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                                  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 JUNE 30, 2002

                         Commission file number 1-15081

                             UNIONBANCAL CORPORATION


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




                              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 July 31, 2002: 157,648,374

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<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...........................................................    18
      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.......................................    38
      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.........................................................    45
      Regulatory Capital................................................    46
      Certain Business Risk Factors.....................................    47
      Written Statements Under Section 906 of the Sarbanes-Oxley Act
      of 2002 ..........................................................    51
   Item 3. Market Risk..................................................    51

PART II
OTHER INFORMATION
   Item 4. Submission of Matters to a Vote of Security Holders..........    52
   Item 6. Exhibits and Reports on Form 8-K.............................    52
Signatures..............................................................    53


<PAGE>

<TABLE>
<CAPTION>


                         PART I. FINANCIAL INFORMATION
                    UnionBanCal Corporation and Subsidiaries
                       Consolidated Financial Highlights
                                  (Unaudited)

                                                                   AS OF AND FOR THE THREE MONTHS ENDED
                                                                  ______________________________________
                                                                  JUNE 30,           JUNE 30,    PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                       2001               2002      CHANGE
_____________________________________________                     ________           ________    _______
<S>                                                            <C>               <C>               <C>

RESULTS OF OPERATIONS:
   Net interest income(1)......................................$   379,313       $    386,298      1.84%
   Provision for credit losses.................................     65,000             50,000    (23.08)
   Noninterest income..........................................    168,391            188,774     12.10
   Noninterest expense.........................................    307,452            329,791      7.27
                                                               ___________       ____________
   Income before income taxes(1)...............................    175,252            195,281     11.43
   Taxable-equivalent adjustment...............................        590                537     (8.98)
   Income tax expense..........................................     57,512             64,802     12.68
                                                               ___________       ____________
   Net income..................................................$   117,150       $    129,942     10.92%
                                                               ===========       ============


PER COMMON SHARE:
   Net income--basic...........................................$      0.74       $       0.83     12.16%
   Net income--diluted.........................................       0.74               0.81      9.46
   Dividends(2)................................................       0.25               0.28     12.00
   Book value (end of period)..................................      21.37              23.94     12.03
   Common shares outstanding (end of period)...................157,839,218        157,718,215     (0.08)
   Weighted average common shares outstanding--basic...........158,180,799        157,314,527     (0.55)
   Weighted average common shares outstanding--diluted.........158,881,633        159,675,924      0.50
BALANCE SHEET (END OF PERIOD):
   Total assets................................................$35,758,333       $ 36,136,725      1.06%
   Total loans................................................. 25,656,247         25,592,306     (0.25)
   Nonperforming assets........................................    460,116            414,972     (9.81)
   Total deposits.............................................. 27,700,624         28,833,365      4.09
   Medium and long-term debt...................................    199,701            406,869    103.74
   Trust preferred securities..................................    364,269            366,265      0.55
   Common equity...............................................  3,373,564          3,775,663     11.92
BALANCE SHEET (PERIOD AVERAGE):
   Total assets................................................$34,589,322       $ 35,730,492      3.30%
   Total loans................................................. 26,114,389         25,578,846     (2.05)
   Earning assets.............................................. 31,272,909         32,674,628      4.48
   Total deposits.............................................. 26,641,335         28,222,245      5.93
   Common equity...............................................  3,406,324          3,749,035     10.06
FINANCIAL RATIOS:
   Return on average assets(3).................................       1.36%              1.46%
   Return on average common equity(3)..........................      13.79              13.90
   Efficiency ratio(4).........................................      56.13              57.35
   Net interest margin(1)......................................       4.86               4.74
   Dividend payout ratio.......................................      33.78              33.73
   Tangible equity ratio.......................................       9.30              10.16
   Tier 1 risk-based capital ratio.............................      10.85              11.90
   Total risk-based capital ratio..............................      12.70              13.65
   Leverage ratio..............................................      10.33              10.77
   Allowance for credit losses to total loans..................       2.44               2.44
   Allowance for credit losses to nonaccrual loans.............     138.18             150.78
   Net loans charged off to average total loans................       1.24               0.90
   Nonperforming assets to total loans, distressed loans
      held for sale, and foreclosed assets.... ................       1.79               1.62
   Nonperforming assets to total assets........................       1.29               1.15


<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.

</FN>
</TABLE>


                                       2


<PAGE>

<TABLE>
<CAPTION>


                    UnionBanCal Corporation and Subsidiaries
                 Consolidated Financial Highlights (Continued)
                                   (Unaudited)

                                                                                         AS OF AND FOR THE SIX MONTHS ENDED
                                                                                      ________________________________________
                                                                                      JUNE 30,           JUNE 30,      PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                                           2001               2002        CHANGE
_____________________________________________                                         ________           ________      _______
<S>                                                                               <C>                <C>                 <C>

RESULTS OF OPERATIONS:
   Net interest income(1)......................................................   $    767,196       $    767,271        0.01%
   Provision for credit losses.................................................        165,000            105,000      (36.36)
   Noninterest income..........................................................        349,198            360,225        3.16
   Noninterest expense.........................................................        614,937            653,154        6.21
                                                                                  ____________       ____________
   Income before income taxes(1)...............................................        336,457            369,342        9.77
   Taxable-equivalent adjustment...............................................          1,212              1,070      (11.72)
   Income tax expense..........................................................        110,808            123,553       11.50
                                                                                  ____________       ____________
   Net income..................................................................   $    224,437       $    244,719        9.04%
                                                                                  ============       ============


PER COMMON SHARE:
   Net income--basic............................................................  $       1.42       $       1.56        9.86%
   Net income--diluted..........................................................          1.41               1.54        9.22
   Dividends(2)................................................................           0.50               0.53        6.00
   Book value (end of period)..................................................          21.37              23.94       12.03
   Common shares outstanding (end of period)...................................    157,839,218        157,718,215       (0.08)
   Weighted average common shares outstanding--basic............................   158,535,105        156,774,339       (1.11)
   Weighted average common shares outstanding--diluted..........................   158,975,932        158,534,791       (0.28)
BALANCE SHEET (END OF PERIOD):
   Total assets................................................................   $ 35,758,333       $ 36,136,725        1.06%
   Total loans.................................................................     25,656,247         25,592,306       (0.25)
   Nonperforming assets........................................................        460,116            414,972       (9.81)
   Total deposits..............................................................     27,700,624         28,833,365        4.09
   Medium and long-term debt...................................................        199,701            406,869      103.74
   Trust preferred securities..................................................        364,269            366,265        0.55
   Common equity...............................................................      3,373,564          3,775,663       11.92
BALANCE SHEET (PERIOD AVERAGE):
   Total assets................................................................   $ 34,509,101       $ 35,408,797        2.61%
   Total loans.................................................................     26,265,170         25,354,548       (3.47)
   Earning assets..............................................................     31,171,142         32,327,489        3.71
   Total deposits..............................................................     26,206,917         27,897,401        6.45
   Common equity...............................................................      3,372,321          3,687,244        9.34
FINANCIAL RATIOS:
   Return on average assets(3).................................................           1.31%              1.39%
   Return on average common equity(3)..........................................          13.42              13.38
   Efficiency ratio(4).........................................................          55.08              57.92
   Net interest margin(1)......................................................           4.94               4.77
   Dividend payout ratio.......................................................          35.21              33.97
   Tangible equity ratio.......................................................           9.30              10.16
   Tier 1 risk-based capital ratio.............................................          10.85              11.90
   Total risk-based capital ratio..............................................          12.70              13.65
   Leverage ratio..............................................................          10.33              10.77
   Allowance for credit losses to total loans..................................           2.44               2.44
   Allowance for credit losses to nonaccrual loans.............................         138.18             150.78
   Net loans charged off to average total loans(3).............................           1.17               0.93
   Nonperforming assets to total loans, distressed loans held for sale, and
      foreclosed assets........................................................           1.79               1.62
   Nonperforming assets to total assets........................................           1.29               1.15

<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) and noninterest income.

</FN>
</TABLE>


                                       3


<PAGE>

<TABLE>
<CAPTION>


ITEM 1. FINANCIAL STATEMENTS


                    UnionBanCal Corporation and Subsidiaries
                  Condensed Consolidated Statements of Income
                                   (Unaudited)


                                                                              FOR THE THREE MONTHS           FOR THE SIX MONTHS
                                                                                 ENDED JUNE 30,                 ENDED JUNE 30,
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                                  2001         2002             2001         2002
_____________________________________________                                ________     ________       __________     ________
<S>                                                                          <C>          <C>            <C>            <C>

INTEREST INCOME
   Loans.................................................................    $486,928     $378,572       $1,023,417     $754,370
   Securities............................................................      71,210       78,244          138,518      159,580
   Interest bearing deposits in banks....................................         661          629            1,627        1,125
   Federal funds sold and securities purchased under resale agreements...       2,158        4,828            3,187        8,887
   Trading account assets................................................       2,164          930            5,064        1,621
                                                                             ________     ________       __________     ________
      Total interest income..............................................     563,121      463,203        1,171,813      925,583
                                                                             ________     ________       __________     ________
INTEREST EXPENSE
   Domestic deposits.....................................................     125,426       55,411          260,543      115,346
   Foreign deposits......................................................      19,447        6,105           44,990       12,369
   Federal funds purchased and securities sold under repurchase agreements     10,622        1,396           36,422        3,345
   Commercial paper......................................................      14,625        4,536           35,038        8,510
   Medium and long-term debt.............................................       2,535        2,411            5,731        4,823
   UnionBanCal Corporation--obligated mandatorily redeemable preferred
      securities of subsidiary grantor trust.............................       5,367        3,948           11,389        7,911
   Other borrowed funds..................................................       6,376        3,635           11,716        7,078
                                                                             ________     ________       __________     ________
      Total interest expense.............................................     184,398       77,442          405,829      159,382
                                                                             ________     ________       __________     ________
NET INTEREST INCOME......................................................     378,723      385,761          765,984      766,201
   Provision for credit losses...........................................      65,000       50,000          165,000      105,000
                                                                             ________     ________       __________     ________
      Net interest income after provision for credit losses..............     313,723      335,761          600,984      661,201
                                                                             ________     ________       __________     ________
NONINTEREST INCOME
   Service charges on deposit accounts...................................      61,852       69,869          118,872      136,012
   Trust and investment management fees..................................      39,234       37,587           78,915       74,312
   Merchant transaction processing fees..................................      20,433       22,421           39,499       43,122
   International commissions and fees....................................      18,125       19,239           35,235       37,462
   Brokerage commissions and fees........................................       9,063        9,275           17,978       18,907
   Merchant banking fees.................................................       9,681        9,081           18,929       16,026
   Securities gains (losses), net........................................       3,751       (1,297)           6,017       (3,863)
   Other.................................................................       6,252       22,599           33,753       38,247
                                                                             ________     ________       __________     ________
      Total noninterest income...........................................     168,391      188,774          349,198      360,225
                                                                             ________     ________       __________     ________
NONINTEREST EXPENSE
   Salaries and employee benefits........................................     164,584      186,100          329,071      364,976
   Net occupancy.........................................................      23,837       25,029           46,596       48,410
   Equipment.............................................................      15,469       15,967           31,267       32,307
   Merchant transaction processing.......................................      13,449       14,433           26,363       27,349
   Communications........................................................      11,806       12,568           23,508       26,509
   Professional services.................................................      11,349       10,936           19,173       20,439
   Data processing.......................................................       9,101        7,540           18,050       16,531
   Foreclosed asset expense (income).....................................          48          (13)              61          112
   Other.................................................................      57,809       57,231          120,848      116,521
                                                                             ________     ________       __________     ________
      Total noninterest expense..........................................     307,452      329,791          614,937      653,154
                                                                             ________     ________       __________     ________
   Income before income taxes............................................     174,662      194,744          335,245      368,272
   Income tax expense....................................................      57,512       64,802          110,808      123,553
                                                                             ________     ________       __________     ________
NET INCOME...............................................................    $117,150     $129,942       $  224,437     $244,719
                                                                             ========     ========       ==========     ========

NET INCOME PER COMMON SHARE--BASIC........................................   $   0.74     $   0.83       $     1.42     $   1.56
                                                                             ========     ========       ==========     ========

NET INCOME PER COMMON SHARE--DILUTED......................................   $   0.74     $   0.81       $     1.41     $   1.54
                                                                             ========     ========       ==========     ========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC.........................    158,181      157,315          158,535      156,774
                                                                             ========     ========       ==========     ========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED.......................    158,882      159,676          158,976      158,535
                                                                             ========     ========       ==========     ========


See accompanying notes to condensed consolidated financial statements.

