________________________________________________________________________________

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

                         Commission file number 1-15081

                             UnionBanCal Corporation

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



                              400 California Street
                      San Francisco, California 94104-1302

                  Registrant's telephone number (415) 765-2969

         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
                                              ___     ___

  Number of shares of Common Stock outstanding at October 31, 2002: 150,285,197

________________________________________________________________________________

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS

                                                                          PAGE
                                                                         NUMBER

PART I
FINANCIAL INFORMATION
  Consolidated Financial Highlights                                           2
  Item 1. Financial Statements:
    Condensed Consolidated Statements of Income                               4
    Condensed Consolidated Balance Sheets                                     5
    Condensed Consolidated Statements of Changes
      in Shareholders' Equity                                                 6
    Condensed Consolidated Statements of Cash Flows                           7
    Notes to Condensed Consolidated Financial
      Statements                                                              8
  Item 2. Management's Discussion and Analysis:
    Introduction                                                             18
    Summary                                                                  19
    Business Segments                                                        20
    Net Interest Income                                                      30
    Noninterest Income                                                       33
    Noninterest Expense                                                      35
    Income Tax Expense                                                       37
    Loans                                                                    37
    Cross-Border Outstandings                                                38
    Provision for Credit Losses                                              39
    Allowance for Credit Losses                                              39
    Nonperforming Assets                                                     43
    Loans 90 Days or More Past Due and Still Accruing                        43
    Quantitative and Qualitative Disclosure about Interest
      Rate Risk Management                                                   44
    Liquidity                                                                46
    Regulatory Capital                                                       46
    Certain Business Risk Factors                                            47
    Written Statements Under Section 906 of the Sarbanes-
      Oxley Act of 2002                                                      52
  Item 3. Market Risk                                                        52
  Item 4. Controls and Procedures                                            52
PART II
OTHER INFORMATION
  Item 1. Legal Proceedings                                                  53
  Item 5. Other Information                                                  53
  Item 6. Exhibits and Reports on Form 8-K                                   53
Signatures                                                                   55
Certifications                                                               56

<PAGE>
<TABLE>
<CAPTION>

                         PART I. FINANCIAL INFORMATION
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
                                   (UNAUDITED)

                                                                   AS OF AND FOR THE THREE MONTHS ENDED
                                                                ____________________________________________
                                                                SEPTEMBER 30,       SEPTEMBER 30,    PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                        2001               2002         CHANGE
___________________________________________________________     ______________       _____________   ________
<S>                                                             <C>                 <C>              <C>
RESULTS OF OPERATIONS:
  Net interest income(1)                                        $     378,517       $     392,636      3.73%
  Provision for credit losses                                          50,000              40,000    (20.00)
  Noninterest income                                                  173,405             182,426      5.20
  Noninterest expense                                                 317,042             331,134      4.44
                                                                _____________       _____________
  Income before income taxes(1)                                       184,880             203,928     10.30
  Taxable-equivalent adjustment                                           426                 534     25.35
  Income tax expense                                                   59,325              65,163      9.84
                                                                _____________       _____________
  Net income                                                    $     125,129       $     138,231     10.47%
                                                                =============       =============
PER COMMON SHARE:
  Net income--basic                                             $        0.79       $        0.89     12.66%
  Net income--diluted                                                    0.79                0.88     11.39
  Dividends(2)                                                           0.25                0.28     12.00
  Book value (end of period)                                            22.49               24.22      7.69
  Common shares outstanding (end of period)                       157,181,483         150,220,119     (4.43)
  Weighted average common shares outstanding--basic               157,584,675         154,889,552     (1.71)
  Weighted average common shares outstanding--diluted             159,028,898         156,709,715     (1.46)
BALANCE SHEET (END OF PERIOD):
  Total assets                                                  $  35,238,937       $  37,608,001      6.72%
  Total loans                                                      25,594,289          25,962,159      1.44
  Nonaccrual loans                                                    444,519             395,212    (11.09)
  Nonperforming assets                                                450,246             395,521    (12.15)
  Total deposits                                                   27,065,423          30,588,080     13.02
  Medium and long-term debt                                           199,713             418,369    109.49
  Trust preferred securities                                          369,441             370,286      0.23
  Common equity                                                     3,534,533           3,637,945      2.93
BALANCE SHEET (PERIOD AVERAGE):
  Total assets                                                  $  34,616,940       $  35,803,475      3.43%
  Total loans                                                      25,917,100          25,971,483      0.21
  Earning assets                                                   31,343,059          32,757,523      4.51
  Total deposits                                                   26,391,293          28,455,452      7.82
  Common equity                                                     3,497,664           3,814,927      9.07
FINANCIAL RATIOS:
  Return on average assets(3)                                            1.43%               1.53%
  Return on average common equity(3)                                    14.19               14.38
  Efficiency ratio(4)                                                   57.45               57.58
  Net interest margin(1)                                                 4.81                4.77
  Dividend payout ratio                                                 31.65               31.46
  Tangible equity ratio                                                  9.91                9.38
  Tier 1 risk-based capital ratio                                       11.18               11.14
  Total risk-based capital ratio                                        13.05               12.89
  Leverage ratio                                                        10.50               10.13
  Allowance for credit losses to total loans                             2.46                2.40
  Allowance for credit losses to nonaccrual loans                      141.65              157.66
  Net loans charged off to average total loans(3)                        0.72                0.64
  Nonperforming assets to total loans, distressed
    loans held for sale, and foreclosed assets                           1.76                1.52
  Nonperforming assets to total assets                                   1.28                1.05
<FN>
___________
(1)   Amounts are on a taxable-equivalent basis using the federal statutory
      tax rate of 35 percent.

(2)   Dividends per share reflect dividends declared on UnionBanCal
      Corporation's common stock outstanding as of the declaration date.

(3)   Annualized.

(4)   The efficiency ratio is noninterest expense, excluding foreclosed asset
      expense (income), as a percentage of net interest income
      (taxable-equivalent basis) and noninterest income. Foreclosed asset
      expense (income) was $(0.1) million in the third quarter of 2001, and
      immaterial in the third quarter of 2002.
</FN>
</TABLE>

                                       2

<PAGE>
<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED FINANCIAL HIGHLIGHTS (CONTINUED)
                                   (UNAUDITED)

                                                                   AS OF AND FOR THE THREE MONTHS ENDED
                                                                ____________________________________________
                                                                 SEPTEMBER 30,       SEPTEMBER 30,   PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                       2001               2002           CHANGE
___________________________________________________________     _______________     _____________    _______
<S>                                                             <C>                 <C>              <C>
RESULTS OF OPERATIONS:
  Net interest income(1)                                        $   1,145,713       $   1,159,907      1.24%
  Provision for credit losses                                         215,000             145,000    (32.56)
  Noninterest income                                                  522,603             542,651      3.84
  Noninterest expense                                                 931,979             984,288      5.61
                                                                _____________       _____________
  Income before income taxes(1)                                       521,337             573,270      9.96
  Taxable-equivalent adjustment                                         1,638               1,604     (2.08)
  Income tax expense                                                  170,133             188,716     10.92
                                                                _____________       _____________
  Net income                                                    $     349,566       $     382,950      9.55%
                                                                =============       =============
PER COMMON SHARE:
  Net income--basic                                             $        2.21       $        2.45     10.86%
  Net income--diluted                                                    2.20                2.43     10.45
  Dividends(2)                                                           0.75                0.81      8.00
  Book value (end of period)                                            22.49               24.22      7.69
  Common shares outstanding (end of period)                       157,181,483         150,220,119     (4.43)
  Weighted average common shares outstanding--basic               158,214,813         156,139,173     (1.31)
  Weighted average common shares outstanding--diluted             158,916,432         157,892,168     (0.64)
BALANCE SHEET (END OF PERIOD):
  Total assets                                                  $  35,238,937       $  37,608,001      6.72%
  Total loans                                                      25,594,289          25,962,159      1.44
  Nonaccrual loans                                                    444,519             395,212    (11.09)
  Nonperforming assets                                                450,246             395,521    (12.15)
  Total deposits                                                   27,065,423          30,588,080     13.02
  Medium and long-term debt                                           199,713             418,369    109.49
  Trust preferred securities                                          369,441             370,286      0.23
  Common equity                                                     3,534,533           3,637,945      2.93
BALANCE SHEET (PERIOD AVERAGE):
  Total assets                                                  $  34,545,443       $  35,541,802      2.88%
  Total loans                                                      26,147,872          25,562,452     (2.24)
  Earning assets                                                   31,229,078          32,472,409      3.98
  Total deposits                                                   26,269,050          28,085,461      6.91
  Common equity                                                     3,414,561           3,730,273      9.25
FINANCIAL RATIOS:
  Return on average assets(3)                                            1.35%               1.44%
  Return on average common equity(3)                                    13.69               13.73
  Efficiency ratio(4)                                                   55.86               57.80
  Net interest margin(1)                                                 4.90                4.77
  Dividend payout ratio                                                 33.94               33.06
  Tangible equity ratio                                                  9.91                9.38
  Tier 1 risk-based capital ratio                                       11.18               11.14
  Total risk-based capital ratio                                        13.05               12.89
  Leverage ratio                                                        10.50               10.13
  Allowance for credit losses to total loans                             2.46                2.40
  Allowance for credit losses to nonaccrual loans                      141.65              157.66
  Net loans charged off to average total loans(3)                        1.02                0.83
  Nonperforming assets to total loans, distressed
    loans held for sale, and foreclosed assets                           1.76                1.52
  Nonperforming assets to total assets                                   1.28                1.05
<FN>
___________
(1)   Amounts are on a taxable-equivalent basis using the federal statutory tax
      rate of 35 percent.

(2)   Dividends per share reflect dividends declared on UnionBanCal
      Corporation's common stock outstanding as of the declaration date.

(3)   Annualized.

(4)   The efficiency ratio is noninterest expense, excluding foreclosed asset
      expense (income), as a percentage of net interest income (taxable-
      equivalent basis) and noninterest income. Foreclosed asset expense
      (income) was immaterial for the first nine months of 2001, and $0.1
      million for the first nine months of 2002.
</FN>
</TABLE>

                                       3

<PAGE>


ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                                             FOR THE THREE MONTHS           FOR THE NINE MONTHS
                                                             ENDED SEPTEMBER 30,            ENDED SEPTEMBER 30,
                                                            ______________________     __________________________
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                   2001        2002           2001            2002
______________________________________________________      ___________  ________      __________      __________
<S>                                                        <C>           <C>           <C>             <C>
INTEREST INCOME
  Loans                                                    $455,477      $381,989      $1,478,894      $1,136,359
  Securities                                                 76,852        77,518         215,370         237,098
  Interest bearing deposits in banks                            622           773           2,249           1,898
  Federal funds sold and securities purchased under
    resale agreements                                         1,398         1,467           4,585          10,354
  Trading account assets                                      1,652         1,366           6,716           2,987
                                                           ________      ________      __________      __________
    Total interest income                                   536,001       463,113       1,707,814       1,388,696
                                                           ________      ________      __________      __________
INTEREST EXPENSE
  Domestic deposits                                         105,851        52,049         366,394         167,395
  Foreign deposits                                           15,954         4,727          60,944          17,096
  Federal funds purchased and securities sold under
    repurchase agreements                                    12,265         1,789          48,687           5,134
  Commercial paper                                           11,844         4,488          46,882          12,998
  Medium and long-term debt                                   2,142         2,375           7,873           7,198
  UnionBanCal Corporation--obligated mandatorily
    redeemable preferred securities of subsidiary
    grantor trust                                             4,940         3,921          16,329          11,832
  Other borrowed funds                                        4,914         1,662          16,630           8,740
                                                           ________      ________      __________      __________
    Total interest expense                                  157,910        71,011         563,739         230,393
                                                           ________      ________      __________      __________
NET INTEREST INCOME                                         378,091       392,102       1,144,075       1,158,303
  Provision for credit losses                                50,000        40,000         215,000         145,000
                                                           ________      ________      __________      __________
    Net interest income after provision for
      credit losses                                         328,091       352,102         929,075       1,013,303
                                                           ________      ________      __________      __________
NONINTEREST INCOME
  Service charges on deposit accounts                        62,742        68,629         181,614         204,641
  Trust and investment management fees                       37,965        35,368         116,880         109,680
  Merchant transaction processing fees                       21,315        22,860          60,814          65,982
  International commissions and fees                         18,053        20,131          53,288          57,593
  Brokerage commissions and fees                              8,786         9,183          26,764          28,090
  Merchant banking fees                                       7,742         6,819          26,671          22,845
  Securities gains (losses), net                             (1,699)          550           4,318          (3,313)
  Other                                                      18,501        18,886          52,254          57,133
                                                           ________      ________      __________      __________
    Total noninterest income                                173,405       182,426         522,603         542,651
                                                           ________      ________      __________      __________
NONINTEREST EXPENSE
  Salaries and employee benefits                            171,172       182,275         500,243         547,251
  Net occupancy                                              23,779        27,340          70,375          75,750
  Equipment                                                  16,985        16,343          48,252          48,650
  Merchant transaction processing                            13,324        14,644          39,687          41,993
  Communications                                             13,074        13,186          36,582          39,695
  Professional services                                       9,982        10,350          29,155          30,789
  Data processing                                             8,885         7,944          26,935          24,475
  Foreclosed asset expense (income)                             (60)           18               1             130
  Other                                                      59,901        59,034         180,749         175,555
                                                           ________      ________      __________      __________
    Total noninterest expense                               317,042       331,134         931,979         984,288
                                                           ________      ________      __________      __________
  Income before income taxes                                184,454       203,394         519,699         571,666
  Income tax expense                                         59,325        65,163         170,133         188,716
                                                           ________      ________      __________      __________
NET INCOME                                                 $125,129      $138,231      $  349,566      $  382,950
                                                           ========      ========      ==========      ==========
NET INCOME PER COMMON SHARE--BASIC                         $   0.79      $   0.89      $     2.21      $     2.45
                                                           ========      ========      ==========      ==========
NET INCOME PER COMMON SHARE--DILUTED                       $   0.79      $   0.88      $     2.20      $     2.43
                                                           ========      ========      ==========      ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC           157,585       154,890         158,215         156,139
                                                           ========      ========      ==========      ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED         159,029       156,710         158,916         157,892
                                                           ========      ========      ==========      ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       4


<PAGE>
<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                (UNAUDITED)                            (UNAUDITED)
                                                                               SEPTEMBER 30,       DECEMBER 31,       SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                              2001              2001                 2002
_____________________________________________________________________          ____________       ____________       _____________
<S>                                                                             <C>                <C>                 <C>
ASSETS
Cash and due from banks                                                         $ 2,577,510        $ 2,682,392         $ 2,184,714
Interest bearing deposits in banks                                                   73,394             64,162             139,323
Federal funds sold and securities purchased under resale agreements                 514,600            918,400           1,137,550
                                                                                ___________        ___________         ___________
  Total cash and cash equivalents                                                 3,165,504          3,664,954           3,461,587
Trading account assets                                                              335,617            229,697             383,749
Securities available for sale:
  Securities pledged as collateral                                                  135,355            137,922             132,974
  Held in portfolio                                                               4,719,724          5,661,160           6,137,325
Loans (net of allowance for credit losses: September 30, 2001,                   24,964,606         24,359,521          25,339,081
  $629,683; December 31, 2001, $634,509; September 30, 2002,
  $623,078)
Due from customers on acceptances                                                   188,020            182,440              68,605
Premises and equipment, net                                                         489,176            494,534             492,687
Intangible assets                                                                     2,447             16,176              23,119
Goodwill                                                                             52,772             68,623              93,279
Other assets                                                                      1,185,716          1,223,719           1,475,595
                                                                                ___________        ___________         ___________
  Total assets                                                                  $35,238,937        $36,038,746         $37,608,001
                                                                                ===========        ===========         ===========
LIABILITIES
Domestic deposits:
  Noninterest bearing                                                           $11,256,740        $12,314,150         $14,125,497
  Interest bearing                                                               13,536,139         14,160,113          14,701,824
Foreign deposits:
  Noninterest bearing                                                               342,189            404,708             401,202
  Interest bearing                                                                1,930,355          1,677,228           1,359,557
                                                                                ___________        ___________         ___________
  Total deposits                                                                 27,065,423         28,556,199          30,588,080
Federal funds purchased and securities sold under repurchase
  agreements                                                                      1,286,730            418,814             303,307
Commercial paper                                                                  1,114,527            830,657             880,170
Other borrowed funds                                                                535,976            700,403             218,282
Acceptances outstanding                                                             188,020            182,440              68,605
Other liabilities                                                                   944,574          1,040,406           1,122,957
Medium and long-term debt                                                           199,713            399,657             418,369
UnionBanCal Corporation--obligated mandatorily redeemable
  preferred securities of subsidiary grantor trust                                  369,441            363,928             370,286
                                                                                ___________        ___________         ___________
  Total liabilities                                                              31,704,404         32,492,504          33,970,056
                                                                                ___________        ___________         ___________
Commitments and contingencies

SHAREHOLDERS' EQUITY
Preferred stock:
  Authorized 5,000,000 shares, no shares issued or
    outstanding as of September 30, 2001, December 31, 2001, and
    September 30, 2002                                                                   --                 --                  --
Common stock--no stated value:
  Authorized 300,000,000 shares, issued 157,181,483
    shares as of September 30, 2001, 156,483,511 shares as of
    December 31, 2001, and 150,220,119 shares as of September 30, 2002            1,207,312          1,181,925             907,088
Retained earnings                                                                 2,137,956          2,231,384           2,488,873
Accumulated other comprehensive income                                              189,265            132,933             241,984
                                                                                ___________        ___________         ___________
  Total shareholders' equity                                                      3,534,533          3,546,242           3,637,945
                                                                                ___________        ___________         ___________
  Total liabilities and shareholders' equity                                    $35,238,937        $36,038,746         $37,608,001
                                                                                ===========        ===========         ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       5

<PAGE>

<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                  (UNAUDITED)

                                                                       FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                                __________________________________________________
(DOLLARS IN THOUSANDS)                                                    2001                       2002
___________________________________________________________     ________________________   _______________________
<S>                                                             <C>           <C>          <C>            <C>
COMMON STOCK
  Balance, beginning of period                                  $1,275,587                 $1,181,925
  Dividend reinvestment plan                                            32                         85
  Deferred compensation--restricted stock awards                       196                        255
  Stock options exercised                                            9,363                     72,953
  Stock issued in acquisition of First Western Bank                     --                     23,852
  Common stock repurchased(1)                                      (77,866)                  (371,982)
                                                                __________                 __________
    Balance, end of period                                      $1,207,312                   $907,088
                                                                __________                 __________
RETAINED EARNINGS
  Balance, beginning of period                                  $1,906,093                 $2,231,384
  Net income                                                       349,566    $349,566        382,950     $382,950
  Dividends on common stock(2)                                    (118,593)                  (125,345)
  Deferred compensation--restricted stock awards                       890                       (116)
                                                                __________                 __________
    Balance, end of period                                      $2,137,956                 $2,488,873
                                                                __________                 __________
ACCUMULATED OTHER COMPREHENSIVE INCOME
  Balance, beginning of period                                  $   29,885                 $  132,933
  Cumulative effect of accounting change (SFAS
    No.133),(3) net of tax expense of $13,754 in 2001                           22,205                          --
  Unrealized net gains on cash flow hedges, net of tax
    expense of $45,793 and $61,525 in the first nine months
    of 2001 and 2002, respectively                                              73,928                      99,325
  Less: reclassification adjustment for net gains on
    cash flow hedges included in net income, net of tax expense
    of $10,751 and $31,920 in the first nine months of 2001 and
    2002, respectively                                                         (17,356)                    (51,532)
                                                                              ________                    ________
  Net unrealized gains on cash flow hedges                                      56,572                      47,793
  Unrealized holding gains arising during the period on
    securities available for sale, net of tax expense of $51,996
    and $35,950 in the first nine months of 2001 and 2002,
    respectively                                                                83,941                      58,037
  Less: reclassification adjustment for losses (gains)
    on securities available for sale included in net income, net
    of tax expense (benefit) of $1,652 and $(1,267) in the first
    nine months of 2001 and 2002, respectively                                  (2,666)                      2,046
                                                                              ________                    ________
  Net unrealized gains on securities available for sale                         81,275                      60,083
  Foreign currency translation adjustment, net of tax
    expense (benefit) of $(416) and $728 in the first nine months
    of 2001 and 2002, respectively                                                (672)                      1,175
                                                                              ________                    ________
  Other comprehensive income                                       159,380     159,380        109,051      109,051
                                                                __________    ________     __________     ________
  Total comprehensive income                                                  $508,946                    $492,001
                                                                              ========                    ========
    Balance, end of period                                      $  189,265                 $  241,984
                                                                __________                 __________
      TOTAL SHAREHOLDERS' EQUITY                                $3,534,533                 $3,637,945
                                                                ==========                 ==========
<FN>
___________
(1)   Common stock repurchased includes commission costs.

