________________________________________________________________________________

                                  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

                                       OR

             [ ] 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

________________________________________________________________________________


<PAGE>


                                      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


<PAGE>


                                     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


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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.


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         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


                                       4

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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


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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.


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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.


                                       7


<PAGE>


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.


                                       8

<PAGE>


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.


                                       9

<PAGE>


         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.


                                       10

<PAGE>


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.













                                       11

<PAGE>

(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.


                                       12

<PAGE>

<TABLE>
<CAPTION>

                                              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
---------------------------------------------   -----------      -----------      -----------       -----------     -----------
<S>                                             <C>              <C>              <C>               <C>             <C>
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>
</TABLE>

                                      F-1

<PAGE>


         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.,  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.

         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.

         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

<PAGE>


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

<PAGE>


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.

<TABLE>
<CAPTION>

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

<S>                                                                       <C>             <C>            <C>

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>
</TABLE>

         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

<PAGE>


         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

<PAGE>


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

<TABLE>
<CAPTION>

                                             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
                                   ---------- ---------- ----------   --------  --------    --------   -------   -------   -------
<S>                                  <C>        <C>        <C>        <C>       <C>         <C>

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

<CAPTION>

                                                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
                                     -------   -------  -------   --------   --------   -------- ----------  ---------- -----------
<S>                                  <C>       <C>      <C>        <C>        <C>       <C>      <C>         <C>        <C>
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>
</TABLE>


         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


<PAGE>

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

<PAGE>


         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

<PAGE>

              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

<PAGE>


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

<PAGE>


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

<PAGE>


         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


<PAGE>

<TABLE>
<CAPTION>

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)
-------------------------------------
<S>                                       <C>               <C>               <C>        <C>              <C>              <C>
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
                                                            ==========                                    ==========

<CAPTION>

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


                                      F-13


<PAGE>


         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

<PAGE>


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.

<TABLE>
<CAPTION>

                                                                             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
----------------------                             --------     --------      --------    ---------       ----------      ----------
<S>                                                <C>          <C>           <C>          <C>            <C>             <C>
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>
</TABLE>

<TABLE>
<CAPTION>

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
---------------------------------------    --------     --------      --------     -------     -------        -------     -------
<S>                                        <C>          <C>           <C>          <C>             <C>        <C>             <C>
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>
</TABLE>


                                      F-15

<PAGE>


         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

<PAGE>

<TABLE>
<CAPTION>

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
-----------------------------------------   ----------   ----------  ----------      ---------   -------         -------- -------
<S>                                         <C>          <C>         <C>             <C>             <C>         <C>           <C>

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>
</TABLE>

         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

<PAGE>


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

<PAGE>


         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.

<TABLE>
<CAPTION>

                                                                             DECEMBER 31,
                                          ----------------------------------------------------------------------------------
(DOLLARS IN MILLIONS)                          1997             1998             1999             2000             2001
----------------------------------------  --------------   --------------   --------------   --------------   --------------
<S>                                       <C>       <C>    <C>       <C>    <C>       <C>    <C>       <C>    <C>       <C>
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%
                                          =======          =======          =======          =======          =======
</TABLE>

         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

<PAGE>


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

<PAGE>


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.

<TABLE>
<CAPTION>

                                                              PUBLIC        CORPORATIONS
                                             FINANCIAL        SECTOR         AND OTHER            TOTAL
(DOLLARS IN MILLIONS)                      INSTITUTIONS      ENTITIES        BORROWERS         OUTSTANDINGS
--------------------------------------     ------------      --------       ------------       ------------
<S>                                            <C>             <C>              <C>                <C>
December 31, 1999
  Japan...............................         $ 82            $-               $339               $421
  Korea...............................          422             -                 53                475
December 31, 2000
  Korea...............................         $507            $-               $ 46               $553
December 31, 2001
  Korea...............................         $514            $-                 $-               $514
</TABLE>


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

<PAGE>


         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.