</TABLE>


                                       4


<PAGE>

<TABLE>
<CAPTION>


                    UnionBanCal Corporation and Subsidiaries
                     Condensed Consolidated Balance Sheets


                                                                                  (UNAUDITED)                           (UNAUDITED)
                                                                                    JUNE 30,        DECEMBER 31,          JUNE 30,
(DOLLARS IN THOUSANDS)                                                                2001              2001                2002
______________________                                                            ___________        ___________        ___________
<S>                                                                                <C>                <C>                <C>

ASSETS
Cash and due from banks..................................................         $ 2,223,197        $ 2,682,392        $ 2,046,286
Interest bearing deposits in banks.......................................              51,510             64,162            153,423
Federal funds sold and securities purchased under resale agreements......           1,491,000            918,400            640,500
                                                                                  ___________        ___________        ___________
   Total cash and cash equivalents.......................................           3,765,707          3,664,954          2,840,209
Trading account assets...................................................             301,744            229,697            365,784
Securities available for sale:
   Securities pledged as collateral......................................             287,881            137,922            133,219
   Held in portfolio.....................................................           4,569,015          5,661,160          5,750,157
Loans (net of allowance for credit losses: June 30, 2001, $626,537;
   December 31, 2001, $634,509; June 30, 2002, $624,948).................          25,029,710         24,359,521         24,967,358
Due from customers on acceptances........................................             167,309            182,440            119,072
Premises and equipment, net..............................................             483,865            494,534            500,584
Intangible assets........................................................               2,264             16,176             23,965
Goodwill.................................................................              48,900             68,623             92,924
Other assets.............................................................           1,101,938          1,223,719          1,343,453
                                                                                  ___________        ___________        ___________
   Total assets..........................................................         $35,758,333        $36,038,746        $36,136,725
                                                                                  ===========        ===========        ===========

LIABILITIES
Domestic deposits:
   Noninterest bearing...................................................         $11,247,828        $12,314,150        $12,938,634
   Interest bearing......................................................          14,267,659         14,160,113         14,267,606
Foreign deposits:
   Noninterest bearing...................................................             342,656            404,708            315,416
   Interest bearing......................................................           1,842,481          1,677,228          1,311,709
                                                                                  ___________        ___________        ___________
   Total deposits........................................................          27,700,624         28,556,199         28,833,365
Federal funds purchased and securities sold under repurchase agreements..             713,056            418,814            318,365
Commercial paper.........................................................           1,416,432            830,657            955,328
Other borrowed funds.....................................................             702,511            700,403            395,826
Acceptances outstanding..................................................             167,309            182,440            119,072
Other liabilities........................................................           1,120,867          1,040,406            965,972
Medium and long-term debt................................................             199,701            399,657            406,869
UnionBanCal Corporation-- obligated mandatorily redeemable preferred
   securities of subsidiary grantor trust................................             364,269            363,928            366,265
                                                                                  ___________        ___________        ___________
   Total liabilities.....................................................          32,384,769         32,492,504         32,361,062
                                                                                  ___________        ___________        ___________
Commitments and contingencies

SHAREHOLDERS' EQUITY
Preferred stock:
   Authorized 5,000,000 shares, no shares issued or outstanding as of
      June 30, 2001, December 31, 2001, and June 30, 2002................                  --                 --                 --
Common stock--no stated value:
   Authorized 300,000,000 shares, issued 157,839,218 shares as of June 30, 2001,
      156,483,511 shares as of December 31, 2001, and 157,718,215
      shares as of June 30, 2002.........................................           1,232,759          1,181,925          1,222,571
Retained earnings........................................................           2,052,159          2,231,384          2,393,132
Accumulated other comprehensive income...................................              88,646            132,933            159,960
                                                                                  ___________        ___________        ___________
   Total shareholders' equity............................................           3,373,564          3,546,242          3,775,663
                                                                                  ___________        ___________        ___________
   Total liabilities and shareholders' equity............................         $35,758,333        $36,038,746        $36,136,725
                                                                                  ===========        ===========        ===========


See accompanying notes to condensed consolidated financial statements.

</TABLE>


                                       5


<PAGE>

<TABLE>
<CAPTION>


                    UnionBanCal Corporation and Subsidiaries
      Condensed Consolidated Statements of Changes in Shareholders' Equity
                                  (Unaudited)

                                                                               FOR THE SIX MONTHS ENDED JUNE 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....................................            22                               72
   Deferred compensation--restricted stock awards.................          (17)                             (15)
   Stock options exercised.......................................         3,841                           70,564
   Stock issued in acquisition of First Western Bank.............            --                           23,852
   Common stock repurchased(1)...................................       (46,674)                         (53,827)
                                                                     __________                       __________
      Balance, end of period.....................................    $1,232,759                       $1,222,571
                                                                     __________                       __________
RETAINED EARNINGS
   Balance, beginning of period..................................    $1,906,093                       $2,231,384
   Net income....................................................       224,437         $224,437         244,719        $244,719
   Dividends on common stock(2)..................................       (79,166)                         (83,077)
   Deferred compensation--restricted stock awards.................          795                              106
                                                                     __________                       __________
      Balance, end of period.....................................    $2,052,159                       $2,393,132
                                                                     __________                       __________
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
      $20,825 and $23,776 in the first six months of 2001 and
      2002, respectively.........................................                         33,620                          38,383
   Less: reclassification adjustment for net gains on cash flow
      hedges included in net income, net of tax expense of $4,900
      and $21,285 in the first six months of 2001 and 2002,
      respectively...............................................                         (7,911)                        (34,361)
                                                                                        ________                        ________
   Net unrealized gains on cash flow hedges......................                         25,709                           4,022
   Unrealized holding gains arising during the period on
      securities available for sale, net of tax expense of $9,434
      and $11,808 in the first six months of 2001 and 2002,
      respectively...............................................                         15,230                          19,063
   Less: reclassification adjustment for losses (gains) on
      securities available for sale included in net income, net of
      tax expense (benefit) of $2,302 and $(1,478) in the first
      six months of 2001 and 2002, respectively..................                         (3,715)                          2,385
                                                                                        ________                        ________
   Net unrealized gains on securities available for sale.........                         11,515                          21,448
   Foreign currency translation adjustment, net of tax expense
      (benefit) of $(414) and $964 in the first six months of 2001
      and 2002, respectively.....................................                           (668)                          1,557
                                                                                        ________                        ________
   Other comprehensive income....................................        58,761           58,761          27,027          27,027
                                                                     __________         ________      __________        ________
   Total comprehensive income....................................                       $283,198                        $271,746
                                                                                        ========                        ========


      Balance, end of period.....................................    $   88,646                       $  159,960
                                                                     __________                       __________
        TOTAL SHAREHOLDERS' EQUITY...............................    $3,373,564                       $3,775,663
                                                                     ==========                       ==========

<FN>

__________________

(1) Common stock repurchased includes commission costs.

(2)  Dividends  per share  were $0.50 and $0.53 for the first six 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>

See accompanying notes to condensed consolidated financial statements.

</TABLE>


                                       6


<PAGE>

<TABLE>
<CAPTION>


                    UnionBanCal Corporation and Subsidiaries
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)

                                                                                                        FOR THE SIX MONTHS
                                                                                                          ENDED JUNE 30,
                                                                                                   ____________________________
(DOLLARS IN THOUSANDS)                                                                                  2001            2002
______________________                                                                             ____________      __________
<S>                                                                                                    <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income..................................................................................    $    224,437      $  244,719
   Adjustments to reconcile net income to net cash provided by operating activities:
      Provision for credit losses..............................................................         165,000         105,000
      Depreciation, amortization and accretion.................................................          40,167          39,605
      Provision for deferred income taxes......................................................          21,076          28,359
      Loss (gain) on securities available for sale.............................................         (6,017)           3,863
      Net (increase) decrease in trading account assets........................................          37,951        (136,087)
      Other, net of acquisition................................................................         372,303           3,245
                                                                                                   ____________      __________
      Total adjustments........................................................................         630,480          43,985
                                                                                                   ____________      __________
   Net cash provided by operating activities...................................................         854,917         288,704
                                                                                                   ____________      __________
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sales of securities available for sale........................................         272,827         131,499
   Proceeds from matured and called securities available for sale..............................         367,840         584,878
   Purchases of securities available for sale..................................................      (1,328,816)       (772,509)
   Net decrease (increase) in loans, net of acquisition........................................         205,234        (825,373)
   Net cash used in acquisition of First Western Bank..........................................              --          64,689
   Other, net..................................................................................         (35,464)        (40,783)
                                                                                                   ____________      __________
      Net cash used in investing activities....................................................        (518,379)       (857,599)
                                                                                                   ____________      __________
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase in deposits, net of acquisition................................................         417,441          72,541
   Net decrease in federal funds purchased and securities sold under repurchase agreements.....        (674,611)       (100,449)
   Net increase (decrease) in commercial paper and other borrowed funds........................         483,703        (179,906)
   Common stock repurchased....................................................................         (46,674)        (53,827)
   Payments of cash dividends..................................................................         (79,502)        (78,165)
   Stock options exercised.....................................................................           3,841          70,564
   Other, net..................................................................................          13,623           1,629
                                                                                                   ____________      __________
      Net cash provided by (used in) financing activities......................................         117,821        (267,613)
                                                                                                   ____________      __________
Net increase (decrease) in cash and cash equivalents...........................................         454,359        (836,508)
Cash and cash equivalents at beginning of period...............................................       3,322,979       3,664,954
Effect of exchange rate changes on cash and cash equivalents...................................         (11,631)         11,763
                                                                                                   ____________      __________
Cash and cash equivalents at end of period.....................................................    $  3,765,707      $2,840,209
                                                                                                   ============      ==========

CASH PAID DURING THE PERIOD FOR:
   Interest....................................................................................    $    432,648      $  168,806
   Income taxes................................................................................          34,485          73,098
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.........    $      6,242      $      281
   Securities transferred from held to maturity to available for sale at the adoption of SFAS
      No. 133..................................................................................          23,529              --


See accompanying notes to condensed consolidated financial statements.

</TABLE>


                                       7


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
              Notes to Condensed Consolidated Financial Statements
                                 June 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 June 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 four stock  repurchase
plans of $100 million each. The Company  repurchased $35 million and $19 million
of common stock in the first and second quarters of 2002, respectively,  and $22
million  and $25  million of common  stock in the first and second  quarters  of
2001,  respectively.  As of June  30,  2002,  $91  million  of  common  stock is
authorized for repurchase. At June 30, 2002, The Bank of Tokyo-Mitsubishi,  Ltd.
(BTM),  which is a wholly-owned  subsidiary of Mitsubishi Tokyo Financial Group,
owned  approximately  67 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  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 amounts. Upon adoption of SFAS No. 142, as of January
1, 2002, the amortization of existing goodwill ceased and the carrying amount of
goodwill was allocated to the  applicable  reporting  units.  The allocation


                                       8


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)


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,  with
measurement  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 June 30, 2002, goodwill was $93 million.

     Net income and  earnings  per share for the second  quarter  and six months
ended  June 30,  2001 were  adjusted  on a proforma  basis to  exclude  goodwill
amortization  expense  (net of taxes of $0.1  million for the second  quarter of
2001 and $0.3 million for the six months ended June 30, 2001) as follows:

<TABLE>
<CAPTION>

                                                                FOR THE THREE MONTHS ENDED       SIX MONTHS ENDED
                                                                __________________________    _____________________
                                                                  JUNE 30,      JUNE 30,      JUNE 30,     JUNE 30,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                       2001          2002          2001         2002
_____________________________________________                     ________      ________      ________     ________
<S>                                                               <C>           <C>           <C>          <C>

NET INCOME:
As reported................................................       $117,150      $129,942      $224,437     $244,719
Goodwill amortization, net of income tax...................          3,720            --         7,345           --
As adjusted................................................       $120,870      $129,942      $231,782     $244,719
BASIC EARNINGS PER SHARE:
As reported................................................       $   0.74      $   0.83      $   1.42     $   1.56
Goodwill amortization......................................           0.02            --          0.05           --
As adjusted................................................       $   0.76      $   0.83      $   1.47     $   1.56
DILUTED EARNINGS PER SHARE:
As reported................................................       $   0.74      $   0.81      $   1.41     $   1.54
Goodwill amortization......................................           0.02            --          0.05           --
As adjusted................................................       $   0.76      $   0.81      $   1.46     $   1.54

</TABLE>



         On May 13, 2002, the Company completed its acquisition of First Western
Bank. As a result of this acquisition,  the Company recorded approximately $23.8
million of goodwill and $10 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 is effective for fiscal years
beginning after June 15, 2002.  Management believes that adopting this Statement
will not have a material impact on the Company's  financial  position or results
of operations.


                                       9


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)


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


                                       10


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


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 six months ended June 30, 2001 and 2002.

<TABLE>
<CAPTION>


                                     THREE MONTHS ENDED JUNE 30,                             SIX MONTHS ENDED JUNE 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............       $117,150      $117,150     $129,942      $129,942     $224,437      $224,437      $244,719     $244,719
                             ========      ========     ========      ========     ========      ========      ========     ========

Weighted average
   common shares
   outstanding........        158,181       158,181      157,315       157,315      158,535       158,535       156,774      156,774
Additional shares
   due to:
   Assumed conversion
      of dilutive
      stock options...             --           701           --         2,361           --           441            --        1,761
                             ________      ________     ________      ________     ________      ________      ________     ________
Adjusted weighted
   average common
   shares outstanding.        158,181       158,882      157,315       159,676      158,535       158,976       156,774      158,535
                             ========      ========     ========      ========     ========      ========      ========     ========

Net income per share..       $   0.74      $   0.74     $   0.83      $   0.81     $   1.42         $1.41         $1.56        $1.54
                             ========      ========     ========      ========     ========      ========      ========     ========

</TABLE>



                                       11


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


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 SECURITIES                FOREIGN CURRENCY        NET UNREALIZED GAINS
                                                           AVAILABLE FOR SALE        TRANSLATION ADJUSTMENT      ON CASH FLOW HEDGES
                                                         _____________________      _______________________     ____________________
                                                                            FOR THE SIX MONTHS ENDED JUNE 30,
                                                         ___________________________________________________________________________
(DOLLARS IN THOUSANDS)                                     2001         2002           2001           2002        2001        2002
______________________                                   _______      ________      ________       ________     _______     _______
<S>                                                      <C>           <C>          <C>            <C>          <C>         <C>

Beginning balance.................................       $41,879      $ 83,271      $(11,191)      $(12,205)    $    --     $62,840
Cumulative effect of accounting change, net of tax            --            --            --             --      22,205          --
Change during the period..........................        11,515        21,448          (668)         1,557      25,709       4,022
                                                         _______      ________      ________       ________     _______     _______
Ending balance....................................       $53,394      $104,719      $(11,859)      $(10,648)    $47,914     $66,862
                                                         =======      ========      ========       ========     =======     =======

</TABLE>


<TABLE>
<CAPTION>

                                                                                         MINIMUM PENSION         ACCUMULATED OTHER
                                                                                       LIABILITY ADJUSTMENT    COMPREHENSIVE INCOME
                                                                                       ____________________    ____________________
                                                                                            FOR THE SIX MONTHS ENDED JUNE 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...........................................................          --         --       36,556       27,027
                                                                                         _____      _____       _______     ________
Ending balance.....................................................................      $(803)     $(973)      $88,646     $159,960
                                                                                         =====      =====       =======     ========

</TABLE>


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 primarily 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.