(2)   Dividends per share were $0.75 and $0.81 for the first nine months of 2001
      and 2002, respectively. Dividends are based on UnionBanCal Corporation's
      shares outstanding as of the declaration date.

(3)   Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
      for Derivative Instruments and Hedging Activities."
</FN>
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       6

<PAGE>
<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUdited)

                                                                                           FOR THE NINE MONTHS
                                                                                           ENDED SEPTEMBER 30,
                                                                                     ___________________________
(DOLLARS IN THOUSANDS)                                                                   2001            2002
________________________________________________________________________________     ___________     ___________
<S>                                                                                  <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                         $   349,566     $   382,950
  Adjustments to reconcile net income to net cash provided by operating
    activities:
    Provision for credit losses                                                          215,000         145,000
    Depreciation, amortization and accretion                                              60,471          62,563
    Provision for deferred income taxes                                                   34,479          42,941
    Loss (gain) on securities available for sale                                          (4,318)          3,313
    Net (increase) decrease in trading account assets                                      4,078        (154,052)
    Other, net of acquisition                                                             81,559          60,776
                                                                                     ___________     ___________
    Total adjustments                                                                    391,269         160,541
                                                                                     ___________     ___________
  Net cash provided by operating activities                                              740,835         543,491
                                                                                     ___________     ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of securities available for sale                                   657,703         183,063
  Proceeds from matured and called securities available for sale                         636,208         856,160
  Purchases of securities available for sale                                          (1,858,667)     (1,425,404)
  Net decrease (increase) in loans, net of acquisition                                   224,002      (1,243,849)
  Net cash received in acquisition                                                            --          64,689
  Purchases of premises and equipment                                                    (70,353)        (55,256)
  Other, net                                                                               2,606           7,153
                                                                                     ___________     ___________
    Net cash used in investing activities                                               (408,501)     (1,613,444)
                                                                                     ___________     ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase (decrease) in deposits, net of acquisition                               (217,760)      1,827,256
  Net decrease in federal funds purchased and securities sold under repurchase
    agreements                                                                          (100,937)       (115,507)
  Net increase (decrease) in commercial paper and other borrowed funds                    15,263        (432,608)
  Common stock repurchased                                                               (77,866)       (371,982)
  Payments of cash dividends                                                            (119,005)       (122,228)
  Stock options exercised                                                                  9,363          72,953
  Other, net                                                                              18,801           1,260
                                                                                     ___________     ___________
    Net cash provided by (used in) financing activities                                 (472,141)        859,144
                                                                                     ___________     ___________
Net decrease in cash and cash equivalents                                               (139,807)       (210,809)
Cash and cash equivalents at beginning of period                                       3,322,979       3,664,954
Effect of exchange rate changes on cash and cash equivalents                             (17,668)          7,442
                                                                                     ___________     ___________
Cash and cash equivalents at end of period                                           $ 3,165,504     $ 3,461,587
                                                                                     ===========     ===========
CASH PAID DURING THE PERIOD FOR:
  Interest                                                                           $   618,076     $   237,723
  Income taxes                                                                            96,274         110,253
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Acquisition of First Western Bank:
    Fair value of assets acquired                                                             --     $   256,276
    Purchase price:
        Cash                                                                                  --         (20,940)
        Stock issued                                                                          --         (23,852)
                                                                                     ___________     ___________
      Liabilities assumed                                                            $        --     $   211,484
                                                                                     ===========     ===========
  Loans transferred to foreclosed assets (OREO) and/or distressed loans held for
    sale                                                                             $     6,611     $       376
  Securities transferred from held to maturity to available for sale at the
    adoption of SFAS No. 133                                                              23,529              --
</TABLE>


See accompanying notes to condensed consolidated financial statements.

                                       7

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

NOTE 1--BASIS OF PRESENTATION AND NATURE OF OPERATIONS

         The   unaudited   condensed   consolidated   financial   statements  of
UnionBanCal  Corporation  and  subsidiaries  (the Company) have been prepared in
accordance with accounting principles generally accepted in the United States of
America (US GAAP) for interim  financial  reporting and the instructions to Form
10-Q and Rule  10-01 of  Regulation  S-X of the  Rules  and  Regulations  of the
Securities  and  Exchange  Commission.  However,  they do not include all of the
disclosures  necessary for annual  financial  statements  in conformity  with US
GAAP. The results of operations for the period ended  September 30, 2002 are not
necessarily  indicative of the operating results  anticipated for the full year.
Accordingly,  these unaudited condensed consolidated financial statements should
be read in  conjunction  with  the  audited  consolidated  financial  statements
included in the Company's  Form 10-K for the year ended  December 31, 2001.  The
preparation  of financial  statements in  conformity  with US GAAP also 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 revenue and
expense  during the  reporting  period.  Actual  results could differ from those
estimates.

         Since November 1999, the Company has announced stock  repurchase  plans
totaling $400 million.  The Company repurchased $35 million, $19 million and $18
million  of common  stock in the  first,  second,  and third  quarters  of 2002,
respectively,  and $22 million,  $25 million, and $31 million of common stock in
the first,  second, and third quarters of 2001,  respectively,  as part of these
repurchase  plans.  As of  September  30,  2002,  $73 million of common stock is
authorized  for  repurchase.  In  addition,  on August  27,  2002,  the  Company
announced  that it purchased  $300 million of its common stock from its majority
owner, The Bank of Tokyo-Mitsubishi (BTM), which is a wholly-owned subsidiary of
Mitsubishi Tokyo Financial Group. At September 30, 2002, BTM owned approximately
65 percent of the outstanding common stock of UnionBanCal Corporation.

         Certain amounts for prior periods have been  reclassified to conform to
current financial statement presentation.

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         ACCOUNTING FOR GOODWILL AND OTHER INTANGIBLE ASSETS

         In June 2001, the Financial  Accounting  Standards  Board (FASB) issued
Statement  of  Financial   Accounting   Standards  (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 of the guidance in Accounting
Principles Board (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.  Goodwill and intangible  assets
acquired in  transactions  completed  after June 30, 2001 are  accounted  for in
accordance with the amortization and nonamortization provisions of SFAS No. 142.
SFAS No.  142  significantly  changes  the  accounting  for  goodwill  and other
intangible  assets  subsequent  to their  initial  recognition.  This  Statement
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

                                       8

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

amounts.  Upon adoption of SFAS No. 142 on January 1, 2002, the  amortization of
existing  goodwill  ceased and the carrying  amount of goodwill was allocated to
the  applicable  reporting  units.  The  allocation  was based on the sources of
previously  recognized  goodwill  as well as the  reporting  units to which  the
related  acquired net assets were assigned.  Management's  expectations of which
reporting  units had benefited  from the synergies of acquired  businesses  were
considered  in the  allocation  process.  The Company  performed a  transitional
impairment test during May 2002,  measured as of the date of adoption.  The fair
market value of the goodwill tested for impairment  exceeded its carrying value;
therefore, no impairment loss was recognized. As of September 30, 2002, goodwill
was $93 million.

         Net income and  earnings  per share for the three and nine months ended
September 30, 2001 were adjusted,  on a pro forma basis, to exclude $3.7 million
in goodwill  amortization  expense (net of taxes of $0.1  million) for the third
quarter of 2001 and $11.1 million in goodwill amortization expense (net of taxes
of $0.4 million) for the nine months ended September 30, 2001 as follows:

<TABLE>
<CAPTION>

                                                                                        FOR THE                    FOR THE
                                                                                  THREE MONTHS ENDED         NINE MONTHS ENDED
                                                                                    SEPTEMBER 30,              SEPTEMBER 30,
                                                                                ______________________     ______________________
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                                     2001          2002          2001         2002
_____________________________________________________________________           ________      ________      ________     ________
<S>                                                                             <C>           <C>           <C>          <C>
NET INCOME:
As reported                                                                     $125,129      $138,231      $349,566     $382,950
Goodwill amortization, net of income tax                                           3,721            --        11,066           --
As adjusted                                                                     $128,850      $138,231      $360,627     $382,950
BASIC EARNINGS PER SHARE:
As reported                                                                     $   0.79      $   0.89      $   2.21     $   2.45
Goodwill amortization                                                               0.02            --          0.07           --
As adjusted                                                                     $   0.81      $   0.89      $   2.28     $   2.45
DILUTED EARNINGS PER SHARE:
As reported                                                                     $   0.79      $   0.88      $   2.20     $   2.43
Goodwill amortization                                                               0.02            --          0.07           --
As adjusted                                                                     $   0.81      $   0.88      $   2.27     $   2.43
</TABLE>


         On May 13, 2002, the Company completed its acquisition of First Western
Bank and recorded  approximately  $23.9 million of goodwill and $10.6 million of
core deposit  intangible.  The core deposit  intangible is being amortized on an
accelerated basis over an estimated life of 12 years.

         ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS

         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

                                       9

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

is effective for fiscal years beginning after June 15, 2002. Management believes
adoption  of this  Statement  will not have a material  impact on the  Company's
financial position or results of operations.

         ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS

         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 was
adopted by the Company on January 1, 2002. The adoption of this Statement had no
material impact on the Company's financial position or results of operations.

         RESCISSION OF SFAS NO. 4, 44, AND 64, AMENDMENT OF SFAS NO.13

         In April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS No. 4,
44, and 64, Amendment of SFAS No. 13, and Technical Corrections." This Statement
rescinds SFAS No. 4, "Reporting Gains and Losses from  Extinguishment  of Debt,"
and an  amendment  of SFAS No.  64,  "Extinguishments  of Debt  Made to  Satisfy
Sinking-Fund   Requirements."   This   Statement  also  rescinds  SFAS  No.  44,
"Accounting for Intangible Assets of Motor Carriers." This Statement amends SFAS
No. 13,  "Accounting  for  Leases," to eliminate  an  inconsistency  between the
required accounting for sale-leaseback  transactions and the required accounting
for certain lease  modifications  that have economic effects that are similar to
sale-leaseback  transactions.  This Statement  requires that capital leases that
are modified so that the resulting lease agreement is classified as an operating
lease be  accounted  for under the  sale-leaseback  provisions  of SFAS No.  98,
"Accounting for Leases." This Statement also amends other existing authoritative
pronouncements  to make technical  corrections,  clarify  meanings,  or describe
their applicability  under changed conditions.  The provisions of this Statement
related  to the  rescission  of SFAS No.  4 shall be  applied  in  fiscal  years
beginning  after May 15, 2002. The provisions of this Statement  related to SFAS
No. 13 are effective for  transactions  occurring  after May 15, 2002. All other
provisions of this Statement are effective for financial statements issued on or
after May 15,  2002,  with early  application  encouraged.  Management  believes
adoption  of this  Statement  will not have a material  impact on the  Company's
financial position or results of operations.

         ACCOUNTING FOR COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This Statement replaces the
accounting and reporting provisions of Emerging Issues Task Force (EITF) Issue
No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." It requires that costs associated with an exit or disposal
activity be recognized when a liability is incurred rather than at the date an
entity commits to an exit plan. This Statement is effective after December 31,
2002. Management

                                       10

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

believes  that adopting this  Statement  will not have a material  impact on the
Company's financial position or results of operations.

         ACCOUNTING FOR ACQUISITIONS OF CERTAIN FINANCIAL INSTITUTIONS

         In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial  Institutions."  This Statement  amended SFAS No. 72,  "Accounting for
Certain  Acquisitions  of  Banking  or  Thrift   Institutions,"  SFAS  No.  144,
"Accounting   for  the  Impairment  or  Disposal  of  Long-Lived   Assets,"  and
Interpretation  No. 9,  "Applying APB Opinion No. 16 and 17, "When a Savings and
Loan Association or a Similar Institution Is Acquired in a Business  Combination
Accounted  for by the  Purchase  Method."  The  requirement  in  paragraph  5 of
Statement 72 to recognize  any excess of the fair value of  liabilities  assumed
over the fair value of tangible and identifiable  intangible  assets acquired as
an unidentifiable  intangible asset no longer applies to acquisitions within the
scope  of  this  Statement.  The  acquisition  of all  or  part  of a  financial
institution  that  meets  the  definition  of a  business  combination  shall be
accounted for by the purchase method in accordance with SFAS No. 141,  "Business
Combinations."  In addition,  this Statement  amends SFAS No. 144, to include in
its  scope  long-term  customer-relationship   intangible  assets  of  financial
institutions such as depositor and  borrower-relationship  intangible assets and
credit cardholder  intangible  assets. As a result,  those intangible assets are
now subject to the impairment test in accordance with the provisions in SFAS No.
144. The  provisions of this  Statement  that relate to the  application  of the
purchase   method  of  accounting   apply  to  all   acquisitions  of  financial
institutions,  except transactions between two or more mutual enterprises.  This
Statement  was  effective  October  1,  2002 and had no  material  impact on the
Company's financial position or results of operations.

NOTE 3--EARNINGS PER 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 are a common
stock  equivalent.  The following table presents a  reconciliation  of basic and
diluted EPS for the three  months and nine months ended  September  30, 2001 and
2002.


                                       11

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                   THREE MONTHS ENDED SEPTEMBER 30,                     NINE MONTHS ENDED SEPTEMBER 30,
                             _________________________________________________   _________________________________________________
                                      2001                       2002                     2001                       2002
                             ______________________     ______________________   ______________________      _____________________
(AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE DATA)         BASIC       DILUTED        BASIC       DILUTED      BASIC       DILUTED         BASIC      DILUTED
__________________________   ________      ________     ________      ________   ________      ________      ________     ________
<S>                          <C>           <C>          <C>           <C>        <C>           <C>           <C>          <C>
Net Income                   $125,129      $125,129     $138,231      $138,231   $349,566      $349,566      $382,950     $382,950
                             ========      ========     ========      ========   ========      ========      ========     ========


Weighted average common
  shares outstanding          157,585       157,585      154,890       154,890    158,215       158,215       156,139      156,139
Additional shares due to:
  Assumed conversion of
    dilutive stock options         --         1,444           --         1,820         --           701            --        1,753
                             ________       _______      _______       _______    _______       _______       _______      _______
Adjusted weighted average
  common shares outstanding   157,585       159,029      154,890       156,710    158,215       158,916       156,139      157,892
                             ========      ========     ========      ========   ========      ========      ========     ========
Net income per share            $0.79         $0.79        $0.89         $0.88      $2.21         $2.20         $2.45        $2.43
                             ========      ========     ========      ========   ========      ========      ========     ========
</TABLE>


NOTE 4--ACCUMULATED OTHER COMPREHENSIVE INCOME

         The following table presents a summary of the components of accumulated
other comprehensive income.

<TABLE>
<CAPTION>
                                                 NET UNREALIZED GAINS ON        NET UNREALIZED GAINS          FOREIGN CURRENCY
                                                    CASH FLOW HEDGES              ON SECURITIES           TRANSLATION ADJUSTMENT
                                                                                AVAILABLE FOR SALE
                                                _________________________      _____________________      ________________________
                                                                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                __________________________________________________________________________________
(DOLLARS IN THOUSANDS)                                2001          2002          2001         2002           2001           2002
______________________________________________      ________      _______      ________     ________      _________      _________
<S>                                                 <C>          <C>           <C>          <C>           <C>            <C>
Beginning balance                                   $    --      $ 62,840      $ 41,879     $ 83,271      $(11,191)      $(12,205)
Cumulative effect of accounting change, net of       22,205            --            --           --             --             --
tax
Change during the period                             56,572        47,793        81,275       60,083          (672)          1,175
                                                    _______      ________      ________     ________      _________      _________
Ending balance                                      $78,777      $110,633      $123,154     $143,354      $(11,863)      $(11,030)
                                                    =======      ========      ========     ========      =========      =========
</TABLE>

<TABLE>
<CAPTION>

                                                                        MINIMUM PENSION        ACCUMULATED OTHER
                                                                     LIABILITY ADJUSTMENT     COMPREHENSIVE INCOME
                                                                     __________________    _______________________
                                                                        FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                                     _____________________________________________
(DOLLARS IN THOUSANDS)                                                 2001       2002          2001         2002
__________________________________________________                   _______     ______      ________     ________
<S>                                                                   <C>        <C>          <C>         <C>
Beginning balance                                                     $(803)     $(973)       $29,885     $132,933
Cumulative effect of accounting change, net of tax                        --         --        22,205           --
Change during the period                                                  --         --       137,175      109,051
                                                                     _______     ______      ________     ________
Ending balance                                                        $(803)     $(973)      $189,265     $241,984
                                                                     =======     ======      ========     ========

</TABLE>

                                       12

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)


NOTE 5--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
               range of banking  services,  primarily to  individuals  and small
               businesses,  delivered  generally  through a tri-state network of
               branches and ATM's.  These  services  include  commercial  loans,
               mortgages,  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 provides 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,  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  page,
reflects selected income statement and balance sheet items by business unit. The
information  presented  does  not  necessarily  represent  the  business  units'
financial  condition and results of operations were they  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.  Included in
the tables are the amounts of goodwill for each  reporting  unit as of September
30, 2002.  Prior to January 1, 2002,  most of the goodwill was  reflected at the
corporate level in "Other."