<TABLE>
<CAPTION>

                                                                                       DECEMBER 31,
                                                              -------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                                1997                 1998                   1999
------------------------------------------------------        -----------------     ------------------     ----------------
<S>                                                           <C>         <C>       <C>           <C>      <C>         <C>
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%
                                                              ========              ========               ========

<CAPTION>
                                                                                                   DECEMBER 31,
                                                                                    ---------------------------------------
(DOLLARS IN THOUSANDS)                                                                     2000                  2001
-------------------------------------------------------------------------------     ------------------     ----------------
<S>                                                                                 <C>           <C>      <C>         <C>
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%
                                                                                    ========               ========
</TABLE>



                                      F-22

<PAGE>


 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

<PAGE>


         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

<PAGE>


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

<PAGE>


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.

<TABLE>
<CAPTION>

                                             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
----------------------------------    --------------   -----   -----  --------------   -----  -----  --------------   -----   -----
<S>                                          <C>       <C>     <C>           <C>       <C>    <C>            <C>       <C>    <C>
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>
</TABLE>

         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

<PAGE>


         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

<PAGE>

         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.

<TABLE>
<CAPTION>

                                                                                         YEARS ENDED DECEMBER 31,
                                                                    --------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                                1997         1998          1999          2000          2001
--------------------------------------------------------------      --------     --------      --------      --------     --------
<S>                                                                 <C>          <C>           <C>           <C>          <C>
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>
</TABLE>

         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

<PAGE>


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.
<TABLE>
<CAPTION>


                                                                                        DECEMBER 31,
                                                                  --------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                              1997         1998          1999          2000          2001
--------------------------------------------------------------    --------     --------      --------      --------     --------
<S>                                                               <C>          <C>           <C>           <C>          <C>
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
</TABLE>

         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

<PAGE>


         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.

<TABLE>
<CAPTION>

                                                                                         DECEMBER 31,
                                                                    ------------------------------------------------------
(DOLLARS IN THOUSANDS)                                                1997        1998       1999        2000       2001
-----------------------------------------------------------------   -------     -------     -------     ------     -------
<S>                                                                 <C>         <C>         <C>         <C>        <C>
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
                                                                    =======     =======     =======     ======     =======
</TABLE>

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.

<TABLE>
<CAPTION>

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
----------------------        ----------  ---------- ---------- ---------- -----------   ---------- ---------- ---------- ----------
<S>                             <C>         <C>          <C>            <C>  <C>          <C>          <C>            <C>  <C>
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
                              ==========  ==========    =======     ======  ==========   ==========   ========    ======= ==========
</TABLE>




                                      F-30


<PAGE>



<TABLE>
<CAPTION>

SECURITIES HELD TO MATURITY

                                                                                 DECEMBER 31,
                                                      --------------------------------------------------------------------
                                                         1999                                  2000
                                                      ----------     -----------------------------------------------------
                                                                                       GROSS           GROSS
                                                      AMORTIZED      AMORTIZED       UNREALIZED      UNREALIZED     FAIR
(DOLLARS IN THOUSANDS)                                  COST           COST            GAINS           LOSSES       VALUE
---------------------------------------------------   ---------      ---------       ----------      ----------   --------
<S>                                                    <C>                 <C>              <C>             <C>         <C>
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
                                                      ========       ========         ========        ========    ========
</TABLE>


         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.


<TABLE>
<CAPTION>

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)
----------------------           --------  --------  --------- --------  --------- --------  ---------- -------- --------- --------
<S>                              <C>         <C>    <C>          <C>    <C>         <C>     <C>          <C>    <C>         <C>
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>
</TABLE>




                                      F-31

<PAGE>
<TABLE>
<CAPTION>

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
--------------------------------------------------------------     ----------      ----------      ----------       -----------
<S>                                                                <C>             <C>             <C>              <C>
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
                                                                                                                    ===========

</TABLE>


CERTIFICATES OF DEPOSIT OF $100,000 AND OVER

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

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
(DOLLARS IN THOUSANDS)                                                                   2001
---------------------------------------------------------------------------         ------------
<S>                                                                                   <C>
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
                                                                                    ============
</TABLE>





         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

<PAGE>


BORROWED FUNDS

         The following table presents information on our borrowed funds.