                                       12


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


NOTE 5--BUSINESS SEGMENTS (Continued)

         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  as if they were  independent
entities.  Unlike  financial  accounting,  there  is no  authoritative  body  of
guidance for management accounting equivalent to US GAAP. Consequently, reported
results are not necessarily  comparable with those presented by other companies.
Included in the tables are the amounts of goodwill for each reporting unit as of
June 30, 2002.  Prior to January 1, 2002,  most of the goodwill was reflected at
the corporate level.

         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.

         "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 amounts, the amount of the provision for
credit losses  (over)/under the RAROC expected loss for the period, the earnings
associated with the unallocated  equity capital and allowance for credit losses,
and the residual costs of support  groups.  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-


                                       13


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


NOTE 5--BUSINESS SEGMENTS (Continued)


owned subsidiaries  located in the US. On an individual basis, none of the items
in "Other" are significant to the Company's business.

<TABLE>
<CAPTION>


                                                             COMMUNITY BANKING
                                                              AND INVESTMENT           COMMERCIAL FINANCIAL        INTERNATIONAL
                                                              SERVICES GROUP              SERVICES GROUP           BANKING GROUP
                                                           _____________________      ______________________     ___________________
                                                                      AS OF AND FOR THE THREE MONTHS ENDED JUNE 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......................................        $279,558     $309,062      $210,928      $211,253     $22,708     $25,998
Net income.........................................        $ 50,912     $ 67,331      $ 65,071      $ 52,700     $ 4,349     $ 6,343
Goodwill at period end.............................        $     --     $     79      $     --      $     14     $    --     $    --
Total assets at period end.........................        $  9,983     $ 11,047      $ 17,169      $ 15,812     $ 1,280     $ 1,466


                                                                 GLOBAL                                              UNIONBANCAL
                                                              MARKETS GROUP                   OTHER                  CORPORATION
                                                           _____________________      ______________________     ___________________
                                                                        AS OF AND FOR THE THREE MONTHS ENDED JUNE 30,
                                                           _________________________________________________________________________
                                                             2001         2002          2001          2002         2001        2002
                                                           ________     ________      ________      ________     _______     _______

RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS) AND ASSETS
   (DOLLARS IN MILLIONS):
Total revenue.........................................     $  5,825     $  1,430      $28,095       $26,792     $547,114    $574,535
Net income (loss).....................................     $  2,927     $(1,622)      $(6,109)      $ 5,190     $117,150    $129,942
Goodwill at period end................................     $     --     $     --      $    49       $    --     $     49    $     93
Total assets at period end............................     $  6,666     $  6,868      $   660       $   944     $ 35,758    $ 36,137

<FN>

__________________

(1) Total revenue is comprised of net interest and noninterest income

</FN>
</TABLE>


                                       14


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


NOTE 5--BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>

                                                             COMMUNITY BANKING
                                                              AND INVESTMENT           COMMERCIAL FINANCIAL         INTERNATIONAL
                                                              SERVICES GROUP             SERVICES GROUP             BANKING GROUP
                                                           _____________________      ______________________     ___________________
                                                                       AS OF AND FOR THE SIX MONTHS ENDED JUNE 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......................................        $553,007     $597,167      $439,731      $412,663     $47,813     $51,591
Net income.........................................        $101,661     $120,980      $144,268      $100,348     $10,940     $12,491
Goodwill at period end.............................        $     --     $     79      $     --      $     14     $    --     $    --
Total assets at period end.........................        $  9,983     $ 11,047      $ 17,169      $ 15,812     $ 1,280     $ 1,466


                                                                  GLOBAL                                             UNIONBANCAL
                                                               MARKETS GROUP                  OTHER                  CORPORATION
                                                           _____________________      ______________________     ___________________
                                                                    AS OF AND FOR THE SIX MONTHS ENDED JUNE 30,
                                                           _________________________________________________________________________
                                                             2001        2002           2001         2002          2001       2002
                                                           ________     ________      ________      ________     _______     _______

RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS)
   AND ASSETS (DOLLARS IN MILLIONS):
Total revenue................................              $  7,863     $ 12,781      $ 66,768      $ 52,224  $1,115,182  $1,126,426
Net income (loss)............................              $ (4,075)    $  2,939      $(28,357)     $  7,961  $  224,437  $  244,719
Goodwill at period end.......................              $     --     $     --      $     49      $     --  $       49  $       93
Total assets at period end...................              $  6,666     $  6,868      $    660      $    944  $   35,758  $   36,137

<FN>

__________________

(1) Total revenue is comprised of net interest 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  derivative  instruments  as part of its  management of asset and liability
positions.  Derivatives  are used to  manage  interest  rate  risk  relating  to
specified groups of assets and  liabilities,  primarily  LIBOR-based  commercial
loans,  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 (Continued)
                                  June 30, 2002
                                   (Unaudited)


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

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

         The Company uses  interest  rate swaps to hedge the variable cash flows
associated  with 1-month LIBOR or 3-month LIBOR  indexed  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 occur is equal to
the term of the  hedge.  As such,  most of the  ineffectiveness  in the  hedging
relationship  results from the mismatch between the timing of reset dates on the
hedge versus those of the loans or CDs.  During the second  quarter of 2002, the
Company recognized a net loss of $0.1 million due to  ineffectiveness,  which is
recognized in noninterest expense, compared to a net gain of $0.3 million in the
second 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.

         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 second quarter of 2002
was a net gain of $0.5  million,  compared to a net loss of $0.2  million in the
second quarter of 2001.


                                       16


<PAGE>


                    UnionBanCal Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Continued)
                                  June 30, 2002
                                   (Unaudited)


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


 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.

NOTE 7--ACQUISITION

         On May 13, 2002, the Company completed its acquisition of First Western
Bank based in Simi Valley,  California. As a result, the Company acquired $222.6
million in total assets,  $118.8  million in loans,  $204.6 million in deposits,
and seven  branches.  The Company paid $20.9 million in cash and issued  489,676
shares of its common stock.

NOTE 8--SUBSEQUENT EVENTS

         On July 24,  2002,  the Board of  Directors  declared a quarterly  cash
dividend  of $0.28 per  share of  common  stock.  The  dividend  will be paid on
October 4, 2002 to shareholders of record as of September 6, 2002.

         On August 5, 2002, the Company signed a definitive agreement to acquire
Valencia Bank and Trust, a commercial  bank with $267 million in assets and five
branches.  The Company will pay $31 million in cash and will issue approximately
$31 million worth of its common stock.  The  acquisition is expected to close in
the fourth quarter of 2002.


                                       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,
GLOBAL  POLITICAL  AND  GENERAL  ECONOMIC  CONDITIONS  RELATED TO THE  TERRORIST
ATTACKS ON SEPTEMBER 11, 2001 AND THEIR AFTERMATH, AND FUTURE ACTS OR THREATS OF
TERRORISM,   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 $36.1 billion at June 30, 2002. At June 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., was created on April 1, 1996 by the combination of Union Bank
with  BanCal  Tri-State  Corporation  and its  banking  subsidiary,  The Bank of
California,  N.A. The  combination  was  accounted  for as a  reorganization  of
entities under common control, similar to a pooling of interests.

         Since November 1999, we announced four stock  repurchase  plans of $100
million each. We repurchased  $35 million and $19 million of common stock in the
first and second quarters of 2002, respectively, and $22 million and $25 million
of common stock in the first and second  quarters of 2001,  respectively.  As of
June 30, 2002, $91 million of common stock is authorized for repurchase. At June
30, 2002, The Bank of  Tokyo-Mitsubishi,  Ltd. owned approximately 67 percent of
our outstanding common stock.

SUMMARY


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

         Reported  net income was $129.9  million,  or $0.81 per diluted  common
share, in the second quarter of 2002, compared with $117.2 million, or $0.74 per
diluted common share,  in the second  quarter of 2001.  This increase in diluted
earnings per share of $0.07, or 9 percent,  above the second quarter of 2001 was
due to a $20.4 million,  or 12 percent,  increase in noninterest income, a $15.0
million,  or 23 percent,  decrease in


                                       18


<PAGE>


provision for credit losses, and a $7.0 million,  or 2 percent,  increase in net
interest  income  (on a  taxable-equivalent  basis),  partly  offset  by a $22.3
million, or 7 percent,  increase in noninterest expense. Other highlights of the
second quarter of 2002 include:

         o        Net interest income, on a taxable-equivalent basis, was $386.3
                  million in the second  quarter of 2002,  an  increase  of $7.0
                  million,  or 2 percent,  over the second  quarter of 2001. Net
                  interest  margin  in the  second  quarter  of  2002  was  4.74
                  percent, a decrease of 12 basis points from the second quarter
                  of 2001.

         o        A provision for credit losses of $50.0 million was recorded in
                  the second  quarter of 2002 compared with $65.0 million in the
                  second  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 $624.9 million,  or 151 percent of total
                  nonaccrual  loans,  at June 30,  2002,  compared  with  $626.5
                  million, or 138 percent of total nonaccrual loans, at June 30,
                  2001.

         o        Noninterest   income  was   $188.8 million  in  the  second
                  quarter of 2002, an increase of $20.4 million,  or 12 percent,
                  from the second quarter of 2001.  This growth included an $8.0
                  million increase in service charges on deposit accounts,  $6.3
                  million in incremental  revenues  associated with our December
                  2001   acquisition   of   Armstrong/Robitaille   Business  and
                  Insurance    Services    ("Armstrong/Robitaille"),    merchant
                  transaction  processing  fees  growth  of  $2.0  million,  and
                  international  commissions  and fees  growth of $1.1  million,
                  partly  offset  by  a  $1.6  million  decrease  in  trust  and
                  investment  management  fees.  For  the  quarter,   securities
                  losses, net, were $1.3 million.  In addition,  we had residual
                  value  writedowns in our auto lease  portfolio of $3.0 million
                  in the second  quarter of 2002  compared with $11.0 million in
                  the second quarter of 2001.

         o        Noninterest  expense was $329.8  million in the second quarter
                  of 2002, an increase of $22.3 million, or 7 percent,  over the
                  second  quarter  of  2001.   Salaries  and  employee  benefits
                  increased  $21.5  million,  or 13  percent,  primarily  due to
                  higher  incentives  of $8.6 million,  higher  salaries of $8.3
                  million, and higher employee benefits of $4.6 million.

         o        Income tax  expense  in the  second  quarter of 2002 was $64.8
                  million,  a 33  percent  effective  income  tax rate.  For the
                  second quarter of 2001, the effective income tax rate was also
                  33 percent.

         o        Return on  average  assets  increased  to 1.46  percent in the
                  second  quarter of 2002 compared to 1.36 percent in the second
                  quarter of 2001. Our return on average common equity increased
                  to 13.90  percent in the second  quarter of 2002  compared  to
                  13.79 percent in the second quarter of 2001.

         o        Total loans at June 30,  2002 were  $25.6 billion,  a decrease
                  of $63.9 million, or 0.3 percent, from June 30, 2001.

         o        Nonperforming  assets were $415.0  million at June 30, 2002, a
                  decrease of $45.1 million, or 10 percent,  from June 30, 2001.
                  Nonperforming assets as a percentage of total assets decreased
                  to 1.15 percent at June 30, 2002,  compared  with 1.29 percent
                  at June 30, 2001.  Total  nonaccrual loans were $414.5 million
                  at June 30,  2002,  compared  with $453.4  million at June 30,
                  2001, resulting in a decrease in the ratio of nonaccrual loans
                  to total  loans of 1.62  percent  at June 30,  2002  from 1.77
                  percent at June 30, 2001.

         o        Our Tier 1 and total  risk-based  capital  ratios  were  11.90
                  percent and 13.65  percent,  respectively,  at June 30,  2002,
                  compared with 10.85 percent and 12.70  percent,  respectively,
                  at June 30, 2001. Our leverage ratio was 10.77 percent at June
                  30, 2002 compared with 10.33 percent at June 30, 2001.