         The information in these tables is derived from the internal management
reporting  system used by management to measure the  performance of the business
segments  and the Company  overall.  The  management  reporting  system  assigns
balance  sheet and income  statement  items to each  business  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 business  segment  are  assigned  to that  business.  Certain
indirect costs, such as operations and technology expense,  are allocated to the
segments based on studies of billable unit costs for product or data processing.
Other indirect costs, such as corporate overhead,  are allocated to the business
segments  based on a  predetermined  percentage  of usage.  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.

                                       13

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

NOTE 5--BUSINESS SEGMENTS (CONTINUED)

         "Other" is  comprised  of goodwill  amortization  for periods  prior to
January 1, 2002, certain parent company non-bank  subsidiaries,  the elimination
of the fully  taxable-equivalent  basis amount,  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.  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 US. On an  individual  basis,  none of the items in  "Other"  are
significant to the Company's business.

         The business units' results for the prior periods have been restated to
reflect  changes in the  transfer  pricing  methodology  and any  reorganization
changes that may have occurred.

<TABLE>
<CAPTION>

                                                        COMMUNITY BANKING         COMMERCIAL FINANCIAL          INTERNATIONAL
                                                          AND INVESTMENT             SERVICES GROUP             BANKING GROUP
                                                          SERVICES GROUP
                                                        _____________________      ______________________    ____________________
                                                                 AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                        _________________________________________________________________________
                                                          2001         2002          2001          2002        2001        2002
_________________________________________________       ________     ________      ________      ________    ________    ________
<S>                                                     <C>          <C>           <C>           <C>         <C>         <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS) AND
  ASSETS (DOLLARS IN MILLIONS):
Total revenue                                           $285,117     $317,892      $206,898      $212,021    $ 22,755    $ 26,421
Net income                                              $ 51,467     $ 72,211      $ 60,743      $ 52,054    $  4,684    $  6,299
Goodwill at period end                                  $     --     $     79      $     --      $     14    $     --    $     --
Total assets at period end                              $ 10,136     $ 11,158      $ 16,937      $ 15,965    $  1,406    $  1,680

<CAPTION>

                                                               GLOBAL                      OTHER                  UNIONBANCAL
                                                           MARKETS GROUP                                          CORPORATION
                                                        _____________________      ______________________    ____________________
                                                                 AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                        _________________________________________________________________________
                                                          2001         2002          2001          2002        2001        2002
_________________________________________________       ________     ________      ________      ________    ________    ________
<S>                                                     <C>          <C>           <C>           <C>         <C>         <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS) AND
  ASSETS (DOLLARS IN MILLIONS):
Total revenue                                           $ 17,757     $(7,574)      $ 18,969      $ 25,768    $551,496    $574,528
Net income (loss)                                       $  8,354     $(7,027)      $   (119)     $ 14,694    $125,129    $138,231
Goodwill at period end                                  $     --     $     --      $     53      $     --    $     53    $     93
Total assets at period end                              $  5,767     $  7,863      $    993      $    942    $ 35,239    $ 37,608

<FN>
___________
(1) Total revenue is comprised of net interest income and noninterest income
</FN>
</TABLE>

                                       14

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

NOTE 5--BUSINESS SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                        COMMUNITY BANKING         COMMERCIAL FINANCIAL          INTERNATIONAL
                                                          AND INVESTMENT             SERVICES GROUP             BANKING GROUP
                                                          SERVICES GROUP
                                                        _____________________      ______________________    _____________________
                                                                    AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                        __________________________________________________________________________
                                                          2001         2002          2001          2002        2001        2002
_________________________________________________       ________     ________      ________      ________   _________   __________
<S>                                                     <C>          <C>           <C>           <C>        <C>         <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS) AND
  ASSETS (DOLLARS IN MILLIONS):
Total revenue                                           $838,124     $915,063      $646,729      $625,050   $  70,569   $   78,012
Net income                                              $153,127     $193,195      $205,071      $152,627   $  15,624   $   18,790
Goodwill at period end                                  $     --     $     79      $     --      $     14   $      --   $       --
Total assets at period end                              $ 10,136     $ 11,158      $ 16,937      $ 15,965   $   1,406   $    1,680

<CAPTION>

                                                               GLOBAL                      OTHER                  UNIONBANCAL
                                                           MARKETS GROUP                                          CORPORATION
                                                        _____________________      ______________________    _____________________
                                                                 AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                        __________________________________________________________________________
                                                          2001         2002          2001          2002        2001        2002
_________________________________________________       ________     ________      ________      ________   _________   __________
<S>                                                     <C>          <C>           <C>           <C>        <C>         <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS)
  AND ASSETS (DOLLARS IN MILLIONS):
Total revenue                                           $ 26,722     $  5,903      $ 84,534      $ 76,926   $1,666,678  $1,700,954
Net income (loss)                                       $  4,960     $ (3,658)     $(29,216)     $ 21,996   $  349,566  $  382,950
Goodwill at period end                                  $     --     $     --      $     53      $     --   $       53  $       93
Total assets at period end                              $  5,767     $  7,863      $    993      $    942   $   35,239  $   37,608

<FN>
___________
(1) Total revenue is comprised of net interest income and noninterest income
</FN>
</TABLE>

NOTE 6--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING

         Derivative   positions   are  integral   components  of  the  Company's
designated asset and liability management activities.  The Company uses interest
rate  derivatives to manage the sensitivity of the Company's net interest income
to changes in interest rates. These instruments are used to manage interest rate
risk  relating  to  specified  groups  of  assets  and  liabilities,   primarily
LIBOR-based   commercial  loans,   certificates  of  deposit,   trust  preferred
securities and medium-term notes.

         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 purchased
floor, cap, corridor options and interest rate swaps.

         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.


                                       15

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

NOTE 6--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
        (CONTINUED)

         The Company uses  interest  rate floor  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 the
relevant  LIBOR index to the extent it falls below the  corridor's  lower strike
rate.

         The Company uses interest rate collars to hedge the variable cash flows
associated with 1-month LIBOR or 3-month LIBOR indexed loans. Net payments to be
received  (or paid)  under the  collar  contracts  offset  the  decline  in loan
interest  income  caused by the relevant  LIBOR index falling below the collar's
strike rate and the increase in interest income caused by the LIBOR index rising
above the collar's cap strike rate.

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

         The Company  uses  purchased  interest  rate caps to hedge the variable
interest  cash flows  associated  with the  forecasted  issuance and rollover of
short-term,  fixed  rate  negotiable  certificates  of deposit  (CDs).  In these
hedging  relationships,  the Company hedges the LIBOR component of the CD rates,
which is either 3-month LIBOR or 6-month LIBOR,  based on the CD's original term
to  maturity,  which  reflects  their  repricing  frequency.  Net payments to be
received under the cap contract  offset the increase in interest  expense caused
by the relevant LIBOR index rising above the cap's strike rate.

         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 occurs 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 the third  quarter of 2002,  the
Company recognized a net gain of $0.2 million due to  ineffectiveness,  which is
recognized  in  noninterest  expense,  compared  to a net loss of less than $0.1
million in the third quarter of 2001.

         FAIR VALUE HEDGES

         HEDGING  STRATEGY FOR  UNIONBANCAL  CORPORATION--OBLIGATED  MANDATORILY
           REDEEMABLE  PREFERRED  SECURITIES OF SUBSIDIARY  GRANTOR TRUST (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 convert 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.

                                       16

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)


NOTE 6--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
        (CONTINUED)

         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.
The  ineffectiveness  on the fair value hedges  during the third quarter of 2002
was a net loss of less than $0.1 million, compared to a net loss of $0.4 million
in the third quarter of 2001.

         HEDGING STRATEGY FOR MEDIUM-TERM NOTES

         The Company  engages in an interest  rate hedging  strategy in which an
interest rate swap is associated with a specified  interest  bearing  liability,
UnionBanCal  Corporation's  five-year,  medium-term  debt issuance,  in order to
convert 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.

         The fair  value  hedging  transaction  for the  medium-term  notes  was
structured  at  inception  to mirror all of the  provisions  of the  medium-term
notes, which allows the Company to assume that no ineffectiveness exists.

         OTHER

         The Company  uses  foreign  currency  forward  contracts  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, the
assets and/or the  liabilities  at fair value,  with the resultant  gain or loss
recognized in noninterest income.

         The Company uses  To-Be-Announced  (TBA) contracts to fix the price and
yield of anticipated purchases or sales of mortgage-backed  securities that will
be  delivered  at an  agreed  upon  date.  This  strategy  hedges  the  risk  of
variability in the cash flows to be paid or received upon  settlement of the TBA
contract.

NOTE 7--SUBSEQUENT EVENTS

         On October 23, 2002,  the Board of Directors  declared a quarterly cash
dividend  of $0.28 per  share of  common  stock.  The  dividend  will be paid on
January 3, 2003 to shareholders of record as of December 6, 2002.

         On October 31, 2002, the Company  completed its acquisition of Valencia
Bank and Trust, a commercial bank with $266 million in assets and five branches.
The  Company  will pay  approximately  $31.5  million  in cash  and  will  issue
approximately  $31.0  million in its  common  stock to  Valencia  Bank and Trust
shareholders.

                                       17

<PAGE>


 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         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
SECURITIES  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 AND
THROUGHOUT THE COUNTRY, GLOBAL POLITICAL AND GENERAL ECONOMIC CONDITIONS RELATED
TO THE TERRORIST ATTACKS ON SEPTEMBER 11, 2001 AND THEIR AFTERMATH,  FUTURE ACTS
OR  THREATS  OF  TERRORISM  AND  POSSIBLE  MILITARY  ACTION,   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 AND OTHER  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
OPERATIONS."

INTRODUCTION

         We  are  a  California-based,  commercial  bank  holding  company  with
consolidated  assets of $37.6  billion at September  30, 2002.  At September 30,
2002,  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., were 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.

         Since November 1999, we announced stock  repurchase plans totaling $400
million.  We  repurchased  $35 million,  $19 million,  and $18 million of common
stock in the first,  second, and third quarters of 2002,  respectively,  and $22
million,  $25 million, and $31 million of common stock in the first, second, and
quarters  of  2001,  respectively,  as part of  these  repurchase  plans.  As of
September 30, 2002, $73 million of common stock is authorized for repurchase. On
August 27, 2002, we announced that we purchased $300 million of our common stock
from  our  majority  owner,  The  Bank of  Tokyo-Mitsubishi  (BTM),  which  is a
wholly-owned  subsidiary of Mitsubishi  Tokyo Financial  Group. At September 30,
2002, BTM owned approximately 65 percent of our outstanding common stock.

                                       18

<PAGE>

SUMMARY



         COMPARISON  OF THREE MONTHS ENDED  SEPTEMBER 30, 2001 AND SEPTEMBER 30,
           2002

         Net income was $138.2  million,  or $0.88 per diluted common share,  in
the third quarter of 2002,  compared with $125.1  million,  or $0.79 per diluted
common share,  in the third quarter of 2001.  This increase in diluted  earnings
per share of $0.09, or 11 percent,  above the third quarter of 2001 was due to a
$14.1  million,   or  4  percent,   increase  in  net  interest   income  (on  a
taxable-equivalent basis), a $10.0 million, or 20 percent, decrease in provision
for credit  losses,  and a $9.0 million,  or 5 percent,  increase in noninterest
income, partly offset by a $14.1 million, or 4 percent,  increase in noninterest
expense. Other highlights of the third quarter of 2002 include:

         o     Net interest income,  on a  taxable-equivalent  basis, was $392.6
               million  in the  third  quarter  of 2002,  an  increase  of $14.1
               million,  or 4  percent,  over the  third  quarter  of 2001.  Net
               interest margin in the third quarter of 2002 was 4.77 percent,  a
               decrease of 4 basis points from the third quarter of 2001.

         o     A provision  for credit  losses of $40.0  million was recorded in
               the third  quarter of 2002  compared  with  $50.0  million in the
               third quarter of 2001.  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.  The allowance for credit losses
               was $623.1 million,  or 158 percent of total nonaccrual loans, at
               September 30, 2002,  compared with $629.7 million, or 142 percent
               of total nonaccrual loans, at September 30, 2001.

         o     Noninterest  income  was $182.4  million in the third  quarter of
               2002, an increase of $9.0 million,  or 5 percent,  from the third
               quarter of 2001. This growth included a $5.9 million  increase in
               service charges on deposit  accounts and $6.1 million in revenues
               associated   with  our   November   30,   2001   acquisition   of
               Armstrong/Robitaille     Business    and    Insurance    Services
               ("Armstrong/Robitaille"),   partly   offset  by  a  $2.6  million
               decrease in trust and investment management fees.

         o     Noninterest  expense was $331.1  million in the third  quarter of
               2002, an increase of $14.1 million, or 4 percent,  over the third
               quarter of 2001.  Salaries and employee benefits  increased $11.1
               million,   or  7  percent,   primarily   attributable  to  higher
               incentives of $3.2 million and higher salaries of $8.7 million.

         o     Income  tax  expense  in the  third  quarter  of 2002  was  $65.2
               million, a 32 percent effective income tax rate, which included a
               $3.3 million net reduction in income tax expense resulting from a
               change in a tax law in the State of California concerning the tax
               treatment of loan loss  reserves.  For the third quarter of 2001,
               the effective income tax rate was also 32 percent.

         o     Return on average  assets  increased to 1.53 percent in the third
               quarter of 2002  compared to 1.43 percent in the third quarter of
               2001.  Our return on average  common  equity  increased  to 14.38
               percent in the third quarter of 2002 compared to 14.19 percent in
               the third quarter of 2001.

         o     Total loans at September 30, 2002 were $26.0 billion, an increase
               of $367.9 million, or 1.4 percent, from September 30, 2001.

         o     Nonperforming assets were $395.5 million at September 30, 2002, a
               decrease of $54.7  million,  or 12 percent,  from  September  30,
               2001.  Nonperforming  assets,  as a percentage  of total  assets,
               decreased to 1.05 percent at September  30, 2002,  compared  with
               1.28 percent at September 30, 2001.  Total  nonaccrual loans were
               $395.2  million at  September  30,  2002,  compared  with  $444.5
               million at  September  30,  2001,  resulting in a decrease in the
               ratio  of  nonaccrual  loans to total  loans of 1.52  percent  at
               September 30, 2002 from 1.74 percent at September 30, 2001.

         o     Our Tier 1 and total risk-based capital ratios were 11.14 percent
               and 12.89 percent,  respectively, at September 30, 2002, compared
               with 11.18 percent and 13.05 percent,  respectively, at September
               30,

                                       19

<PAGE>

               2001.  Our leverage  ratio was 10.13 percent at September 30,
               2002 compared with 10.50 percent at September 30, 2001.

         COMPARISON  OF NINE MONTHS ENDED  SEPTEMBER  30, 2001 AND SEPTEMBER 30,
           2002

         Net income was $383.0  million,  or $2.43 per diluted common share,  in
the first nine months of 2002 compared with $349.6 million, or $2.20 per diluted
common  share,  in the first  nine  months of 2001.  This  increase  in  diluted
earnings per share of $0.23,  or 11 percent  above the first nine months of 2001
was due to a $70.0  million,  or 33 percent,  decrease in  provision  for credit
losses, a $20.0 million,  or 4 percent,  increase in noninterest  income,  and a
$14.2  million,   or  1  percent,   increase  in  net  interest   income  (on  a
taxable-equivalent  basis),  partly  offset by a $52.3  million,  or 6  percent,
increase in noninterest  expense.  Other  highlights of the first nine months of
2002 include:

         o     Net interest income, on a taxable-equivalent  basis, was $1,159.9
               million in the first nine  months of 2002,  an  increase of $14.2
               million over the first nine months of 2001.  Net interest  margin
               in the first nine months of 2002 was 4.77 percent,  a decrease of
               13 basis points from the first nine months of 2001.

         o     A provision for credit  losses of $145.0  million was recorded in
               the first nine months of 2002,  compared  with $215.0  million in
               the first nine months of 2001.

         o     Noninterest income was $542.7 million in the first nine months of
               2002, an increase of $20.0 million, or 4 percent,  from the first
               nine  months  of  2001.  Noninterest  income,  excluding  a $20.7
               million gain  recognized on the exchange of our STAR System stock
               in the prior year,  increased $40.7 million,  or 8 percent.  This
               growth was mainly  attributable  to a $23.0  million  increase in
               service charges on deposit accounts and $19.5 million in revenues
               associated with our acquisition of  Armstrong/Robitaille,  partly
               offset  by a  $7.2  million  decrease  in  trust  and  investment
               management fees. In addition, we had residual value writedowns in
               our auto lease portfolio of $9.0 million in the first nine months
               of 2002  compared  with $28.3 million in the first nine months of
               2001.

         o     Noninterest  expense was $984.3  million in the first nine months
               of 2002,  an increase of $52.3  million,  or 6 percent,  over the
               first  nine  months  of  2001.  Salaries  and  employee  benefits
               increased $47.0 million, or 9 percent,  primarily attributable to
               higher  incentives  of $17.6  million,  higher  salaries of $22.6
               million, and higher employee benefits of $6.7 million.

         o     Income tax  expense  in the first nine  months of 2002 was $188.7
               million, a 33 percent effective income tax rate, which included a
               $3.3 million net reduction in income tax expense resulting from a
               change in a tax law in the State of California concerning the tax
               treatment  of loan loss  reserves.  For the first nine  months of
               2001, the effective income tax rate was also 33 percent.

         o     Return on average  assets  increased to 1.44 percent in the first
               nine months of 2002  compared  to 1.35  percent in the first nine
               months of 2001. Our return on average common equity  increased to
               13.73  percent in the first nine months of 2002 compared to 13.69
               percent in the first nine months of 2001.

BUSINESS SEGMENTS

         We segregate our  operations  into four primary  business units for the
purpose of management reporting,  as shown in the tables 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

                                       20

<PAGE>

rates,  currency rates and volatilities.  Operational risk is the potential loss
due to failures in internal control, system failures, or external events.

         The following tables reflect 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.  Also,  the tables  have been  expanded  to include
performance center earnings.  A performance center is a special unit of the bank
whose income generating activities,  unlike typical profit centers, are based on
other  business  segment units'  customer base. A performance  center has direct
interactions  with customers,  and its purpose is to foster cross selling with a
total  profitability  view of the product and services it manages.  For example,
the  Global  Trading  and Sales  unit,  within the Global  Markets  Group,  is a
performance  center that manages the foreign  exchange,  derivatives,  and fixed
income securities activities within the Global Markets organization. However the
revenues generated and expenses incurred for those transactions  entered into to
accommodate  our customers are allocated to other  business  segments  where the
customer  relationships  reside.  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
attributable 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.

