were not recognized on
the Consolidated Balance Sheet.

FOREIGN CURRENCY TRANSLATION

Assets, liabilities and results of operations for foreign branches are
recorded based on the functional currency of each branch. Since the functional
currency of the branches is the local currency, the net assets are remeasured
into U.S. dollars using a combination of current and historical exchange rates.
The resulting gains or losses are included in shareholders' equity, as a
component of accumulated other comprehensive income (loss), on a net of tax
basis.

INCOME TAXES

The Company files consolidated federal and combined state income tax
returns. Amounts provided for income tax expense are based on income reported
for financial statement purposes and do not necessarily represent amounts
currently payable under tax laws. Deferred taxes, which arise principally from
temporary differences between the period in which certain income and expenses
are recognized for financial accounting purposes and the period in which they
affect taxable income, are included in the amounts provided for income taxes.
Under this method, the computation of the net deferred tax liability or asset
gives current recognition to changes in the tax laws.

NET INCOME PER COMMON SHARE

Basic earnings per share (EPS) is computed by dividing net income by
the weighted average number of common shares outstanding during the period.
Diluted EPS incorporates the dilutive effect of common stock equivalents
outstanding on an average basis during the period. Stock options (see Note 13)
are a common stock equivalent. Also see Note 18.

EMPLOYEE BENEFIT AND INCENTIVE PLANS AND OTHER POSTRETIREMENT BENEFITS

The Company provides a variety of benefit and incentive compensation
plans for eligible employees and retirees. Provisions for the costs of these
employee benefit and incentive plans and postretirement benefit plans are
accrued and charged to expense when the benefit is earned.

On January 1, 2000, the Company changed the method it uses to calculate
the market-related value of its pension plan assets. This change increased the
value of plan assets on which the expected returns are based and, therefore,
results in lower net periodic pension cost. This change in methodology resulted
in a one-time credit to salaries and benefits of $16.0 million. The impact on
future years is not considered significant.

STOCK-BASED COMPENSATION

As allowed under the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation", the Company has chosen to continue to recognize
compensation expense using the intrinsic value-based method of valuing stock
options prescribed in Accounting Principles Board Opinion (APB) No. 25,

F-54

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)

"Accounting for Stock Issued to Employees" and related Interpretations. Under
the intrinsic value-based method, compensation cost is measured as the amount by
which the quoted market price of the Company's stock at the date of grant
exceeds the stock option exercise price (also see Note 13).

Compensation cost associated with the Company's unvested restricted
stock issued under the management stock plan is measured based on the market
price of the stock at the grant date and is expensed over the vesting period.

SEGMENT REPORTING

Business unit results are based on an internal management reporting
system used by management to measure the performance of the units and the
Company as a whole. The management reporting system identifies balance sheet and
income statement items to each business unit based on internal management
accounting policies. Net interest income is determined using the Company's
internal funds transfer pricing system, which assigns a cost of funds to assets
or a credit for funds to liabilities and capital based on their type, maturity
or repricing characteristics. Noninterest income and expense directly or
indirectly attributable to a business unit are assigned to that business.
Economic capital is attributed to each business unit using a Risk Adjusted
Return on Capital (RAROC) methodology, which seeks to allocate capital to each
business unit consistent with the level of risk they assume. These risks are
primarily credit risk, market risk and operational risk. Credit risk is the
potential loss in economic value due to the likelihood that the obligor will not
perform as agreed. Market risk is the potential loss in fair value due to
changes in interest rates, currency rates and volatilities. Operational risk is
the potential loss due to failures in internal controls, system failures, or
external events.

RESALE AND REPURCHASE AGREEMENTS

Transactions involving purchases of securities under agreements to
resell (reverse repurchase agreements or reverse repos) or sales of securities
under agreements to repurchase (repurchase agreements or repos) are accounted
for as collateralized financings except where the Company does not have an
agreement to sell (or purchase) the same or substantially the same securities
before maturity at a fixed or determinable price. The Company's policy is to
obtain possession of collateral with a market value equal to or in excess of the
principal amount loaned under resale agreements. Collateral is valued daily, and
the Company may require counterparties to deposit additional collateral or
return collateral pledged when appropriate.

COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF SUBSIDIARY
GRANTOR TRUST

Company-obligated mandatorily redeemable preferred securities of
subsidiary grantor trust (trust preferred securities) are accounted for as a
liability on the balance sheet. Dividends (or distributions) on trust preferred
securities are treated as interest expense on an accrual basis.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 141 requires that all business combinations be
accounted for by a single method-the purchase method. This Statement eliminates
the pooling-of-interests method but carries forward without reconsideration the
guidance in

F-55

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)

APB Opinion No. 16, "Business Combinations" and SFAS No. 38, "Accounting for
Preacquisition Contingencies of Purchased Enterprises" related to the
application of the purchase method of accounting. The provisions of SFAS No. 141
apply to all business combinations initiated after June 30, 2001, and all
business combinations accounted for using the purchase method for which the date
of acquisition is July 1, 2001, or later. SFAS No. 142 significantly changes the
accounting for goodwill and other intangible assets subsequent to their initial
recognition. SFAS No. 142 requires that goodwill and some intangible assets no
longer be amortized, but tested for impairment at least annually by comparing
the fair value of those assets with their recorded amounts. SFAS No. 142 is
effective for fiscal years beginning after December 15, 2001 and must be adopted
at the beginning of the fiscal year. However, goodwill and intangible assets
acquired in a transaction completed after June 30, 2001, but before SFAS No. 142
is adopted, would be accounted for in accordance with the amortization and
nonamortization provisions of this Statement. Upon adoption on January 1, 2002,
the amortization of existing goodwill will cease and a transitional impairment
test will be performed. Impairment loss at adoption, if any, will be recognized
as a change in accounting principle. Management believes that at adoption, SFAS
No. 141 and SFAS No. 142 will not have a material impact on the Company's
financial position or results of operations, and approximately $15.1 million of
goodwill amortization for the year ending December 31, 2002 will be eliminated.
Goodwill acquired subsequent to June 30, 2001 is not amortized.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This Statement addresses the financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. It applies to the legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction, development and, or, the normal operation of a
long-lived asset. A legal obligation is an obligation that a party is required
to settle as a result of an existing or enacted law, statute, ordinance, or
written or oral contract or by legal construction of a contract under the
doctrine of promissory estoppel. This Statement is effective for fiscal years
beginning after June 15, 2002. Management believes that adopting this Statement
will not have a material impact on the Company's financial position or results
of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This Statement supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed of," and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions," for the disposal of a segment of a business.
SFAS No. 144 establishes a single accounting model for long-lived assets to be
disposed of by sale, whether previously held and used or newly acquired. This
Statement carries over the framework established in SFAS No. 121, and is
effective for fiscal years beginning after December 15, 2001. Management
believes that adopting this Statement will not have a material impact on the
Company's financial position or results of operations.

F-56

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 2-SECURITIES

The amortized cost, gross unrealized gains, gross unrealized losses,
and fair values of securities are presented below. At January 1, 2001, all of
our securities held to maturity were transferred to securities available for
sale in conjunction with the adoption of SFAS No. 133, and therefore, no
information is provided for December 31, 2001 in the securities held to maturity
table.

SECURITIES AVAILABLE FOR SALE

DECEMBER 31,
-----------------------------------------------------------------------------------------------
2000 2001
---------------------------------------------- ----------------------------------------------
GROSS GROSS GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR AMORTIZED UNREALIZED UNREALIZED FAIR
(DOLLARS IN THOUSANDS) COST GAINS LOSSES VALUE COST GAINS LOSSES VALUE
- --------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

U.S. Treasury.................... $ 433,703 $ 6,394 $ - $ 440,097 $ 214,249 $ 7,957 $ - $ 222,206
Other U.S. government............ 1,233,908 40,441 594 1,273,755 1,902,001 91,315 303 1,993,013
Mortgage-backed securities....... 2,138,101 19,447 6,516 2,151,032 3,293,857 48,138 14,127 3,327,868
State and municipal.............. 52,881 8,908 - 61,789 40,116 5,897 80 45,933
Corporate debt securities........ 99,003 10 290 98,723 129,314 - 4,152 125,162
Equity securities................ 95,685 268 306 95,647 78,810 133 - 78,943
Foreign securities............... 6,570 69 12 6,627 5,883 92 18 5,957
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total securities available for
sale........................... $4,059,851 $ 75,537 $ 7,718 $4,127,670 $5,664,230 $ 153,532 $ 18,680 $5,799,082
========== ========== ========== ========== ========== ========== ========== ==========

SECURITIES HELD TO MATURITY
DECEMBER 31,
------------------------------------------------------
2000
------------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
(DOLLARS IN THOUSANDS) COST GAINS LOSSES VALUE
- ------------------------------------------------------------------- --------- ---------- ---------- -------

Mortgage-backed securities......................................... $ 8,521 $ 437 $ 1 $ 8,957
State and municipal................................................ 15,008 - 663 14,345
--------- ---------- ---------- -------
Total securities held to maturity................................ $ 23,529 $ 437 $ 664 $23,302
========= ========== ========== =======

The amortized cost and fair value of securities, by contractual
maturity, are shown below. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay obligations,
with or without call or prepayment penalties

F-57

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 2-SECURITIES (CONTINUED)

MATURITY SCHEDULE OF SECURITIES

SECURITIES
AVAILABLE FOR SALE(1)
--------------------------
DECEMBER 31, 2001
--------------------------
AMORTIZED FAIR
(DOLLARS IN THOUSANDS) COST VALUE
- ----------------------------------------- ---------- ----------
Due in one year or less.................. $185,022 $186,769
Due after one year through five years.... 2,370,961 2,477,331
Due after five years through ten years... 1,303,623 1,294,548
Due after ten years...................... 1,725,814 1,761,491
Equity securities(2)..................... 78,810 78,943
---------- ----------
Total securities....................... $5,664,230 $5,799,082
========== ==========
______________
(1) The remaining contractual maturities of mortgage-backed securities are
classified without regard to prepayments. The contractual maturity of
these securities is not a reliable indicator of their expected life
since borrowers have the right to repay their obligations at any time.
(2) Equity securities do not have a stated maturity.

During the year ended 2000, there were no sales or transfers from the
securities held to maturity portfolio.

In 1999, proceeds from sales of securities available for sale were $210
million with gross realized gains of $8 million and no gross realized losses. In
2000, proceeds from sales of securities available for sale were $423 million
with gross realized gains of $27 million and $18 million of gross realized
losses. In 2001, proceeds from sales of securities available for sale were $931
million with gross realized gains of $31 million and gross realized losses of
$22 million.

COLLATERAL

The Company reports securities pledged as collateral in secured
borrowings and other arrangements when the secured party can sell or repledge
the securities. These securities have been separately identified. If the secured
party cannot resell or repledge the securities of the Company, those securities
are not separately identified. As of December 31, 2000 and 2001, the Company had
no pledged collateral to secured parties who are not permitted to resell or
repledge those securities.

As of December 31, 2000 and 2001, the Company had not accepted any
collateral that it is permitted by contract to sell or repledge.