                                       19


<PAGE>


 COMPARISON OF SIX MONTHS ENDED JUNE 30, 2001 AND JUNE 30, 2002

         Reported  net income was $244.7  million,  or $1.54 per diluted  common
share,  in the first six months of 2002 compared with $224.4  million,  or $1.41
per diluted  common  share,  in the first six months of 2001.  This  increase in
diluted  earnings per share of $0.13, or 9 percent above the first six months of
2001 was due to a $60.0 million, or 36 percent, decrease in provision for credit
losses and a $11.0 million, or 3 percent, increase in noninterest income, partly
offset by $38.2 million, or 6 percent,  increase in noninterest  expense.  Other
highlights of the first six months of 2002 include:

         o        Net interest income, on a taxable-equivalent basis, was $767.3
                  million in the first six months of 2002,  an  increase of less
                  than  $0.1  million  over the first  six  months of 2001.  Net
                  interest  margin  in the  first  six  months  of 2002 was 4.77
                  percent,  a  decrease  of 17 basis  points  from the first six
                  months of 2001.

         o        A provision for credit  losses of $105.0  million was recorded
                  in the first six months of 2002,  compared with $165.0 million
                  in  the  first  six  months  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.

         o        Noninterest  income  was  $360.2 million  in the  first  six
                  months of 2002,  an increase of $11.0  million,  or 3 percent,
                  from  the  first  six  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  $31.7
                  million, or 10 percent. This growth was mainly attributable to
                  a  $17.1  million  increase  in  service  charges  on  deposit
                  accounts,  $13.4 million in  incremental  revenues  associated
                  with  our   acquisition  of   Armstrong/Robitaille,   merchant
                  transaction  processing  fees  growth  of  $3.6  million,  and
                  international  commissions  and fees  growth of $2.2  million,
                  partly  offset  by  a  $4.6  million  decrease  in  trust  and
                  investment   management  fees,  a  $2.9  million  decrease  in
                  merchant   banking  fees,  and  a  $9.9  million  decrease  in
                  securities  gains,  net. In addition,  we had  residual  value
                  writedowns in our auto lease  portfolio of $9.0 million in the
                  first six months of 2002  compared  with $28.3  million in the
                  first six months of 2001.

         o        Noninterest expense was $653.2 million in the first six months
                  of 2002, an increase of $38.2 million, or 6 percent,  over the
                  first  six  months of 2001.  Salaries  and  employee  benefits
                  increased  $35.9  million,  or 11  percent,  primarily  due to
                  higher  incentives of $14.4 million,  higher salaries of $14.0
                  million, and higher employee benefits of $7.5 million.

         o        Income tax  expense in the first six months of 2002 was $123.6
                  million, a 34 percent effective income tax rate. For the first
                  six  months  of 2001,  the  effective  income  tax rate was 33
                  percent.

         o        Return on  average  assets  increased  to 1.39  percent in the
                  first six months of 2002 compared to 1.31 percent in the first
                  six  months of 2001.  Our  return  on  average  common  equity
                  decreased  to 13.38  percent  in the first six  months of 2002
                  compared to 13.42 percent in the first six 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 rates, currency rates and volatilities.
Operational  risk is the  potential  loss due to failures  in internal  control,
system failures, or external events.


                                       20


<PAGE>


         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
                                                            AND INVESTMENT          COMMERCIAL FINANCIAL          INTERNATIONAL
                                                            SERVICES GROUP             SERVICES GROUP             BANKING GROUP
                                                        ______________________     ______________________      _____________________
                                                                     AS OF AND FOR THE THREE MONTHS ENDED JUNE 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...........................       $174,274      $197,882     $176,994     $ 159,600      $  8,627   $   9,366
   Noninterest income............................        105,284       111,180       33,934        51,653        14,081      16,632
                                                        ________      ________     ________     _________      ________   _________
   Total revenue.................................        279,558       309,062      210,928       211,253        22,708      25,998
   Noninterest expense...........................        186,355       190,952       77,684        87,130        14,473      15,266
   Credit expense (income).......................         10,754         9,072       33,902        47,341         1,192         460
                                                        ________      ________     ________     _________      ________   _________
   Income before income tax expense (benefit)....         82,449       109,038       99,342        76,782         7,043      10,272
   Income tax expense (benefit)..................         31,537        41,707       34,271        24,082         2,694       3,929
                                                        ________      ________     ________     _________      ________   _________
   Net income....................................       $ 50,912      $ 67,331     $ 65,071     $  52,700      $  4,349   $   6,343
                                                        ========      ========     ========     =========      ========   =========


PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income...........................       $    917      $    682     $  5,567     $   9,488      $     --   $      --
   Noninterest income............................           (381)      (10,995)       4,927        13,252            84       1,157
   Noninterest expense...........................         (1,099)       (8,227)       5,002        11,300           109         861
   Total loans (dollars in millions).............             98           116          811         1,045            --          --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1)................................       $  8,787      $  9,991     $ 15,927     $  14,144      $    967   $   1,047
   Total assets..................................          9,730        10,871       17,739        15,772         1,301       1,403
   Total deposits(1).............................         14,159        15,549        7,037         8,121         1,351       1,567
FINANCIAL RATIOS:
   Return on risk adjusted capital(2)............             36%           46%          14%           14%           19%         40%
   Return on average assets(2)...................           2.10          2.48         1.47          1.34          1.34        1.81
   Efficiency ratio(3)...........................          66.64         61.78        36.82         41.21         63.74       58.72


                                                                GLOBAL                                             UNIONBANCAL
                                                            MARKETS GROUP                  OTHER                   CORPORATION
                                                        ______________________     ______________________      _____________________
                                                                     AS OF AND FOR THE THREE MONTHS ENDED JUNE 30,
                                                        ____________________________________________________________________________
                                                          2001          2002         2001         2002           2001         2002
                                                        ________      ________     ________     _________      ________    _________

RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
   EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income...........................       $  3,488      $ (3,278)    $ 15,340     $  22,191      $378,723    $385,761
   Noninterest income............................          2,337         4,708       12,755         4,601       168,391     188,774
                                                        ________      ________     ________     _________      ________    ________
   Total revenue.................................          5,825         1,430       28,095        26,792       547,114     574,535
   Noninterest expense...........................          1,085         4,007       27,855        32,436       307,452     329,791
   Credit expense (income).......................             --            50       19,152        (6,923)       65,000      50,000
                                                        ________      ________     ________     _________      ________    ________
   Income before income tax expense (benefit)....          4,740        (2,627)     (18,912)        1,279       174,662     194,744
   Income tax expense (benefit)..................          1,813        (1,005)     (12,803)       (3,911)       57,512      64,802
                                                        ________      ________     ________     _________      ________    ________
   Net income (loss).............................       $  2,927      $ (1,622)    $ (6,109)    $   5,190      $117,150    $129,942
                                                        ========      ========     ========     =========      ========    ========


PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income...........................       $     --      $     --     $ (6,484)    $ (10,170)     $     --   $      --
   Noninterest income............................         (5,824)       (6,934)       1,194         3,520            --          --
   Noninterest expense...........................           (938)       (1,217)      (3,074)       (2,717)           --          --
   Total loans (dollars in millions).............             --            --         (909)       (1,161)           --          --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1)................................       $     71      $     70     $    362     $     327      $ 26,114   $  25,579
   Total assets..................................          5,020         6,902          799           782        34,589      35,730
   Total deposits(1).............................          3,401         2,070          693           915        26,641      28,222
FINANCIAL RATIOS:
   Return on risk adjusted capital(2)............             4%            (1)%         na            na            na          na
   Return on average assets(2)...................           0.23         (0.09)          na            na          1.36%       1.46%
   Efficiency ratio(3)...........................          17.05        225.30           na            na         56.13       57.35

<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  (income)  was $48  thousand  in
     the first  quarter of 2001 and ($13) thousand in the first quarter of 2002.

na=not applicable

</FN>
</TABLE>


                                       22


<PAGE>

<TABLE>
<CAPTION>


                                                          COMMUNITY BANKING
                                                            AND INVESTMENT          COMMERCIAL FINANCIAL          INTERNATIONAL
                                                            SERVICES GROUP             SERVICES GROUP             BANKING GROUP
                                                        ______________________     ______________________      _____________________
                                                                    AS OF AND FOR THE SIX MONTHS ENDED JUNE 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...........................       $352,118      $381,220     $362,434     $ 315,306      $ 18,635    $ 18,871
   Noninterest income............................        200,889       215,947       77,297        97,357        29,178      32,720
                                                        ________      ________     ________     _________      ________    ________
   Total revenue.................................        553,007       597,167      439,731       412,663        47,813      51,591
   Noninterest expense...........................        364,947       383,189      152,378       171,118        27,731      30,409
   Credit expense (income).......................         23,428        18,058       66,330        94,246         2,365         954
                                                        ________      ________     ________     _________      ________    ________
   Income before income tax expense (benefit)....        164,632       195,920      221,023       147,299        17,717      20,228
   Income tax expense (benefit)..................         62,971        74,940       76,755        46,951         6,777       7,737
                                                        ________      ________     ________     _________      ________    ________
   Net income....................................       $101,661      $120,980     $144,268     $ 100,348      $ 10,940    $ 12,491
                                                        ========      ========     ========     =========      ========    ========


PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income...........................       $  2,106      $  1,092     $  8,224     $  18,066      $     --   $      --
   Noninterest income............................         (2,295)      (21,836)      11,103        27,321           150       2,041
   Noninterest expense...........................         (2,156)      (16,018)       9,364        20,987           329       1,626
   Total loans (dollars in millions).............             88           119          728         1,045            --          --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1)................................       $  8,629      $  9,768     $ 16,224     $  14,133      $    967   $   1,032
   Total assets..................................          9,596        10,645       18,049        15,763         1,361       1,357
   Total deposits(1).............................         14,081        15,172        6,920         8,014         1,381       1,562
FINANCIAL RATIOS:
   Return on risk adjusted capital(2)............            36%           43%          16%           13%           24%          39%
   Return on average assets(2)...................           2.14          2.29         1.61          1.28          1.62        1.86
   Efficiency ratio(3)...........................          65.99         64.16        34.64         41.41         58.00       58.94


                                                                GLOBAL                                             UNIONBANCAL
                                                            MARKETS GROUP                  OTHER                   CORPORATION
                                                        ______________________     ______________________      _____________________
                                                                      AS OF AND FOR THE SIX MONTHS ENDED JUNE 30,
                                                        ____________________________________________________________________________
                                                          2001          2002         2001         2002           2001         2002
                                                        ________      ________     ________     _________      ________    _________

RESULTS OF OPERATIONS AFTER PERFORMANCE
   CENTER EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income.....................             $  1,567      $  6,554     $ 31,230     $  44,250      $765,984   $ 766,201
   Noninterest income......................                6,296         6,227       35,538         7,974       349,198     360,225
                                                        ________      ________     ________     _________      ________   _________
   Total revenue...........................                7,863        12,781       66,768        52,224     1,115,182   1,126,426
   Noninterest expense.....................               14,461         7,921       55,420        60,517       614,937     653,154
   Credit expense (income).................                   --           100       72,877        (8,358)      165,000     105,000
                                                        ________      ________     ________     _________      ________   _________
   Income before income tax expense (benefit)             (6,598)        4,760      (61,529)           65       335,245     368,272
   Income tax expense (benefit)............               (2,523)        1,821      (33,172)       (7,896)      110,808     123,553
                                                        ________      ________     ________     _________      ________   _________
   Net income (loss).......................             $ (4,075)     $  2,939     $(28,357)    $   7,961      $224,437   $ 244,719
                                                        ========      ========     ========     =========      ========   =========


PERFORMANCE CENTER EARNINGS (DOLLARS IN
   THOUSANDS):
   Net interest income.....................             $     --      $     --     $(10,330)    $ (19,158)     $     --   $      --
   Noninterest income......................              (10,986)      (13,569)       2,028         6,043            --          --
   Noninterest expense.....................               (1,995)       (2,231)      (5,542)       (4,364)           --          --
   Total loans (dollars in millions).......                   --            --         (816)       (1,164)           --          --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1)..........................             $     55      $     85     $    390     $     337      $ 26,265   $  25,355
   Total assets............................                4,747         6,814          756           830        34,509      35,409
   Total deposits(1).......................                3,085         2,242          740           907        26,207      27,897
FINANCIAL RATIOS:
   Return on risk adjusted capital(2)......                   (4)%           1%          na            na            na          na
   Return on average assets(2).............                (0.17)         0.09           na            na          1.31%       1.39%
   Efficiency ratio(3).....................                161.3         58.77           na            na         55.08       57.92

<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 $61 thousand in the
    first six months of 2001 and $112 thousand in the first six months of 2002.

na=not applicable

</FN>
</TABLE>


                                       23


<PAGE>


COMMUNITY BANKING AND INVESTMENT SERVICES GROUP

         The Community  Banking and Investment  Services Group provides the best
possible 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 second quarter of 2002, net income  increased  $16.4 million,  or 32
percent,  compared to the prior year. Total revenue increased $29.5 million,  or
11 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 $23.6  million,  or 14 percent,  in net interest  income over the
prior year quarter.  Noninterest income was $5.9 million,  or 6 percent,  higher
than  the   prior   year   quarter   primarily   due  to  our   acquisition   of
Armstrong/Robitaille.  Excluding  residual  value  writedowns  in our auto lease
portfolio of $3.0 million and $11.0 million, in 2002 and 2001, respectively, and
the impact of performance  center  earnings,  noninterest  income increased $8.5
million, or 7 percent, compared to a year earlier. Noninterest expense increased
$4.6 million, or 3 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, and residential loan growth
over the second 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 June  30,  2002,  residential  loans  have  grown by $1.5  billion,  or 35
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 May 13,  2002,  we
completed the acquisition of First Western Bank.

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

         COMMUNITY   BANKING  serves  its  customers  through  254  full-service
branches in California, 6 full-service branches in Oregon and Washington,  and a
network of 505 proprietary ATMs. Customers may also access our services 24 hours
a day by  telephone  or  through  our  BANK@HOME  product  at  www.UBOC.com.  In
addition, the division offers automated teller and point-of-sale debit services.

         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.  The Private Bank's strategy is to expand
                  its business by leveraging existing Bank client relationships.
                  Through 12 existing  locations,  the Private Bank relationship
                  managers offer all of our available products and services.

         o        Our brokerage  products and services are provided through UBOC
                  Investment Services, Inc., a registered broker/dealer offering
                  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  also
                  provides  mutual  fund  support  services.   HighMark  Capital
                  Management's  strategy is to increase assets under  management
                  by  broadening  its  client  base and  helping  to expand  the
                  distribution of shares of its mutual fund clients.

         o        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.

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

         o        The  group,  which  primarily  focuses  on local,  state,  and
                  federal  agencies,  includes an expanding  product offering to
                  the Native American government market. Niche markets have been
                  developed   that   service   colleges,   universities,   trade
                  associations,  cultural institutions, and religious non-profit
                  organizations.  The  group's  strategy is to expand its market
                  presence by continued  delivery of cash  management  products,
                  internet  based  technology   solutions,   and  expanding  its
                  tax-exempt  lending  capabilities  to meet  existing  clients'
                  needs.

         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.