                                       21

<PAGE>

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

<TABLE>
<CAPTION>
                                                     COMMUNITY BANKING         COMMERCIAL FINANCIAL          INTERNATIONAL
                                                       AND INVESTMENT             SERVICES GROUP             BANKING GROUP
                                                       SERVICES GROUP
                                                     ______________________     ______________________      _____________________
                                                                    AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                     ____________________________________________________________________________
                                                       2001          2002         2001          2002          2001         2002
                                                     ________      ________     ________      ________      ________     ________
<S>                                                  <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
  EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $174,830      $203,687     $171,791      $167,919      $  8,736     $  9,153
                  Noninterest income                  110,287       114,205       35,107        44,102        14,019       17,268
                                                     ________      ________     ________      ________      ________     ________
                  Total revenue                       285,117       317,892      206,898       212,021        22,755       26,421
                  Noninterest expense                 192,291       193,588       82,677        88,532        14,006       15,746
                  Credit expense (income)               9,479         7,363       32,851        47,380         1,164          474
                                                     ________      ________     ________      ________      ________     ________
                  Income before income tax expense
                    (benefit)                          83,347       116,941       91,370        76,109         7,585       10,201
                  Income tax expense (benefit)         31,880        44,730       30,627        24,055         2,901        3,902
                                                     ________      ________     ________      ________      ________     ________
                  Net income                         $ 51,467      $ 72,211     $ 60,743      $ 52,054      $  4,684     $  6,299
                                                     ========      ========     ========      ========      ========     ========
PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $    517      $    808     $  6,330      $ 11,075      $     --     $     --
                  Noninterest income                   (3,056)      (10,494)       9,052        15,009           121        1,098
                  Noninterest expense                  (1,051)       (8,030)       5,603        11,118            48          860
                  Total loans (dollars in millions)       100            97          846         1,055            --           --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
                  Total loans(1)                     $  9,145      $ 10,170     $ 15,386      $ 14,191      $  1,004     $  1,219
                  Total assets                         10,076        11,034       17,237        15,898         1,317        1,547
                  Total deposits(1)                    14,240        15,947        7,095         8,662         1,448        1,358
FINANCIAL RATIOS:
                  Return on risk adjusted capital(2)       35%           49%          13%           13%           23%          37%
                  Return on average assets(2)            2.03          2.60         1.40          1.30          1.41         1.62
                  Efficiency ratio(3)                   67.45         60.90        39.97         41.76         61.55        59.60

<CAPTION>
                                                             GLOBAL                     OTHER                   UNIONBANCAL
                                                         MARKETS GROUP                                          CORPORATION
                                                     ______________________     ______________________      _____________________
                                                                    AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                     ____________________________________________________________________________
                                                       2001          2002         2001          2002          2001         2002
                                                     ________      ________     ________      ________      ________     ________
<S>                                                  <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
  EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $  5,855      $(10,135)    $ 16,879       $21,478      $378,091     $392,102
                  Noninterest income                   11,902         2,561        2,090         4,290       173,405      182,426
                                                     ________      ________     ________      ________      ________     ________
                  Total revenue                        17,757        (7,574)      18,969        25,768       551,496      574,528
                  Noninterest expense                   4,079         3,756       23,989        29,512       317,042      331,134
                  Credit expense (income)                 150            50        6,356      (15,267)        50,000       40,000
                                                     ________      ________     ________      ________      ________     ________
                  Income before income tax expense     13,528       (11,380)     (11,376)       11,523       184,454      203,394
                    (benefit)
                  Income tax expense (benefit)          5,174        (4,353)     (11,257)       (3,171)       59,325       65,163
                                                     ________      ________     ________      ________      ________     ________
                  Net income (loss)                  $  8,354      $ (7,027)    $   (119)     $ 14,694      $125,129     $138,231
                                                     ========      ========     ========      ========      ========     ========
PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $     --      $     --     $ (6,847)     $(11,883)     $     --     $     --
                  Noninterest income                   (7,131)       (8,578)       1,014         2,965            --           --
                  Noninterest expense                  (1,280)       (1,534)      (3,320)       (2,414)           --           --
                  Total loans (dollars in millions)        --            --         (946)       (1,152)           --           --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
                  Total loans(1)                     $     80      $    103     $    302      $    288      $ 25,917     $ 25,971
                  Total assets                          5,295         6,562          692           762        34,617       35,803
                  Total deposits(1)                     2,900         1,496          708           992        26,391       28,455
FINANCIAL RATIOS:
                  Return on risk adjusted capital(2)        8%           (4)%         na            na            na           na
                  Return on average assets(2)            0.63         (0.42)          na            na          1.43%        1.53%
                  Efficiency ratio(3)                   22.97        (49.59)          na            na         57.45        57.58
<FN>
___________
(1) 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.

(2) Annualized

(3) The efficiency ratio is noninterest expense, excluding foreclosed asset
    expense (income), as a percentage of net interest income (taxable-equivalent
    basis) and noninterest income. Foreclosed asset expense was immaterial in
    the first nine months of 2001 and $0.1 million in the first nine months of
    2002.

na = not applicable
</FN>
</TABLE>

                                       22

<PAGE>

<TABLE>
<CAPTION>
                                                     COMMUNITY BANKING         COMMERCIAL FINANCIAL          INTERNATIONAL
                                                       AND INVESTMENT             SERVICES GROUP             BANKING GROUP
                                                       SERVICES GROUP
                                                     ______________________     ______________________      _____________________
                                                                    AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                     ____________________________________________________________________________
                                                       2001          2002         2001          2002          2001         2002
                                                     ________      ________     ________      ________      ________     ________
<S>                                                  <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
  EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $526,948      $584,910     $534,326      $483,592    $   27,371   $   28,024
                  Noninterest income                  311,176       330,153      112,403       141,458        43,198       49,988
                                                     ________      ________     ________      ________    __________   __________
                  Total revenue                       838,124       915,063      646,729       625,050        70,569       78,012
                  Noninterest expense                 557,204       576,735      235,034       259,583        41,737       46,155
                  Credit expense (income)              32,942        25,462       99,203       141,693         3,530        1,428
                                                     ________      ________     ________      ________    __________   __________
                  Income before income tax expense
                    (benefit)                         247,978       312,866      312,492       223,774        25,302       30,429
                  Income tax expense (benefit)         94,851       119,671      107,421        71,147         9,678       11,639
                                                     ________      ________     ________      ________    __________   __________
                  Net income                         $153,127      $193,195     $205,071      $152,627    $   15,624   $   18,790
                                                     ========      ========     ========      ========    ==========   ==========
PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $  2,623      $  1,900     $ 14,555      $ 29,141    $       --   $       --
                  Noninterest income                   (5,351)      (32,329)      20,154        42,330           270        3,139
                  Noninterest expense                  (3,208)      (24,048)      14,968        32,104           377        2,487
                  Total loans (dollars in millions)        92           111          767         1,048            --           --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
                  Total loans(1)                     $  8,803      $  9,904     $ 15,941      $ 14,152    $      980   $    1,095
                  Total assets                          9,758        10,776       17,775        15,808         1,346        1,421
                  Total deposits(1)                    14,134        15,433        6,979         8,232         1,403        1,493
FINANCIAL RATIOS:
                  Return on risk adjusted capital(2)       35%           45%          15%           13%           24%          38%
                  Return on average assets(2)            2.10          2.40         1.54          1.29          1.55         1.77
                  Efficiency ratio(3)                   66.48         63.03        36.34         41.53         59.14        59.16


<CAPTION>
                                                             GLOBAL                     OTHER                   UNIONBANCAL
                                                         MARKETS GROUP                                          CORPORATION
                                                     ______________________     ______________________      _____________________
                                                                    AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                     ____________________________________________________________________________
                                                       2001          2002         2001          2002          2001         2002
                                                     ________      ________     ________      ________      ________     ________
<S>                                                  <C>           <C>          <C>           <C>           <C>          <C>

RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $  8,524      $ (2,885)    $ 46,906      $ 64,662    $1,144,075   $1,158,303
                  Noninterest income                   18,198         8,788       37,628        12,264       522,603      542,651
                                                     ________      ________     ________      ________    __________   __________
                  Total revenue                        26,722         5,903       84,534        76,926     1,666,678    1,700,954
                  Noninterest expense                  18,540        11,677       79,464        90,138       931,979      984,288
                  Credit expense (income)                 150           150       79,175      (23,733)       215,000      145,000
                                                     ________      ________     ________      ________    __________   __________
                  Income before income tax expense
                    (benefit)                           8,032        (5,924)     (74,105)        10,521      519,699      571,666
                  Income tax expense (benefit)          3,072        (2,266)     (44,889)      (11,475)      170,133      188,716
                                                     ________      ________     ________      ________    __________   __________
                  Net income (loss)                  $  4,960      $ (3,658)    $(29,216)     $ 21,996    $  349,566   $  382,950
                                                     ========      ========     ========      ========    ==========   ==========
PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
                  Net interest income                $     --      $     --     $(17,178)     $(31,041)   $       --   $       --
                  Noninterest income                  (18,117)      (22,146)       3,044         9,006            --           --
                  Noninterest expense                  (3,275)       (3,766)      (8,862)       (6,777)           --           --
                  Total loans (dollars in millions)        --            --         (859)       (1,159)           --           --

AVERAGE BALANCES (DOLLARS IN MILLIONS):
                  Total loans(1)                     $     64      $     91     $    360      $    320    $   26,148   $   25,562
                  Total assets                          4,932         6,729          734           808        34,545       35,542
                  Total deposits(1)                     3,023         1,991          730           936        26,269       28,085
FINANCIAL RATIOS:
                  Return on risk adjusted capital(2)        2%           (1)%         na            na            na           na
                  Return on average assets(2)            0.13         (0.07)          na            na          1.35%        1.44%
                  Efficiency ratio(3)                   69.38        197.80           na            na         55.86        57.80
<FN>
___________
(1)  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.

(2)  Annualized

(3)  The efficiency ratio is noninterest expense, excluding foreclosed asset
     expense (income), as a percentage of net interest income (taxable-
     equivalent basis) and noninterest income. Foreclosed asset expense was
     immaterial in the first nine months of 2001 and $0.1 million in the first
     nine months of 2002.

na = not applicable
</FN>
</TABLE>

                                       23

<PAGE>


         COMMUNITY BANKING AND INVESTMENT SERVICES GROUP

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

         In the third quarter of 2002, net income increased $20.7 million, or 40
percent,  compared to the third quarter of 2001.  Total revenue  increased $32.8
million, or 12 percent, compared to a year earlier.  Increased asset and deposit
volumes offset the effect of a  significantly  lower  interest rate  environment
leading to an increase of $28.9 million,  or 17 percent,  in net interest income
over the prior year quarter.  Noninterest income was $3.9 million, or 4 percent,
higher  than  the  prior  year  quarter  primarily  due  to our  acquisition  of
Armstrong/Robitaille.  Noninterest expense increased $1.4 million, or 1 percent,
compared to a year earlier with the majority of that increase being attributable
to higher salaries and employee  benefits  mainly related to deposit  gathering,
small business  growth,  acquisitions and residential loan growth over the third
quarter of 2001.

         In 2002, 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,  expanding the branch network,
and expanding  cross selling  activities  throughout  the bank. The strategy for
growing the  consumer  asset  portfolio  primarily  focuses on mortgage and home
equity products that may be originated  through the branch  network,  as well as
through channels such as wholesalers,  correspondents, and whole loan purchases.
As of September 30, 2002,  residential  loans have grown by $1.3 billion,  or 29
percent,  from the same  period  last year.  The Wealth  Management  division is
focused on becoming a growing  provider of banking and  investment  products for
affluent  individuals  in  geographic  areas  already  served  by us. We seek to
provide  quality  service  superior  to that  of our  competitors,  offering  an
attractive  product  suite.  Core elements of the initiative to extend our small
business  franchise  include  improving  our sales force,  increasing  marketing
activities,   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.  On October 31, 2002, the
Company  completed its acquisition of Valencia Bank and Trust, a commercial bank
with $266 million in assets and five branches.

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

         COMMUNITY   BANKING  serves  its  customers  through  254  full-service
branches in California, 6 full-service branches in Oregon and Washington,  and a
network of 512 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  merchant
services.

         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 an array of
               customer transaction, bill payment and loan payment services;

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

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

                                       24

<PAGE>

         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  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 deposit and credit
               products.  A key  strategy of the  Private  Bank is to expand its
               business  by  leveraging  existing  Bank  client   relationships.
               Through 13  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
               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
management  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,  Inc.  also provides
               mutual fund support services.  HighMark Capital Management Inc.'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     Institutional  Services  provides  custody,  corporate trust, and
               retirement plan services. Custody Services provides both domestic
               and international  safekeeping/settlement services in addition to
               securities lending. Corporate Trust acts as trustee for corporate
               and municipal debt issues.  Retirement  Services  provides a full
               range of defined benefit and defined contribution  administrative
               services, including trustee services, administration,  investment
               management,  and 401(k)  valuation  services.  The client base of
               Institutional    Services   includes   financial    institutions,
               corporations,  government agencies,  unions, insurance companies,
               mutual funds, investment managers, and non-profit  organizations.
               Institutional  Services'  strategy is to continue to leverage and
               expand our  position in our target  markets.  As we  announced on
               April 30, 2002,  we acquired a  substantial  portion of the trust
               and institutional  custody business of a bank located in Southern
               California.

         CONSUMER ASSET MANAGEMENT is the centralized underwriting,  processing,
servicing,   collection  and   administration   for  consumer  assets  including
residential loans and merchant bank cards.

         o     Consumer Asset Management is centralized in two sites, one in San
               Diego and one in Brea, and

         o     provides  customer  and credit  management  services for consumer
               loan products.

         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  division,  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  division's  strategy is to expand its market
               presence  by  continued  delivery  of cash  management  products,
               internet based technology solutions, and expanding its tax-exempt
               lending capabilities to meet existing clients' needs.

                                       25

<PAGE>

         INSURANCE  SERVICES  provides a range of risk  management  services and
insurance products to business and retail customers.

         o     The group,  which includes our fourth quarter 2001 acquisition of
               Armstrong/Robitaille,  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 attempting to provide  service
quality superior to that of its major competitors.  The group's primary means of
competing with community  banks include its branch network and its technology to
deliver banking  services.  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  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  specialized  financing  expertise  to  specific
geographic markets and industry segments such as Energy, Entertainment, and Real
Estate. Relationship managers 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 cash management  services  delivered through deposit managers with experience
in cash management solutions for businesses.

         In the third quarter of 2002, net income decreased $8.7 million,  or 14
percent,  compared to the third quarter of 2001. Net interest  income  decreased
$3.9 million,  or 2 percent,  primarily  attributable to the lower interest rate
environment,  wherein our wholesale  liabilities are closely tied to the effects
of the lower treasury bill rates.  The impact on earnings of decreasing  earning
asset balances was mitigated by a  significantly  lower cost of funds  resulting
from this lower interest rate  environment.  Noninterest  income  increased $9.0
million,  or 26  percent,  mainly due to net losses of only $2.8  million in the
private  equity  portfolio in the third quarter of 2002 compared with net losses
of $9.9 million in the third quarter of 2001.  Excluding  these  private  equity
portfolio  losses,  noninterest  income  increased  by 4 percent  over the third
quarter of 2001, which was primarily due to higher deposit-related service fees.
Noninterest  expense  increased $5.9 million,  or 7 percent,  compared to a year
earlier due to higher  expenses to support  increased  product sales and deposit
volume.  Credit expense increased $14.5 million due to a refinement in the RAROC
credit metrics that were implemented in late 2001 and not reflected in our third
quarter 2001 results.

         The  group's  initiatives  during  2002  included  expanding  wholesale
deposit  activities  and  increasing  domestic  trade  financing.   Loan  growth
strategies  included  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

                                       26

<PAGE>

provides  strong  processing   services,   including   services  such  as  check
processing, front-end item processing, cash vault services and digital imaging.

         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  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 limited
               merchant and investment banking related products and services;

         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, nationwide; and

         o     the National Banking Division, which provides custom financing to
               middle  market  and  large  corporate  clients  in their  defined
               industries and geographic markets.

         The group  competes  with  other  banks  primarily  on the basis of the
quality of its relationship  managers, the delivery of quality customer service,
and its reputation as a "business bank."

         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 US corporate  clients in selected  countries
where we have branches,  including Hong Kong, Japan,  Korea, the Philippines and
Taiwan. In the US, the group serves  subsidiaries and affiliates of non-Japanese
Asian companies and US  branches/agencies  of foreign banks. The majority of the
revenue generated by the International Banking Group is from customers domiciled
outside of the US.

         In the third quarter of 2002, net income increased $1.6 million,  or 35
percent,  compared  to the third  quarter  of 2001.  Total  revenue in the third
quarter of 2002  increased  $3.7 million,  or 16 percent,  compared to the third
quarter of 2001. Net interest income increased $0.4 million, or 5 percent,  over
the third quarter of 2001, mainly due to higher loan volumes. Noninterest income
was $3.2 million,  or 23 percent,  higher than the third quarter of 2001, mainly
attributable to higher foreign remittance and collection commissions, reflecting
a strategic  focus on this  business,  and merchant card activity in the current
quarter.  Noninterest expense increased $1.7 million, or 12 percent, compared to
the third quarter of 2001,  with the majority of that increase  attributable  to
merchant card activity. Also contributing to the group's overall increase in net
income  was a  reduction  in credit  expense  of $0.7  million,  or 59  percent,
compared to the

                                       27

<PAGE>

third quarter of 2001.  International  Banking Group's business  revolves around
short-term,  trade financing,  mostly to banks, which we believe tends to result
in significantly lower credit risk when compared to other lending activities and
service-related income.

         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.  The International
Banking Group,  headquartered  in San Francisco,  also maintains  representative
offices in 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 the third quarter of 2002, net loss was $7.0 million compared to net
income of $8.4 million in the third quarter of 2001.  Total revenue in the third
quarter of 2002 decreased $25.3 million,  or 143 percent,  compared to the third
quarter of 2001,  resulting from a $16.0 million decrease in net interest income
and a $9.3 million decrease in noninterest  income. The decrease in net interest
income  from the third  quarter of 2001 was  mainly  attributed  to a  declining
interest  rate  environment,  offset  in part by  reduced  volume  and  costs of
wholesale  funding and increased income from hedged  positions.  The noninterest
income decrease,  compared to the third quarter of 2001, was mainly attributable
to  higher  net gains on the sale of  securities  in our  investment  securities
portfolio in the third quarter of 2001 and to higher distribution of performance
center earnings to other business  segments of the bank in the current  quarter.
Noninterest expense increased $0.3 million, or 8 percent,  compared to the third
quarter of 2001.