F-58

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 3-LOANS AND ALLOWANCE FOR CREDIT LOSSES

A summary of loans, net of unearned interest and fees of $83 million
and $56 million, at December 31, 2000 and 2001, respectively, is as follows:

DECEMBER 31,
-----------------------------
(DOLLARS IN THOUSANDS) 2000 2001
- -------------------------------------------------------- ----------- -----------

Domestic:
Commercial, financial and industrial.................. $13,748,838 $11,476,361
Construction.......................................... 939,302 1,059,847
Mortgage:
Residential.......................................... 3,294,485 4,788,219
Commercial........................................... 3,348,252 3,590,318
----------- -----------
Total mortgage..................................... 6,642,737 8,378,537
Consumer:
Installment.......................................... 1,655,676 1,200,047
Home equity.......................................... 755,053 859,021
----------- -----------
Total consumer..................................... 2,410,729 2,059,068
Lease financing....................................... 1,134,440 979,242
----------- -----------
Total loans in domestic offices.................... 24,876,046 23,953,055
Loans originated in foreign branches.................... 1,134,352 1,040,975
----------- -----------
Total loans........................................ 26,010,398 24,994,030
Allowance for credit losses........................ 613,902 634,509
----------- -----------
Loans, net......................................... $25,396,496 $24,359,521
=========== ===========

Changes in the allowance for credit losses were as follows:

Balance, beginning of year............................................... $459,328 $470,378 $613,902
Loans charged off........................................................ (81,685) (322,363) (322,469)
Recoveries of loans previously charged off............................... 27,539 26,297 58,370
-------- -------- --------
Total net loans charged off............................................ ( 54,146) (296,066) (264,099)
Provision for credit losses.............................................. 65,000 440,000 285,000
Foreign translation adjustment and other net additions (deductions)...... 196 (410) (294)
-------- -------- --------
Balance, end of year..................................................... $470,378 $613,902 $634,509
======== ======== ========

Nonaccrual loans totaled $400 million and $492 million at December 31,
2000 and 2001, respectively. There were no renegotiated loans at December 31,
2000 and 2001.

LOAN IMPAIRMENT

Impaired loans of the Company include commercial, financial and
industrial, construction and commercial mortgage loans designated as nonaccrual.
When the value of an impaired loan is less than the

F-59

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 3-LOANS AND ALLOWANCE FOR CREDIT LOSSES (CONTINUED)

recorded investment in the loan, a portion of the Company's allowance for credit
losses is allocated as an impairment allowance.

The Company's policy for recognition of interest income, charge-offs of
loans, and application of payments on impaired loans is the same as the policy
applied to nonaccrual loans.

The following table sets forth information about the Company's impaired
loans.

DECEMBER 31,
-----------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- ------------------------------------------------------------------------- -------- -------- --------

Impaired loans with an allowance......................................... $128,576 $318,418 $383,967
Impaired loans without an allowance(1)................................... 38,818 81,581 107,918
-------- -------- --------
Total impaired loans(2)................................................ $167,394 $399,999 $491,885
======== ======== ========

Allowance for impaired loans............................................. $ 42,429 $118,378 $ 97,651
Average balance of impaired loans during the year........................ $128,403 $257,650 $455,168
Interest income recognized during the year on nonaccrual loans at
December 31............................................................ $ 23 $ 1,221 $ 5,442
______________
<FN>
(1) These loans do not require an allowance for credit losses under SFAS
No. 114 since the fair values of the impaired loans equal or exceed
the recorded investments in the loans.

(2) This amount was evaluated for impairment using three measurement
methods as follows: $141 million, $361 million, and $452 million was
evaluated using the present value of the expected future cash flows at
December 31, 1999, 2000 and 2001, respectively; $6 million, $13
million, and $15 million was evaluated using the fair value of the
collateral at December 31, 1999, 2000 and 2001, respectively; and $21
million, $26 million, and $25 million was evaluated using historical
loss factors at December 31, 1999, 2000 and 2001, respectively.
</FN>

RELATED PARTY LOANS

In some cases, the Company makes loans to related parties including its
directors, executive officers, and their affiliated companies. At December 31,
2000, related party loans outstanding to individuals who served as directors or
executive officers at anytime during the year totaled $107 million, as compared
to $33 million at December 31, 2001. In the opinion of management, these related
party loans were made on substantially the same terms, including interest rates
and collateral requirements, as those terms prevailing at the date these loans
were made. During 2000 and 2001, there were no loans to related parties that
were charged off. Additionally, at December 31, 2000 and 2001, there were no
loans to related parties that were nonperforming.

F-60

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 4-PREMISES AND EQUIPMENT

Premises and equipment are carried at cost, less accumulated
depreciation and amortization. As of December 31, 2000 and 2001, the amounts
were:

DECEMBER 31,
------------------------------------------------------------------------------------------------------
2000 2001
----------------------------------------- ----------------------------------------
ACCUMULATED ACCUMULATED
DEPRECIATION AND NET BOOK DEPRECIATION AND NET BOOK
(DOLLARS IN THOUSANDS) COST AMORTIZATION VALUE COST AMORTIZATION VALUE
- ---------------------- ---------- ------------ -------- ---------- ------------ --------

Land.................. $ 66,090 $ - $ 66,090 $ 65,834 $ - $ 65,834
Premises.............. 314,255 103,144 211,111 328,366 115,485 212,881
Leasehold improvements 168,778 112,240 56,538 189,438 123,241 66,197
Furniture, fixtures
and equipment....... 494,357 353,817 140,540 541,187 391,565 149,622
---------- -------- -------- ---------- -------- --------
Total............... $1,043,480 $569,201 $474,279 $1,124,825 $630,291 $494,534
========== ======== ======== ========== ======== ========

Rental and depreciation and amortization expenses were as follows:

YEARS ENDED DECEMBER 31,
-------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- ---------------------- ------- -------- --------

Rental expense of premises................................... $49,719 $ 52,085 $ 48,482
Less: rental income.......................................... 13,900 15,464 19,343
------- -------- --------
Net rental expense......................................... $35,819 $ 36,621 $ 29,139
======= ======== ========
Other net rental income, primarily for equipment............. $ (821) $ (1,300) $ (1,570)
======= ======== ========
Depreciation and amortization of premises and equipment...... $68,090 $ 66,503 $ 74,786
======= ======== ========

Future minimum lease payments are as follows:

(DOLLARS IN THOUSANDS) DECEMBER 31, 2001
- ------------------------------------------------------- -----------------
Years ending December 31,
2002................................................. $ 51,991
2003................................................. 48,639
2004................................................. 42,759
2005................................................. 35,524
2006................................................. 29,616
Later years.......................................... 92,473
--------
Total minimum operating lease payments................. $301,002
========

Minimum rental income due in the future under
noncancellable subleases.............................. $ 70,355
========

A majority of the leases provide for the payment of taxes, maintenance,
insurance, and certain other expenses applicable to the leased premises. Many of
the leases contain extension provisions, escalation clauses, and purchase
options.

F-61

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 4-PREMISES AND EQUIPMENT (CONTINUED)

Included in other liabilities in the accompanying December 31, 2001
Consolidated Balance Sheet is $6.4 million of future operating lease payments
accrued in connection with the 1996 merger and the 1999 restructuring charge.

NOTE 5-DEPOSITS

At December 31, 2001, the Company had $396 million in domestic interest
bearing time deposits with a remaining term of greater than one year, of which
$129 million exceeded $100,000. Maturity information for all domestic interest
bearing time deposits with a remaining term of greater than one year is
summarized below.

(DOLLARS IN THOUSANDS) DECEMBER 31, 2001
- ------------------------------------------------------ -----------------
Due after one year through two years.................. $216,022
Due after two years through three years............... 78,545
Due after three years through four years.............. 55,551
Due after four years through five years............... 37,744
Due after five years.................................. 8,149
--------
Total............................................... $396,011
========

All of the foreign interest bearing time deposits exceeding $100,000
mature in less than one year.

NOTE 6-EMPLOYEE BENEFIT AND INCENTIVE PLANS AND OTHER POSTRETIREMENT BENEFITS

RETIREMENT PLANS

The Company maintains the Union Bank of California, N.A. Retirement
Plan (the Plan), which is a noncontributory defined benefit plan covering
substantially all of the employees of the Company. The Plan provides retirement
benefits based on years of credited service and the final average compensation
amount, as defined in the Plan. Employees become eligible for this plan after
one year of service and become fully vested after five years of service. The
Company's funding policy is to make contributions equal to the maximum
deductible amount as allowed by the Internal Revenue Code. Contributions are
intended to provide not only for benefits attributed to services to date, but
also for those expected to be earned in the future. Plan assets are invested in
U.S. government securities, corporate bonds, and commingled investment funds.

OTHER POSTRETIREMENT BENEFITS

The Company provides certain health care benefits for its retired
employees and life insurance benefits for those employees who retired prior to
January 1, 2001. The health care cost is shared between the Company and the
retiree. The life insurance plan is noncontributory. The accounting for the
health care plan anticipates future cost-sharing changes that are consistent
with the Company's intent to maintain a level of cost-sharing at approximately
25 percent. Assets set aside to cover such obligations are primarily invested in
mutual funds.

F-62

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 6-EMPLOYEE BENEFIT AND INCENTIVE PLANS AND OTHER POSTRETIREMENT BENEFITS
(CONTINUED)

The following table sets forth the funded status of the Company's
defined benefit pension plan and its other postretirement benefit plans.

PENSION BENEFITS OTHER BENEFITS
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
--------------------- ----------------------
(DOLLARS IN THOUSANDS) 2000 2001 2000 2001
- ------------------------------------------------------ -------- -------- ------- --------

CHANGE IN BENEFIT OBLIGATION
Benefit obligation, beginning of year................. $439,908 $509,016 $96,257 $94,108
Service cost.......................................... 20,688 21,889 3,024 3,844
Interest cost......................................... 34,429 38,931 6,708 7,267
Plan participants' contributions...................... - - 1,143 1,386
Amendments............................................ - - (1,537) -
Actuarial (gain) loss................................. 30,805 45,393 (4,286) 25,249
Benefits paid......................................... (16,814) (19,493) (7,201) (8,134)
-------- -------- ------- --------
Benefit obligation, end of year....................... 509,016 595,736 94,108 123,720
-------- -------- ------- --------
CHANGE IN PLAN ASSETS
Fair value of plan assets, beginning of year.......... 601,527 588,469 46,666 50,296
Actual return on plan assets.......................... (12,328) (35,272) (1,319) (2,518)
Employer contribution................................. 16,084 62,767 11,007 11,459
Plan participants' contributions...................... - - 1,143 1,386
Benefits paid......................................... (16,814) (19,494) (7,201) (8,134)
-------- -------- ------- --------
Fair value of plan assets, end of year................ 588,469 596,470 50,296 52,489
-------- -------- ------- --------
Funded status......................................... 79,453 734 (43,812) (71,231)
Unrecognized transition amount........................ - - 38,595 37,432
Unrecognized net actuarial gain....................... (39,240) 92,570 (6,624) 25,083
Unrecognized prior service cost....................... 6,658 5,591 (1,537) (1,441)
-------- -------- ------- --------
Prepaid (accrued) benefit cost........................ $ 46,871 $ 98,895 $(13,378) $(10,157)
======== ======== ======= ========

The following table summarizes the assumptions used in computing the
present value of the projected benefit obligation and the net pension expense.

PENSION BENEFITS OTHER BENEFITS
--------------------- ---------------------
YEARS ENDED YEARS ENDED
DECEMBER 31, DECEMBER 31,
--------------------- ---------------------
1999 2000 2001 1999 2000 2001
---- ---- ---- ---- ---- ----

Discount rate in determining expense........................................ 6.50% 7.75% 7.50% 6.50% 7.75% 7.50%
Discount rate in determining benefit obligations at year end................ 7.75 7.50 7.25 7.75 7.50 7.25
Rate of increase in future compensation levels for determining expense...... 5.00 5.00 5.00 - - -
Rate of increase in future compensation levels for determining benefit
obligations at year end................................................... 5.00 5.00 5.00 - - -
Expected return on plan assets.............................................. 8.25 8.25 8.25 8.00 8.00 8.00

F-63

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 6-EMPLOYEE BENEFIT AND INCENTIVE PLANS AND OTHER POSTRETIREMENT BENEFITS
(CONTINUED)

The following table sets forth the components of postretirement benefit
expense.