<TABLE>
<CAPTION>


                                                                                                      DECEMBER 31,
                                                                                         -------------------------------------------
(DOLLARS IN THOUSANDS)                                                                      1999            2000            2001
---------------------------------------------------------------------------------        -----------      ----------      ----------
<S>                                                                                       <C>             <C>             <C>
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%
</TABLE>


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

<PAGE>

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.

<TABLE>
<CAPTION>

                                                                     DECEMBER 31,
                                 ---------------------------------------------------------------------------------
                                                                                                                        MINIMUM
                                                                                                                      REGULATORY
(DOLLARS IN THOUSANDS)              1997             1998              1999              2000              2001       REQUIREMENT
-------------------------        -----------      -----------       -----------       -----------      -----------    -----------
<S>                              <C>              <C>               <C>               <C>              <C>                   <C>
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>
</TABLE>

         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

<PAGE>

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

<PAGE>


         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

<PAGE>


         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.

<TABLE>
<CAPTION>

                                                               DECEMBER 31,
                                           -------------------------------------------------
                                                    2000                        2001
                                           -----------------------    ----------------------
                                           AVERAGE   HIGH     LOW     AVERAGE    HIGH    LOW
(DOLLARS IN THOUSANDS)                       VAR      VAR     VAR       VAR       VAR    VAR
------------------------------------       -------   -----   -----    -------    ----    ---
<S>                                          <C>     <C>     <C>         <C>     <C>     <C>
Foreign exchange....................         $355    $850    $109        $205    $552    $70
Securities..........................          156     280      63         292     556    108
</TABLE>


         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

<PAGE>

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.

<TABLE>
<CAPTION>

                                                                                  DECEMBER 31, 2001
                                                     ----------------------------------------------------------------------------
                                                     LESS THAN      ONE THROUGH        FOUR TO        AFTER FIVE
(DOLLARS IN THOUSANDS)                               ONE YEAR       THREE YEARS      FIVE YEARS         YEARS            TOTAL
-----------------------------------------------      -----------    -----------      ----------       ------------    -----------
<S>                                                  <C>            <C>              <C>              <C>             <C>
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
                                                                                                                      ===========
</TABLE>


                                      F-38



<PAGE>


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

<PAGE>


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

<PAGE>


 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
<PAGE>


         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

<PAGE>


 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

<PAGE>


                    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


<PAGE>

<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME


                                                                                                 YEARS ENDED DECEMBER 31,
                                                                                      ------------------------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                                            1999            2000            2001
---------------------------------------------------------------------------------     ----------      ----------      ----------
<S>                                                                                   <C>             <C>             <C>
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
                                                                                      ==========      ==========      ==========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      F-45


<PAGE>

<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                                                                                            DECEMBER 31,
                                                                                                 -----------------------------
(DOLLARS IN THOUSANDS)                                                                               2000             2001
-----------------------------------------------------------------------------------------        -----------       -----------
<S>                                                                                              <C>               <C>
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
                                                                                                 ===========       ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      F-46

<PAGE>

<TABLE>
<CAPTION>

                    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
---------------------------------------------    -----------------------    -----------------------    -----------------------
<S>                                              <C>            <C>         <C>            <C>         <C>            <C>
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>
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-47

<PAGE>

<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                              YEARS ENDED DECEMBER 31,
                                                                                -------------------------------------------------
(DOLLARS IN THOUSANDS)                                                              1999               2000               2001
-------------------------------------------------------------------------       -----------        -----------        -----------
<S>                                                                             <C>                <C>                <C>
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                  -
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-48

<PAGE>


                    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

<PAGE>



                    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

<PAGE>


                    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

<PAGE>



                    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

<PAGE>



                    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

<PAGE>



                    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

<PAGE>



                    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

<PAGE>



                    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

<PAGE>


                    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.