                                       25


<PAGE>


         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 second quarter of 2002, net income  decreased $12.4 million,  or
19 percent,  compared to the prior year.  Net interest  income  decreased  $17.4
million,  or 10 percent,  primarily due 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 $17.7 million,  or 52
percent,  including a net loss of $2.7 million in the private  equity  portfolio
compared  with net loss of $7.1  million in the second  quarter of 2001,  mainly
attributable  to a 32 percent growth in all other  noninterest  income.  This 32
percent  growth  was  primarily  due to  higher  deposit-related  service  fees.
Noninterest  expense increased $9.4 million,  or 12 percent,  compared to a year
earlier due to higher  expenses to support  increased  product sales and deposit
volume.  Credit expense increased $13.4 million due to a refinement in the RAROC
credit  metrics  that were  implemented  in late 2001 and not  reflected  in our
second quarter of 2001 results.

         The group's initiatives during 2002 include expanding wholesale deposit
activities  and  increasing  domestic trade  financing.  Loan growth  strategies
include  originating,  underwriting  and  syndicating  loans in core  competency
markets, such as the California middle market,  commercial real estate,  energy,
entertainment,   equipment  leasing  and  commercial  finance.   The  Commercial
Financial Services Group provides strong processing services, including services
such as check  processing,  front-end item  processing,  cash vault services and
digital  imaging.  The combination of expanded  products and an emphasis on core
competencies are expected to contribute to growth in operating earnings in 2002.

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

         o        the  Commercial  Banking  Division,  which  serves  California
                  middle-market  and large  corporate  companies with 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;


                                       26


<PAGE>


         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,  in California and Texas;
                  and

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

         The group  competes  with  other  banks  primarily  on the basis of 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 second quarter of 2002, net income increased $2.0 million, or 46
percent, compared to the prior year. Total revenue in the second quarter of 2002
increased $3.3 million, or 15 percent,  compared to a year earlier. Net interest
income increased $0.7 million, or 9 percent,  over the prior year, mainly due to
higher  deposit  volumes.  Noninterest  income was $2.6 million,  or 18 percent,
higher  than the prior year mainly  attributable  to higher  foreign  remittance
commissions  reflecting a strategic  focus on this  business  and merchant  card
activity in the current quarter.  Noninterest expense increased $0.8 million, or
6 percent,  compared to a year earlier with the majority of that increase  being
attributable to merchant card activity. And lastly,  contributing to the group's
overall increase in net income was lower portfolio  exposure resulting in a $0.7
million,  or 61  percent,  reduction  in credit  expense  compared to the second
quarter  of 2001.  The  nature of the  International  Banking  Group's  business
revolves around short-term,  trade financing mostly to banks and service-related
income, which we believe tends to result in significantly lower credit risk when
compared to other lending activities.

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


                                       27


<PAGE>


 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 second  quarter of 2002,  net loss was $1.6 million  compared to
net  income of $2.9  million  in the prior  year.  Total  revenue  in the second
quarter of 2002  decreased  $4.4  million,  or 76  percent,  compared  to a year
earlier primarily resulting from a $6.8 million decrease in net interest income,
partly offset by a $2.4 million increase in noninterest  income. The decrease in
net  interest  income from the prior year 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. Noninterest income
increased $2.4 million compared to the second quarter of 2001. This increase was
mainly due to higher  trading  product sales and higher net gains on the sale of
securities in our  securities  available for sale portfolio in the current year,
partly offset by higher  distribution  of performance  center  earnings to other
business segments of the bank in the current year. Noninterest expense increased
$2.9 million, or 269 percent, compared to a year earlier,  primarily as a result
of a corporate  decision to allocate $2.2 million of expenses  recorded in first
quarter  2001,  relating  to SFAS No. 133  transition  expense,  from the Global
Markets  Group to  corporate  activities  (reported  in  "Other')  in the second
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 amounts;

         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  $460  million and $415  million of
                  nonperforming   assets   as  of  June  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.

         Net income for "Other" in the second  quarter of 2002 was $5.2 million.
The results were impacted by the following factors:

         o        credit  expense  (income)  of  ($6.9)  million  was due to the
                  difference  between the $50.0  million in provision for credit
                  losses  calculated under our US GAAP methodology and the $56.9
                  million  in  expected  losses  for  the  reportable   business
                  segments, which utilizes the RAROC methodology;

         o        net interest income of $22.2 million,  which resulted from the
                  differences  between the credit for equity for the  reportable
                  segments  under RAROC and the net  interest  income  earned by
                  UnionBanCal  Corporation,  and a credit for demand deposits in
                  the Pacific Rim Corporate Group;

         o        noninterest income of $4.6 million; and


                                       28


<PAGE>


         o        noninterest expense of $32.4 million.

         Net loss for  "Other" in the second  quarter of 2001 was $6.1  million.
The results were impacted by the following factors:

         o        credit expense of $19.2 million due to the difference  between
                  the $65.0 million in provision  for credit  losses  calculated
                  under  our US  GAAP  methodology  and  the  $45.8  million  in
                  expected losses for the reportable  business  segments,  which
                  utilizes the RAROC methodology; offset by

         o        net interest income of $15.3 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 $12.8 million,  which included a $9.5
                  million  gain  recognized  when we sold our stock  holding  in
                  Concord EFS, and

         o        noninterest expense of $27.9 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
                                  ___________________________________________________________________________________________
                                             JUNE 30, 2001                                   JUNE 30, 2002
                                  ___________________________________________     ___________________________________________
                                                       INTEREST       AVERAGE                         INTEREST        AVERAGE
                                    AVERAGE            INCOME/        YIELD/        AVERAGE           INCOME/         YIELD/
(DOLLARS IN THOUSANDS)              BALANCE           EXPENSE(1)      RATE(1)       BALANCE          EXPENSE(1)       RATE(1)
______________________            ___________         __________      _______     ___________        __________       _______
<S>                               <C>                  <C>             <C>        <C>                 <C>               <C>

ASSETS
Loans:(2)
   Domestic...............        $25,080,509          $472,070        7.55%      $24,538,646         $371,173          6.06%
   Foreign(3).............          1,033,880            14,909        5.78         1,040,200            7,587          2.93
Securities--taxable........         4,488,401            70,114        6.25         5,570,242           77,553          5.57
Securities--tax-exempt.....            64,319             1,605        9.98            36,946              998         10.81
Interest bearing deposits
   in banks...............             65,781               661        4.03           120,411              629          2.09
Federal funds sold and
   securities purchased
   under resale agreements            189,973             2,158        4.56         1,090,306            4,828          1.78
Trading account assets....            350,046             2,194        2.51           277,877              972          1.40
                                  ___________          ________                   ___________         ________
        Total earning
           assets.........         31,272,909           563,711        7.23        32,674,628          463,740          5.69
                                                       ________                                       ________
Allowance for credit losses          (630,939)                                       (630,120)
Cash and due from banks...          2,228,293                                       1,833,950
Premises and equipment, net           484,049                                         498,683
Other assets..............          1,235,010                                       1,353,351
                                  ___________                                     ___________
        Total assets......        $34,589,322                                     $35,730,492
                                  ===========                                     ===========

LIABILITIES
Domestic deposits:
   Interest bearing.......        $ 5,920,157            35,470        2.40       $ 7,883,320           22,551          1.15
   Savings and consumer
      time................          3,379,890            28,361        3.37         3,599,305           15,267          1.70
   Large time.............          5,029,502            61,595        4.91         3,218,788           17,593          2.19
Foreign deposits(3).......          1,937,288            19,447        4.03         1,614,335            6,105          1.52
                                  ___________          ________                   ___________         ________
        Total interest
           bearing deposits        16,266,837           144,873        3.57        16,315,748           61,516          1.51
                                  ___________          ________                   ___________         ________
Federal funds purchased
   and securities sold
   under repurchase
   agreements.............          1,021,062            10,622        4.17           361,412            1,396          1.55
Commercial paper..........          1,344,106            14,625        4.36         1,033,358            4,536          1.76
Other borrowed funds......            567,553             6,376        4.51           667,234            3,635          2.19
Medium and long-term debt.            200,000             2,535        5.08           399,681            2,411          2.42
UnionBanCal
   Corporation--obligated
   mandatorily redeemable
   preferred securities of
   subsidiary grantor trust           352,148             5,367        6.09           352,375            3,948          4.47
                                  ___________          ________                   ___________         ________
        Total borrowed
           funds..........          3,484,869            39,525        4.55         2,814,060           15,926          2.27
                                  ___________          ________                   ___________         ________
        Total interest
           bearing
           liabilities....         19,751,706           184,398        3.74        19,129,808           77,442          1.62
                                                       ________                                       ________
Noninterest bearing
   deposits...............         10,374,498                                      11,906,497
Other liabilities.........          1,056,794                                         945,152
                                  ___________                                     ___________
      Total liabilities...         31,182,998                                      31,981,457
SHAREHOLDERS' EQUITY
Common equity.............          3,406,324                                       3,749,035
                                  ___________                                     ___________
        Total
           shareholders'
           equity.........          3,406,324                                       3,749,035
                                  ___________                                     ___________
        Total liabilities
           and
           shareholders'equity    $34,589,322                                     $35,730,492
                                  ===========                                     ===========

Net interest income/margin
   (taxable-equivalent
   basis).................                              379,313        4.86%                           386,298          4.74%
Less: taxable-equivalent
   adjustment.............                                  590                                            537
                                                       ________                                       ________
        Net interest income                            $378,723                                       $385,761
                                                       ========                                       ========

<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 SIX MONTHS ENDED
                                  ___________________________________________________________________________________________
                                             JUNE 30, 2001                                   JUNE 30, 2002
                                  ___________________________________________     ___________________________________________
                                                       INTEREST       AVERAGE                         INTEREST        AVERAGE
                                    AVERAGE            INCOME/        YIELD/        AVERAGE           INCOME/         YIELD/
(DOLLARS IN THOUSANDS)              BALANCE           EXPENSE(1)      RATE(1)       BALANCE          EXPENSE(1)       RATE(1)
______________________            ___________         __________      _______     ___________        __________       _______
<S>                               <C>                  <C>             <C>        <C>                 <C>               <C>

ASSETS
Loans:(2)
   Domestic...............        $25,229,819          $991,104        7.91%      $24,314,639         $739,235          6.12%
   Foreign(3).............          1,035,351            32,423        6.32         1,039,909           15,509          3.01
Securities--taxable........         4,286,712           136,302        6.36         5,561,342          158,216          5.69
Securities--tax-exempt.....            65,791             3,256        9.90            37,586            1,989         10.59
Interest bearing deposits
   in banks...............             72,473             1,627        4.53           102,509            1,125          2.21
Federal funds sold and
   securities purchased
   under resale agreements            131,828             3,187        4.88         1,013,769            8,887          1.77
Trading account assets....            349,168             5,126        2.96           257,735            1,692          1.32
                                  ___________         _________                   ___________         ________
        Total earning
           assets.........         31,171,142         1,173,025        7.57        32,327,489          926,653          5.76
                                                      _________                                       ________
Allowance for credit losses          (632,940)                                       (637,210)
Cash and due from banks...          2,211,250                                       1,887,985
Premises and equipment, net           482,396                                         497,483
Other assets..............          1,277,253                                       1,333,050
                                  ___________                                     ___________
        Total assets......        $34,509,101                                     $35,408,797
                                  ===========                                     ===========

LIABILITIES
Domestic deposits:
   Interest bearing.......        $ 6,029,529            76,812        2.57       $ 7,672,584           45,709          1.20
   Savings and consumer
      time................          3,350,591            58,273        3.51         3,574,422           32,237          1.82
   Large time.............          4,729,912           125,458        5.35         3,351,398           37,400          2.25
Foreign deposits(3).......          1,985,220            44,990        4.57         1,681,420           12,369          1.48
                                  ___________         _________                   ___________         ________
        Total interest
           bearing deposits        16,095,252           305,533        3.83        16,279,824          127,715          1.58
                                  ___________         _________                   ___________         ________
Federal funds purchased
   and securities sold
   under repurchase
   agreements.............          1,422,984            36,422        5.16           450,800            3,345          1.50
Commercial paper..........          1,410,964            35,038        5.01           976,624            8,510          1.76
Other borrowed funds......            482,405            11,716        4.90           682,558            7,078          2.09
Medium and long-term debt.            200,000             5,731        5.78           399,834            4,823          2.43
UnionBanCal
   Corporation--obligated
   mandatorily redeemable
   preferred securities of
   subsidiary grantor trust           352,139            11,389        6.46           352,337            7,911          4.47
                                  ___________         _________                   ___________         ________
        Total borrowed
           funds..........          3,868,492           100,296        5.22         2,862,153           31,667          2.23
                                  ___________         _________                   ___________         ________
        Total interest
           bearing
           liabilities....         19,963,744           405,829        4.10        19,141,977          159,382          1.68
                                                      _________                                       ________
Noninterest bearing
   deposits...............         10,111,665                                      11,617,577
Other liabilities.........          1,061,371                                         961,999
                                  ___________                                     ___________
      Total liabilities...         31,136,780                                      31,721,553
SHAREHOLDERS' EQUITY
Common equity.............          3,372,321                                       3,687,244
                                  ___________                                     ___________
        Total
           shareholders'
           equity.........          3,372,321                                       3,687,244
                                  ___________                                     ___________
        Total liabilities
           and
           shareholders'
           equity.........        $34,509,101                                     $35,408,797
                                  ===========                                     ===========


Net interest income/margin
   (taxable-equivalent
   basis).................                              767,196        4.94%                           767,271          4.77%
Less: taxable-equivalent
   adjustment.............                                1,212                                          1,070
                                                      _________                                       ________
        Net interest income                           $ 765,984                                       $766,201
                                                      =========                                       ========

<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 JUNE 30, 2001 AND JUNE 30, 2002

         Net interest income, on a taxable-equivalent  basis, was $386.3 million
in the  second  quarter  of 2002,  compared  with  $379.3  million in the second
quarter of 2001. This increase of $7.0 million,  or 2 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 154 basis points on average  earning  assets of $32.7  billion,
which were  partly  offset by lower cost of fund rates on our  interest  bearing
liabilities of 212 basis points on average balances of $19.1 billion. Mitigating
the impact of this 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 $1.5  billion,  or 15  percent,  increase  in  average
noninterest  bearing deposits.  The resulting impact of these changes on our net
interest margin was a decrease of 12 basis points to 4.74 percent.