PENSION BENEFITS OTHER BENEFITS
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------------------------- -----------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001 1999 2000 2001
- ------------------------------------------- ------- ------- ------- ------ ------ ------

Components of net periodic benefit cost
Service cost............................... $25,107 $20,688 $21,889 $3,450 $3,024 $3,844
Interest cost.............................. 31,295 34,429 38,930 5,552 6,708 7,267
Expected return on plan assets............. (36,194) (45,357) (51,144) (3,317) (3,893) (4,177)
Amortization of prior service cost......... 2,016 1,067 1,067 - - (96)
Amortization of transition amount.......... (61) - - 3,987 3,455 3,216
Recognized net actuarial (gain) loss....... 2,435 (1,077) - (878) (858) 12
------- ------- ------- ------ ------ ------
Net periodic benefit cost................ 24,598 9,750 10,742 8,794 8,436 10,066
Loss (gain) due to curtailment............. - - - 6,132 2,868 (1,828)
------- ------- ------- ------ ------ ------
Total benefit cost for year.............. $24,598 $9,750 $10,742 $14,926 $11,304 $8,238
======= ======= ======= ======= ======= =======

For 1999, the Company assumed an 11 percent annual rate of increase in
the per capita cost of postretirement medical benefits for the indemnity plan
and an 8.5 percent annual rate of increase for the health maintenance
organization (HMO) plan. For future periods, the rate for the indemnity plan was
expected to gradually decrease from 11 percent to 5 percent in 2007 remaining
level thereafter. The rate for the HMO plan was expected to gradually decrease
from 8.5 percent to 5.0 percent in 2007 and remain at that level thereafter.

For 2000, the Company assumed a 10 percent annual rate of increase in
the per capita cost of postretirement medical benefits for the indemnity plan
and an 8 percent annual rate of increase for the HMO plan. For future periods,
the rate for the indemnity plan was expected to gradually decrease from 10
percent to 5 percent in 2007 and will remain at that level thereafter. The rate
for the HMO plan was expected to gradually decrease from 8 percent to 5 percent
in 2007 and remain at that level thereafter

For 2001, the Company assumed a 9 percent annual rate of increase in
the per capita cost of postretirement medical benefits for the indemnity plan
and a 7.5 percent annual rate of increase for the HMO plan. For future periods,
the rate for the indemnity plan was expected to gradually decrease from 9
percent to 5 percent in 2007 and will remain at that level thereafter. The rate
for the HMO plan was expected to gradually decrease from 7.5 percent to 5
percent in 2007 and remain at that level thereafter.

The healthcare cost trend rate assumption has a significant effect on
the amounts reported for the health care plans. A one-percentage-point change in
assumed health care cost trend rates would have the following effects.

1-PERCENTAGE- 1-PERCENTAGE-
(DOLLARS IN THOUSANDS) POINT INCREASE POINT DECREASE
- ------------------------------------------------------------------- -------------- --------------

Effect on total of service and interest cost components............ $ 1,496 $ (1,246)
Effect on postretirement benefit obligation........................ 14,064 (11,960)

F-64

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 6-EMPLOYEE BENEFIT AND INCENTIVE PLANS AND OTHER POSTRETIREMENT BENEFITS
(CONTINUED)

EXECUTIVE SUPPLEMENTAL BENEFIT PLANS

The Company has several Executive Supplemental Benefit Plans (ESBP)
which provide eligible employees with supplemental retirement benefits. The
plans are unfunded. The accrued liability for ESBP's included in other
liabilities in the Consolidated Balance Sheets was $28 million at December 31,
2000 and 2001. The Company's expense relating to the ESBP's was $3 million for
the year ended December 31, 1999, $2 million for the year ended December 31,
2000, and $3 million for the year ended December 2001.

SECTION 401(K) SAVINGS PLANS

The Company has a defined contribution plan authorized under Section
401(k) of the Internal Revenue Code. All benefits-eligible employees are
eligible to participate in the plan. Employees may contribute up to 16 percent
of their pre-tax covered compensation or up to 10 percent of their after-tax
covered compensation through salary deductions. The Company contributes 50
percent of every pre-tax dollar an employee contributes up to the first 6
percent of the employee's pre-tax covered compensation. Employees are fully
vested in the employer's contributions immediately. In addition, the Company may
make a discretionary annual profit-sharing contribution up to 2.5 percent of an
employee's pay. This profit-sharing contribution is for all eligible employees,
regardless of whether an employee is participating in the 401(k) plan, and
depends on the Bank's annual financial performance. All employer contributions
are tax deductible by the Company. The Company's combined matching contribution
expense was $17 million, $6 million, and $13 million for the years ended
December 31, 1999, 2000 and 2001, respectively.

NOTE 7-OTHER EXPENSES

The detail of other expenses is as follows:

YEARS ENDED DECEMBER 31,
-----------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- -------------------------------------- -------- -------- --------
Advertising and public relations...... $ 27,163 $ 29,125 $ 37,710
Software.............................. 24,519 24,037 31,766
Intangible asset amortization......... 13,980 13,352 14,340
Other................................. 151,230 156,234 159,582
-------- -------- --------
Total other expenses................ $216,892 $222,748 $243,398
======== ======== ========

F-65

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 8-INCOME TAXES

The components of income tax expense were as follows:

YEARS ENDED DECEMBER 31,
-----------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- --------------------------------------------------------- -------- -------- --------

Taxes currently payable:
Federal................................................ $217,713 $202,427 $172,898
State.................................................. 5,140 3,595 326
Foreign................................................ 1,564 1,804 1,965
-------- -------- --------
Total currently payable................................ 224,417 207,826 175,189
-------- -------- --------
Taxes deferred:
Federal................................................ (7,600) 9,300 49,163
State.................................................. (2,040) 3,998 9,905
Foreign................................................ (889) 411 (413)
-------- -------- --------
Total deferred......................................... (10,529) 13,709 58,655
-------- -------- --------
Total income tax expense............................... $213,888 $221,535 $233,844
======== ======== ========

The components of the net deferred tax balances of the Company were as
follows:

DECEMBER 31,
---------------------
(DOLLARS IN THOUSANDS) 2000 2001
- ---------------------------------------------------------------- -------- --------

Deferred tax assets:
Allowance for credit losses................................... $245,985 $247,809
Accrued income and expense.................................... 27,617 1,141
Accrued restructuring expenses................................ 15,871 3,858
Deferred state taxes.......................................... 4,740 8,975
Other......................................................... 7,973 24,209
-------- --------
Total deferred tax assets..................................... 302,186 285,992
Deferred tax liabilities:
Leasing....................................................... 399,034 443,194
Unrealized gain on securities available for sale.............. 25,940 51,580
Unrealized net gains on cash flow hedges...................... - 38,925
Depreciation.................................................. 13,735 11,303
-------- --------
Total deferred tax liabilities................................ 438,709 545,002
-------- --------
Net deferred tax liability.................................... $136,523 $259,010
======== ========

F-66

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 8-INCOME TAXES (CONTINUED)

The following table is an analysis of the effective tax rate:

YEARS ENDED
DECEMBER 31,
---------------------
1999 2000 2001
---- ---- ----

Federal income tax rate........................................ 35% 35% 35%
Net tax effects of:
State income taxes, net of federal income tax benefit........ - 1 1
Tax credits.................................................. (1) (2) (2)
Net refunds from tax audits.................................. (2) - -
Other........................................................ 1 (1) (1)
-- -- --
Effective tax rate........................................... 33% 33% 33%
== == ==

The Company has filed its 1999 and 2000, and intends to file its 2001,
California franchise tax returns on a worldwide unitary basis, incorporating the
financial results of BTM and its worldwide affiliates.

During 1999, the Company recognized tax benefits of $10.7 million from
federal and California audit settlements covering the years 1986 to 1994.
Federal and state tax returns for several years are under or subject to
examination by the respective taxing authorities. Although the ultimate outcome
of such examinations cannot be determined at this time, management believes that
the resolution of issues that have been or may be raised will not have a
material adverse effect on the Company's consolidated financial position or
results of operations.

F-67

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 9-BORROWED FUNDS

The following is a summary of the major categories of borrowed funds:

DECEMBER 31,
----------------------------
(DOLLARS IN THOUSANDS) 2000 2001
- ------------------------------------------------------------------------------- ---------- ----------

Federal funds purchased and securities sold under repurchase agreements
with weighted average interest rates of 6.52% and 1.41% at December 31,
2000 and 2001, respectively.................................................. $1,387,667 $ 418,814
Commercial paper, with weighted average interest rates of 6.49% and 1.89%
at December 31, 2000 and 2001, respectively.................................. 1,385,771 830,657
Other borrowed funds, with weighted average interest rates of 5.64% and
2.96% at December 31, 2000 and 2001, respectively............................ 249,469 700,403
---------- ----------
Total borrowed funds........................................................... $3,022,907 $1,949,874
========== ==========
Federal funds purchased and securities sold under repurchase agreements:
Maximum outstanding at any month end......................................... $2,095,868 $1,575,938
Average balance during the year.............................................. 1,548,730 1,243,933
Weighted average interest rate during the year............................... 6.24% 4.19%
Commercial paper:
Maximum outstanding at any month end......................................... $1,525,932 $1,572,029
Average balance during the year.............................................. 1,521,614 1,287,603
Weighted average interest rate during the year............................... 6.24% 4.07%
Other borrowed funds:
Maximum outstanding at any month end......................................... $ 507,782 $ 702,511
Average balance during the year.............................................. 314,425 464,033
Weighted average interest rate during the year............................... 5.31% 4.35%

Included in other borrowed funds in 2000 and 2001 are assumed mortgage
notes related to the purchase of the Company's administrative facility at
Monterey Park, California. The notes consist of 20 zero coupon notes with
varying maturity dates through 2011. Maturities of these notes for the next five
years are as follows: $6.5 million in each of 2002, 2003, and 2004, $5.3 million
in 2005, $5.0 million in 2006 and $29.3 million thereafter.

NOTE 10-MEDIUM AND LONG-TERM DEBT

The following is a summary of our medium-term senior debt and long-term
subordinated debt.

DECEMBER 31,
---------------------
(DOLLARS IN THOUSANDS) 2000 2001
- ---------------------------------------------------------------------------------- -------- --------

Medium-term debt, fixed rate 5.75% senior notes due December 2006................. $ - $200,000
Long-term subordinated debt, floating rate notes due June 2007. These notes
bear interest at 0.325% above 3-month London Interbank Offered Rate
(LIBOR) and are payable to BTM.................................................. 200,000 200,000
-------- --------
Total medium and long-term debt................................................... $200,000 $400,000
======== ========

F-68

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 10-MEDIUM AND LONG-TERM DEBT (CONTINUED)

On November 30, 2001, the Company issued $200 million of medium-term
notes. At December 31, 2001, the weighted average interest rate of the
medium-term notes including the impact of the deferred issuance costs was 5.54
percent. The notes do not qualify as Tier 2 risk-based capital under the Federal
Reserve guidelines for assessing regulatory capital and are not redeemable prior
to the stated maturity. The notes are senior obligations and are ranked equally
with all existing or future unsecured senior debt.

The long-term subordinated debt qualifies as Tier 2 risk-based capital
under the Federal Reserve guidelines for assessing regulatory capital. For the
total risk-based capital ratio, the amount of notes that qualify as capital is
reduced as the notes approach maturity. At December 31, 2000 and 2001, the $200
million of notes qualified as risk-based capital. The weighted average interest
rate of the notes as of December 31, 2001 was 4.74 percent.

Provisions of the subordinated notes restrict the use of the Company's
property as security for borrowings, and place limitations on leases,
indebtedness, distributions to shareholders, mergers, sales of certain assets,
transactions with affiliates, and changes in majority stock ownership of the
company.

NOTE 11- UNIONBANCAL CORPORATION-OBLIGATED MANDATORILY REDEEMABLE PREFERRED
SECURITIES OF SUBSIDIARY GRANTOR TRUST

In February 1999, UnionBanCal Finance Trust I issued $350 million
preferred securities to the public and $10,824,750 common securities to the
Company. The proceeds of such issuances were invested by UnionBanCal Finance
Trust I in $360,824,750 aggregate principal amount of the Company's 7 3/8
percent debt securities due May 15, 2029 (the Trust Notes). The Trust Notes
represent the sole asset of UnionBanCal Finance Trust I. The Trust Notes mature
on May 15, 2029, bear interest at the rate of 7 3/8 percent, payable quarterly,
and are redeemable by the Company beginning on or after February 19, 2004 at 100
percent of the principal amount thereof, plus any accrued and unpaid interest to
the redemption date.