         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  amortization  for periods  prior to January 1, 2002 and
               certain other  nonrecurring  items such as merger and integration
               expense,  certain parent company non-bank  subsidiaries,  and the
               elimination of the fully taxable-equivalent basis amount;

         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  $450  million  and  $396  million  of
               nonperforming   assets  as  of  September   30,  2001  and  2002,
               respectively;

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

         o     the residual costs of support groups.

                                       28

<PAGE>

         Net income for "Other"  in the third quarter of 2002 was $14.7 million.
The results were impacted by the following factors:

         o     credit  expense  (income)  of  ($15.3)  million  was  due  to the
               difference  between  the $40.0  million in  provision  for credit
               losses  calculated  under our US GAAP  methodology  and the $55.3
               million in expected losses for the reportable  business segments,
               which utilizes the RAROC methodology;

         o     net interest  income of $21.5  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 Corporate Group;

         o     noninterest income of $4.3 million; and

         o     noninterest expense of $29.5 million.

         Net loss for "Other" in the third quarter of 2001 was $0.1 million. The
results were impacted by the following factors:

         o     credit expense of $6.4 million due to the difference  between the
               $50.0 million in provision for credit losses calculated under our
               US GAAP  methodology and the $43.6 million in expected losses for
               the  reportable  business  segments,  which  utilizes  the  RAROC
               methodology; offset by

         o     net interest  income of $16.9  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 Corporate Group;

         o     noninterest income of $2.1 million, and

         o     noninterest expense of $24.0 million.

                                       29

<PAGE>



NET INTEREST INCOME

         The following tables show the major components of net interest income
and net interest margin.

<TABLE>
<CAPTION>
                                                                        FOR THE THREE MONTHS ENDED
                                            ______________________________________________________________________________________
                                                    SEPTEMBER 30, 2001                           SEPTEMBER 30, 2002
                                            _________________________________________    _________________________________________
                                              AVERAGE           INTEREST     AVERAGE       AVERAGE            INTEREST    AVERAGE
                                              BALANCE           INCOME/       YIELD/       BALANCE            INCOME/      YIELD/
(DOLLARS IN THOUSANDS)                                          EXPENSE(1)    RATE(1)                         EXPENSE(1)   RATE(1)
_____________________________________       ___________         ________     _______     ___________          ________    _______
<S>                                         <C>                 <C>            <C>       <C>                  <C>           <C>
ASSETS
Loans:(2)
  Domestic                                  $24,825,234         $442,062        7.08%    $24,770,565          $374,043       6.00%
  Foreign(3)                                  1,091,866           13,451        4.89       1,200,918             8,134       2.69
Securities--taxable                           4,853,629           75,728        6.24       5,907,792            76,825       5.20
Securities--tax-exempt                           42,501            1,475       13.88          35,761               990      11.08
Interest bearing deposits in banks               61,074              622        4.04         135,952               773       2.26
Federal funds sold and securities               164,876            1,398        3.36         327,820             1,467       1.78
purchased under resale agreements
Trading account assets                          303,879            1,691        2.21         378,715             1,415       1.48
                                            ___________         ________                 ___________          ________
    Total earning assets                     31,343,059          536,427        6.81      32,757,523           463,647       5.63
                                                                ________                                      ________
Allowance for credit losses                    (639,736)                                    (631,581)
Cash and due from banks                       2,191,527                                    1,860,183
Premises and equipment, net                     489,181                                      497,542
Other assets                                  1,232,909                                    1,319,808
                                            ___________                                  ___________
    Total assets                            $34,616,940                                  $35,803,475
                                            ===========                                  ===========
LIABILITIES
Domestic deposits:
  Interest bearing                          $ 5,941,131           33,509        2.24     $ 8,292,080            22,855       1.09
  Savings and consumer time                   3,481,091           26,605        3.03       3,614,192            14,593       1.60
  Large time                                  4,346,272           45,737        4.18       2,679,594            14,601       2.16
Foreign deposits(3)                           1,986,119           15,954        3.19       1,369,123             4,727       1.37
                                            ___________         ________                 ___________          ________
    Total interest bearing deposits          15,754,613          121,805        3.07      15,954,989            56,776       1.41
                                            ___________         ________                 ___________          ________
Federal funds purchased and
  securities sold under repurchase
  agreements                                  1,413,866           12,265        3.44         487,201             1,789       1.46
Commercial paper                              1,330,949           11,844        3.53       1,043,111             4,488       1.71
Other borrowed funds                            404,629            4,914        4.82         270,795             1,662       2.44
Medium and long-term debt                       200,000            2,142        4.25         399,697             2,375       2.36
UnionBanCal Corporation--obligated
  mandatorily redeemable preferred
  securities of subsidiary grantor
  trust                                         352,363            4,940        5.62         351,879             3,921       4.48
                                            ___________         ________                 ___________          ________
    Total borrowed funds                      3,701,807           36,105        3.87       2,552,683            14,235       2.22
                                            ___________         ________                 ___________          ________
    Total interest bearing liabilities       19,456,420          157,910        3.22      18,507,672            71,011       1.52
                                                                ________                                      ________
Noninterest bearing deposits                 10,636,680                                   12,500,463
Other liabilities                             1,026,176                                      980,413
                                            ___________                                  ___________
    Total liabilities                        31,119,276                                   31,988,548
SHAREHOLDERS' EQUITY
Common equity                                 3,497,664                                    3,814,927
                                            ___________                                  ___________
    Total shareholders' equity                3,497,664                                    3,814,927
                                            ___________                                  ___________

    Total liabilities and shareholders'
      equity                                $34,616,940                                  $35,803,475
                                            ===========                                  ===========

Net interest income/margin
  (taxable-equivalent basis)                                     378,517        4.81%                          392,636       4.77%
Less: taxable-equivalent adjustment                                  426                                           534
                                                                ________                                      ________
    Net interest income                                         $378,091                                      $392,102
                                                                ========                                      ========
<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>

                                       30

<PAGE>

<TABLE>
<CAPTION>
                                                                        FOR THE NINE MONTHS ENDED
                                            ______________________________________________________________________________________
                                                    SEPTEMBER 30, 2001                           SEPTEMBER 30, 2002
                                            _________________________________________    _________________________________________
                                              AVERAGE           INTEREST     AVERAGE       AVERAGE            INTEREST    AVERAGE
                                              BALANCE           INCOME/       YIELD/       BALANCE            INCOME/      YIELD/
(DOLLARS IN THOUSANDS)                                          EXPENSE(1)    RATE(1)                         EXPENSE(1)   RATE(1)
_____________________________________       ___________         ________     _______     ___________          ________    _______
<S>                                         <C>                 <C>            <C>       <C>                  <C>           <C>
ASSETS
Loans:(2)
  Domestic                                  $25,093,475       $1,433,167        7.63%    $24,468,284          $1,113,279     6.08%
  Foreign(3)                                  1,054,397           45,873        5.82       1,094,168              23,642     2.89
Securities--taxable                           4,477,761          212,030        6.31       5,678,095             235,041     5.52
Securities--tax-exempt                           57,943            4,731       10.89          36,971               2,979    10.75
Interest bearing deposits in banks               68,631            2,249        4.38         113,779               1,898     2.23
Federal funds sold and securities
  purchased under resale agreements             142,965            4,585        4.29         782,607              10,354     1.77
Trading account assets                          333,906            6,817        2.73         298,505               3,107     1.39
                                            ___________       __________                 ___________          __________
    Total earning assets                     31,229,078        1,709,452        7.31      32,472,409           1,390,300     5.72
                                                              __________                                      __________
Allowance for credit losses                    (635,230)                                    (635,313)
Cash and due from banks                       2,204,603                                    1,878,616
Premises and equipment, net                     484,682                                      497,503
Other assets                                  1,262,310                                    1,328,587
                                            ___________                                  ___________
    Total assets                            $34,545,443                                  $35,541,802
                                            ===========                                  ===========
LIABILITIES
Domestic deposits:
  Interest bearing                          $ 5,999,738          110,321        2.46     $ 7,881,352              68,564     1.16
  Savings and consumer time                   3,394,569           84,878        3.34       3,587,824              46,830     1.75
  Large time                                  4,600,627          171,195        4.98       3,125,003              52,001     2.22
Foreign deposits(3)                           1,985,523           60,944        4.10       1,576,176              17,096     1.45
                                            ___________       __________                 ___________          __________
Total interest bearing deposits              15,980,457          427,338        3.58      16,170,355             184,491     1.53
                                            ___________       __________                 ___________          __________
Federal funds purchased and
  securities sold under repurchase
  agreements                                  1,419,912           48,687        4.58         463,067               5,134     1.48
Commercial paper                              1,383,999           46,882        4.53         999,030              12,998     1.74
Other borrowed funds                            456,195           16,630        4.87         543,796               8,740     2.15
Medium and long-term debt                       200,000            7,873        5.26         399,788               7,198     2.41
UnionBanCal Corporation--obligated
  mandatorily redeemable preferred
  securities of subsidiary grantor
  trust                                         352,215           16,329        6.18         352,183              11,832     4.47
                                            ___________       __________                 ___________          __________
    Total borrowed funds                      3,812,321          136,401        4.78       2,757,864              45,902     2.22
                                            ___________       __________                 ___________          __________
    Total interest bearing liabilities       19,792,778          563,739        3.81      18,928,219             230,393     1.63
                                                              __________                                      __________
Noninterest bearing deposits                 10,288,593                                   11,915,106
Other liabilities                             1,049,511                                      968,204
                                            ___________                                  ___________
    Total liabilities                        31,130,882                                   31,811,529
SHAREHOLDERS' EQUITY
Common equity                                 3,414,561                                    3,730,273
                                            ___________                                  ___________
    Total shareholders' equity                3,414,561                                    3,730,273
                                            ___________                                  ___________
    Total liabilities and shareholders'
      equity                                $34,545,443                                  $35,541,802
                                            ===========                                  ===========
Net interest income/margin
  (taxable-equivalent basis)                                   1,145,713        4.90%                          1,159,907     4.77%
Less: taxable-equivalent adjustment                                1,638                                           1,604
                                                              __________                                      __________
    Net interest income                                       $1,144,075                                      $1,158,303
                                                              ==========                                      ==========
<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>

                                       31
<PAGE>

         Net interest income is interest  earned on loans and  investments  less
interest expense on deposit accounts and borrowings.  Primary factors  affecting
the level of net interest  income include the margin between the yield earned on
interest  earning assets and the rate paid on interest bearing  liabilities,  as
well as the  volume  and  composition  of average  interest  earning  assets and
average interest bearing liabilities.

         THREE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2002

         Net interest income, on a taxable-equivalent  basis, was $392.6 million
in the third quarter of 2002,  compared with $378.5 million in the third quarter
of 2001.  This  increase  of  $14.1  million,  or 4  percent,  was  attributable
primarily to the impact of the decreasing  interest rate environment  throughout
the prior year on interest bearing  liabilities,  increasing average noninterest
bearing  deposits,  and higher earning  assets,  partly offset by  significantly
lower yields on our earning assets.  Decreasing market rates resulted in a lower
average  yield of 118 basis  points,  which  was  favorably  impacted  by higher
interest rate derivatives income of $12.5 million,  on average earning assets of
$32.8  billion.  This lower average yield on earning assets was partly offset by
lower rates on our interest  bearing  liabilities of 170 basis points on average
balances of $18.5  billion.  Mitigating  the impact of the lower  interest  rate
environment on our net interest margin was an increase in average earning assets
of $1.4  billion,  primarily  in  securities,  funded by a $1.9  billion,  or 18
percent,  increase in average noninterest bearing deposits. The resulting impact
of these changes on our net interest  margin was a decrease of 4 basis points to
4.77 percent.

         Average earning assets were $32.8 billion in the third quarter of 2002,
compared  with $31.3  billion  in the third  quarter  of 2001.  This  growth was
attributable to a $1.1 billion,  or 21 percent,  increase in average securities.
The increase in average securities, which were comprised primarily of fixed rate
securities, reflected liquidity and interest rate risk management actions. While
average loans  increased $54.4 million,  or less than 1 percent,  over the prior
year, our loan mix has substantially changed. Average commercial loans decreased
by $1.5  billion  mainly  attributable  to slower  loan  growth due to  economic
conditions,  loan sales,  and a  reduction  in our  exposure to  nonrelationship
syndicated loans while average residential  mortgages increased by $1.3 billion,
which was a result of a strategic  portfolio shift from more volatile commercial
loans.  Other  loan  categories  included  an  increase  in  average  commercial
mortgages of $451.3  million and a decrease in average  consumer loans and lease
financing of $208.4 million and $145.0 million, respectively.

         NINE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2002

         Net interest income, on a taxable-equivalent basis, was $1.2 billion in
the first  nine  months of 2002,  compared  with $1.1  billion in the first nine
months of 2001. This increase of $14.2 million,  or 1 percent,  was attributable
primarily to the impact of decreasing  interest rate environment  throughout the
prior year on  interest  bearing  liabilities,  increasing  average  noninterest
bearing  deposits,  and higher earning  assets,  partly offset by  significantly
lower yields on our earning assets.  Decreasing market rates resulted in a lower
average  yield of 159 basis  points,  which  was  favorably  impacted  by higher
interest rate derivatives income of $55.3 million,  on average earning assets of
$32.5  billion.  This lower average yield on earning assets was partly offset by
lower rates on our interest  bearing  liabilities of 218 basis points on average
balances of $18.9  billion.  Mitigating  the impact of the lower  interest  rate
environment on our net interest margin was an increase in average earning assets
of $1.2  billion,  primarily  in  securities,  funded by a $1.6  billion,  or 16
percent,  increase in average noninterest bearing deposits. The resulting impact
of these changes on our net interest margin was a decrease of 13 basis points to
4.77 percent.

         Average  earning  assets were $32.5 billion in the first nine months of
2002,  compared with $31.2 billion in the first nine months of 2001. This growth
was  attributable  to a  $1.2  billion,  or  26  percent,  increase  in  average
securities, partly offset by a $585.4 million, or 2 percent, decrease in average
loans.  The increase in average  securities,  which were comprised  primarily of
fixed rate  securities,  reflected  liquidity and interest rate risk  management
actions.  The decline in average loans was mostly due to a $2.2 billion decrease
in average  commercial  loans mainly  attributable  to slower loan growth due to
economic   conditions,   loan  sales,   and  a  reduction  in  our  exposure  to
nonrelationship  syndicated  loans.  The decrease in commercial

                                       32

<PAGE>

loans was partly offset by an increase in average residential  mortgages of $1.6
billion,  which was a result of a strategic  portfolio  shift from more volatile
commercial  loans.  Other  loan  categories  included  an  increase  in  average
commercial  mortgages of $388.8 million and a decrease in average consumer loans
and lease financing of $273.9 million and $152.8 million, respectively.

<TABLE>
<CAPTION>

NONINTEREST INCOME

                                           FOR THE THREE MONTHS ENDED                        FOR THE NINE MONTHS ENDED
                                     _________________________________________       __________________________________________
                                     SEPTEMBER 30,      SEPTEMBER 30,  PERCENT       SEPTEMBER 30,      SEPTEMBER 30,   PERCENT
(DOLLARS IN THOUSANDS)                  2001                2002       CHANGE           2001                 2002       CHANGE
______________________               ________            ________      _______       ________             ________     ________
<S>                                  <C>                 <C>              <C>        <C>                  <C>             <C>
Service charges on deposit accounts  $ 62,742            $ 68,629         9.38%      $181,614             $204,641        12.68%
Trust and investment management
  fees                                 37,965              35,368        (6.84)       116,880              109,680        (6.16)
Merchant transaction processing
  fees                                 21,315              22,860         7.25         60,814               65,982         8.50
International commissions and
  fees                                 18,053              20,131        11.51         53,288               57,593         8.08
Brokerage commissions and fees          8,786               9,183         4.52         26,764               28,090         4.95
Merchant banking fees                   7,742               6,819       (11.92)        26,671               22,845       (14.35)
Gain on exchange of STAR System
  stock                                    --                  --           --         20,700                   --      (100.00)
Foreign exchange trading gains,
  net                                   6,351               8,193        29.00         19,472               21,653        11.20
Insurance commissions                      --               6,120           nm             --               19,525           nm
Securities gains (losses), net         (1,699)                550           nm          4,318               (3,313)          nm
Other                                  12,150               4,573       (62.36)        12,082               15,955        32.06
                                     ________            ________      _______       ________             ________     ________
Total noninterest income             $173,405            $182,426         5.20%      $522,603             $542,651         3.84%
                                     ========            ========      =======       ========             ========     ========
<FN>
___________
nm = not meaningful
</FN>
</TABLE>

         THREE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2002

         In the third quarter of 2002, noninterest income was $182.4 million, an
increase of $9.0 million,  or 5 percent,  over the third  quarter of 2001.  This
increase was mainly  attributable to incremental  insurance  commissions of $6.1
million  related to the  acquisition  of  Armstrong/Robitaille,  a $5.9  million
increase in service  charges on deposit  accounts,  a $2.1  million  increase in
international  commissions  and fees,  and a $1.5  million  increase in merchant
transaction  processing fees,  partly offset by a $2.6 million decrease in trust
and investment  management fees and a $0.9 million  decrease in merchant banking
fees. In addition, securities gains, net, were $0.6 million in the third quarter
of 2002 compared to securities losses, net, of $1.7 million in the third quarter
of 2001.

         Revenue from service charges on deposit accounts was $68.6 million,  an
increase  of 9  percent  over the  third  quarter  of 2001.  This  increase  was
primarily  attributable  to an 18 percent  increase in quarterly  average demand
deposits  and  reductions  in the  earnings  credit  rates,  caused by the lower
interest  rate  environment  on analyzed  deposit  accounts,  which  resulted in
customers  paying fees for  services  rather than  increasing  required  deposit
balances.

         Trust and investment  management fees were $35.4 million, a decrease of
7  percent  over  the  third  quarter  of  2001.   This  decrease  is  primarily
attributable to declining market  conditions and their impact on transaction and
asset-based  fees.  Total  assets  under  administration  of $129.7  billion  at
September 30, 2002 decreased by $5.8 billion,  or 4 percent,  from September 30,
2001.

         Merchant transaction processing fees were $22.9 million, an increase of
7  percent  over  the  third  quarter  of  2001.  This  increase  was  primarily
attributable  to an increase in the volume of credit  card drafts  deposited  by
merchants and increased consumer usage of our enhanced Gold and Platinum version
of our  standard  MasterMoney  Card (debit card) aimed at  stimulating  consumer
usage for higher dollar purchases.

         Insurance  commissions  were $6.1 million  reflecting  the  incremental
revenues associated with our acquisition of Armstrong/Robitaille.