         Average  earning  assets  were $32.7  billion in the second  quarter of
2002, compared with $31.3 billion in the second quarter of 2001. This growth was
attributable to a $1.1 billion,  or 23 percent,  increase in average securities,
offset by a $535.5  million,  or 2  percent,  decrease  in  average  loans.  The
increase in average  securities,  which were  comprised  primarily of fixed rate
available  for sale  securities,  reflected  liquidity  and  interest  rate risk
management  actions.  The  decline  in  average  loans was  mostly due to a $2.3
billion decrease in average commercial loans mainly  attributable to slower loan
growth due to economic  conditions,  loan sales, and a reduction in our exposure
in nonrelationship syndicated loans. The decrease in commercial loans was partly
offset by an increase in average  residential  mortgages of $1.7 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
$407.0 million and a decrease in average  consumer loans and lease  financing of
$276.5 million and $156.0 million, respectively.

 SIX MONTHS ENDED JUNE 30, 2001 AND JUNE 30, 2002

         Net interest income, on a taxable-equivalent  basis, was $767.3 million
in the first six months of 2002,  compared with $767.2  million in the first six
months of 2001. This slight increase of less than $0.1 million was  attributable
primarily to 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 181 basis  points on  average  earning  assets of $32.3  billion,  which were
partly offset by lower cost of fund rates on our interest bearing liabilities of
242 basis points on average balances of $19.1 billion.  Mitigating the impact of
this 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
$1.5 billion,  or 15 percent,  increase in average noninterest bearing deposits.
The resulting  impact of these changes on our net interest margin was a decrease
of 17 basis points to 4.77 percent.

         Average  earning  assets were $32.3  billion in the first six months of
2002,  compared with $31.2 billion in the first six months of 2001.  This growth
was  attributable  to a  $1.2  billion,  or  29  percent,  increase  in  average
securities, offset by a $910.6 million, or 4 percent, decrease in average loans.
The increase in average securities, which were comprised primarily of fixed rate
available  for sale  securities,  reflected  liquidity  and  interest  rate risk
management  actions.  The  decline  in  average  loans was  mostly due to a $2.6
billion decrease in average commercial loans mainly  attributable to slower loan
growth due to economic  conditions,  loan sales, and a reduction in our exposure
in nonrelationship syndicated loans. The decrease in commercial loans was partly
offset by an increase in average  residential  mortgages of $1.7 billion,  which
was a result of a strategic portfolio shift from more volatile commercial loans.
Other


                                       32


<PAGE>


loan categories  included an increase in average commercial  mortgages of $357.0
million and a decrease in average  consumer loans and lease  financing of $307.1
million and $156.8 million, respectively.

<TABLE>
<CAPTION>


NONINTEREST INCOME



                                                   FOR THE THREE MONTHS ENDED                     FOR THE SIX MONTHS ENDED
                                                ___________________________________         ________________________________________
                                                JUNE 30,        JUNE 30,    PERCENT         JUNE 30,        JUNE 30,         PERCENT
(DOLLARS IN THOUSANDS)                            2001            2002       CHANGE           2001            2002            CHANGE
______________________                          ________        ________    _______         ________        ________        ________
<S>                                              <C>             <C>         <C>            <C>             <C>               <C>

Service charges on deposit accounts...          $ 61,852        $ 69,869     12.96%         $118,872        $136,012          14.42%
Trust and investment management fees..            39,234          37,587     (4.20)           78,915          74,312          (5.83)
Merchant transaction processing fees..            20,433          22,421      9.73            39,499          43,122           9.17
International commissions and fees....            18,125          19,239      6.15            35,235          37,462           6.32
Gain on exchange of STAR System stock.                --              --        --            20,700              --        (100.00)
Brokerage commissions and fees........             9,063           9,275      2.34            17,978          18,907           5.17
Merchant banking fees.................             9,681           9,081     (6.20)           18,929          16,026         (15.34)
Foreign exchange trading gains, net...             6,900           7,011      1.61            13,120          13,459           2.58
Insurance commissions.................                --           6,252        nm                --          13,405             nm
Securities gains (losses), net........             3,751          (1,297)       nm             6,017          (3,863)            nm
Other.................................             (648)           9,336        nm               (67)         11,383             nm
                                                ________        ________                    ________        ________
Total noninterest income..............          $168,391        $188,774     12.10%         $349,198        $360,225           3.16%
                                                ========        ========                    ========        ========

<FN>

__________________

nm = not meaningful

</FN>
</TABLE>


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

         In the second quarter of 2002,  noninterest  income was $188.8 million,
an increase of $20.3  million,  or 12 percent,  over the second quarter of 2001.
This  increase was mainly  attributable  to an $8.0 million  increase in service
charges on deposit  accounts,  lower residual value writedowns in our auto lease
portfolio  of $8.0  million,  a $6.3 million  increase in insurance  commissions
related to the acquisition of  Armstrong/Robitaille,  a $2.0 million increase in
merchant   transaction   processing   fees,  and  a  $1.1  million  increase  in
international  commissions and fees, partly offset by a $1.6 million decrease in
trust and investment management fees. In addition,  securities losses, net, were
$1.3 million.

         Revenue from service charges on deposit accounts was $69.9 million,  an
increase  of 13 percent  over the  second  quarter of 2001.  This  increase  was
primarily  attributable  to a 15 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 $37.6 million, a decrease of
4  percent  over  the  second  quarter  of  2001.  This  decrease  is  primarily
attributable to declining market  conditions and their impact on transaction and
asset-based fees.

         Merchant transaction processing fees were $22.4 million, an increase of
10 percent over the second  quarter of 2001.  This increase was primarily due to
an increase in the volume of credit card drafts  deposited by merchants  and the
July 2001 introduction 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 $6.3 million  reflecting  the  incremental
revenues associated with our acquisition of Armstrong/Robitaille.

         Securities losses, net, were $1.3 million compared to securities gains,
net,  of $3.8  million  in the prior  year.  In the second  quarter of 2001,  we
realized net gains of $10.5 million on the sale of securities


                                       33


<PAGE>


(including a $9.5 million realized gain on the sale of our Concord EFS holdings,
which we received in exchange  for our stock  holdings of STAR  System),  partly
offset by permanent writedowns on private capital securities of $6.8 million. In
the  current  quarter,  we  realized  gains  of  $4.6  million  on the  sale  of
securities, offset by permanent writedowns on private capital securities of $5.9
million.

         Other noninterest income was $9.3 million, an increase of $10.0 million
over the second quarter of 2001. This increase was mainly  attributable to lower
residual  value  writedowns  in our auto lease  portfolio of $3.0 million in the
second quarter of 2002 compared to $11.0 million in the second quarter of 2001.

 SIX MONTHS ENDED JUNE 30, 2001 AND JUNE 30, 2002

         In the first six months of 2002, noninterest income was $360.2 million,
an increase of $11.0 million,  or 3 percent,  over the first six 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  $31.7
million, or 10 percent.  This increase was mainly attributable to lower residual
value  writedowns in our auto lease portfolio of $19.3 million,  a $17.1 million
increase in service  charges on deposit  accounts,  a $13.4 million  increase in
insurance commissions related to our acquisition of Armstrong/Robitaille, a $3.6
million  increase in merchant  transaction  processing  fees, and a $2.2 million
increase in international  commissions and fees, partly offset by a $4.6 million
decrease in trust and  investment  management  fees, a $2.9 million  decrease in
merchant banking fees, and a $9.9 million decrease in securities gains, net.

         Revenue from service charges on deposit accounts was $136.0 million, an
increase  of 14 percent  over the first six months of 2001.  This  increase  was
primarily  attributable to a 15 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 $74.3 million, a decrease of
6 percent over the first six months of 2001.  This decrease is  attributable  to
declining  market  conditions  and their impact on transaction  and  asset-based
fees. Total assets under administration decreased by $2.7 billion, or 2 percent,
from June 30, 2001.

         Merchant transaction processing fees were $43.1 million, an increase of
9 percent over the first six months of 2001.  This increase was primarily due to
an increase in the volume of credit card drafts  deposited by merchants  and the
July 2001 introduction 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 $16.0 million, a decrease of 15 percent from
the first six months of 2001. This decrease was primarily  attributable to fewer
and smaller  syndication and investment banking  transactions as a result of the
current market situation.

         Insurance  commissions  were $13.4 million  reflecting the  incremental
revenues associated with our acquisition of Armstrong/Robitaille.

         Securities losses, net, were $3.9 million compared to securities gains,
net,  of $6.0  million in the prior  year.  In the first six months of 2001,  we
realized net gains of $16.2 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 $10.1  million.  In the first six
months of 2002,  we realized  gains of $5.1  million on the sale of  securities,
partly  offset by permanent  writedowns  on private  capital  securities of $8.9
million.

         Other  noninterest  income  was $11.4  million,  an  increase  of $11.5
million over the first six months of 2001. This increase was mainly attributable
to lower residual value  writedowns in our auto lease  portfolio of $9.0 million
in the  first six  months of 2002  compared  to $28.3  million  in the first six
months of 2001. This increase was partly offset by higher  unrealized  losses on
other  non-publicly  traded  securities  of $3.8  million


                                       34


<PAGE>


in the current  year  (compared to $1.1 million in the first six months of 2001)
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 SIX MONTHS ENDED
                                                ___________________________________         ________________________________________
                                                JUNE 30,        JUNE 30,    PERCENT         JUNE 30,        JUNE 30,         PERCENT
(DOLLARS IN THOUSANDS)                            2001            2002       CHANGE           2001            2002            CHANGE
______________________                          ________        ________    _______         ________        ________        ________
<S>                                              <C>             <C>         <C>            <C>             <C>               <C>

Salaries and other compensation......           $137,294        $154,209     12.32%         $268,266        $296,633          10.57%
Employee benefits....................             27,290          31,891     16.86            60,805          68,343          12.40

   Salaries and employee benefits....            164,584         186,100     13.07           329,071         364,976          10.91
Net occupancy........................             23,837          25,029      5.00            46,596          48,410           3.89
Equipment............................             15,469          15,967      3.22            31,267          32,307           3.33
Merchant transaction processing......             13,449          14,433      7.32            26,363          27,349           3.74
Communications.......................             11,806          12,568      6.45            23,508          26,509          12.77
Software.............................              6,832          10,039     46.94            14,363          21,549          50.03
Professional services................             11,349          10,936     (3.64)           19,173          20,439           6.60
Advertising and public relations.....             11,444           8,621    (24.67)           18,049          18,629           3.21
Data processing......................              9,101           7,540    (17.15)           18,050          16,531          (8.42)
Intangible asset amortization........              3,633           1,280    (64.77)            7,171           2,164         (69.82)
Foreclosed asset expense (income)....                 48             (13)       nm                61             112          83.61
Other................................             35,900          37,291      3.87            81,265          74,179          (8.72)
                                                ________        ________                    ________        ________
   Total noninterest expense.........           $307,452        $329,791      7.27%         $614,937        $653,154           6.21%
                                                ========        ========                    ========        ========

<FN>

__________________

nm = not meaningful

</FN>
</TABLE>


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

         In the second quarter of 2002,  noninterest expense was $329.8 million,
an increase of $22.3 million,  or 7 percent,  over the same period in 2001. This
increase  was mostly due to a $21.5  million  increase in salaries  and employee
benefits,  a $3.2 million increase in software expense,  a $1.4 million increase
in other noninterest  expense, a $1.2 million increase in net occupancy expense,
and a $1.0 million increase in merchant  transaction  processing expense.  These
increases  were partly  offset by a $2.8  million  decrease in  advertising  and
public  relations  expense,  a $2.4 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,  and a $1.6  million  decrease  in  data  processing
expense.

         Salaries and employee  benefits were $186.1 million,  an increase of 13
percent over the second  quarter of 2001.  This  increase was  primarily  due to
salary expense increases  necessary to achieve our strategic goals to expand key
businesses,  to annual merit increases,  to higher incentive expense,  to higher
other benefit expenses including higher pension and medical costs and lower COLI
(company-owned life insurance) income.

         Net occupancy expense was $25.0 million,  an increase of 5 percent over
the second quarter of 2001.  This increase was primarily  attributable to higher
building  rent,   depreciation,   and  leasehold   amortization  expense  mainly
associated with new branches and the Armstrong/Robitaille and First Western Bank
acquisitions.

         Merchant transaction  processing expense was $14.4 million, an increase
of 7 percent  over the  second  quarter of 2001.  This  increase  was  primarily
attributable  to an increase in the volume of credit  card drafts  deposited  by
merchants.


                                       35


<PAGE>


         Software expense was $10.0 million,  an increase of 47 percent over the
second quarter of 2001.  This increase was primarily  attributable  to increased
software purchases and development to support strategic technology initiatives.

         Advertising and public relations expenses were $8.6 million, a decrease
of 25  percent  from the  second  quarter  of 2001.  This  decrease  was  mainly
attributable  to a new  year-round  approach to  advertising  for certain market
segments, which reduced the seasonality of these expenses.

         Data processing expense was $7.5 million, a decrease of 17 percent from
the second  quarter 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 $1.3 million, a decrease of
65  percent  from the  second  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.