Holders of the preferred securities and common securities are entitled
to cumulative cash distributions at an annual rate of 7 3/8 percent of the
liquidation amount of $25 per security. The preferred securities are subject to
mandatory redemption upon repayment of the Trust Notes and are callable by the
Company at 100 percent of the liquidation amount beginning on or after February
19, 2004. The Trust exists for the sole purpose of issuing the preferred
securities and investing the proceeds in the Trust Notes issued by the Company.

The Company has guaranteed, on a subordinated basis, distributions and
other payments due on the preferred securities (the Guarantee). The Guarantee,
when taken together with the Company's obligations under the Trust Notes and in
the indenture pursuant to which the Trust Notes were issued and the Company's
obligations under the Amended and Restated Declaration of Trust governing the
subsidiary trust, provide a full and unconditional guarantee of amounts due on
the Trust Preferred securities.

The Company has converted a portion of its 7 3/8 percent fixed rate to
a floating rate of interest by utilizing a $200 million interest rate swap,
which qualified as a fair value hedge at December 31, 2001. The market value
adjustment to the preferred securities was $13.9 million while the fair value of
the hedge was $11.6 million. The weighted average interest rate, including the
impact of the hedge and deferred issuance costs, was 5.88 percent.

The grantor trust is a wholly owned subsidiary of UnionBanCal
Corporation. The Trust Notes and related trust investment in the Trust Notes
have been eliminated in consolidation and the preferred securities are reflected
as a liability in the accompanying financial statements.

F-69

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 12-DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN

The Company has a dividend reinvestment and stock purchase plan for
shareholders. The plan allows shareholders to automatically reinvest all or part
of their dividends in additional shares of the Company's common stock at a cost
of 5 percent below the market price. Participating shareholders also have the
option of purchasing additional shares at the full market price with cash
payments of $25 to $3,000 per quarter. The Company obtains shares required for
reinvestment through open market purchases or through the issuance of new shares
from its authorized but unissued stock. During 1999, 2000, and 2001, 101,570,
449,064, and 383,765 shares, respectively, were required for dividend
reinvestment purposes, of which 6,407, 24,666, and 20,402 shares were considered
new issuances during 1999, 2000, and 2001, respectively. BTM did not participate
in the plan in 1999, 2000 or 2001.

NOTE 13-MANAGEMENT STOCK PLAN

The Company has two management stock plans. The Year 2000 UnionBanCal
Corporation Stock Plan, effective January 1, 2000 (the 2000 Stock Plan), and the
UnionBanCal Corporation Management Stock Plan, restated effective June 1, 1997
(the 1997 Stock Plan), have 10.0 million and 6.6 million shares, respectively,
of the Company's common stock authorized to be awarded to key employees and
outside directors of the Company at the discretion of the Executive Compensation
and Benefits Committee of the Board of Directors (the Committee). Employees on
rotational assignment from BTM are not eligible for stock awards.

The Committee determines the term of each stock option grant, up to a
maximum of ten years from the date of grant. The exercise price of the options
issued under the Stock Plan shall not be less than the fair market value on the
date the option is granted. Unvested restricted stock issued under the Stock
Plan is shown as a reduction to retained earnings. The value of the restricted
shares at the date of grant is amortized to compensation expense over its
vesting period. All cancelled or forfeited options and restricted stock become
available for future grants.

In 1999, 2000 and 2001, the Company granted options to non-employee
directors and various key employees, including policy-making officers under the
1997 and 2000 Stock Plans. Under both Stock Plans, options granted to employees
vest pro-rata on each anniversary of the grant date and become fully exercisable
three years from the grant date, provided that the employee has completed the
specified continuous service requirement. The options vest earlier if the
employee dies, is permanently disabled, or retires under certain grant, age, and
service conditions. Options granted to non-employee directors are fully vested
on the grant date and exercisable 33 1/3 percent on each anniversary under the
1997 Stock Plan,

F-70

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 13-MANAGEMENT STOCK PLAN (CONTINUED)

and fully vested and exercisable on the grant date under the 2000 Stock Plan.
The following is a summary of stock option transactions under the Stock Plans.

YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1999 2000 2001
----------------------------- ---------------------------- -----------------------------
NUMBER OF WEIGHTED-AVERAGE NUMBER OF WEIGHTED-AVERAGE NUMBER OF WEIGHTED-AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE SHARES EXERCISE PRICE
--------- -------------- --------- -------------- --------- --------------

Options outstanding, beginning of
year............................ 1,740,081 $21.47 3,281,273 $28.46 5,191,899 $28.47
Granted......................... 1,747,750 34.31 2,126,506 27.99 3,448,242 30.03
Exercised....................... (157,007) 14.65 (98,004) 13.18 (557,597) 19.02
Forfeited....................... (49,551) 33.04 (117,876) 32.04 (143,273) 29.91
--------- --------- ---------
Options outstanding, end of year.. 3,281,273 $28.46 5,191,899 $28.47 7,939,271 $29.79
========= ========= =========
Options exercisable, end of year.. 1,266,976 $20.01 2,135,228 $25.90 3,009,555 $29.53
========= ========= =========

The weighted-average fair value of options granted was $9.77 during
1999, $10.21 during 2000, and $10.38 during 2001.

The following table summarizes information about stock options
outstanding.

OPTIONS OUTSTANDING AT DECEMBER 31, 2001 OPTIONS EXERCISABLE AT
----------------------------------------------------------- DECEMBER 31, 2001
WEIGHTED-AVERAGE -----------------------------------
RANGE OF NUMBER REMAINING WEIGHTED-AVERAGE NUMBER WEIGHTED-AVERAGE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICE EXERCISABLE EXERCISE PRICE
---------------- ----------- ---------------- ---------------- ----------- ----------------

$ 8.92 - 12.83 189,601 2.4 years $10.99 189,601 $10.99
18.29 - 25.00 558,381 4.7 21.55 479,191 21.26
27.56 - 37.96 7,168,289 7.9 30.88 2,325,431 32.65
44.56 - 44.56 23,000 7.9 44.56 15,332 44.56
---------- ---------
7,939,271 3,009,555
========== =========

In 1999, 2000, and 2001, the Company also granted 1,050, 13,500 and
6,000 shares, respectively, of restricted stock to key officers, including
policy-making officers, under the Stock Plan. The awards of restricted stock
vest pro rata on each anniversary of the grant date and become fully vested four
years from the grant date, provided that the employee has completed the
specified continuous service requirement. They vest earlier if the employee
dies, is permanently and totally disabled, or retires under certain grant, age,
and service conditions. Restricted shareholders have the right to vote their
restricted shares and receive dividends.

F-71

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 13-MANAGEMENT STOCK PLAN (CONTINUED)

The following is a summary of restricted stock transactions under the
Stock Plan.

YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------
1999 2000 2001
---------------------------- ---------------------------- -----------------------------
WEIGHTED-AVERAGE WEIGHTED-AVERAGE WEIGHTED-AVERAGE
NUMBER OF GRANT DATE NUMBER OF GRANT DATE NUMBER OF GRANT DATE
SHARES FAIR VALUE SHARES FAIR VALUE SHARES FAIR VALUE
--------- ---------- --------- ---------- --------- ----------

Restricted stock awards
outstanding, beginning of year.. 1,504,302 $14.12 1,496,106 $14.05 1,506,162 $14.11
Granted......................... 1,050 32.88 13,500 25.00 6,000 37.10
Cancelled....................... (9,246) 27.60 (3,444) 31.66 (636) 37.47
--------- ------ --------- ------ --------- ------
Restricted stock awards
outstanding, end of year........ 1,496,106 $14.05 1,506,162 $14.11 1,511,526 $14.19
========= ====== ========= ====== ========= ======
Restricted stock awards vested, and
of year......................... 1,290,900 $11.84 1,408,696 $13.00 1,469,354 $13.66
========= ====== ========= ====== ========= ======

At December 31, 1999, 2000 and 2001, 989,811, 8,969,424 and 5,659,091
shares, respectively, were available for future grants as either stock options
or restricted stock under the Stock Plan.

The Company follows the intrinsic value based method in accounting for
its employee stock-based compensation plan. Accordingly, no compensation cost
has been recognized for its stock option grants. Had compensation cost for the
Company's stock-based plan been determined based on the fair value at the grant
dates for awards under that plan consistent with the method of SFAS No. 123,
"Accounting for Stock-Based Compensation", the Company's net income and net
income per share would have decreased to the pro forma amounts indicated in the
following table.

YEARS ENDED DECEMBER 31,
-----------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 2000 2001
- -------------------------------------------------------------- -------- -------- --------

Net income As reported $441,731 $439,900 $481,428
Pro forma 435,766 429,730 464,750
Net income per share-basic As reported $ 2.65 $ 2.72 $ 3.05
Pro forma 2.62 2.66 2.94
Net income per share-diluted As reported $ 2.64 $ 2.72 $ 3.04
Pro forma 2.61 2.65 2.93

The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted-average
assumptions used for grants made in 1999, 2000 and 2001; risk-free interest
rates of 5.2 percent in 1999, 6.4 percent in 2000, and 4.9 percent in 2001;
expected volatility of 30 percent in 1999, 44 percent in 2000, and 45 percent in
2001; expected lives of 5 years for 1999, 2000, and 2001; and expected dividend
yields of 2.2 percent in 1999, 3.5 percent in 2000, and 3.4 percent in 2001.

Effective January 1, 1997, the Company established a Performance Share
Plan. Eligible participants may earn performance share awards to be redeemed in
cash three years after the date of grant. Performance shares are linked to
shareholder value in two ways: (1) the market price of the Company's

F-72

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 13-MANAGEMENT STOCK PLAN (CONTINUED)

common stock, and (2) return on equity, a performance measure closely linked to
value creation. Eligible participants generally receive grants of performance
shares annually. The total number of performance shares granted under the plan
cannot exceed 600,000. The Company granted 22,000 shares in 1999, 31,500 shares
in 2000, and 68,000 shares in 2001. No performance shares were forfeited in
either 1999 or in 2000. In 2001, 9,000 performance shares were forfeited. The
value of a performance share is equal to the market price of the Company's
common stock. All cancelled or forfeited performance shares become available for
future grants.

NOTE 14-FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale. All of the fair values presented
below are as of their respective period ends and have been made under this
definition of fair value unless otherwise disclosed.

It is management's belief that the fair values presented below are
reasonable based on the valuation techniques and data available to the Company
as of December 31, 2000 and 2001, as more fully described below. It should be
noted that the operations of the Company are managed on a going concern basis
and not on a liquidation basis. As a result, the ultimate value realized for the
financial instruments presented could be substantially different when actually
recognized over time through the normal course of operations. Additionally, a
substantial portion of an institution's inherent value is its capitalization and
franchise value. Neither of these components has been given consideration in the
presentation of fair values that follow.

F-73

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 14-FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The table below presents the carrying value and fair value of the
specified assets and liabilities held by the Company.