<TABLE>
<CAPTION>

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
---------------------------------  ----------  ----------  ----------  ----------   ----------  ----------  ----------  ----------
<S>                                <C>         <C>         <C>         <C>          <C>         <C>         <C>         <C>
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
                                   ==========  ==========  ==========  ==========   ==========  ==========  ==========  ==========
</TABLE>



<TABLE>
<CAPTION>

SECURITIES HELD TO MATURITY
                                                                                              DECEMBER 31,
                                                                       ------------------------------------------------------
                                                                                                  2000
                                                                       ------------------------------------------------------
                                                                                         GROSS            GROSS
                                                                       AMORTIZED       UNREALIZED      UNREALIZED      FAIR
(DOLLARS IN THOUSANDS)                                                    COST           GAINS           LOSSES        VALUE
-------------------------------------------------------------------    ---------       ----------      ----------     -------
<S>                                                                    <C>             <C>             <C>            <C>
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
                                                                       =========       ==========      ==========     =======
</TABLE>

         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
<PAGE>


                    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

<PAGE>


                    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:

<TABLE>
<CAPTION>

                                                                          DECEMBER 31,
                                                                -----------------------------
(DOLLARS IN THOUSANDS)                                              2000             2001
--------------------------------------------------------        -----------       -----------
<S>                                                             <C>               <C>
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
                                                                ===========       ===========
</TABLE>

         Changes in the allowance for credit losses were as follows:
<TABLE>
<CAPTION>

                                                                                      YEARS ENDED DECEMBER 31,
                                                                                -----------------------------------
(DOLLARS IN THOUSANDS)                                                            1999          2000          2001
-------------------------------------------------------------------------       --------      --------     --------
<S>                                                                             <C>           <C>          <C>
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
                                                                                ========      ========     ========
</TABLE>

         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

<PAGE>


                    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.

<TABLE>
<CAPTION>

                                                                                             DECEMBER 31,
                                                                                -----------------------------------
(DOLLARS IN THOUSANDS)                                                            1999          2000          2001
-------------------------------------------------------------------------       --------      --------     --------
<S>                                                                             <C>           <C>          <C>
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>
</TABLE>

 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

<PAGE>


                    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:

<TABLE>
<CAPTION>

                                                                        DECEMBER 31,
                              ------------------------------------------------------------------------------------------------------
                                                    2000                                                  2001
                              -----------------------------------------      ----------------------------------------
                                              ACCUMULATED                                     ACCUMULATED
                                            DEPRECIATION AND   NET BOOK                    DEPRECIATION AND  NET BOOK
(DOLLARS IN THOUSANDS)          COST          AMORTIZATION       VALUE          COST         AMORTIZATION      VALUE
----------------------        ----------      ------------     --------      ----------      ------------    --------
<S>                           <C>                <C>           <C>           <C>                <C>          <C>
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
                              ==========         ========      ========      ==========         ========     ========
</TABLE>

         Rental and depreciation and amortization expenses were as follows:

<TABLE>
<CAPTION>

                                                                        YEARS ENDED DECEMBER 31,
                                                                    -------------------------------
(DOLLARS IN THOUSANDS)                                               1999        2000        2001
----------------------                                              -------    --------    --------
<S>                                                                 <C>        <C>         <C>
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
                                                                    =======    ========    ========
</TABLE>

         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


<PAGE>


                    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

<PAGE>


                    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.

<TABLE>
<CAPTION>


                                                               PENSION BENEFITS              OTHER BENEFITS
                                                            YEARS ENDED DECEMBER 31,     YEARS ENDED DECEMBER 31,
                                                             ---------------------        ----------------------
(DOLLARS IN THOUSANDS)                                         2000          2001          2000           2001
------------------------------------------------------       --------     --------        -------       --------
<S>                                                          <C>          <C>             <C>           <C>
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)
                                                             ========     ========        =======       ========
</TABLE>

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

<TABLE>
<CAPTION>

                                                                                    PENSION BENEFITS         OTHER BENEFITS
                                                                                 ---------------------   ---------------------
                                                                                      YEARS ENDED              YEARS ENDED
                                                                                      DECEMBER 31,            DECEMBER 31,
                                                                                 ---------------------   ---------------------
                                                                                 1999     2000    2001    1999    2000    2001
                                                                                 ----     ----    ----    ----    ----    ----
<S>                                                                              <C>      <C>     <C>     <C>     <C>     <C>
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
</TABLE>



                                      F-63


<PAGE>


                    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.