         Other noninterest  expense was $37.3 million,  an increase of 4 percent
over the second  quarter of 2001.  This increase was primarily  attributable  to
higher stationery and supply expenses.

 SIX MONTHS ENDED JUNE 30, 2001 AND JUNE 30, 2002

         In the  first  six  months  of 2002,  noninterest  expense  was  $653.2
million,  an increase of $38.2  million,  or 6 percent,  over the same period in
2001.  This increase was mostly due to a $35.9 million  increase in salaries and
employee  benefits,  a $7.2  million  increase in software  expense,  and a $3.0
million increase in communications  expense.  These increases were partly offset
by a $5.0 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,  and a $7.1  million  decrease in other  noninterest
expense.

         Salaries and employee  benefits were $365.0 million,  an increase of 11
percent over the first six months of 2001.  This  increase was  primarily due 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.

         Communications  expense  was $26.5  million,  an increase of 13 percent
over the first six months of 2001.  This increase was primarily  attributable to
higher  costs  associated  with  increased  rates  and  usage for data and voice
communication.

         Software expense was $21.5 million,  an increase of 50 percent over the
first six months of 2001. This increase was primarily  attributable to increased
software purchases and development to support strategic technology initiatives.

         Intangible asset  amortization  expense was $2.2 million, a decrease of
70 percent from the second quarter of 2001. This decrease  reflects the adoption
of SFAS No. 142 in the first quarter of 2002.

         Other  noninterest  expense was $74.2 million,  a decrease of 9 percent
from the first six months of 2001. This decrease was 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  expenses of
$3.5  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 in the
prior year.


                                       36


<PAGE>


INCOME TAX EXPENSE

         Income tax expense in the second quarter of 2002 was $64.8 million. For
both second quarter 2002 and 2001, the effective income tax rate was 33 percent.

         Income tax expense in the first six months of 2002 was $123.6  million,
a 34 percent  effective  income tax rate.  For the first six months of 2001, the
effective income tax rate was 33 percent.

LOANS

         The following table shows loans outstanding by loan type.

<TABLE>
<CAPTION>

                                                                                                              PERCENT CHANGE TO
                                                                                                              JUNE 30, 2002 FROM:
                                                                                                           _________________________
                                                      JUNE 30,         DECEMBER 31,       JUNE 30,         JUNE 30,     DECEMBER 31,
(DOLLARS IN THOUSANDS)                                  2001               2001             2002             2001           2001
______________________                              ___________        ___________      ___________        ________     ____________
<S>                                                 <C>                <C>              <C>                <C>               <C>

Domestic:
   Commercial, financial and industrial....         $12,632,541        $11,476,361      $11,006,283        (12.87)%          (4.10)%
   Construction............................           1,094,524          1,059,847        1,163,530          6.30             9.78
   Mortgage:
      Residential..........................           4,196,899          4,788,219        5,673,529         35.18            18.49
      Commercial...........................           3,399,316          3,590,318        3,769,068         10.88             4.98
                                                    ___________        ___________      ___________
        Total mortgage.....................           7,596,215          8,378,537        9,442,597         24.31            12.70
   Consumer:
      Installment..........................           1,446,219          1,200,047          997,973        (30.99)          (16.84)
      Revolving lines of credit............             767,199            859,021          988,996         28.91            15.13
                                                    ___________        ___________      ___________
        Total consumer.....................           2,213,418          2,059,068        1,986,969        (10.23)           (3.50)
   Lease financing.........................           1,031,358            979,242          880,892        (14.59)          (10.04)
                                                    ___________        ___________      ___________
        Total loans in domestic offices....          24,568,056         23,953,055       24,480,271         (0.36)            2.20
Loans originated in foreign branches.......           1,088,191          1,040,975        1,112,035          2.19             6.83
                                                    ___________        ___________      ___________
        Total loans........................         $25,656,247        $24,994,030      $25,592,306         (0.25)%           2.39%
                                                    ===========        ===========      ===========

</TABLE>



         Our lending  activities  are  predominantly  domestic,  with such loans
comprising 96 percent of the total loan portfolio at June 30, 2002.  Total loans
at June 30, 2002 were $25.6  billion,  a decrease of 0.3 percent,  from June 30,
2001.  The  decrease  was mainly  attributable  to a decline in the  commercial,
financial  and  industrial  loan  portfolio of $1.6 billion and a decline in the
consumer loan portfolio of $226.4  million,  partly offset by an increase in the
residential mortgage portfolio of $1.5 billion and an increase in the commercial
mortgage portfolio of $369.8 million.

         Commercial,  financial  and  industrial  loans  represent  the  largest
category  in the  loan  portfolio.  These  loans  are  extended  principally  to
corporations,  middle market businesses, and small businesses,  with no industry
concentration exceeding 10 percent of total commercial, financial and industrial
loans.  The  commercial,  financial  and  industrial  loan  portfolio  was $11.0
billion,  or 43 percent of total loans,  at June 30, 2002,  compared  with $12.6
billion,  or 49 percent of total loans,  at June 30, 2001.  The decrease of $1.6
billion,  or 13  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 $1.2 billion,  or 5 percent of
total loans, at June 30, 2002, compared with $1.1 billion, or 4 percent of total
loans,  at June 30, 2001. This growth of $69.0 million,  or 6 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.


                                       37


<PAGE>


         Commercial  mortgages were $3.8 billion,  or 15 percent of total loans,
at June 30, 2002,  compared with $3.4 billion,  or 13 percent of total loans, at
June 30, 2001. The mortgage loan  portfolio  consists of loans on commercial and
industrial  projects  primarily  in  California.   The  increase  in  commercial
mortgages of $369.8  million,  or 11 percent,  from June 30, 2001, was primarily
due to demand in the Southern California real estate market.

         Residential  mortgages were $5.7 billion, or 22 percent of total loans,
at June 30, 2002,  compared with $4.2 billion,  or 16 percent of total loans, at
June 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 $1.5 billion, or 35 percent, from June
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
June 30, 2002,  compared with $2.2 billion, or 9 percent of total loans, at June
30, 2001. The decrease of $226.4 million, or 10 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 $880.9 million, or 3 percent of total loans, at
June 30, 2002,  compared with $1.0 billion, or 4 percent of total loans, at June
30, 2001. As we previously announced,  effective April 20, 2001, we discontinued
our auto leasing activity.

         Loans originated in foreign branches totaled $1.1 billion, or 4 percent
of total loans, at June 30, 2002, unchanged from June 30, 2001.

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 June 30, 2001,  December 31, 2001 and June 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 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>

                                                                       PUBLIC          CORPORATIONS
                                                      FINANCIAL        SECTOR           AND OTHER          TOTAL
(DOLLARS IN MILLIONS)                               INSTITUTIONS      ENTITIES          BORROWERS       OUTSTANDINGS
_____________________                               ____________      ________         ____________     ____________
<S>                                                     <C>             <C>                <C>              <C>

June 30, 2001
Korea...............................................    $378            $ -                $46              $424
December 31, 2001
Korea...............................................    $468            $ -                $46              $514
June 30, 2002
Korea...............................................    $483            $ -                $38              $521

</TABLE>



PROVISION FOR CREDIT LOSSES

         We recorded a $50  million  provision  for credit  losses in the second
quarter of 2002, compared with a $65 million provision for credit losses for the
same period in the prior year.  The provision for credit losses in the first six
months of 2002 was $105  million,  compared  with a $165 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


                                       38


<PAGE>


for credit  losses to a level  deemed  appropriate  by  management  based on the
factors discussed under "Allowance for Credit Losses" below.

         Our  provision  for the  second  quarter  and first six months of 2002,
reflects our application of strict standards to the definitions of potential and
well-defined  weaknesses  in our loan  portfolio,  which impact the level of our
criticized assets.

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 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  measured in the
determination  of the formula and specific  allowances.  The  evaluation  of the
inherent loss with respect to these  conditions is subject to a higher degree of
uncertainty  because they 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;


                                       39


<PAGE>


         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 condition
may be reflected as a specific allowance, applicable to such credit or portfolio
segment.  Where  any of these  conditions  is not  evidenced  by a  specifically
identifiable  problem  credit or portfolio  segment as of the  evaluation  date,
management's  evaluation  of the  probable  loss  related to such  condition  is
reflected in the unallocated allowance.

         The  allowance  for credit  losses is based upon  estimates of probable
losses  inherent  in the loan  portfolio.  The  actual  losses can vary from the
estimated amounts.  Our methodology  includes several features that are intended
to  reduce  the  differences  between  estimated  and  actual  losses.  The loss
migration  model that is used to  establish  the loan loss  factors  for problem
graded loans and pass graded  commercial,  financial,  and  industrial  loans is
designed to be  self-correcting  by taking into account our loss experience over
prescribed periods.  Similarly, by basing the pass graded loan loss factors over
a period  reflective of 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 second 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, except
for a refinement of our allowance  estimations  for impaired  loans.  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.

         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 June 30, 2002, our total  allowance for credit losses was
$625  million or 2.44  percent of the total loan  portfolio  and 151  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  $414  million  and  $37  million,
respectively, at June 30, 2002.


                                       40


<PAGE>


         We recorded a $50 million  provision in the second 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, 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 June 30, 2002, the formula allowance remained  relatively  unchanged
at $334  million,  compared to $325 million at December 31, 2001, an increase of
$9 million.

         At June 30, 2002, the specific  allowance was $101 million  compared to
$138 million at December 31, 2001, a decrease of $37 million. This was primarily
due to charge-offs  recognized during the quarter as well as a refinement in our
estimated losses for impaired loans and a decline in nonaccrual loans.

 CHANGES IN THE UNALLOCATED ALLOWANCE

         At June 30, 2002, the unallocated allowance was $190 million,  compared
to $172 million at December 31, 2001, an increase of $18 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 debt ratings and weak equity
                  prices on borrowers in the power  industry,  which could be in
                  the range of $20 million to $40 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, 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  continued  soft  consumer confidence
                  on borrowers in the retailing industry,  which could be in the
                  range of $10 million to $25 million; and

         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.

         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".


                                       41


<PAGE>


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 SIX MONTHS
                                                                                 ENDED JUNE 30,                 ENDED JUNE 30,
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                                  2001         2002           2001           2002
_____________________________________________                                ________     ________       ________       ________
<S>                                                                          <C>          <C>            <C>            <C>

Balance, beginning of period..........................................       $642,334     $629,367       $613,902       $634,509
Loans charged off:
   Commercial, financial and industrial...............................         90,151       67,952        164,706        130,178
   Mortgage...........................................................             28          248             58            428
   Consumer...........................................................          2,897        2,228          6,234          4,827
   Lease financing....................................................          1,007          674          1,788          1,507
                                                                             ________     ________       ________       ________
      Total loans charged off.........................................         94,083       71,102        172,786        136,940
Recoveries of loans previously charged off:
   Commercial, financial and industrial...............................         12,073       12,822         18,010         17,339
   Construction.......................................................             --           40             --             40
   Mortgage...........................................................             --           44             24            139
   Consumer...........................................................          1,125          873          2,252          1,781
   Lease financing....................................................            171          182            319            383
   Foreign(1).........................................................             --           --             14             --
                                                                             ________     ________       ________       ________
      Total recoveries of loans previously charged off................         13,369       13,961         20,619         19,682
                                                                             ________     ________       ________       ________
        Net loans charged off.........................................         80,714       57,141        152,167        117,258
Provision for credit losses...........................................         65,000       50,000        165,000        105,000
Foreign translation adjustment and other net additions (deductions)(2)           (83)        2,722           (198)         2,697
                                                                             ________     ________       ________       ________
Balance, end of period................................................       $626,537     $624,948       $626,537       $624,948
                                                                             ========     ========       ========       ========


Allowance for credit losses to total loans............................          2.44%        2.44%          2.44%          2.44%
Provision for credit losses to net loans charged off..................          80.53        87.50         108.43          89.55
Net loans charged off to average loans outstanding for the period(3)..           1.24         0.90           1.17           0.93

<FN>

__________________

(1) Foreign loans are those loans originated in foreign branches.

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

(3) Annualized.

</FN>
</TABLE>


         Total loans  charged  off in the second  quarter of 2002  decreased  by
$23.0 million from the second quarter of 2001,  primarily due to a $22.2 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.

         Second  quarter  2002  recoveries  of  loans  previously   charged  off
increased by $0.6 million from the second quarter of 2001. The percentage of net
loans charged off to average loans  outstanding  for the second  quarter of 2002
decreased by 34 basis points from the same period in 2001. At June 30, 2002, the
allowance for credit losses exceeded the annualized net loans charged off during
the  second  quarter  of  2002,  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.


                                       42


<PAGE>

<TABLE>
<CAPTION>


NONPERFORMING ASSETS


                                                                                         JUNE 30,         DECEMBER 31,     JUNE 30,
(DOLLARS IN THOUSANDS)                                                                     2001               2001           2002
______________________                                                                   ________         __________       ________
<S>                                                                                      <C>                <C>            <C>

Commercial, financial and industrial...........................................          $432,756           $471,509       $386,912
Construction...................................................................             3,967                 --             --
Commercial mortgage............................................................            16,699             17,430         24,201
Lease financing................................................................                --              2,946          3,369
                                                                                         ________         __________       ________
   Total nonaccrual loans......................................................           453,422            491,885        414,482
Foreclosed assets..............................................................             1,345                597            490
Distressed loans held for sale.................................................             5,349                 --             --
                                                                                         ________         __________       ________
   Total nonperforming assets..................................................          $460,116           $492,482       $414,972
                                                                                         ========         ==========       ========

Allowance for credit losses....................................................          $626,537           $634,509       $624,948
                                                                                         ========         ==========       ========


Nonaccrual loans to total loans................................................              1.77%              1.97%          1.62%
Allowance for credit losses to nonaccrual loans................................            138.18             129.00         150.78
Nonperforming assets to total loans, distressed loans held for sale and
   foreclosed assets...........................................................              1.79               1.97           1.62
Nonperforming assets to total assets...........................................              1.29               1.37           1.15

</TABLE>



         At June 30,  2002,  nonperforming  assets  totaled  $415.0  million,  a
decrease of $45.1 million,  or 10 percent,  from June 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 1.62 percent at
June 30, 2002, compared with 1.77 percent at June 30, 2001. Nonperforming assets
as a percentage of total loans,  distressed  loans held for sale, and foreclosed
assets were 1.62 percent at June 30, 2002,  compared to 1.79 percent at June 30,
2001.