DECEMBER 31,
----------------------------------------------------------------
2000 2001
----------------------------- -----------------------------
CARRYING FAIR CARRYING FAIR
(DOLLARS IN THOUSANDS) VALUE VALUE VALUE VALUE
- ------------------------------------------------------------ ----------- ----------- ----------- -----------

ASSETS
Cash and cash equivalents................................. $ 3,322,979 $ 3,322,979 $ 3,664,954 $ 3,664,954
Trading account assets.................................... 339,695 339,695 229,697 229,697
Securities available for sale:
Securities pledged as collateral.......................... 593,686 593,686 137,922 137,922
Held in portfolio......................................... 3,533,984 3,533,984 5,661,160 5,661,160
Securities held to maturity............................... 23,529 23,302 - -
Loans, net of allowance for credit losses (1)............. 24,269,956 24,475,952 23,392,279 23,774,330
LIABILITIES
Deposits:
Noninterest bearing....................................... 11,240,493 11,240,493 12,718,858 12,718,858
Interest bearing.......................................... 16,042,690 16,042,718 15,837,341 15,869,729
----------- ----------- ----------- -----------
Total deposits............................................ 27,283,183 27,283,211 28,556,199 28,588,587
Borrowed funds............................................ 3,022,907 3,019,884 1,949,874 1,967,333
Medium and long-term debt................................. 200,000 200,000 400,000 398,051
UnionBanCal Corporation-obligated mandatorily redeemable
preferred securities of subsidiary grantor trust.......... 350,000 317,100 363,928 348,600
___________
<FN>
(1) Excludes lease financing.
</FN>

The Company is also a party to financial instruments that are not
reflected on the balance sheet but represent obligations of the Company in the
normal course of business. For information regarding the fair value of
derivatives and off-balance sheet financial instruments, see Note 15.

The following methods and assumptions were used to estimate fair value
of each class of financial instruments for which it is practicable to estimate
that value.

CASH AND CASH EQUIVALENTS: The book value of cash and cash equivalents
is considered a reasonable estimate of fair value.

TRADING ACCOUNT ASSETS: Trading account assets are short term in nature
and valued at market based on quoted market prices or dealer quotes. If a quoted
market price is not available, the recorded amounts are estimated using quoted
market prices for similar securities. Thus, carrying value is considered a
reasonable estimate of fair value for these financial instruments.

SECURITIES: The fair value of securities is based on quoted market
prices or dealer quotes. If a quoted market price is not available, fair value
is estimated using quoted market prices for similar securities. Securities
available for sale are carried at their aggregate fair value, while securities
held to maturity are carried at amortized cost.

F-74

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 14-FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

LOANS: The fair value for performing fixed and non-reference rate loans
was estimated by discounting the future cash flows using the current rates at
which similar loans would be made to borrowers with similar credit ratings and
for similar remaining maturities and, where available, discount rates were based
on current market rates.

Loans that are on nonaccrual status were not included in the loan
valuation methods discussed previously. The fair value of these assets was
estimated assuming these loans were sold at their carrying value less their
impairment allowance.

The fair value of performing mortgage loans was based on quoted market
prices for loans with similar credit and interest rate risk characteristics.

The fair value of credit lines is assumed to approximate their book
value.

NONINTEREST BEARING DEPOSITS: The fair value of noninterest bearing
deposits is the amount payable on demand at the reporting date. The fair value
of the demand deposit intangible has not been estimated.

INTEREST BEARING DEPOSITS: The fair value of savings accounts and
certain money market accounts is the amount payable on demand at the reporting
date. The fair value of fixed maturity certificates of deposit was estimated
using rates currently being offered on certificates with similar maturities.

BORROWED FUNDS: The book values of federal funds purchased and
securities sold under repurchase agreements and other short-term borrowed funds
are assumed to approximate their fair value due to their limited duration
characteristics. The fair value for commercial paper and term federal funds
purchased was estimated using market quotes.

MEDIUM AND LONG-TERM DEBT: The fair value of the fixed-rate senior
notes was estimated using market quotes. The book values for variable-rate
subordinated capital notes are assumed to approximate fair market value.

TRUST PREFERRED SECURITIES: The fair value of fixed-rate trust
preferred securities was estimated using market quotes.

NOTE 15- DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE
SHEET RISK

The Company is a party to certain derivative and other financial
instruments that are used for trading activities of the Company, to meet the
needs of customers, and to change the impact on the Company's operating results
due to market fluctuations in currency or interest rates.

Credit risk is defined as the possibility that a loss may occur from
the failure of another party to perform in accordance with the terms of the
contract, which exceeds the value of the existing collateral, if any. The
Company utilizes master netting agreements in order to reduce its exposure to
credit risk. Master netting agreements mitigate credit risk by permitting the
offset of amounts due from and to individual counterparties in the event of
default. Market risk is the possibility that future changes in market conditions
may make the financial instrument less valuable.

F-75

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 15-DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE
SHEET RISK (CONTINUED)

TRADING ACTIVITIES IN DERIVATIVE INSTRUMENTS

Derivatives instruments used for trading purposes are carried at fair
value. The following table reflects the Company's positions relating to trading
activities in derivative instruments. Trading activities include both activities
for the Company's own account and for customers. At December 31, 2000 and 2001,
the majority of the Company's derivative transactions for customers were
essentially offset by contracts with other counterparties.

The following is a summary of derivative instruments held or written
for trading purposes.

DECEMBER 31,
-------------------------------------------------------------------------------------------
2000 2001
------------------------------------------ -------------------------------------------
UNREALIZED UNREALIZED ESTIMATED UNREALIZED UNREALIZED ESTIMATED
(DOLLARS IN THOUSANDS) GAINS LOSSES FAIR VALUE GAINS LOSSES FAIR VALUE
- -------------------------------- ---------- ---------- ---------- ---------- ---------- ----------

HELD OR WRITTEN FOR TRADING
PURPOSES AND CUSTOMER
ACCOMMODATIONS
Foreign exchange forward
contracts:
Commitments to purchase....... $ 7,273 $ (62,018) $(54,745) $ 2,521 $(28,955) $(26,434)
Commitments to sell........... 66,610 (8,587) 58,023 33,476 (2,071) 31,405
Foreign exchange OTC options:
Options purchased............. 102 - 102 - (224) (224)
Options written............... - (102) (102) 224 - 224
Currency swap agreements:
Commitments to pay............ 2,310 - 2,310 5,311 - 5,311
Commitments to receive........ - (2,239) (2,239) - (5,257) (5,257)
Interest rate contracts:
Caps purchased................ 4,261 - 4,261 4,567 - 4,567
Floors purchased.............. 5,789 - 5,789 20,027 - 20,027
Caps written.................. - (4,259) (4,259) - (4,567) (4,567)
Floors written................ - (5,789) (5,789) - (20,027) (20,027)
Swap contracts:
Pay fixed/receive variable 3,025 (50,031) (47,006) 4,843 (91,054) (86,211)
Pay variable/receive fixed 54,671 (2,741) 51,930 96,764 (4,084) 92,680
-------- --------
144,041 167,733
Effect of master netting
agreements.................... (6,469) (48,762)
-------- --------
Total credit exposure........... $137,572 $118,971
======== ========

DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING

On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts. All derivatives, whether designated as
a hedge, or not, are required to be recorded on the balance sheet at fair value.
SFAS No. 133 requires that derivative instruments used to hedge be identified
specifically to assets, liabilities, firm commitments

F-76

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 15-DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE
SHEET RISK (CONTINUED)

or anticipated transactions and be expected to be effective throughout the life
of the hedge. Derivative instruments that do not qualify as either a fair value
or cash flow hedge are valued at fair value and classified as trading account
assets with the resultant gain or loss recognized in current earnings. At
adoption of SFAS No. 133, the Company recognized a loss of $6 million ($4
million, net of tax), which is included in noninterest expense. Additionally,
the adoption of SFAS No. 133 resulted in a cumulative effect of a change in
accounting principle on accumulated other comprehensive income, net of tax, of
$22 million in unrealized gain.

Derivative positions are integral components of the Company's
designated asset and liability management activities. The Company uses interest
rate derivative instruments as part of its management of asset and liability
positions. Derivatives are used to manage interest rate risk relating to
specified groups of assets and liabilities, primarily LIBOR-based commercial
loans and trust preferred securities.

CASH FLOW HEDGES

HEDGING STRATEGIES FOR VARIABLE RATE LOANS AND CERTIFICATES OF DEPOSIT

The Company engages in several types of cash flow hedging strategies
for which the hedged transactions are forecasted future loan interest payments,
and the hedged risk is the variability in those payments due to changes in the
designated benchmark rate, e.g., US dollar LIBOR. In these strategies, the
hedging instruments are matched with groups of variable rate loans such that the
tenor of the variable rate loans and that of the hedging instrument is
identical. Cash flow hedging strategies include the utilization of net purchased
floor, cap, corridor options and interest rate swaps. The maximum length of time
over which the Company is hedging these exposures is 4 years.

The Company uses purchased interest rate floors to hedge the variable
cash flows associated with 1-month LIBOR or 3-month LIBOR indexed loans.
Payments received under the floor contract offset the decline in loan interest
income caused by the relevant LIBOR index falling below the floor's strike rate.

The Company uses interest rate corridors to hedge the variable cash
flows associated with 1-month LIBOR or 3-month LIBOR indexed loans. Net payments
to be received under the floor corridor contracts offset the decline in loan
interest income caused by the relevant LIBOR index falling below the corridor's
upper strike rate, but only to the extent the index falls to the lower strike
rate. The corridor will not provide protection from declines in LIBOR to the
extent it falls below the corridor's lower strike rate.

The Company uses interest rate swaps to hedge the variable cash flows
associated with 1-month LIBOR or 3-month LIBOR indexed loan portfolios. Payments
to be received (or paid) under the swap contracts will offset the fluctuations
in loan interest receipts caused by changes in the relevant LIBOR index. As
such, these instruments hedge all fluctuations in the loans' interest receipts
caused by changes in LIBOR.

The Company uses purchased interest rate caps to hedge the variable
cash flows associated with 3-month LIBOR or 6-month LIBOR indexed negotiable
certificates of deposits (CDs). Net payments to be received under the cap
contract offset the increase in interest payments caused by the relevant LIBOR
index rising above the cap's strike rate.

F-77

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 15-DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE
SHEET RISK (CONTINUED)

Hedging transactions are structured at inception so that the notional
amounts of the hedge are matched with an equal principal amount of loans or CDs,
the index and repricing frequencies of the hedge matches those of the loans or
CDs, and the period in which the designated hedged cash flows occur is equal to
the term of the hedge. As such, most of the ineffectiveness in the hedging
relationship results from the mismatch between the timing of reset dates on the
hedge versus those of the loans or CDs. During 2001, the Company recognized a
net loss of $0.5 million due to ineffectiveness, which is recognized in
noninterest expense. Most of the ineffectiveness related to the portion of the
options that were being excluded from the assessment of hedge effectiveness.

For cash flow hedges, based upon amounts included in accumulated other
comprehensive income at December 31, 2001, the Company expects to recognize a
gross increase of $90.5 million in net interest income during 2002. This amount
could differ from amounts actually realized due to changes in interest rates and
the addition of other hedges subsequent to December 31, 2001.

FAIR VALUE HEDGES

HEDGING STRATEGIES FOR UNIONBANCAL CORPORATION- OBLIGATED MANDATORILY
REDEEMABLE PREFERRED SECURITIES OF SUBSIDIARY GRANTOR TRUSTS (TRUST
PREFERRED SECURITIES)

The Company engages in an interest rate hedging strategy in which an
interest rate swap is associated with a specific interest bearing liability,
UnionBanCal Corporation's Trust Preferred Securities, in order to essentially
convert a portion of the liability from a fixed rate to a floating rate
instrument. This strategy mitigates the changes in fair value of the hedged
liability caused by changes in the designated benchmark interest rate, US dollar
LIBOR.

Fair value hedging transactions are structured at inception so that the
notional amounts of the swap match an associated principal amount of the Trust
Preferred Securities. The interest payment dates, the expiration date, and the
embedded call option of the swap match those of the Trust Preferred Securities.

HEDGING STRATEGIES FOR FOREIGN CURRENCY-DENOMINATED LOANS AND
LIABILITIES

The Company engages in a hedging strategy in which cross-currency swaps
are associated with specific foreign currency-denominated loans or liabilities.
This strategy converts a fixed-rate, foreign-currency denominated loan or
liability to a US dollar, floating rate loan or liability. This strategy
mitigates the impact from changes in fair value associated with fluctuations in
the foreign currency's benchmark interest rate and mitigates the changes in fair
value of hedged loan or liability caused by changes in the exchange rate between
the Bank's functional currency and the currency in which the loan or liability
is denominated.