<TABLE>
<CAPTION>

                                                          PENSION BENEFITS                     OTHER BENEFITS
                                                      YEARS ENDED DECEMBER 31,             YEARS ENDED DECEMBER 31,
                                                  --------------------------------      -----------------------------
(DOLLARS IN THOUSANDS)                             1999          2000       2001         1999        2000        2001
-------------------------------------------       -------      -------     -------      ------      ------     ------
<S>                                               <C>          <C>         <C>          <C>         <C>        <C>
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
                                                  =======      =======     =======     =======     =======    =======
</TABLE>

         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.

<TABLE>
<CAPTION>

                                                                        1-PERCENTAGE-         1-PERCENTAGE-
(DOLLARS IN THOUSANDS)                                                 POINT INCREASE        POINT DECREASE
-------------------------------------------------------------------    --------------        --------------
<S>                                                                          <C>                 <C>
Effect on total of service and interest cost components............          $ 1,496             $ (1,246)
Effect on postretirement benefit obligation........................           14,064              (11,960)
</TABLE>



                                      F-64

<PAGE>


                    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



<PAGE>


                    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:

<TABLE>
<CAPTION>

                                                                     YEARS ENDED DECEMBER 31,
                                                                -----------------------------------
(DOLLARS IN THOUSANDS)                                            1999          2000          2001
---------------------------------------------------------       --------      --------     --------
<S>                                                             <C>           <C>          <C>
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
                                                                ========      ========     ========
</TABLE>

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

<TABLE>
<CAPTION>

                                                                              DECEMBER 31,
                                                                        ---------------------
(DOLLARS IN THOUSANDS)                                                    2000         2001
----------------------------------------------------------------        --------     --------
<S>                                                                     <C>          <C>
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
                                                                        ========     ========
</TABLE>





                                      F-66


<PAGE>


                    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:

<TABLE>
<CAPTION>

                                                                         YEARS ENDED
                                                                         DECEMBER 31,
                                                                    ---------------------
                                                                    1999    2000     2001
                                                                    ----    ----     ----
<S>                                                                   <C>     <C>     <C>
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%
                                                                      ==      ==      ==
</TABLE>

         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



<PAGE>


                    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:

<TABLE>
<CAPTION>

                                                                                                 DECEMBER 31,
                                                                                        ----------------------------
(DOLLARS IN THOUSANDS)                                                                     2000              2001
-------------------------------------------------------------------------------         ----------        ----------
<S>                                                                                     <C>               <C>
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%
</TABLE>

         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.

<TABLE>
<CAPTION>

                                                                                               DECEMBER 31,
                                                                                         ---------------------
(DOLLARS IN THOUSANDS)                                                                     2000          2001
----------------------------------------------------------------------------------       --------     --------
<S>                                                                                      <C>          <C>
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
                                                                                         ========     ========

</TABLE>






                                      F-68

<PAGE>


                    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

<PAGE>


                    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



<PAGE>


                    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.

<TABLE>
<CAPTION>

                                                                        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
                                       ---------     --------------   ---------    --------------   ---------     --------------
<S>                                    <C>                <C>         <C>                <C>        <C>                <C>
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
                                       =========                      =========                     =========
</TABLE>

         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.

<TABLE>
<CAPTION>

                                    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
    ----------------       -----------        ----------------        ----------------  -----------        ----------------
      <S>                   <C>                      <C>                  <C>            <C>                    <C>
      $ 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
                           ==========                                                    =========
</TABLE>

         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



<PAGE>



                    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.

<TABLE>
<CAPTION>

                                                                       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
                                        ---------       ----------    ---------       ----------    ---------         ----------
<S>                                     <C>               <C>         <C>              <C>          <C>                 <C>
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
                                        =========         ======      =========         ======      =========           ======
</TABLE>

         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.