                                       33

<PAGE>

         Securities gains, net, were $0.6 million compared to securities losses,
net, of $1.7  million in the prior year.  In the  current  quarter,  we realized
gains of $1.9 million on the sale of securities,  offset by permanent writedowns
on private capital securities of $1.4 million.  In the third quarter of 2001, we
realized  net  gains  of $7.8  million  on the  sale of  securities,  offset  by
permanent writedowns on private capital securities of $9.5 million.

         Other noninterest  income was $4.6 million,  a decrease of $7.6 million
from the third quarter of 2001.  This decrease was mainly  attributable  to $5.6
million in higher valuation reserves for commercial loans held for sale and $3.4
million in unrealized losses on other non-publicly traded securities compared to
an unrealized loss of $0.6 million in the third quarter of 2001.

         NINE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2002

         In the  first  nine  months  of 2002,  noninterest  income  was  $542.7
million, an increase of $20.0 million, or 4 percent,  over the first nine months
of 2001.  In the prior year,  we  recognized a $20.7 million gain when our stock
holding in STAR System was exchanged  for Concord EFS stock.  Excluding the gain
on the exchange of our STAR System holdings,  noninterest income increased $40.7
million,  or 8 percent.  This increase was mainly attributable to lower residual
value  writedowns in our auto lease portfolio of $19.3 million,  a $23.0 million
increase  in  service  charges  on  deposit  accounts,   incremental   insurance
commissions of $19.5 million related to our acquisition of Armstrong/Robitaille,
a $5.2 million  increase in merchant  transaction  processing  fees,  and a $4.3
million increase in international  commissions and fees, partly offset by a $7.2
million  decrease in trust and  investment  management  fees, and a $3.8 million
decrease in merchant  banking fees. In addition,  securities  losses,  net, were
$3.3 million in the first nine months of 2002 compared to securities gains, net,
of $4.3 million in the first nine months of 2001.

         Revenue from service charges on deposit accounts was $204.6 million, an
increase of 13 percent  over the first nine months of 2001.  This  increase  was
primarily  attributable to a 16 percent  increase in average demand deposits and
reductions  in the earnings  credit  rates,  caused by the lower  interest  rate
environment on analyzed  deposit  accounts,  which resulted in customers  paying
fees for services rather than increasing required deposit balances.

         Trust and investment management fees were $109.7 million, a decrease of
6 percent over the first nine months of 2001.  This decrease is  attributable to
declining  market  conditions  and their impact on transaction  and  asset-based
fees.

         Merchant transaction processing fees were $66.0 million, an increase of
9 percent  over the first  nine  months of 2001.  This  increase  was  primarily
attributable  to an increase in the volume of credit  card drafts  deposited  by
merchants and increased consumer usage of our enhanced Gold and Platinum version
of our  standard  MasterMoney  Card (debit card) aimed at  stimulating  consumer
usage for higher dollar purchases.

         Merchant banking fees were $22.8 million, a decrease of 14 percent from
the first nine months of 2001. This decrease was primarily attributable to fewer
and smaller  syndication  and  investment  banking  transactions  as a result of
current market conditions.

         Insurance  commissions  were $19.5 million  reflecting the  incremental
revenues associated with our acquisition of Armstrong/Robitaille.

         Securities losses, net, were $3.3 million compared to securities gains,
net, of $4.3 million in the prior year. In the first nine months of 2002, we had
permanent  writedowns on private  capital  securities of $10.3  million,  partly
offset by realized gains of $7.0 million on the sale of securities. In the first
nine  months of 2001,  we  realized  net gains of $23.9  million  on the sale of
securities,  including  a $9.5  million  gain on the sale of Concord EFS shares,
partly  offset by permanent  writedowns on private  capital  securities of $19.6
million.

         Other noninterest income was $16.0 million, an increase of $3.9 million
over the first nine months of 2001.  The  increase  was mainly  attributable  to
lower residual value  writedowns in our auto lease  portfolio of

                                       34

<PAGE>

$9.0 million in the first nine months of 2002  compared to $28.3  million in the
first nine months of 2001. This increase was partly offset by higher  unrealized
losses on other  non-publicly  traded  securities of $7.2 million in the current
year compared to an unrealized  loss of $1.7 million in the first nine months of
2001,  $5.6 million in higher  valuation  reserve for loans held for sale in the
current  year,  and a $3.1 million  gain on the sale of leased  equipment in the
prior year.

<TABLE>
<CAPTION>

NONINTEREST EXPENSE


                                            FOR THE THREE MONTHS ENDED                        FOR THE NINE MONTHS ENDED
                                     _________________________________________        __________________________________________
                                     SEPTEMBER 30,     SEPTEMBER 30,   PERCENT        SEPTEMBER 30,      SEPTEMBER 30,   PERCENT
(DOLLARS IN THOUSANDS)                  2001                2002       CHANGE            2001                 2002       CHANGE
_____________________                ________            ________      _______        ________             ________     ________
<S>                                  <C>                 <C>              <C>         <C>                  <C>              <C>
Salaries and other compensation      $140,147            $152,057         8.50%       $408,413             $448,690         9.86%
Employee benefits                      31,025              30,218        (2.60)         91,830               98,561         7.33
                                     ________            ________      _______        ________             ________     ________
  Salaries and employee benefits      171,172             182,275         6.49         500,243              547,251         9.40
Net occupancy                          23,779              27,340        14.98          70,375               75,750         7.64
Equipment                              16,985              16,343        (3.78)         48,252               48,650         0.82
Merchant transaction processing        13,324              14,644         9.91          39,687               41,993         5.81
Communications                         13,074              13,186         0.86          36,582               39,695         8.51
Software                                8,250              10,061        21.95          22,614               31,610        39.78
Professional services                   9,982              10,350         3.69          29,155               30,789         5.60
Advertising and public relations       10,084               9,145        (9.31)         28,134               27,774        (1.28)
Data processing                         8,885               7,944       (10.59)         26,935               24,475        (9.13)
Intangible asset amortization           3,635               1,497       (58.82)         10,806                3,661       (66.12)
Foreclosed asset expense (income)         (60)                 18           nm               1                  130           nm
Other                                  37,932              38,331         1.05         119,195              112,510        (5.61)
                                     ________            ________      _______        ________             ________     ________
  Total noninterest expense          $317,042            $331,134         4.44%       $931,979             $984,288         5.61%
                                     ========            ========      =======        ========             ========     ========
<FN>
_____________
nm = not meaningful
</FN>
</TABLE>

         THREE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2002

         In the third quarter of 2002,  noninterest  expense was $331.1 million,
an increase of $14.1 million, or 4 percent, over the third quarter of 2001. This
increase was primarily due to a $11.1 million  increase in salaries and employee
benefits,  a $3.6  million  increase in net  occupancy  expense,  a $1.8 million
increase  in  software  expense,   and  a  $1.3  million  increase  in  merchant
transaction  processing  expense.  These  increases were partly offset by a $2.1
million decrease in intangible asset expense mostly attributable to the adoption
of SFAS No. 142, "Goodwill and Other Intangible Assets," in the first quarter of
2002, which eliminated the amortization of goodwill.

         Salaries and employee  benefits were $182.3  million,  an increase of 7
percent over the third quarter of 2001. This increase was primarily attributable
to salary expense  increases  necessary to achieve our strategic goals to expand
key  businesses,  to  annual  merit  increases,  to  higher  incentive  expense,
partially  offset  by  lower  benefit  expenses  primarily  due to  higher  COLI
(company-owned  life insurance)  income.  Excluding higher COLI income,  benefit
expenses, including higher medical costs, would have been $2.9 million higher.

         Net occupancy expense was $27.3 million, an increase of 15 percent over
the third quarter of 2001.  This increase was primarily  attributable  to higher
building rent,  depreciation,  leasehold  amortization and maintenance  expenses
mainly associated with the opening of new branches and the  Armstrong/Robitaille
and First Western Bank acquisitions.

                                       35

<PAGE>


         Software expense was $10.1 million,  an increase of 22 percent over the
third quarter of 2001.  This increase was  primarily  attributable  to increased
software purchases and development to support strategic technology initiatives.

         Merchant transaction  processing expense was $14.6 million, an increase
of 10  percent  over the third  quarter of 2001.  This  increase  was  primarily
attributable  to an increase in the volume of credit  card drafts  deposited  by
merchants.

         Intangible asset  amortization  expense was $1.5 million, a decrease of
59  percent  from  the  third  quarter  of 2001.  This  decrease  was  primarily
attributable to lower goodwill  amortization related to the adoption of SFAS No.
142 in the first quarter of 2002.

         NINE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2002

         In the  first  nine  months of 2002,  noninterest  expense  was  $984.3
million,  an increase of $52.3  million,  or 6 percent,  over the same period in
2001.  This increase was  primarily due to a $47.0 million  increase in salaries
and employee benefits,  a $9.0 million increase in software expense,  and a $3.1
million increase in communications  expense.  These increases were partly offset
by a $7.1 million  decrease in intangible  asset expense mostly  attributable to
the adoption of SFAS No. 142 in the first quarter of 2002,  which eliminated the
amortization of goodwill,  a $2.5 million  decrease in data processing  expense,
and a $6.7 million decrease in other noninterest expense.

         Salaries and employee  benefits were $547.3  million,  an increase of 9
percent  over the  first  nine  months  of 2001.  This  increase  was  primarily
attributable  to increases in staff  necessary to achieve our strategic goals to
expand key businesses,  to annual merit increases,  to higher incentive expense,
and to higher other benefit expenses including higher pension and medical costs.

         Software expense was $31.6 million,  an increase of 40 percent over the
first nine months of 2001. This increase was primarily attributable to increased
software purchases and development to support strategic technology initiatives.

         Net occupancy expense was $75.8 million,  an increase of 8 percent over
the third quarter of 2001.  This increase was primarily  attributable  to higher
building rent,  depreciation,  leasehold  amortization and maintenance  expenses
mainly associated with the opening of new branches and the  Armstrong/Robitaille
and First Western Bank acquisitions.

         Communications expense was $39.7 million, an increase of 9 percent over
the first nine months of 2001.  This  increase  was  primarily  attributable  to
higher  costs  associated  with  increased  rates  and  usage for data and voice
communication.

         Merchant transaction  processing expense was $42.0 million, an increase
of 6  percent  over the third  quarter  of 2001.  This  increase  was  primarily
attributable  to an increase in the volume of credit  card drafts  deposited  by
merchants.

         Professional  services  expense  was $30.8  million,  an  increase of 6
percent  over the  first  nine  months  of 2001.  This  increase  was  primarily
attributable  to higher  consulting  expenses  related  to  process  improvement
projects and higher legal expenses.

         Data processing expense was $24.5 million, a decrease of 9 percent over
the first nine months of 2001.  This decrease was primarily  attributable to the
impact of reductions in the earnings credit rates,  caused by the lower interest
rate environment, on analyzed deposit accounts used to offset vendor expenses.

         Intangible asset  amortization  expense was $3.7 million, a decrease of
66 percent from the third quarter of 2001.  This decrease  reflects the adoption
of SFAS No. 142 in the first quarter of 2002.

         Other noninterest  expense was $112.5 million,  a decrease of 6 percent
from the  first  nine  months  of 2001.  This  decrease  was  mainly  due to the
recognition  of a $6.2 million loss at the adoption of SFAS No.133,  "Accounting
for   Derivative    Instruments    and   Hedging    Activities,"    and   higher
derivative-related

                                       36

<PAGE>

expenses  of $3.6  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, both of which occurred in the prior year.

INCOME TAX EXPENSE

         Income tax expense in the third quarter of 2002 was $65.2 million, a 32
percent  effective  income tax rate, which included a $3.3 million net reduction
in  income  tax  expense  resulting  from a change  in a tax law in the State of
California  concerning  the tax treatment of loan loss  reserves.  For the third
quarter of 2001, the effective income tax rate was also 32 percent.

         Income tax expense in the first nine months of 2002 was $188.7 million,
a 33 percent  effective  income tax rate,  which  included  a $3.3  million  net
reduction  in income  tax  expense  resulting  from a change in a tax law in the
State of California concerning the tax treatment of loan loss reserves.  For the
first nine months of 2001, the effective income tax rate was also 33 percent.

LOANS

         The following table shows loans outstanding by loan type.

<TABLE>
<CAPTION>
                                                                                                     PERCENT CHANGE TO
                                                                                                SEPTEMBER 30, 2002 FROM:
                                                                                             ______________________________
                                          SEPTEMBER 30,     DECEMBER 31,     SEPTEMBER 30,    SEPTEMBER 30,    DECEMBER 31,
(DOLLARS IN THOUSANDS)                       2001               2001             2002            2001            2001
______________________________________    ___________       ___________      ____________    _____________     ____________
<S>                                       <C>               <C>              <C>                    <C>              <C>
Domestic:
  Commercial, financial and industrial    $12,227,368       $11,476,361      $10,759,876            (12.00)%          (6.24)%
  Construction                              1,119,854         1,059,847        1,259,435             12.46            18.83
  Mortgage:
    Residential                             4,537,854         4,788,219        5,852,932             28.98            22.24
    Commercial                              3,434,037         3,590,318        3,950,568             15.04            10.03
                                          ___________       ___________       ___________    _____________     ____________
      Total mortgage                        7,971,891         8,378,537        9,803,500             22.98            17.01
  Consumer:
    Installment                             1,326,056         1,200,047          899,263            (32.19)          (25.06)
    Revolving lines of credit                 810,188           859,021        1,057,245             30.49            23.08
                                          ___________       ___________       ___________    _____________     ____________
      Total consumer                        2,136,244         2,059,068        1,956,508             (8.41)           (4.98)
  Lease financing                             981,290           979,242          836,688            (14.74)          (14.56)
                                          ___________       ___________       ___________    _____________     ____________
      Total loans in domestic offices      24,436,647        23,953,055       24,616,007              0.73             2.77
Loans originated in foreign branches        1,157,642         1,040,975        1,346,152             16.28            29.32
                                          ___________       ___________       ___________    _____________     ____________
      Total loans                         $25,594,289       $24,994,030      $25,962,159              1.44%            3.87%
                                          ===========       ===========      ============    =============     ============
</TABLE>

         Our lending  activities  are  predominantly  domestic,  with such loans
comprising 95 percent of the total loan  portfolio at September 30, 2002.  Total
loans at September 30, 2002 were $26.0 billion,  an increase of 1 percent,  from
September 30, 2001. The increase was mainly  attributable  to an increase in the
residential mortgage portfolio of $1.3 billion and an increase in the commercial
mortgage  portfolio  of  $516.5  million,  partly  offset  by a  decline  in the
commercial,  financial  and  industrial  loan  portfolio  of $1.5  billion and a
decline in the consumer loan portfolio of $179.7 million.

         Commercial, financial and industrial loans continue to be a significant
portion  of  our  loan  portfolio.  These  loans  are  extended  principally  to
corporations,  middle market businesses, and small businesses,  with no industry
concentration exceeding 10 percent of total loans. The commercial, financial and
industrial

                                       37

<PAGE>

loan portfolio was $10.8 billion, or 41 percent of total loans, at September 30,
2002,  compared with $12.2 billion,  or 48 percent of total loans,  at September
30, 2001. The decrease of $1.5 billion,  or 12 percent,  from the prior year was
primarily   attributable  to  current  economic  conditions,   loan  sales,  and
reductions in our exposure in nonrelationship syndicated loans. The reduction in
commercial,  financial,  and industrial loans is consistent with our strategy to
reduce  our  exposure  in  more  volatile  commercial  loans  and  increase  the
percentage of more stable consumer loans.

         The construction loan portfolio  totaled $1.3 billion,  or 5 percent of
total loans, at September 30, 2002,  compared with $1.1 billion, or 4 percent of
total  loans,  at  September  30,  2001.  This growth of $139.6  million,  or 12
percent,  from the prior year was primarily  attributable to a reasonably stable
Southern California housing market during 2001 and 2002, despite the slowdown in
the economy.

         Commercial  mortgages were $4.0 billion,  or 15 percent of total loans,
at September 30, 2002, compared with $3.4 billion, or 13 percent of total loans,
at  September  30,  2001.  The  mortgage  loan  portfolio  consists  of loans on
commercial and  industrial  projects  primarily in  California.  The increase in
commercial mortgages of $516.5 million, or 15 percent,  from September 30, 2001,
was primarily due to demand in the Southern California real estate market.

         Residential  mortgages were $5.9 billion, or 23 percent of total loans,
at September 30, 2002, compared with $4.5 billion, or 18 percent of total loans,
at  September  30,  2001.  The  residential   mortgage   portfolio  consists  of
residential loans secured by one-to-four family residential properties primarily
in  California.  The increase in  residential  mortgages of $1.3 billion,  or 29
percent,  from  September 30, 2001,  continues to be influenced by our strategic
decision  to increase  our  residential  mortgage  portfolio  through  increased
in-house production and additional wholesale and correspondent channels.

         Consumer  loans totaled $2.0 billion,  or 8 percent of total loans,  at
September 30, 2002,  compared with $2.1 billion, or 8 percent of total loans, at
September  30,  2001.  The  decrease  of  $179.7  million,  or  8  percent,  was
attributable  to the impact of our  decision to exit the  indirect  auto lending
business  in the third  quarter of 2000,  partly  offset by an  increase in home
equity loans.

         Lease financing totaled $836.7 million, or 3 percent of total loans, at
September 30, 2002,  compared with $981.3 million,  or 4 percent of total loans,
at September 30, 2001. As we previously announced,  effective April 20, 2001, we
discontinued our auto leasing activity.

         Loans originated in foreign branches totaled $1.3 billion, or 5 percent
of total loans, at September 30, 2002, compared with $1.2 billion, or 5 percent,
at September 30, 2001. The increase in loans  originated in foreign  branches of
$188.5 million,  or 16 percent,  from September 30, 2001, was attributable to an
increase in trade related short-term loans and funded acceptances.

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 September  30,  2001,  December  31, 2001 and  September  30, 2002 for any
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 exclude local

                                       38

<PAGE>

currency outstandings.  For any country 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>

                                                      FINANCIAL        PUBLIC       CORPORATIONS         TOTAL
                                                    INSTITUTIONS       SECTOR        AND OTHER       OUTSTANDINGS
(DOLLARS IN MILLIONS)                                  ENTITIES       BORROWERS
__________________________________________          ____________      _________     ____________     ____________
<S>                                                      <C>            <C>                <C>               <C>
September 30, 2001
Korea                                                    $425           $--                $50               $475
December 31, 2001
Korea                                                    $468           $--                $46               $514
September 30, 2002
Korea                                                    $580           $--                $55               $635
</TABLE>


PROVISION FOR CREDIT LOSSES

         We  recorded a $40  million  provision  for credit  losses in the third
quarter of 2002, compared with a $50 million provision for credit losses for the
same period in the prior year. The provision for credit losses in the first nine
months of 2002 was $145  million,  compared  with a $215 million  provision  for
credit  losses  for the same  period in the prior  year.  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.