These fair value hedging transactions are structured at inception so
that the notional amount of the swap is matched with the principal amount of the
loan or liability throughout the hedging period. The interest payment dates and
the expiration date of the swap matches those of the loan or liability.

The ineffectiveness on all fair value hedges in 2001 resulted in a net
gain $0.1 million, which is recognized in noninterest expense.

F-78

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 15-DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE
SHEET RISK (CONTINUED)

OTHER

The Company uses foreign currency forward contracts and currency swaps
as a means of managing foreign exchange rate risk associated with assets and/or
liabilities denominated in foreign currencies. The Company values the forward
contracts and the currency swaps at fair value, while the assets and/or the
liabilities are remeasured at the spot exchange rate, with the resultant gain or
loss recognized in noninterest income.

The following table reflects summary information on our derivative
contracts used to hedge or modify the Company's risk as of December 31, 2000 and
2001.

DECEMBER 31, 2000(2)
------------------------------------------
UNAMORTIZED
PREMIUM
PAID CREDIT ESTIMATED
(DOLLARS IN THOUSANDS) (RECEIVED) RISK(1) FAIR VALUE
- -------------------------------------------------------------- ---------- ---------- ----------

HELD FOR ASSET AND LIABILITY MANAGEMENT PURPOSES
Foreign exchange forward contracts:
Commitments to purchase..................................... $ - $ 2,215 $ 550
Commitments to sell......................................... - 6 (291)
Currency swap agreements:
Commitments to pay.......................................... - - (815)
Interest rate contracts:
Caps purchased.............................................. - -
Floors purchased............................................ 7,945 24,514 16,569
Caps written................................................ - - -
Floors written.............................................. - - (2,117)
Swap contracts:
Pay variable/receive fixed.................................. - 19,653 17,941

________________
<FN>
(1) Credit risk amounts reflect the replacement cost for those contracts
in a gain position in the event of default.

(2) At December 31, 2000, the estimated fair value of derivatives used for
hedging were not reflected on the balance sheet.
</FN>

F-79

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 15-DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE
SHEET RISK (CONTINUED)

DECEMBER 31, 2001
----------------------------------------
UNREALIZED UNREALIZED ESTIMATED
(DOLLARS IN THOUSANDS) GAINS LOSSES FAIR VALUE
- ------------------------------------------------------------- ---------- ---------- ----------

HELD FOR ASSET AND LIABILITY MANAGEMENT PURPOSES
Fair Value Hedges and Hedged Items:
Interest rate swap contracts:
Pay variable/receive fixed................................. $11,632 $ - $ 11,632
Trust preferred securities................................. - (13,928) (13,928)
Currency swap agreements:
Commitments to pay......................................... 2,179 - 2,179
Foreign currency loan...................................... - (2,184) (2,184)
Cash Flow Hedges:
Interest rate option contracts:
Caps purchased............................................. 3,904 - 3,904
Floors purchased........................................... 59,296 - 59,296
Floors written............................................. - (14,987) (14,987)
Interest rate swap contracts:
Pay variable/receive fixed................................. 62,210 (5,350) 56,860
Other Hedges:
Foreign exchange forward contracts
Commitments to purchase.................................... 195 (1,728) (1,533)
Commitments to sell........................................ 126 (84) 42

OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Commitments to extend credit are legally binding agreements to lend to
a customer provided there are no violations of any condition established in the
contract. Commitments have fixed expiration dates or other termination clauses
and may require payment of a fee or maintenance of compensatory balances. Such
fees are deferred and, upon partial or full exercise of the commitment,
amortized over the life of the loan or, if exercise is deemed remote, amortized
over the commitment period. Since many of the commitments are expected to expire
without being drawn upon, the contractual amounts do not necessarily represent
future cash requirements. With respect to commitments to extend credit and
letters of credit, the Company's exposure to credit risk in the event of
nonperformance by customers is represented by the contractual amount of those
instruments.

Standby letters of credit are provided to customers to assure their
performance to a third party, generally in the production of goods and services
or under contractual commitments in the financial markets. Commercial letters of
credit are issued to customers to facilitate foreign or domestic trade
transactions. The Company charges fees for the issuance of standby and
commercial letters of credit. The majority of these types of commitments have
terms of one year or less and any fees charged are recognized as noninterest
income. The credit risk involved in issuing letters of credit is essentially the
same as that involved in extending loan facilities to customers and is
represented by the contractual amount of those instruments. When deemed
necessary, the Company holds appropriate collateral supporting those
commitments.

The Company uses the same credit underwriting policies in granting or
accepting such commitments or contingent obligations as it does for on-balance
sheet instruments, by evaluating customers' credit worthiness. The amount of
collateral obtained, if deemed necessary by the Company upon extension of

F-80

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 15-DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS WITH OFF-BALANCE
SHEET RISK (CONTINUED)

credit, is based on management's evaluation of the customer. The nature of the
collateral varies but may include deposits held in financial institutions,
marketable securities, accounts receivable, inventory, property and equipment,
and real estate. The Company also provides for probable losses from either
commitments to extend credit or standby letters of credit as a component of its
evaluation in determining the adequacy of its allowance for credit losses and
resulting level of provision charged against current period earnings.

The Company's pricing of these financial instruments is based on the
credit quality and other covenants or requirements. Management believes that the
current fees assessed on these off-balance sheet items represent market rates
that would be charged for similar agreements. Based on this belief, the Company
feels that the carrying amounts are reasonable estimates of the fair value of
these financial instruments. At December 31, 2000 and 2001, fair value
represents management's estimate of the unamortized fee income associated with
these instruments. The following is a summary of other financial instruments
with off-balance sheet risk.

DECEMBER 31,
-----------------------------------------------------
2000 2001
----------------------- ------------------------
CONTRACTUAL FAIR CONTRACTUAL FAIR
(DOLLARS IN THOUSANDS) AMOUNTS VALUE AMOUNTS VALUE
- ---------------------------------------- ----------- ------- ----------- -------

Commitments to extend credit............ $15,330,751 $54,942 $13,038,761 $50,813
Standby letters of credit............... 2,742,788 7,960 2,410,535 8,239
Other letters of credit................. 272,076 - 271,083 -

The Company conducts securities lending transactions for institutional
customers as a fully disclosed agent, and, at times, indemnifies its customers
against counterparty default. All lending transactions are collateralized,
primarily by cash. The amount of securities lent with indemnification was $1,218
million and $1,513 million at December 31, 2000 and 2001, respectively. The
market value of the associated collateral was $1,247 million and $1,552 million
at December 31, 2000 and 2001, respectively.

NOTE 16- RESTRICTIONS ON CASH AND DUE FROM BANKS, SECURITIES, LOANS AND
DIVIDENDS

Federal Reserve Board regulations require the Bank to maintain reserve
balances based on the types and amounts of deposits received. Average reserve
balances were approximately $201million and $240 million for the years ended
December 31, 2000 and 2001, respectively.

As of December 31, 2000 and 2001, securities carried at $1.8 billion
and $1.5 billion and loans of $6.2 billion and $6.5 billion, respectively, were
pledged as collateral for borrowings, to secure public and trust department
deposits, and for repurchase agreements as required by contract or law.

The Federal Reserve Act restricts the extension of credit by the Bank
to BTM and affiliates and to the Company and its non-bank subsidiaries and
requires that such loans be secured by certain types of collateral. At December
31, 2001, $122.8 million remained outstanding on ten Bankers Commercial
Corporation notes payable to the Bank. The respective notes were fully
collateralized with equipment leases pledged by Bankers Commercial Corporation.

F-81

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 16- RESTRICTIONS ON CASH AND DUE FROM BANKS, SECURITIES, LOANS AND
DIVIDENDS (CONTINUED)

The payment of dividends by the Bank to the Company is subject to the
approval of the Office of the Comptroller of the Currency (OCC) if the total of
all dividends declared in any calendar year exceeds certain calculated amounts.
The payment of dividends is also limited by minimum capital requirements imposed
on national banks by the OCC. At December 31, 2001, the Bank could have declared
dividends aggregating $684 million without prior regulatory approval.

NOTE 17-REGULATORY CAPITAL REQUIREMENTS

The Company and the Bank are subject to various regulatory capital
requirements administered by the federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary, actions by regulators that, if undertaken, could have
a direct material effect on the Company's Consolidated Financial Statements.
Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Company and the Bank must meet specific capital
guidelines that involve quantitative measures of the Company's and Bank's
assets, liabilities, and certain off-balance sheet items as calculated under
regulatory accounting practices. The capital amounts and the Bank's prompt
corrective action classification are also subject to qualitative judgments by
the regulators about components, risk weightings and other factors. Prompt
corrective action provisions are not applicable to Bank Holding Companies.

Quantitative measures established by regulation to ensure capital
adequacy require the Company and the Bank to maintain minimum amounts and ratios
(set forth in the table below) of total and Tier 1 capital (as defined in the
regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as
defined) to quarterly average assets (as defined). Management believes, as of
December 31, 2000 and 2001, that the Company and the Bank met all capital
adequacy requirements to which they are subject.

On February 19, 1999, the Company issued $350 million of trust
preferred securities, which qualify as Tier 1 capital. See Note 11 for a
complete description of these securities.

As of December 31, 2000 and 2001, the most recent notification from the
OCC categorized the Bank as "well-capitalized" under the regulatory framework
for prompt corrective action. To be categorized as "well-capitalized", the Bank
must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage
ratios as set forth in the following table. There are no conditions or events
since that notification that management believes have changed the Bank's
category.

F-82

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 17-REGULATORY CAPITAL REQUIREMENTS (CONTINUED)

The Company's and the Bank's capital amounts and ratios are presented
in the following tables

FOR CAPITAL
ACTUAL ADEQUACY PURPOSES
-------------------- -------------------
(DOLLARS IN THOUSANDS) AMOUNT RATIO AMOUNT RATIO
- ------------------------------------------------------------- ---------- ------ ---------- ------

CAPITAL RATIOS FOR THE COMPANY:
As of December 31, 2000:
Total capital (to risk-weighted assets)...................... $4,091,391 12.07% > $2,712,032 8.0%
-
Tier 1 capital (to risk-weighted assets)..................... 3,471,289 10.24 > 1,356,016 4.0
-
Tier 1 capital (to quarterly average assets)(1).............. 3,471,289 10.19 > 1,363,033 4.0
-
As of December 31, 2001:
Total capital (to risk-weighted assets)...................... $4,260,043 13.35% > $2,552,515 8.0%
-
Tier 1 capital (to risk-weighted assets)..................... 3,661,231 11.47 > 1,276,258 4.0
-
Tier 1 capital (to quarterly average assets)(1).............. 3,661,231 10.53 > 1,390,408 4.0
-
___________
<FN>
(1) Excludes certain intangible assets.
</FN>

TO BE WELL CAPITALIZED
FOR CAPITAL UNDER PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
--------------------- -------------------- --------------------
(DOLLARS IN THOUSANDS) AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
- -------------------------------------------------- ----------- ----- ---------- ----- ----------- -----

CAPITAL RATIOS FOR THE BANK:
As of December 31, 2000:
Total capital (to risk-weighted assets)........... $3,670,660 11.01% > $2,667,340 > 8.0% > $3,334,175 > 10.0%
- - - -
Tier 1 capital (to risk-weighted assets).......... 3,157,516 9.47 > 1,333,670 > 4.0 > 2,000,505 > 6.0
- - - -
Tier 1 capital (to quarterly average assets)(1)... 3,157,516 9.24 > 1,366,949 > 4.0 > 1,708,686 > 5.0
- - - -
As of December 31, 2001:
Total capital (to risk-weighted assets)........... $3,810,736 12.19% > $2,501,701 > 8.0% > $3,127,127 > 10.0%
- - - -
Tier 1 capital (to risk-weighted assets).......... 3,323,096 10.63 > 1,250,851 > 4.0 > 1,876,276 > 6.0
- - - -
Tier 1 capital (to quarterly average assets)(1)... 3,323,096 9.69 > 1,371,305 > 4.0 > 1,714,131 > 5.0
- - - -
_______________
<FN>
(1) Excludes certain intangible assets.
</FN>