<TABLE>
<CAPTION>

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

</TABLE>

         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



<PAGE>


                    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


<PAGE>


                    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.

<TABLE>
<CAPTION>

                                                                                           DECEMBER 31,
                                                                    ----------------------------------------------------------------
                                                                                 2000                              2001
                                                                    -----------------------------      -----------------------------
                                                                      CARRYING            FAIR           CARRYING           FAIR
(DOLLARS IN THOUSANDS)                                                 VALUE             VALUE            VALUE             VALUE
------------------------------------------------------------        -----------       -----------      -----------       -----------
<S>                                                                 <C>               <C>              <C>               <C>
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>
</TABLE>

         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




<PAGE>


                    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



<PAGE>


                    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.

<TABLE>
<CAPTION>

                                                                          DECEMBER 31,
                                   -------------------------------------------------------------------------------------------
                                                      2000                                             2001
                                   ------------------------------------------      -------------------------------------------
                                   UNREALIZED      UNREALIZED       ESTIMATED       UNREALIZED      UNREALIZED       ESTIMATED
(DOLLARS IN THOUSANDS)               GAINS           LOSSES        FAIR VALUE         GAINS           LOSSES        FAIR VALUE
--------------------------------   ----------      ----------      ----------       ----------      ----------      ----------
<S>                                  <C>            <C>              <C>              <C>             <C>              <C>
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
                                     ========                                         ========
</TABLE>

         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



<PAGE>


                    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



<PAGE>


                    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



<PAGE>


                    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.

<TABLE>
<CAPTION>

                                                                              DECEMBER 31, 2000(2)
                                                                 ------------------------------------------
                                                                 UNAMORTIZED
                                                                   PREMIUM
                                                                    PAID            CREDIT        ESTIMATED
(DOLLARS IN THOUSANDS)                                           (RECEIVED)        RISK(1)       FAIR VALUE
--------------------------------------------------------------   ----------      ----------      ----------
<S>                                                                <C>           <C>             <C>
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>
</TABLE>





                                      F-79



<PAGE>


                    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)

<TABLE>
<CAPTION>


                                                                                  DECEMBER 31, 2001
                                                                      ----------------------------------------
                                                                      UNREALIZED      UNREALIZED     ESTIMATED
(DOLLARS IN THOUSANDS)                                                   GAINS          LOSSES      FAIR VALUE
-------------------------------------------------------------         ----------      ----------    ----------
<S>                                                                    <C>            <C>             <C>
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
</TABLE>


         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

<PAGE>


                    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.

<TABLE>
<CAPTION>

                                                              DECEMBER 31,
                                             -----------------------------------------------------
                                                      2000                          2001
                                             -----------------------      ------------------------
                                              CONTRACTUAL      FAIR        CONTRACTUAL       FAIR
(DOLLARS IN THOUSANDS)                         AMOUNTS        VALUE         AMOUNTS         VALUE
----------------------------------------     -----------     -------      -----------      -------
<S>                                          <C>             <C>          <C>              <C>
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            -
</TABLE>


         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

<PAGE>


                    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

<PAGE>


                    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

<TABLE>
<CAPTION>

                                                                                                     FOR CAPITAL
                                                                              ACTUAL              ADEQUACY PURPOSES
                                                                     --------------------        -------------------
(DOLLARS IN THOUSANDS)                                                 AMOUNT       RATIO         AMOUNT       RATIO
-------------------------------------------------------------        ----------    ------        ----------   ------
<S>                                                                  <C>           <C>      <C>   <C>             <C>
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>
</TABLE>

<TABLE>
<CAPTION>
                                                                                                         TO BE WELL CAPITALIZED
                                                                                   FOR CAPITAL          UNDER PROMPT CORRECTIVE
                                                             ACTUAL              ADEQUACY PURPOSES          ACTION PROVISIONS
                                                    ---------------------     --------------------      --------------------
(DOLLARS IN THOUSANDS)                                 AMOUNT       RATIO       AMOUNT       RATIO        AMOUNT       RATIO
--------------------------------------------------  -----------     -----     ----------     -----      -----------    -----
<S>                                                  <C>            <C>       <C>             <C>        <C>            <C>
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>
</TABLE>