<TABLE>
<CAPTION>


LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING


                                                                                         JUNE 30,         DECEMBER 31,     JUNE 30,
(DOLLARS IN THOUSANDS)                                                                     2001               2001           2002
______________________                                                                   ________         ____________     ________
<S>                                                                                      <C>                <C>            <C>

Commercial, financial and industrial................................................     $ 12,812           $ 26,571       $11,096
Mortgage:
   Residential......................................................................        3,376              4,854         5,104
   Commercial.......................................................................        1,087              2,356           523
                                                                                         ________         ____________     ________
      Total mortgage................................................................        4,463              7,210         5,627
Consumer and other..................................................................        3,286              2,579         1,513
                                                                                         ________         ____________     ________
   Total loans 90 days or more past due and still accruing..........................     $ 20,561           $ 36,360       $18,236
                                                                                         ========         ============     ========

</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.

         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 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 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
March 31, 2002 and June 30, 2002.

<TABLE>
<CAPTION>

                                                          MARCH 31,     JUNE 30,
(DOLLARS IN MILLIONS)                                        2002         2002
_____________________                                     _________     ________
<S>                                                        <C>          <C>

+200 basis points...................................       $ 12.6       $ 48.3
as a percentage of mean NII.........................         0.83%        3.24%
-200 basis points...................................       $(56.3)      $(66.5)
as a percentage of mean NII.........................         3.72%        4.47%

</TABLE>


         Asset sensitivity increased in the second quarter of 2002 following the
implementation  of ALCO's  decision to unwind  longer-term  swap  hedges.  Other
contributing  factors  included a flattening in the Treasury yield curve,  which
caused modeled prepayment levels in our mortgage-related  portfolios to increase
in the lower rate  scenarios,  and  continued  strong growth in our core deposit
businesses.  However, the increase in asset sensitivity was substantially offset
in the down 200 basis point  simulation  by the  purchase of $1 billion in LIBOR
floors.  This  reflected  management's  decision to adjust the rate  sensitivity
profile.  These  activities allow us to benefit if interest rates should rise in
the next 12 months, while maintaining a prudent level of hedge protection if the
economy unexpectedly weakens and the Federal Reserve finds it necessary to lower
interest rates.

         With federal funds and LIBOR rates at the end of the second  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 rate  environment.  As of
June 30, 2002,  the  difference  between flat rate NII and NII after a 100 basis
point downward shock was ($22.5) million, or (1.5) percent of a flat rate NII.


                                       44


<PAGE>


         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 March 31, 2002 and June 30, 2002.

<TABLE>
<CAPTION>


                                                          MARCH 31,     JUNE 30,
(DOLLARS IN MILLIONS)                                        2002         2002
_____________________                                     _________     ________
<S>                                                         <C>           <C>

EaR.......................................................  $19.0        $25.8
EaR as a percentage of mean NII...........................    1.32%        1.78%

</TABLE>


         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.

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  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 76 percent of average total assets
of $35.7  billion  for the  second  quarter  ended  June 30,  2002.  Most of the
remaining  funding  was


                                       45


<PAGE>


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 $1.5 billion during the second 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


                                                                                                  MINIMUM
                                   JUNE 30,           DECEMBER 31,             JUNE 30,         REGULATORY
(DOLLARS IN THOUSANDS)               2001                 2001                   2002           REQUIREMENT
______________________            ___________         ___________            ___________        ___________
<S>                               <C>                 <C>                    <C>                <C>

CAPITAL COMPONENTS
Tier 1 capital...............     $ 3,570,022          $ 3,661,231           $ 3,834,103
Tier 2 capital...............         607,791              598,812               562,165
                                  ___________          ___________           ___________
Total risk-based capital.....     $ 4,177,813          $ 4,260,043           $ 4,396,268
                                  ===========          ===========           ===========

Risk-weighted assets.........     $32,908,813          $31,906,438           $32,213,352
                                  ===========          ===========           ===========


Quarterly average assets.....     $34,568,113          $34,760,203           $35,613,957
                                  ===========          ===========           ===========


CAPITAL RATIOS                  AMOUNT     RATIO       AMOUNT     RATIO       AMOUNT   RATIO      AMOUNT     RATIO
______________                __________   _____     __________   _____    __________  _____    __________   _____

Total capital (to
   risk-weighted assets)..    $4,177,813   12.70%    $4,260,043   13.35%   $4,396,268  13.65%   $2,577,068    8.0%
Tier 1 capital (to
   risk-weighted assets)..     3,570,022   10.85      3,661,231   11.47     3,834,103  11.90     1,288,534    4.0
Leverage(1)...............     3,570,022   10.33      3,661,231   10.53     3,834,103  10.77     1,424,558    4.0

<FN>

__________________

(1) Tier 1 capital  divided  by  quarterly  average  assets  (excluding  certain intangible assets).

</FN>
</TABLE>


<TABLE>

UNION BANK OF CALIFORNIA, N.A.


                                                                                                 MINIMUM         "WELL-CAPITALIZED"
                                   JUNE 30,            DECEMBER 31,          JUNE 30,           REGULATORY            REGULATORY
(DOLLARS IN THOUSANDS)               2001                 2001                 2002             REQUIREMENT           REQUIREMENT
______________________            ___________          ___________          ___________         ___________       __________________
<S>                               <C>                  <C>                  <C>                 <C>               <C>

CAPITAL COMPONENTS
Tier 1 capital...............     $ 3,187,528          $ 3,323,096          $ 3,473,828
Tier 2 capital...............         500,739              487,640              471,258
                                  ___________          ___________          ___________
Total risk-based capital.....     $ 3,688,267          $ 3,810,736          $ 3,945,086
                                  ===========          ===========          ===========

Risk-weighted assets.........     $32,344,858          $31,271,268          $31,581,189
                                  ===========          ===========          ===========

Quarterly average assets.....     $34,179,220          $34,282,625          $35,113,945
                                   ===========         ===========          ===========


CAPITAL RATIOS                  AMOUNT     RATIO      AMOUNT     RATIO      AMOUNT   RATIO     AMOUNT     RATIO     AMOUNT     RATIO
______________                __________   _____    __________   _____   __________  _____   __________   _____    __________  _____

Total capital (to
   risk-weighted assets)..    $3,688,267   11.40%   $3,810,736   12.19%  $3,945,086  12.49%  $2,526,495    8.0%   $3,158,119   10.0%
Tier 1 capital (to
   risk-weighted assets)..     3,187,528    9.85     3,323,096   10.63    3,473,828  11.00    1,263,248    4.0     1,894,871    6.0
Leverage(1)...............     3,187,528    9.33     3,323,096    9.69    3,473,828   9.89    1,404,558    4.0     1,755,697    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
June 30, 2002 increased 43 basis points to 11.90 percent,  our total  risk-based
capital ratio increased 30 basis points to 13.65 percent, and our leverage ratio
increased 24 basis points to 10.77 percent.  The increases in the capital ratios
were  primarily  attributable  to higher  shareholder  equity,  partly offset by
slightly higher risk-weighted  assets.  Shareholder equity was higher mainly due
to  increased  retained  earnings  driven by net  income in the first and second
quarters of 2002 as well as higher unrealized gains on securities  available for
sale and on cash flow hedges as recognized in other comprehensive income.

         As of June 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 CONTINUING DOWNTURN IN US ECONOMIC CONDITIONS

         The  terrorist  attacks on the World Trade  Center and the  Pentagon on
September 11, 2001,  as well as the threat of further  terrorist  attacks,  have
contributed to the continuing  downturn in the US economic  conditions.  Further
acts or threats of terrorism,  and actions taken by the US or other  governments
as a result of such acts or threats, 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 real estate.  Accordingly,  a downturn in the real estate industry in
California could have an adverse effect on our operations.  Similarly, a portion
of our total  loan  portfolio  is to  borrowers  in the  agricultural  industry.
Adverse weather  conditions,  combined with low commodity prices,  may adversely
affect the  agricultural  industry  and,  consequently,  may impact our business
negatively.  In addition,  auto leases comprise a 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  loans  to  businesses  in a  number  of  other  industries  that may be
particularly  vulnerable to  industry-specific  economic factors,  including the
communications/media  industry,  the  retailing  industry,  and  the  technology
industry.  Industry-  specific risks are beyond our control and could  adversely
affect  our  portfolio  of  loans,  potentially  resulting  in  an  increase  in
nonperforming loans or charge-offs.


                                       47


<PAGE>


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

         The recent  failure of Enron,  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  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 effected.

 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  67
percent as of June 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, 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-


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<PAGE>


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,  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


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<PAGE>


legislative  and regulatory  reactions to the terrorist  attack on September 11,
2001, and future acts of terrorism,  and the Enron Corporation and WorldCom Inc.
bankruptcies  and  recent  reports  of  accounting   irregularities   at  public
companies,  including  various  large and  seemingly  well  regarded  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.  Under  long-standing  policy of the Federal Reserve
Board (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.

         Additionally,  our business is affected significantly by the fiscal and
monetary  policies  of  the  federal   government  and  its  agencies.   We  are
particularly  affected by the policies of the FRB, which regulates the supply of
money and credit in the US. 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

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

 WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR OPERATING STRATEGIES

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

         o        deterioration of our asset quality;

         o        our inability to control  noninterest  expense,  including,
                  but not limited to, rising employee and healthcare costs;

         o        our inability to increase noninterest income;

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


                                       50


<PAGE>


         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  investments as this will
depend on the  availability of prospective  target companies at valuation levels
we find  attractive  and the  competition  for  such  opportunities  from  other
bidders.  In  addition,  we continue to evaluate the  performance  of all of our
businesses  and business  lines and may sell a business or business  lines.  Any
acquisitions,  divestitures  or  restructuring  may  result  in the  potentially
dilutive issuance of equity securities,  significant write-offs, including those
related to goodwill and other  intangible  assets and/or the incurrence of debt,
any of which could have a material  adverse  effect on our  business,  financial
condition and results of operations. Acquisitions, divestitures or restructuring
could involve numerous additional risks including  difficulties in 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.

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 more  inclusive  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 the previous text in this  document  under
the caption  "Quantitative  and Qualitative  Disclosure about Interest Rate Risk
Management (Other Than Trading)".


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<PAGE>


                           PART II. OTHER INFORMATION



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

         For  information  regarding  matters  submitted to  shareholders at the
Annual  Meeting of  Shareholders  on April 24, 2002, see Part II, Item 4 of Form
10-Q for the quarter ended March 31, 2002, incorporated herein.

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



(a)      Exhibits:


NO.     DESCRIPTION

  3.1   Restated Articles of Incorporation of the Registrant, as amended(1)
  3.2   By-laws of the Registrant, as amended January 27, 1999(2)
 10.1   UnionBanCal Corporation Management Stock Plan. (As restated effective
        June 1, 1997)*(3)
 10.2   Union Bank of California Deferred Compensation Plan. (January 1, 1997,
        Restatement, as amended November 21, 1996)*(4)
 10.3   Union Bank of California Senior Management Bonus Plan. (Effective
        January 1, 2000)*(5)
 10.4   Richard C. Hartnack Employment Agreement.(Effective January 1, 1998)*(6)
 10.5   Robert M. Walker Employment Agreement. (Effective January 1, 1998)*(6)
 10.6   Union Bank of California, N.A. Supplemental Executive Retirement Plan.
        (Effective January 1, 1988)(Amended and restated as of January 1, 1997)*
        (3)
 10.7   Union Bank Financial Services Reimbursement Program. (Effective January
        1, 1996)*(7)
 10.8   1997 UnionBanCal Corporation Performance Share Plan, as amended. (As
        amended, effective January 1, 2001)*(5)
 10.9   Service Agreement Between Union Bank of California and The Bank of
        Tokyo-Mitsubishi Ltd. (Effective October 1, 1997)*(3)
10.10   Year 2000 UnionBanCal Corporation Management Stock Plan. (As restated
        effective January 1, 2000)*(8)
10.11   Union Bank of California, N.A. Supplemental Retirement Plan for Policy
        Making Officers (Effective November 1, 1999)(9)
10.12   Philip B. Flynn Employment Agreement (Effective September 21, 2000)(10)


__________________

(1)     Incorporated by reference to Form 10-K for the year ended December 31,
        1998.

(2)     Incorporated by reference to Form 10-Q for the quarter ended March 31,
        1999.

(3)     Incorporated by reference to Form 10-K for the year ended December 31,
        1997.

(4)     Incorporated by reference to Form 10-K for the year ended December 31,
        1996.

(5)     Incorporated by reference to Form DEF-14A dated March 28, 2001.

(6)     Incorporated by reference to Form 10-Q for the quarter ended September
        30, 1998.

(7)     Incorporated by reference to Form 8-K dated April 1, 1996.

(8)     Incorporated by reference to form 10-Q for the quarter ended June 30,
        1999.

(9)     Incorporated by reference to form 10-Q for the quarter ended June 30,
        2000.

(10)    Incorporated by reference to form 10-K for the year ended December 31,
        2001.

* Management contract or compensatory plan, contract or arrangement.

(b)     Reports on Form 8-K

We filed a report  on Form 8-K on April  17,  2002 to  report  that  UnionBanCal
Corporation issued a press release concerning earnings for first quarter 2002.


                                       52


<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:  August 14, 2002


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