NOTE 18-EARNINGS PER SHARE

Basic EPS is computed by dividing net income after preferred dividends
by the weighted average number of common shares outstanding during the period.
For all periods presented, there were no dividends on preferred stock. Diluted
EPS is computed based on the weighted average number of common shares
outstanding adjusted for common stock equivalents, which include stock options.
The following

F-83

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 18-EARNINGS PER SHARE (CONTINUED)

table presents a reconciliation of basic and diluted EPS for the years ended
December 31, 1999, 2000 and 2001:

DECEMBER 31,
------------------------------------------------------------------------
1999 2000 2001
---------------------- ---------------------- --------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) BASIC DILUTED BASIC DILUTED BASIC DILUTED
- ------------------------------------------------- -------- -------- -------- -------- -------- --------

Net income....................................... $441,731 $441,731 $439,900 $439,900 $481,428 $481,428
Weighted average common shares outstanding....... 166,382 166,382 161,605 161,605 157,845 157,845
Additional shares due to:
Assumed conversion of dilutive stock options... - 767 - 384 - 778
-------- -------- -------- -------- --------- --------
Adjusted weighted average common shares outstanding 166,382 167,149 161,605 161,989 157,845 158,623
======== ======== ======== ======== ========= ========

Net income per share............................. $2.65 $2.64 $2.72 $2.72 $3.05 $3.04
======== ======== ======== ======== ========= ========

Options to purchase 1,500 shares of common stock at $39.25 per share
and options to purchase 23,000 shares of common stock at $44.56 per share were
outstanding but not included in the computation of diluted EPS in 1999. Options
to purchase 4,040,244 shares of common stock with the range from $27.56 to
$44.56 per share were outstanding but not included in the computation of diluted
EPS in 2000. Options to purchase 2,234,080 shares of common stock with the range
from $32.63 to $44.56 per share were outstanding but not included in the
computation of diluted EPS in 2001. These options to purchase shares were not
included in the computation of diluted EPS in each of the years 1999, 2000, and
2001 because they were anti-dilutive.

F-84

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 19-ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following is a summary of the components of accumulated other
comprehensive income (loss):

FOREIGN NET UNREALIZED GAINS (LOSSES) NET UNREALIZED GAINS
CURRENCY TRANSLATION ON SECURITIES AVAILABLE FOR SALE ON CASH FLOW HEDGES
-------------------------------- ------------------------------ -----------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------------------------- ------------------------------ -----------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001 1999 2000 2001 1999 2000 2001
- ---------------------------------- -------- ------- -------- -------- -------- ------- ------ ----- -------

Beginning balance................. $ (9,651) $(8,713) $(11,191) $ 29,109 $(32,548) $41,879 $- $- $ -
Cumulative effect of accounting
change, net of tax.............. - - - - - - - - 22,205
Change during the year............ 938 (2,478) (1,014) (61,657) 74,427 41,392 - - 40,635
-------- -------- -------- -------- -------- ------- ------ ----- -------
Ending balance.................... $ (8,713) $(11,191) $(12,205) $(32,548) $ 41,879 $83,271 $- $- $62,840
======== ======== ======== ======== ======== ======= ====== ===== =======

MINIMUM PENSION ACCUMULATED OTHER
LIABILITY ADJUSTMENT COMPREHENSIVE INCOME (LOSS)
------------------------------ -------------------------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
------------------------------ -------------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001 1999 2000 2001
- --------------------------------------------------- -------- ------ ------ -------- --------- --------

Beginning balance.................................. $(1,748) $(689) $(803) $ 17,710 $(41,950) $ 29,885
Cumulative effect of accounting change, net of tax. - - - - - 22,205
Change during the year............................. 1,059 (114) (170) (59,660) 71,835 80,843
------- ------ ------ -------- -------- --------
Ending balance..................................... $ (689) $(803) $(973) $(41,950) $ 29,885 $132,933
======= ====== ====== ======== ======== ========

NOTE 20-CONTINGENCIES

The Company is subject to various pending and threatened legal actions
that arise in the normal course of business. The Company maintains reserves for
losses from legal actions that are both probable and estimable. In the opinion
of management, the disposition of claims currently pending will not have a
material adverse effect on the Company's financial position or results of
operations.

NOTE 21-TRANSACTIONS WITH AFFILIATES

The Company had, and expects to have in the future, banking
transactions and other transactions in the ordinary course of business with BTM
and with its affiliates. During 1999, 2000 and 2001, such transactions included,
but were not limited to, origination, participation, servicing and remarketing
of loans and leases, purchase and sale of acceptances, interest rate derivatives
and foreign exchange transactions, funds transfers, custodianships, electronic
data processing, investment advice and management, deposits and credit
examination, and trust services. In the opinion of management, such transactions
were made at prevailing rates, terms, and conditions and do not involve more
than the normal risk of collectibility or present other unfavorable features. In
addition, some compensation for services rendered to the Company is paid to the
expatriate officers from BTM, and reimbursed by the Company to BTM under a
service agreement.

F-85

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 22-BUSINESS SEGMENTS

The Company is organized based on the products and services that it
offers and operates in four principal areas:

o The Community Banking and Investment Services Group offers a full
range of banking services, primarily to individuals and small
businesses, delivered primarily through a tri-state network of
branches and ATM's. These services include commercial loans,
mortgages and home equity lines of credit, consumer loans, deposit
services and cash management as well as fiduciary, private
banking, investment and asset management services for individuals
and institutions, and risk management and insurance products for
businesses and individuals.

o The Commercial Financial Services Group primarily provides
tailored credit and cash management services to large corporate
and middle market companies. Services include commercial and
project loans, real estate financing, asset-based financing, trade
finance and letters of credit, lease financing, customized cash
management services and selected capital markets products.

o The International Banking Group provides correspondent banking and
trade-finance products and services to financial institutions, and
extends primarily short-term credit to corporations engaged in
international business. The group's revenue predominately relates
to foreign customers.

o The Global Markets Group manages the Company's wholesale funding
needs, securities portfolio, and interest rate and liquidity
risks. The group also offers a broad range of risk management and
trading products to institutional and business clients of the
Company through the businesses described above.

The information, set forth in the tables on the following pages,
reflects selected income statement items and a selected balance sheet item by
business unit. The information presented does not necessarily represent the
business units' financial condition and results of operations as if they were
independent entities. Unlike financial accounting, there is no authoritative
body of guidance for management accounting equivalent to US GAAP. Consequently,
reported results are not necessarily comparable with those presented by other
companies.

The information in this table is derived from the internal management
reporting system used by management to measure the performance of the segments
and the Company overall. The management reporting system assigns balance sheet
and income statement items to each segment based on internal management
accounting policies. Net interest income is determined by the Company's internal
funds transfer pricing system, which assigns a cost of funds or a credit for
funds to assets or liabilities based on their type, maturity or repricing
characteristics. Noninterest income and expense directly attributable to a
segment are assigned to that business, other than restructuring charges
(credits). Indirect costs, such as overhead, operations, and technology expense,
are allocated to the segments based on studies of billable unit costs for
product or data processing. Under the Company's risk-adjusted return on capital
(RAROC) methodology, credit expense is charged to business segments based upon
expected losses arising from credit risk. In addition, the attribution of
economic capital is related to unexpected losses arising from credit, market and
operational risks.

"Other" is comprised of goodwill amortization, certain parent company
non-bank subsidiaries, the elimination of the fully taxable-equivalent amounts,
the amount of the provision for credit losses (over)/under the RAROC expected
loss for the period, the earnings associated with the unallocated equity capital
and allowance for credit losses, and the residual costs of support groups, as
well as certain nonrecurring

F-86

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 22-BUSINESS SEGMENTS (CONTINUED)

items such as restructuring charges (credits). In addition, it includes two
units, the Credit Management Group, which manages nonperforming assets, and the
Pacific Rim Corporate Group, which offers financial products to Asian-owned
subsidiaries located in the U.S. On an individual basis, none of the items in
"Other" are significant to the Company's business.

COMMUNITY BANKING COMMERCIAL FINANCIAL INTERNATIONAL
AND INVESTMENT SERVICES GROUP SERVICES GROUP BANKING GROUP
-------------------------------- ---------------------------- --------------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------------------------- ---------------------------- --------------------------
1999 2000 2001 1999 2000 2001 1999 2000 2001
--------- --------- --------- -------- -------- -------- ------- -------- -------

RESULTS OF OPERATIONS (DOLLARS IN
THOUSANDS):
Net interest income............... $697,113 $729,807 $694,715 $596,082 $743,346 $675,898 $43,824 $34,971 $39,479
Noninterest income................ 370,917 412,197 432,009 133,994 173,141 158,462 56,201 60,114 59,022
--------- --------- --------- -------- -------- -------- ------- -------- -------
Total revenue..................... 1,068,030 1,142,004 1,126,724 730,076 916,487 834,360 100,025 95,085 98,501
Noninterest expense].............. 760,163 722,013 749,851 284,680 303,211 316,164 52,275 54,299 57,364
Credit expense (income)........... 53,410 48,582 41,555 98,916 120,874 149,713 13,948 7,008 4,424
--------- --------- --------- -------- -------- -------- ------- -------- -------
Income (loss) before income tax
expense (benefit)............... 254,457 371,409 335,318 346,480 492,402 368,483 33,802 33,778 36,713
Income tax expense (benefit)...... 98,375 142,064 128,259 127,175 176,053 123,495 12,927 12,920 14,043
--------- --------- --------- -------- -------- -------- ------- -------- -------
Net income........................ $156,082 $229,345 $207,059 $219,305 $316,349 $244,988 $20,875 $20,858 $22,670
========= ========= ========= ======== ======== ======== ======= ======== =======

Total assets (DOLLARS IN MILLIONS): $9,148 $9,441 $10,337 $17,420 $18,260 $16,376 $1,555 $1,568 $1,365
========= ========= ========= ======== ======== ======== ======= ======== =======

GLOBAL UNIONBANCAL
MARKETS GROUP OTHER CORPORATION
------------------------- ----------------------------- ----------------------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
------------------------- ----------------------------- ----------------------------------
1999 2000 2001 1999 2000 2001 1999 2000 2001
------- ------- ------- -------- --------- -------- ---------- ---------- ----------

RESULTS OF OPERATIONS (DOLLARS
IN THOUSANDS):
Net interest income............... $60,884 $21,186 $47,793 $17,930 $55,130 $66,157 $1,415,833 $1,584,440 $1,524,042
Noninterest income................ 15,954 (7,083) 19,633 9,693 8,811 47,278 586,759 647,180 716,404
------- ------- ------- -------- --------- -------- ---------- ---------- ----------
Total revenue..................... 76,838 14,103 67,426 27,623 63,941 113,435 2,002,592 2,231,620 2,240,446
Noninterest expense].............. 20,826 15,757 24,064 164,029 34,905 92,731 1,281,973 1,130,185 1,240,174
Credit expense (income)........... - - 200 (101,274) 263,536 89,108 65,000 440,000 285,000
------- ------- ------- -------- --------- -------- ---------- ---------- ----------
Income (loss) before income tax
expense (benefit)............... 56,012 (1,654) 43,162 (35,132) (234,500) (68,404) 655,619 661,435 715,272
Income tax expense (benefit)...... 21,517 (633) 16,510 (46,106) (108,869) (48,463) 213,888 221,535 233,844
------- ------- ------- -------- --------- -------- ---------- ---------- ----------
Net income........................ $34,495 $(1,021) $26,652 $10,974 $(125,631) $(19,941) $441,731 $439,900 $481,428
======= ======= ======= ======== ========= ======== ========== ========== ==========