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

<PAGE>


                    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:

<TABLE>
<CAPTION>

                                                                                      DECEMBER 31,
                                                     ------------------------------------------------------------------------
                                                           1999                     2000                     2001
                                                     ----------------------   ----------------------    --------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)         BASIC         DILUTED     BASIC        DILUTED      BASIC       DILUTED
-------------------------------------------------    --------      --------   --------      --------    --------     --------
<S>                                                  <C>           <C>        <C>           <C>         <C>          <C>
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
                                                     ========      ========   ========      ========    =========    ========
</TABLE>

         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

<PAGE>


                    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):

<TABLE>
<CAPTION>

                                                 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
----------------------------------  --------     -------    --------     --------   --------    -------   ------  -----   -------
<S>                                 <C>          <C>        <C>          <C>        <C>         <C>          <C>     <C>  <C>
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
                                    ========    ========    ========     ========   ========    =======   ======  =====   =======

<CAPTION>

                                                           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
---------------------------------------------------   --------     ------     ------      --------       ---------     --------
<S>                                                   <C>          <C>        <C>         <C>            <C>           <C>
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
                                                      =======      ======     ======      ========       ========      ========
</TABLE>

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


<PAGE>


                    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

<PAGE>


                    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.

<TABLE>
<CAPTION>

                                             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
                                     ---------   ---------  ---------   --------  --------  --------   -------  --------  -------
<S>                                  <C>         <C>        <C>         <C>       <C>       <C>        <C>      <C>       <C>
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
                                     =========   =========  =========   ========  ========  ========   =======  ========  =======
<CAPTION>


                                              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
                                     -------  -------  -------   --------  ---------  --------   ----------  ----------  ----------
<S>                                  <C>      <C>      <C>        <C>        <C>       <C>       <C>         <C>         <C>
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>
</TABLE>



                                      F-87


<PAGE>


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

NOTE 23-CONDENSED UNIONBANCAL CORPORATION UNCONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

CONDENSED BALANCE SHEETS


                                                                                         DECEMBER 31,
                                                                                --------------------------
(DOLLARS IN THOUSANDS)                                                             2000            2001
------------------------------------------------------------------------        ----------      ----------
<S>                                                                             <C>             <C>
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
                                                                                ==========      ==========

</TABLE>










                                      F-88

<PAGE>


                    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)

<TABLE>
<CAPTION>

CONDENSED STATEMENTS OF INCOME



                                                                                         YEARS ENDED DECEMBER 31,
                                                                                  -----------------------------------
(DOLLARS IN THOUSANDS)                                                               1999         2000          2001
-----------------------------------------------------------------------------     --------      --------     --------
<S>                                                                               <C>           <C>          <C>
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
                                                                                  ========      ========     ========
</TABLE>







                                      F-89

<PAGE>



                    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)


<TABLE>
<CAPTION>

CONDENSED STATEMENTS OF CASH FLOWS


                                                                                              YEARS ENDED DECEMBER 31,
                                                                                     -----------------------------------------
(DOLLARS IN THOUSANDS)                                                                 1999            2000            2001
----------------------                                                               ---------       ---------        --------
<S>                                                                                  <C>             <C>              <C>
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)
</TABLE>








                                      F-90


<PAGE>


                    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:

<TABLE>
<CAPTION>

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

<CAPTION>

                                                                                   2001 QUARTERS ENDED
                                                                  ----------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                     MARCH 31      JUNE 30        SEPTEMBER 30      DECEMBER 31
---------------------------------------------                     --------     --------        ------------      -----------
<S>                                                               <C>          <C>                <C>               <C>
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>
</TABLE>






                                      F-91

<PAGE>


                    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

<PAGE>


                          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

<PAGE>

                                   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


<PAGE>


                     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

<PAGE>

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


       _________________________________                        Director
                  Kenji Yoshizawa





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

Dated:  February 27, 2001















                                      II-3