ALLOWANCE FOR CREDIT LOSSES

         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 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  losses  over a period,
               which  we  believe  captures  the  inherent  losses  in our  loan
               portfolio;

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

         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,   residential   mortgage  loans  and
               automobile leases.

         We believe that an economic cycle is a period in which both upturns and
downturns in the economy have been  reflected.  We calculate loss factors over a
time   interval   that  spans  what  we  believe   constitutes  a  complete  and
representative 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

                                       39

<PAGE>

Creditors for Impairment of a Loan," or methods that include a range of probable
outcomes based upon certain qualitative factors.

         The  unallocated   allowance   contains   amounts  that  are  based  on
management's  evaluation  of conditions  that are not directly  reflected 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 may not be 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 economic cycle;

         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 conditions
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 an economic  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 FROM DECEMBER 31, 2001

         During the third  quarter of 2002,  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.
Changes in  estimates  and  assumptions  regarding  the effects of economic  and
business  conditions on borrowers and other factors,  which are described below,
affected the assessment of the unallocated allowance.

                                       40

<PAGE>

         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.  At September 30, 2002, our total allowance for credit losses
was $623 million or 2.40 percent of the total loan  portfolio and 158 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,
"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. At December 31,
2001,  total  impaired  loans were $492  million and the  associated  impairment
allowance  was  $98  million   compared  with  $395  million  and  $87  million,
respectively,  at September 30, 2002. The impairment  allowance at September 30,
2002 reflects a refinement of  methodology  for  estimating  losses for impaired
loans. The December 31, 2001 impairment allowance has not been restated.

         We recorded a $40 million  provision in the third  quarter of 2002 as a
result of  management's  assessment of factors,  including the continued slow US
economy,  uncertainty in the communication/media,  power, real estate, airlines,
and other  sectors  in  domestic  markets  in which we  operate,  and growth and
changes in the  composition  of the loan  portfolio.  Losses  inherent  in large
commercial  loans are more difficult to assess because  historically  these have
been more volatile than losses from other credits.

         CHANGES IN THE FORMULA AND SPECIFIC ALLOWANCES

         At  September  30,  2002,  the formula  allowance  remained  relatively
unchanged  at $321  million,  compared to $325  million at December  31, 2001, a
decrease of $4 million.

         At September 30, 2002, the specific allowance was $124 million compared
to $138  million at  December  31,  2001,  a net  decrease of $14  million.  The
specific  allowance  includes $15 million  related to aircraft  leases.  The net
decline was primarily due to charge-offs  recognized  year-to-date  as well as a
refinement  in  our  estimated  losses  for  impaired  loans  and a  decline  in
nonaccrual loans.

         CHANGES IN THE UNALLOCATED ALLOWANCE

         At September  30, 2002,  the  unallocated  allowance  was $178 million,
compared to $172  million at December 31,  2001,  an increase of $6 million.  In
evaluating the appropriateness of the unallocated  allowance,  we considered the
following  factors as well as more general  factors  such as the  interest  rate
environment and the impact of the economic  downturn on those borrowers who have
a more leveraged financial profile:

         o     the  adverse   effects  of  declining   wholesale  power  prices,
               continued  accounting concerns,  and uncertainties  regarding the
               course of deregulation on borrowers in the power industry,  which
               could be in the range of $25 million to $50 million;

         o     the adverse effects of changes in the economic,  regulatory,  and
               technology environments on borrowers in the  communications/media
               industry,  which  could  be in the  range of $18  million  to $40
               million;

         o     the adverse  effects of the general  weakening in commercial real
               estate markets  reflecting  weak demand,  as well as the specific
               deterioration in Northern California, which could be in the range
               of $16 million to $32 million;

         o     the adverse effects of the continued weak economic  conditions in
               certain  Asia/Pacific  Rim countries and the reduced  strength of
               the  Japanese  corporate  parents of our Pacific  Rim  borrowers,
               which could be in the range of $7 million to $13 million; and

         o     the adverse  effects of continued  soft  consumer  confidence  on
               borrowers in the retailing industry,  which could be in the range
               of $6 million to $12 million.

                                       41

<PAGE>

         There  can be no  assurance  that the  adverse  impact  of any of these
conditions  on us will not be in  excess of the  ranges  set  forth  above.  See
"Certain Business Risks Factors."

         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>


                                                                FOR THE THREE MONTHS        FOR THE NINE MONTHS
                                                                 ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                                               ______________________      _____________________
(DOLLARS IN THOUSANDS)                                            2001          2002          2001         2002
____________________________________________________________   ________      ________      ________     ________
<S>                                                            <C>           <C>           <C>          <C>
Balance, beginning of period                                   $626,537      $624,948      $613,902     $634,509
Loans charged off:
  Commercial, financial and industrial                           65,974        48,284       230,680      178,462
  Construction                                                      567            --           567           --
  Mortgage                                                           37         2,097            95        2,525
  Consumer                                                        3,299         1,845         9,534        6,672
  Lease financing                                                   807           479         2,595        1,986
                                                               ________      ________      ________     ________
    Total loans charged off                                      70,684        52,705       243,471      189,645
Recoveries of loans previously charged off:
  Commercial, financial and industrial                           22,467         8,769        40,477       26,108
  Construction                                                       --            --            --           40
  Mortgage                                                           --            75            24          214
  Consumer                                                        1,027         2,012         3,279        3,793
  Lease financing                                                   282           115           601          497
  Foreign(1)                                                         --            --            14           --
                                                               ________      ________      ________     ________
    Total recoveries of loans previously charged off             23,776        10,971        44,395       30,652
                                                               ________      ________      ________     ________
                    Net loans charged off                        46,908        41,734       199,076      158,993
Provision for credit losses                                      50,000        40,000       215,000      145,000
Foreign translation adjustment and other net additions
  (deductions)(2)                                                    54          (136)         (143)       2,562
                                                               ________      ________      ________     ________
Balance, end of period                                         $629,683      $623,078      $629,683     $623,078
                                                               ========      ========      ========     ========
Allowance for credit losses to total loans                         2.46%         2.40%         2.46%        2.40%
Provision for credit losses to net loans charged off             106.59         95.85        108.00        91.20
Net loans charged off to average loans outstanding for
  the period(3)                                                    0.72          0.64          1.02         0.83
<FN>
____________
(1)   Foreign loans are those loans originated in foreign branches.

(2)   Includes a second quarter 2002 addition of $2.4 million related to the
      First Western Bank acquisition.

(3)   Annualized.
</FN>
</TABLE>

         Total loans charged off in the third quarter of 2002 decreased by $18.0
million  from the  third  quarter  of  2001,  primarily  due to a $17.7  million
decrease in commercial,  financial and industrial loans charged off. Charge-offs
reflect  the  realization  of  losses  in the  portfolio  that  were  recognized
previously through provisions for credit losses.

         Third quarter 2002 recoveries of loans previously charged off decreased
by $12.8  million from the third  quarter of 2001.  The  percentage of net loans
charged off to average loans outstanding for the third quarter of 2002 decreased
by 8 basis  points from the same period in 2001.  At  September  30,  2002,  the
allowance for credit losses exceeded the annualized net loans charged off during
the  third  quarter  of  2002,

                                       42

<PAGE>

reflecting  management's belief, based on the foregoing analysis, that there are
additional losses inherent in the portfolio.

         Historical net charge-offs are not necessarily indicative of the amount
of net charge-offs that we will realize in the future.


<TABLE>
<CAPTION>

NONPERFORMING ASSETS


                                                                        SEPTEMBER 30,      DECEMBER 31,       SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                       2001               2001                2002
_____________________________________________________                   ____________       ___________        ____________
<S>                                                                     <C>                <C>                <C>
Commercial, financial and industrial                                    $    419,544       $   471,509        $    367,888
Construction                                                                      --                --               1,096
Commercial mortgage                                                           24,975            17,430              24,133
Lease financing                                                                   --             2,946               2,095
                                                                        ____________       ___________        ____________
   Total nonaccrual loans                                                    444,519           491,885             395,212
Foreclosed assets                                                                378               597                 309
Distressed loans held for sale                                                 5,349                --                  --
                                                                        ____________       ___________        ____________
   Total nonperforming assets                                           $    450,246       $   492,482        $    395,521
                                                                        ============       ===========        ============
Allowance for credit losses                                             $    629,683       $   634,509        $    623,078
                                                                        ============       ===========        ============
Nonaccrual loans to total loans                                                 1.74%             1.97%               1.52%
Allowance for credit losses to nonaccrual loans                               141.65            129.00              157.66
Nonperforming assets to total loans, distressed loans
  held for sale and foreclosed assets                                           1.76              1.97                1.52
Nonperforming assets to total assets                                            1.28              1.37                1.05
</TABLE>

         At September 30, 2002,  nonperforming  assets totaled $395.5 million, a
decrease of $54.7 million, or 12 percent,  from September 30, 2001. The decrease
was  primarily  due to  moderate  inflows  of  nonaccrual  loans,  coupled  with
continuing higher levels of pay-downs and charge-offs.

         Nonaccrual  loans as a  percentage  of total loans were 1.52 percent at
September  30,  2002,   compared  with  1.74  percent  at  September  30,  2001.
Nonperforming  assets as a percentage of total loans,  distressed loans held for
sale, and foreclosed assets were 1.52 percent at September 30, 2002, compared to
1.76 percent at September 30, 2001.

<TABLE>
<CAPTION>

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING


                                                                        SEPTEMBER 30,      DECEMBER 31,       SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                      2001               2001                2002
_____________________________________________________                   ____________       ___________        ____________
<S>                                                                     <C>                <C>                <C>
Commercial, financial and industrial                                    $      5,993       $    26,571        $        565
Mortgage:
  Residential                                                                  5,063             4,854               4,127
  Commercial                                                                     710             2,356                  --
                                                                        ____________       ___________        ____________
    Total mortgage                                                             5,773             7,210               4,127
Consumer and other                                                             2,459             2,579               2,121
                                                                        ____________       ___________        ____________
    Total loans 90 days or more past due and still
      accruing                                                          $     14,225       $    36,360        $      6,813
                                                                        ============       ===========        ============
</TABLE>

                                       43

<PAGE>

QUANTITATIVE  AND  QUALITATIVE  DISCLOSURE  ABOUT INTEREST RATE RISK  MANAGEMENT
(OTHER THAN TRADING)

         THE FOLLOWING  INFORMATION ON MARKET RISK ASSOCIATED WITH INTEREST RATE
RISK IS BEING  PROVIDED IN ORDER TO EXPAND THE  INFORMATION  ON THE  ASSUMPTIONS
USED IN OUR  SIMULATION  MODELS,  WHICH  QUANTIFY OUR  SENSITIVITY TO CHANGES IN
INTEREST RATES. SEE ALSO PART I, ITEM 3 OF THIS DOCUMENT, TITLED "MARKET RISK."

         We engage in asset and liability management activities with the primary
purposes of managing the  sensitivity of net interest income (NII) to changes in
interest rates within limits  established by the Board of Directors  (Board) and
maintaining  a risk  profile  that is  consistent  with  management's  strategic
objectives.

         The Asset & Liability  Management  (ALM)  policy  approved by the Board
requires  monthly  monitoring  of  interest  rate risk by the Asset &  Liability
Management  Committee  (ALCO),  which is  composed  of  UnionBanCal  Corporation
executives. 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 investment  securities and derivative  instruments such as interest rate
swaps, floors, and caps to hedge the our interest rate exposures. Traditionally,
we have  entered  into  swaps and  floors  to offset  the  adverse  impact  that
declining  interest  rates would have on the  interest  income  generated by our
variable  rate  commercial  loans.  For  a  further   discussion  of  derivative
instruments see Note 6--"Derivative  Instruments and Other Financial Instruments
Used For Hedging" of the Notes to Condensed Consolidated Financial Statements.

         We use two types of simulation  models to quantify the  sensitivity  of
NII to changes in interest  rates:  a shock  simulation  model and a Monte Carlo
simulation model. In both approaches,  NII is adjusted to incorporate the effect
of certain noninterest expense items related to demand deposit accounts that are
nevertheless sensitive to changes in interest rates.

         Our  primary  simulation  tool  involves a shock  analysis  in which we
estimate the impact that  immediate and sustained  parallel  shifts in the yield
curve would have on NII over a 12-month horizon. Under policy limits established
by the Board,  the negative change in simulated NII in either the up or down 200
basis point shock  scenarios  may not exceed 8 percent of NII as measured in the
flat rate,  or no change,  scenario.  The  following  table sets forth the shock
sensitivity results in both the up and down 200 basis point scenarios as of June
30, 2002 and September 30, 2002.


                                              JUNE 30,       SEPTEMBER 30,
(DOLLARS IN MILLIONS)                           2002               2002
_____________________________________        ___________     _____________

+200 basis points                              $  48.3               $ 38.3
as a percentage of flat rate scenario NII         3.24%                2.64%
-200 basis points                              $ (66.5)              $ (7.2)
as a percentage of flat rate scenario NII         4.47%                0.50%



         Asset  sensitivity  in the  minus  200  basis  point  shock  simulation
decreased  significantly in the third quarter of 2002,  primarily as a result of
the  execution  of interest  rate hedges in July and August,  which  included $1
billion in "zero cost" collars and $1 billion in receive-fixed swaps. Both types
of hedges will generate income in a declining interest rate environment, thereby
offsetting  the  reduction in interest  income from our  LIBOR-based  commercial
loans.  However,  the  collars,  which  involve  the  simultaneous  purchase  of
at-the-money floors and sale of  out-of-the-money  caps, have less of a negative
impact on interest  income than swaps when interest  rates rise, as evidenced by
the decrease of $10 million in the plus 200 basis point  shock,  compared to the
$59.3 million reduction in risk in the down scenario. Overall, the flattening of
the yield  curve in the third  quarter and the  associated  increase in mortgage
asset prepayment  activity had a negative effect on our NII. However, we believe
our NII sensitivity profile indicates that our exposure to further  acceleration
of prepayment speeds has diminished.  With Treasury yields nearing all-time lows
in late September,  the prepayment levels projected by our model do not increase
significantly  from current  levels,  even if interest  rates  decline  further.
Consequently, the assumed loss of income from reinvesting prepaid

                                       44

<PAGE>

cash flows at lower rates decreased.  However,  in formulating our interest rate
risk management strategy we will continue to closely monitor prepayment activity
in our  investment  and  residential  mortgage  portfolios  and test  our  model
assumptions against actual data.

         With federal  funds and LIBOR rates at the end of the third  quarter of
2002 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 interest rate environment.
As of September  30, 2002,  the  difference  between flat rate  Adjusted NII and
Adjusted NII after a 100 basis point downward  shock was plus $15.6 million,  or
1.08%  percent of a flat rate NII. This  represents a favorable  change of $38.1
million from the second quarter,  when the difference was ($22.5) million due to
the execution of $2 billion in interest rate derivatives and slowing  prepayment
speeds, described previously.

         In the Monte Carlo  simulation  analysis,  we randomly sample up to 300
paths  that  short-term  interest  rates  could take over the next 12 months and
calculate  the NII  associated  with each  path.  The  result  is a  probability
distribution of 12-month NII outcomes.  Earnings-at  risk (EaR),  defined as the
potential negative change in NII, is measured at a 97.5% confidence level and is
managed  within the limit  established by the Board's ALM policy at 5 percent of
mean NII. The following table  summarizes our EaR as a percentage of mean NII as
of June 30, 2002 and September 30, 2002.


                                                    JUNE 30,      SEPTEMBER 30,
(DOLLARS IN MILLIONS)                                2002              2002
 _________________________________________         _________      _____________
EaR                                                 $25.8             $19.7
EaR as a percentage of mean NII                      1.78%             1.39%


         Management's  goal  in the  NII  simulations  is to  capture  the  risk
embedded in the balance  sheet.  As a result,  asset and liability  balances are
kept constant  throughout the analysis horizon.  Two exceptions are non-maturity
deposits,  which vary with levels of interest rates  according to  statistically
derived balance equations,  and discretionary derivative hedges and fixed income
portfolios,  which are allowed to run off.  Additional  assumptions  are made to
model the future behavior of deposit rates and loan spreads based on statistical
analysis,  management's outlook, and historical experience. The prepayment risks
related to residential loans and  mortgage-backed  securities are measured using
industry  estimates of prepayment  speeds.  The  sensitivity  of the  simulation
results to the  underlying  assumptions  is tested as a regular part of the risk
measurement  process by  running  simulations  with  different  assumptions.  In
addition,  management  supplements  the  official  risk  measures  based  on the
constant  balance  sheet  assumption  with  volume-based  simulations  based  on
forecasted  balances.  We  believe  that  together,  these  simulations  provide
management  with a  reasonably  comprehensive  view  of the  sensitivity  of our
operating  results to changes in interest  rates,  at least over the measurement
horizon.  However,  as with any financial model, the underlying  assumptions are
inherently uncertain and subject to refinement as modeling techniques and theory
improve and historical data becomes more readily accessible.  Consequently,  our
simulation  models cannot predict with certainty how rising or falling  interest
rates might impact net interest  income.  Actual and  simulated NII results will
differ to the extent there are differences  between actual and assumed  interest
rate changes,  balance sheet  volumes,  and management  strategies,  among other
factors.

         A third  measure that ALCO uses to monitor our 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 our  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, the
Board has not  established  official  policy limits for EVE. We will continue to
improve  and refine the EVE  methodology  in the coming  months with the goal of
proposing an official EVE risk measure in 2003.

                                       45

<PAGE>

LIQUIDITY

         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 an ALCO coordination
process on a bank-wide basis, and implemented 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 79 percent of average total assets
of $35.8  billion for the third quarter  ended  September 30, 2002.  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. In the fourth quarter of 2001, we issued $200 million in medium-term
notes, the proceeds of which were utilized for general corporate purposes.

         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 $0.8 billion during the third quarter of
2002.  Additional  liquidity may be provided by investment  securities available
for sale and by loan maturities.