Total assets (DOLLARS IN MILLIONS): $3,776 $4,662 $6,983 $1,786 $1,231 $978 $33,685 $35,162 $36,039
======= ======= ======= ======== ========= ======== ========== ========== ==========
____________
<FN>
(1) "Other" includes a 1999 restructuring charge of $85.0 million ($55.2
million, net of tax) and 2000 restructuring credits of $19.0 million
($11.8 million, net of taxes).
</FN>

F-87

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 23-CONDENSED UNIONBANCAL CORPORATION UNCONSOLIDATED FINANCIAL STATEMENTS

CONDENSED BALANCE SHEETS

DECEMBER 31,
--------------------------
(DOLLARS IN THOUSANDS) 2000 2001
- ------------------------------------------------------------------------ ---------- ----------

ASSETS
Cash and cash equivalents............................................. $ 126,371 $ 435,513
Investment in and advances to subsidiaries............................ 3,778,355 3,999,509
Loans................................................................. 4,074 3,556
Other assets.......................................................... 10,311 25,960
---------- ----------
Total assets.......................................................... $3,919,111 $4,464,538
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Commercial paper...................................................... $ 99,969 $ 99,086
Other liabilities..................................................... 46,752 44,457
Medium and long-term debt............................................. 200,000 400,000
Junior subordinated debt payable to subsidiary grantor trust.......... 360,825 374,753
---------- ----------
Total liabilities..................................................... 707,546 918,296
Shareholders' equity.................................................. 3,211,565 3,546,242
---------- ----------
Total liabilities and shareholders' equity............................ $3,919,111 $4,464,538
========== ==========

F-88

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 23-CONDENSED UNIONBANCAL CORPORATION UNCONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED STATEMENTS OF INCOME

INCOME:
Dividends from bank subsidiary............................................. $227,099 $283,471 $379,110
Dividends from nonbank subsidiaries........................................ - 10,000 7,500
Interest income on advances to subsidiaries and deposits in bank........... 15,120 18,850 17,700
Other income............................................................... 1,292 458 882
-------- -------- --------
Total income ............................................................ 243,511 312,779 405,192
-------- -------- --------
EXPENSE:
Interest expense........................................................... 41,736 47,172 35,890
Other expense, net......................................................... 3,203 3,313 4,683
-------- -------- --------
Total expense.............................................................. 44,939 50,485 40,573
-------- -------- --------
Income before income taxes and equity in undistributed net income
of subsidiaries........................................................... 198,572 262,294 364,619
Provision for credit losses................................................ - (25) 6
Income tax benefit......................................................... (11,266) (11,935) (8,409)
-------- -------- --------
Income before equity in undistributed net income of subsidiaries........... 209,838 274,204 373,034
Equity in undistributed net income of subsidiaries:
Bank subsidiary............................................................ 208,699 138,105 100,361
Nonbank subsidiaries....................................................... 23,194 27,591 8,033
-------- -------- --------
NET INCOME................................................................... $441,731 $439,900 $481,428
======== ======== ========

F-89

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 23-CONDENSED UNIONBANCAL CORPORATION UNCONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,
-----------------------------------------
(DOLLARS IN THOUSANDS) 1999 2000 2001
- ---------------------- --------- --------- --------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................................... $ 441,731 $ 439,900 $481,428
Adjustments to reconcile net income to net cash provided by operating
activities:
Equity in undistributed net income of subsidiaries.......................... (231,893) (165,696) (108,394)
Provision for credit losses................................................. - 25 (6)
Other, net.................................................................. 839 7,953 11,357
--------- --------- --------
Net cash provided by operating activities................................. 210,677 282,182 384,385
--------- --------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Advances to subsidiaries....................................................... (79,370) (43,704) (23,967)
Repayment of advances to subsidiaries.......................................... 8,766 11,903 16,965
--------- --------- --------
Net cash used by investing activities........................................ (70,604) (31,801) (7,002)
--------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in short term borrowings............................... (1,973) 1,984 (883)
Proceeds from issuance of medium-term debt..................................... - - 200,000
Proceeds from issuance of junior subordinated debt payable to subsidiary
grantor trust................................................................ 360,825 - -
Payments of cash dividends..................................................... (127,119) (162,575) (158,406)
Repurchase of common stock..................................................... (328,662) (130,642) (107,629)
Other, net..................................................................... 51 52 (1,323)
--------- --------- --------
Net cash used by financing activities........................................ (96,878) (291,181) (68,241)
--------- --------- --------
Net increase (decrease) in cash and due from banks............................... 43,195 (40,800) 309,142
Cash and due from banks at beginning of year..................................... 123,976 167,171 126,371
--------- --------- --------
Cash and due from banks at end of year........................................... $ 167,171 $ 126,371 $435,513
========= ========= ========
Cash Paid (Received) During the Year for:
Interest....................................................................... $ 35,828 $ 44,327 $ 33,910
Income taxes................................................................... 137 26,704 (271)

F-90

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999, 2000 AND 2001

NOTE 24-SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Unaudited quarterly results are summarized as follows:

2000 QUARTERS ENDED
----------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
- ------------------------------------------------------------ -------- ------- ------------ -----------

Interest income............................................. $597,816 $626,383 $640,481 $636,400
Interest expense............................................ 212,294 230,091 236,496 237,759
-------- -------- -------- --------
Net interest income......................................... 385,522 396,292 403,985 398,641
Provision for credit losses................................. 40,000 70,000 80,000 250,000
Noninterest income.......................................... 152,010 173,070 168,928 153,172
Noninterest expense......................................... 256,038 282,319 291,378 300,450
-------- -------- -------- --------
Income before income taxes.................................. 241,494 217,043 201,535 1,363
Income tax expense (benefit)................................ 83,023 75,628 69,959 (7,075)
-------- -------- -------- --------
Net income.................................................. $158,471 $141,415 $131,576 $ 8,438
======== ======== ======== ========
Net income per common share-basic........................... $ 0.97 $ 0.87 $ 0.82 $ 0.05
======== ======== ======== ========
Net income per common share-diluted......................... $ 0.96 $ 0.87 $ 0.82 $ 0.05
======== ======== ======== ========
Dividends per share(1)...................................... $ 0.25 $ 0.25 $ 0.25 $ 0.25
======== ======== ======== ========

2001 QUARTERS ENDED
----------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
- --------------------------------------------- -------- -------- ------------ -----------

Interest income............................................. $608,692 $563,121 $536,001 $487,497
Interest expense............................................ 221,431 184,398 157,910 107,530
-------- -------- -------- --------
Net interest income......................................... 387,261 378,723 378,091 379,967
Provision for credit losses................................. 100,000 65,000 50,000 70,000
Noninterest income.......................................... 180,807 168,391 173,405 193,801
Noninterest expense......................................... 307,485 307,452 317,042 308,195
-------- -------- -------- --------
Income before income taxes.................................. 160,583 174,662 184,454 195,573
Income tax expense.......................................... 53,296 57,512 59,325 63,711
-------- -------- -------- --------
Net income.................................................. $107,287 $117,150 $125,129 $131,862
======== ======== ======== ========
Net income per common share-basic........................... $ 0.68 $ 0.74 $ 0.79 $ 0.84
======== ======== ======== ========
Net income per common share-diluted......................... $ 0.67 $ 0.74 $ 0.79 $ 0.84
======== ======== ======== ========
Dividends per share(1)...................................... $ 0.25 $ 0.25 $ 0.25 $ 0.25
======== ======== ======== ========
_______________
<FN>
(1) Dividends per share are based on the Company's common stock outstanding
as of the declaration date.
</FN>

F-91

UNIONBANCAL CORPORATION AND SUBSIDIARIES
MANAGEMENT STATEMENT

The management of UnionBanCal Corporation is responsible for the
preparation, integrity, and fair presentation of its published financial
statements and all other information presented in this annual report. The
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (US GAAP) and, as such,
include amounts based on informed judgments and estimates made by management.

We maintain a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that transactions are
executed in accordance with management's authorization and recorded properly to
permit the preparation of financial statements in accordance with US GAAP.
Management recognizes that even a highly effective internal control system has
inherent risks, including the possibility of human error and the circumvention
or overriding of controls, and that the effectiveness of an internal control
system can change with circumstances. However, management believes that the
internal control system provides reasonable assurance that errors or
irregularities that could be material to the financial statements would be
prevented or detected on a timely basis and corrected through the normal course
of business. As of December 31, 2001, management believes that the internal
controls are in place and operating effectively.

The Audit Committee of the Board of Directors is comprised entirely of
outside directors who are independent of our management; it includes members
with banking or related financial management expertise and who are not large
customers of Union Bank of California, N.A. The Audit Committee has access to
outside counsel. The Audit Committee is responsible for recommending to the
Board of Directors the selection of independent auditors. It meets periodically
with management, the independent auditors, and the internal auditors to ensure
that they are carrying out their responsibilities. The Audit Committee is also
responsible for performing an oversight role by reviewing and monitoring our
financial, accounting, and auditing procedures in addition to reviewing our
financial reports. The independent auditors and internal auditors have full and
free access to the Audit Committee, with or without the presence of management,
to discuss the adequacy of internal controls for financial reporting and any
other matters which they believe should be brought to the attention of the Audit
Committee.

The financial statements have been audited by Deloitte & Touche LLP,
independent auditors, who were given unrestricted access to all financial
records and related data, including minutes of all meetings of shareholders, the
Board of Directors and committees of the Board. Management believes that all
representations made to the independent auditors during their audit were valid
and appropriate. The independent auditors' report is presented on the following
page.

/s/NORIMICHI KANARI
_____________________________________
Norimichi Kanari
PRESIDENT AND CHIEF EXECUTIVE OFFICER

/s/TAKAHARU SAEGUSA
_____________________________________
Takaharu Saegusa
DEPUTY CHAIRMAN OF THE BOARD

/s/DAVID I. MATSON
_____________________________________
David I. Matson
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER

/s/DAVID A. ANDERSON
_____________________________________
David A. Anerson
SENIOR VICE PRESIDENT AND CONTROLLER

F-92

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Directors of
UnionBanCal Corporation:

We have audited the accompanying consolidated balance sheets of
UnionBanCal Corporation and subsidiaries as of December 31, 2000 and 2001, and
the related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 2001. These
financial statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of UnionBanCal Corporation and
subsidiaries as of December 31, 2000 and 2001, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States of America.

/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP

San Francisco, California
January 16, 2002

F-93

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, UnionBanCal Corporation has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

UNIONBANCAL CORPORATION
(Registrant)

By: /s/NORIMICHI KANARI
_____________________________________
Norimichi Kanari
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(Principal Executive Officer)

By: /s/DAVID I. MATSON
____________________________________
David I. Matson
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(Principal Financial Officer)

By: /s/DAVID A. ANDERSON
_____________________________________
David A. Anderson
SENIOR VICE PRESIDENT AND CONTROLLER
(Principal Accounting Officer)

Date: March 13, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
UnionBanCal Corporation and in the capacities and on the date indicated below.

SIGNATURE TITLE
--------- -----

_________________________________ Director
David R. Andrews

*
_________________________________ Director
L. Dale Crandall

*
_________________________________ Director
Richard D. Farman

II-1

SIGNATURE TITLE
--------- -----

*
_________________________________ Director
Stanley F. Farrar

*
_________________________________ Director
Richard C. Hartnack

*
_________________________________ Director
Kaoru Hayama

*
_________________________________ Director
Norimichi Kanari

_________________________________ Director
Satori Kishi

*
_________________________________ Director
Monica C. Lazano

*
_________________________________ Director
Mary S. Metz

*
_________________________________ Director
Raymond E. Miles

*
_________________________________ Director
J. Fernando Niebla

_________________________________ Director
Charles R. Rinehart

*
_________________________________ Director
Carl W. Roberston

*
_________________________________ Director
Takaharu Saegusa

*
_________________________________ Director
Robert M. Walker

II-2

SIGNATURE TITLE
--------- -----

_________________________________ Director
Kenji Yoshizawa

*By: /s/JOHN H. MCGUCKIN, JR.
_______________________________
John H. McGuckin, Jr.
ATTORNEY-IN-FACT

Dated: February 27, 2001

II-3