REGULATORY CAPITAL

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

<TABLE>
<CAPTION>

UNIONBANCAL CORPORATION


                                          SEPTEMBER 30,   DECEMBER 31,    SEPTEMBER 30,       MINIMUM
                                              2001            2001             2002         REGULATORY
(DOLLARS IN THOUSANDS)                                                                      REQUIREMENT
___________________________               ____________    ____________    _____________     ___________
<S>                                        <C>             <C>             <C>
CAPITAL COMPONENTS
Tier 1 capital                             $ 3,631,340     $ 3,661,231     $ 3,617,173
Tier 2 capital                                 605,605         598,812         568,163
                                           ___________     ___________     ___________
Total risk-based capital                   $ 4,236,945     $ 4,260,043     $ 4,185,336
                                           ===========     ===========     ===========
Risk-weighted assets                       $32,473,206     $31,906,438     $32,457,228
                                           ===========     ===========     ===========
Quarterly average assets                   $34,572,908     $34,760,203     $35,690,024
                                           ===========     ===========     ===========
<CAPTION>

CAPITAL RATIOS                   AMOUNT   RATIO       AMOUNT    RATIO      AMOUNT   RATIO       AMOUNT   RATIO
___________________________   __________  _____     __________  ______   __________ ______    __________  _____
<S>                           <C>         <C>       <C>         <C>      <C>        <C>       <C>          <C>
Total capital (to
  risk-weighted assets)       $4,236,945  13.05%    $4,260,043  13.35%   $4,185,336 12.89%  > $2,596,578   8.0%
                                                                                            -
Tier 1 capital (to
  risk-weighted assets)        3,631,340   11.18     3,661,231   11.47    3,617,173  11.14  >  1,298,289   4.0
                                                                                            -
Leverage(1)                    3,631,340   10.50     3,661,231   10.53    3,617,173  10.13  >  1,427,601   4.0
                                                                                            -
<FN>
____________
(1)  Tier 1 capital divided by quarterly average assets (excluding certain
     intangible assets).
</FN>
</TABLE>

<TABLE>
<CAPTION>

UNION BANK OF CALIFORNIA, N.A.


                                          SEPTEMBER 30,   DECEMBER 31,    SEPTEMBER 30,       MINIMUM             "WELL-CAPITALIZED"
                                              2001            2001             2002         REGULATORY               REGULATORY
(DOLLARS IN THOUSANDS)                                                                      REQUIREMENT             REQUIREMENT
___________________________               ____________    ____________    _____________     ___________            _________________
<S>                                        <C>             <C>             <C>
CAPITAL COMPONENTS
Tier 1 capital                             $ 3,275,643     $ 3,323,096     $ 3,271,284
Tier 2 capital                                 495,165         487,640         479,792
                                           ___________     ___________     ___________
Total risk-based capital                   $ 3,770,808     $ 3,810,736     $ 3,751,076
                                           ===========     ===========     ===========
Risk-weighted assets                       $31,887,207     $31,271,268     $31,803,655
                                           ===========     ===========     ===========
Quarterly average assets                   $34,132,248     $34,282,625     $35,160,630
                                           ===========     ===========     ===========

<CAPTION>

CAPITAL RATIOS                   AMOUNT   RATIO       AMOUNT    RATIO      AMOUNT   RATIO       AMOUNT   RATIO     AMOUNT     RATIO
___________________________   __________  _____     __________  ______   __________ ______    __________  _____   __________  _____
<S>                            <C>         <C>      <C>         <C>      <C>        <C>       <C>          <C>    <C>         <C>
Total capital (to
  risk-weighted assets)        $3,770,808  11.83%   $3,810,736  12.19%   $3,751,076 11.79%  > $2,544,292   8.0% > $3,180,366  10.0%
                                                                                            -                   -
Tier 1 capital (to
  risk-weighted assets)         3,275,643   10.27    3,323,096  10.63    3,271,284  10.29   >  1,272,146   4.0  >  1,908,219   6.0
                                                                                            -                   -
Leverage(1)                     3,275,643    9.60    3,323,096   9.69    3,271,284   9.30   >  1,406,425   4.0  >  1,758,032   5.0
                                                                                            -                   -
<FN>
_____________
(1)  Tier 1 capital divided by quarterly average assets (excluding certain
     intangible assets).
</FN>
</TABLE>


                                       46

<PAGE>

         We  and  Union  Bank  of  California,   N.A.  are  subject  to  various
regulations  issued by  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, 2001, our Tier 1 risk-based capital ratio at
September  30,  2002  decreased  33 basis  points  to 11.14  percent,  our total
risk-based  capital ratio  decreased 46 basis points to 12.89  percent,  and our
leverage ratio decreased 40 basis points to 10.13 percent.  The decreases in the
capital ratios were primarily  attributable  to higher  risk-weighted  assets of
$550.8  million,  or 1.7 percent,  resulting from higher earning asset levels in
the current year. Shareholders' equity, excluding unrealized gains on securities
available for sale and on cash flow hedges as recognized in other  comprehensive
income,  was slightly  lower by $13.5  million,  or 0.4  percent.  The impact of
increased  retained earnings from net income in the first nine months of 2002 on
shareholders'  equity  was  mostly  offset  by our  $300  million  common  share
repurchase from Bank of Tokyo-Mitsubishi announced on August 27, 2002.

         As of September  30, 2002,  management  believes the capital  ratios of
Union  Bank  of  California,   N.A.  met  all  regulatory   requirements   of  a
"well-capitalized"  institution,  which are 10 percent for the Total  risk-based
capital ratio, 6 percent for the Tier 1 risk-based  capital ratio, and 5 percent
for the leverage ratio.

CERTAIN BUSINESS RISK 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.  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.

         THE TRAGIC EVENTS OF SEPTEMBER 11 AND THE ENSUING WAR ON TERRORISM
           CONTRIBUTED TO THE DOWNTURN IN US ECONOMIC CONDITIONS WHICH CONTINUES

         On-going  acts or threats of terrorism  and actions  taken by the US or
other  governments  as a result  of such  acts or  threats,  including  possible
military  action,  have  contributed to the  continuing  downturn in US economic
conditions and could further  adversely affect business and economic  conditions
in the US generally and in our  principal  markets.  For example,  the events of
September 11, 2001,  caused a decrease in air travel in the US, which  adversely
affected  the  airline  industry  and  many  other  travel-related   industries,
including those operating in California.

         ADVERSE ECONOMIC FACTORS AFFECTING CERTAIN INDUSTRIES COULD ADVERSELY
           AFFECT OUR BUSINESS

         We are  subject  to certain  industry-specific  economic  factors.  For
example,  a significant  and  increasing  portion of our total loan portfolio is
related to residential real estate.  Accordingly,  a downturn in the real estate
and  housing  industries  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 declining 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 remaining auto leases.  We provide financing 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,  the airlines industry and the technology industry.  Industry-specific
risks are beyond our

                                       47

<PAGE>

control and could adversely affect our portfolio of loans, potentially resulting
in an increase in nonperforming loans or charge-offs.

         RISKS ASSOCIATED WITH CURTAILED MARKET ACCESS OF POWER COMPANIES COULD
           AFFECT OUR PORTFOLIO CREDIT QUALITY

         The recent failure of Enron  Corporation  and WorldCom,  Inc.,  coupled
with continued  turbulence in energy markets,  has  significantly  impacted debt
ratings  and  equity   valuations  of  a  broad  spectrum  of  power  companies,
particularly   those   involved  in  energy   trading  and  in   deregulated  or
non-regulated  markets. These developments have sharply reduced these companies'
ability to access  public debt and equity  markets,  contributing  to heightened
liquidity  pressures.  Should these negative  trends continue and /or intensify,
the credit quality of certain of our borrowers could be adversely affected.

         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, could result in
a decrease in our interest income relative to interest expense.

         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  (approximately  65
percent as of September 30, 2002) 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 other 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,

                                       48

<PAGE>

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 by
Japanese and US regulatory  authorities.  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.

         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 US 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.

         Banks,  securities firms, and insurance  companies can now combine in a
new type of financial  services  company called a "financial  holding  company."
Financial holding  companies can offer virtually any type of financial  service,
including  banking,   securities   underwriting,   insurance  (both  agency  and
underwriting),  and merchant banking.  Recently,  a number of foreign banks have
acquired financial services companies in the US, further increasing  competition
in the US market.

         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
liquidate, 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 OR OTHER LAWS AND
           REGULATIONS OR GOVERNMENTAL  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,

                                       49

<PAGE>

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 future  acts of  terrorism,  and the Enron
Corporation, WorldCom, Inc. and other major US corporate bankruptcies and recent
reports of accounting  irregularities at US public companies,  including various
large and publicly traded companies.  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.

         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 Federal Reserve Board (FRB), which
regulates the supply of money and credit in the US. 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.  Among the  instruments  of
monetary policy  available to the FRB are (a) conducting open market  operations
in US government  securities,  (b) changing the discount  rates of borrowings of
depository  institutions,  (c) 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

         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 can make no
assurances 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,  including, but not
               limited to, rising employee and healthcare costs;

         o     our inability to increase noninterest income;

                                       50

<PAGE>

         o     our inability to decrease reliance on revenues generated from
               assets;

         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 our net interest margin;

         o     increases in competition;

         o     adverse regulatory or legislative developments; and

         o     unexpected increases in costs related to acquisitions.

         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 investment 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  line.  Any
acquisitions,  divestitures  or  restructuring  may  result in the  issuance  of
potentially dilutive 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 obtaining any
required  regulatory   approvals  and  in  the  assimilation  or  separation  of
operations,  services,  products and  personnel,  the diversion of  management's
attention from other business  concerns,  higher than expected deposit attrition
(run-off),  divestitures required by regulatory  authorities,  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.

                                       51

<PAGE>


WRITTEN STATEMENTS UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         The  written  statements  of our  chief  executive  officer  and  chief
financial  officer  with  respect to this  report on Form 10-Q,  as  required by
section 906 of the  Sarbanes-Oxley  Act of 2002 (18 U.S.C.  section 1350),  have
been  submitted  to  the  Securities  and  Exchange   Commission  as  additional
correspondence accompanying this report.

ITEM 3. MARKET RISK.

         A  complete   explanation   concerning  our  market  risk  exposure  is
incorporated  by  reference  from the text under the caption  "Quantitative  and
Qualitative  Disclosures  About Market Risk" in the Form 10-K for the year ended
December 31, 2001 and by reference to Part I, Item 2 of this document  under the
captions  "Quantitative  and  Qualitative  Disclosure  about  Interest Rate Risk
Management  (Other Than  Trading),"  "Liquidity,"  and  "Certain  Business  Risk
Factors."

ITEM 4. CONTROLS AND PROCEDURES


         (a)   EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.  Based on their
               evaluation  as of a date  within  90 days of the  filing  of this
               quarterly report on Form 10-Q, the Company's  principal executive
               officer and principal  financial  officer have concluded that the
               Company's  disclosure  controls  and  procedures  (as  defined by
               13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934
               ("the  "Exchange  Act") are effective to ensure that  information
               required to be  disclosed by the Company in reports that it files
               or  submits  under  the  Exchange  Act  is  recorded,  processed,
               summarized,  and reported  within the time  periods  specified in
               Securities and Exchange Commission rules and forms.

         (b)   CHANGES IN INTERNAL CONTROLS.  There were no significant  changes
               in the Company's internal controls or in other factors that could
               significantly  affect these  controls  subsequent  to the date of
               their  evaluation.  There  were no  significant  deficiencies  or
               material  weaknesses,  and  therefore  there  were no  corrective
               actions taken.

                                       52

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. 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.

         Union Bank of  California,  our major  subsidiary,  (the Bank) has been
named in two suits pending in the United States  District  Court for the Central
District of California, ROCKOFF V UNION BANK OF CALIFORNIA ET AL (filed December
21, 2001) and NEILSON V UNION BANK OF CALIFORNIA ET AL (filed September 4, 2002)
in which  the  plaintiffs  seek in  excess  of $250  million  lost by those  who
invested  money in various  investment  arrangements  conducted by an individual
named Reed Slatkin.  Mr.  Slatkin is alleged to have been operating a fraudulent
investment  scheme commonly  referred to as a "Ponzi" scheme.  The plaintiffs in
the ROCKOFF  case are various  investors  in the  arrangements  conducted by Mr.
Slatkin and the  plaintiffs  in the NEILSON case include both  investors and the
trustee of Mr. Slatkin's  bankruptcy estate. A substantial majority of those who
invested with Mr. Slatkin had no  relationship  with the Bank. A small minority,
comprising less than five percent of the investors,  had custodial accounts with
the Bank. The NEILSON case seeks to impose liability upon the Bank and two other
financial institutions for both the losses suffered by those custodial customers
as well as investors who had no relationship with the Bank.

         Although the cases are in the  preliminary  stages of  litigation,  the
Bank has numerous legal  defenses which it will invoke.  Based on our evaluation
to date of these two cases,  management  believes  that these  lawsuits will not
result in a material  adverse  effect on our  financial  position  or results of
operations.  In addition,  we believe that the  disposition  of all other claims
currently  pending will also not have a material adverse effect on our financial
position or results of operations.

ITEM 5. OTHER INFORMATION

         ANNUAL MEETING OF SHAREHOLDERS: The Annual Meeting of Shareholders will
be held on  Wednesday,  April 23,  2003,  at 9:30 a.m.  upon the approval of the
Board of  Directors,  expected at the December 2002  meeting.  Shareholders  who
expect to present a proposal  at the 2003  Annual  Meeting of  Shareholders  for
publication  in the  Company's  proxy  statement and action on the proxy form or
otherwise for such meeting must submit their  proposal by November 24, 2002. The
proposal  must be  mailed  to the  Corporate  Secretary  of the  Company  at 400
California Street,  Mail Code 1-001-16,  San Francisco,  CA 94104.  Without such
notice, proxy holders appointed by the Board of Directors of the Company will be
entitled to exercise their  discretionary  voting authority when the proposal is
raised at the annual  meeting,  without any  discussion  of the  proposal in the
proxy statement.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(A)   EXHIBITS:


NO.                                 DESCRIPTION

2.0     Agreement and Plan of Merger, dated as of August 5, 2002 by and among
        Valencia Bank and Trust, Union Bank of California, N.A., and
        UnionBanCal Corporation(1)
___________
(1)   Incorporated by reference to Exhibit 2 of the UnionBanCal Registration
      Statement on Form S-4 (file no. 333-99573) filed on September 26, 2002

                                       53

<PAGE>


(B)   REPORTS ON FORM 8-K

         We filed a report on Form 8-K on August 14, 2002 reporting under Item 9
thereof  which  included  the  written  certification  statements  of our  chief
executive  officer and chief  financial  officer with  respect to our  quarterly
report  on Form  10-Q  for the  period  ended  June  30,  2002,  filed  with the
Securities  and Exchange  Commission  on August 14, 2002, as required by section
906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350).

         We filed a report on Form 8-K on October 17, 2002 reporting  under Item
5  thereof  that  UnionBanCal  Corporation  issued  a press  release  concerning
earnings for the third quarter of 2002.

                                       54

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



                                     UNIONBANCAL CORPORATION
                                           (Registrant)

                                     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)


                                     Dated: November 13, 2002

                                       55

<PAGE>


CERTIFICATIONS

I, Norimichi Kanari, certify that:

         1.    I have reviewed this quarterly report on Form 10-Q of UnionBanCal
               Corporation (the "Registrant");

         2.    Based on my knowledge, this quarterly report does not contain any
               untrue statement of a material fact or omit to state a material
               fact necessary to make the statements made, in light of the
               circumstances under which such statements were made, not
               misleading with respect to the period covered by this quarterly
               report;

         3.    Based on my knowledge, the financial statements, and other
               financial information included in this quarterly report, fairly
               present in all material respects the financial condition, results
               of operations and cash flows of the Registrant as of, and for,
               the periods presented in this quarterly report;

         4.    The Registrant's other certifying officer and I are responsible
               for establishing and maintaining disclosure controls and
               procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
               for the Registrant and we have:

               a)    designed such disclosure controls and procedures to ensure
                     that material information relating to the Registrant,
                     including its consolidated subsidiaries, is made known to
                     us by others within those entities, particularly during the
                     period in which this quarterly report is being prepared;

               b)    evaluated the effectiveness of the Registrant's disclosure
                     controls and procedures as of a date within 90 days prior
                     to the filing date of this quarterly report (the
                     "Evaluation Date"); and

               c)    presented in this quarterly report our conclusions about
                     the effectiveness of the disclosure controls and procedures
                     based on our evaluation as of the Evaluation Date;

         5.    The Registrant's other certifying officer and I have disclosed,
               based on our most recent evaluation, to the Registrant's auditors
               and the audit committee of Registrant's board of directors (or
               persons performing the equivalent function):

               a)    all significant deficiencies in the design or operation of
                     internal controls which could adversely affect the
                     Registrant's ability to record, process, summarize and
                     report financial data and have identified for the
                     Registrant's auditors any material weaknesses in internal
                     controls; and

               b)    any fraud, whether or not material, that involves
                     management or other employees who have a significant role
                     in the Registrant's internal controls; and

         6.    The Registrant's other certifying officer and I have indicated in
               this quarterly report whether or not there were significant
               changes in internal controls or in other factors that could
               significantly affect internal controls subsequent to the date of
               our most recent evaluation, including any corrective actions with
               regard to significant deficiencies and material weaknesses.

Date: November 13, 2002


                                         By:/s/ NORIMICHI KANARI
                                            ____________________________
                                            Norimichi Kanari
                                            PRESIDENT AND
                                            CHIEF EXECUTIVE OFFICER

                                       56

<PAGE>

I, David I. Matson, certify that:

         1.    I have reviewed this quarterly report on Form 10-Q of UnionBanCal
               Corporation (the "Registrant");

         2.    Based on my knowledge, this quarterly report does not contain any
               untrue statement of a material fact or omit to state a material
               fact necessary to make the statements made, in light of the
               circumstances under which such statements were made, not
               misleading with respect to the period covered by this quarterly
               report;

         3.    Based on my knowledge, the financial statements, and other
               financial information included in this quarterly report, fairly
               present in all material respects the financial condition, results
               of operations and cash flows of the Registrant as of, and for,
               the periods presented in this quarterly report;

         4.    The Registrant's other certifying officer and I are responsible
               for establishing and maintaining disclosure controls and
               procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
               for the Registrant and we have:

               a)    designed such disclosure controls and procedures to ensure
                     that material information relating to the Registrant,
                     including its consolidated subsidiaries, is made known to
                     us by others within those entities, particularly during the
                     period in which this quarterly report is being prepared;

               b)    evaluated the effectiveness of the Registrant's disclosure
                     controls and procedures as of a date within 90 days prior
                     to the filing date of this quarterly report (the
                     "Evaluation Date"); and

               c)    presented in this quarterly report our conclusions about
                     the effectiveness of the disclosure controls and procedures
                     based on our evaluation as of the Evaluation Date;

         5.    The Registrant's other certifying officer and I have disclosed,
               based on our most recent evaluation, to the Registrant's auditors
               and the audit committee of Registrant's board of directors (or
               persons performing the equivalent function):

               a)    all significant deficiencies in the design or operation of
                     internal controls which could adversely affect the
                     Registrant's ability to record, process, summarize and
                     report financial data and have identified for the
                     Registrant's auditors any material weaknesses in internal
                     controls; and

               b)    any fraud, whether or not material, that involves
                     management or other employees who have a significant role
                     in the Registrant's internal controls; and

         6.    The Registrant's other certifying officer and I have indicated in
               this quarterly report whether or not there were significant
               changes in internal controls or in other factors that could
               significantly affect internal controls subsequent to the date of
               our most recent evaluation, including any corrective actions with
               regard to significant deficiencies and material weaknesses.

Date: November 13, 2002


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

                                       57