<PAGE>
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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 MARCH 31, 1999
 
                         Commission file number 0-28118
 
                            UNIONBANCAL CORPORATION
 
<TABLE>
<S>                                            <C>
     State of Incorporation: California        I.R.S. Employer Identification No. 94-1234979
</TABLE>
 
                             350 California Street
                      San Francisco, California 94104-1476
                  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 April 30, 1999: 164,583,338
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                            NUMBER
                                                                                                          -----------
<S>                                                                                                       <C>
 
PART I
FINANCIAL INFORMATION
 
  Consolidated Financial Highlights.....................................................................           2
 
  Item 1. Financial Statements:
    Consolidated Statements of Income...................................................................           3
    Consolidated Balance Sheets.........................................................................           4
    Consolidated Statements of Changes in Shareholders' Equity..........................................           5
    Consolidated Statements of Cash Flows...............................................................           6
    Notes to Consolidated Financial Statements..........................................................           7
 
  Item 2. Management's Discussion and Analysis:
    Introduction........................................................................................          11
    Summary.............................................................................................          11
    Business Segments...................................................................................          12
    Net Interest Income.................................................................................          16
    Noninterest Income..................................................................................          17
    Noninterest Expense.................................................................................          18
    Income Tax Expense..................................................................................          19
    Loans...............................................................................................          20
    Cross-Border Outstandings...........................................................................          21
    Provision for Credit Losses.........................................................................          22
    Allowance for Credit Losses.........................................................................          22
    Nonperforming Assets................................................................................          26
    Loans 90 Days or More Past Due and Still Accruing...................................................          26
    Liquidity...........................................................................................          26
    Regulatory Capital..................................................................................          27
    Year 2000...........................................................................................          27
 
  Item 3. Market Risk...................................................................................          32
 
PART II
OTHER INFORMATION
 
  Item 6. Exhibits and Reports on Form 8-K..............................................................          33
 
  Signatures............................................................................................          34
</TABLE>
<PAGE>
                         PART I. FINANCIAL INFORMATION
 
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                                   PERCENT CHANGE TO
                                                            FOR THE THREE MONTHS ENDED            MARCH 31, 1999 FROM:
                                                      --------------------------------------  ----------------------------
                                                       MARCH 31,   DECEMBER 31,   MARCH 31,    MARCH 31,    DECEMBER 31,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)            1998          1998         1999         1998           1998
----------------------------------------------------  -----------  ------------  -----------  -----------  ---------------
<S>                                                   <C>          <C>           <C>          <C>          <C>
RESULTS OF OPERATIONS:
  Net interest income(1)............................  $   318,646   $  339,599   $   340,711        6.92%          0.33%
  Provision for credit losses.......................       20,000           --         5,000      (75.00)            nm
  Noninterest income................................      128,030      133,582       139,308        8.81           4.29
  Noninterest expense...............................      268,475      299,040       302,993       12.86           1.32
                                                      -----------  ------------  -----------
  Income before income taxes(1).....................      158,201      174,141       172,026        8.74          (1.21   )
  Taxable-equivalent adjustment.....................        1,196        1,015           890      (25.59 )       (12.32   )
  Income tax expense................................       61,428       59,030        52,641      (14.30 )       (10.82   )
                                                      -----------  ------------  -----------
  Net income........................................  $    95,577  $   114,096   $   118,495       23.98%          3.86%
                                                      -----------  ------------  -----------
                                                      -----------  ------------  -----------
PER COMMON SHARE:
  Net income--basic.................................  $      0.55  $      0.65   $      0.69       25.45%          6.15%
  Net income--diluted...............................         0.54         0.65          0.69       27.78           6.15
  Dividends(2)......................................         0.14         0.19          0.19       35.71             --
  Book value (end of period)........................        15.72        17.45         17.17        9.22          (1.60   )
  Common shares outstanding (end of period).........  174,996,613  175,259,919   164,580,273       (5.95 )        (6.09   )
  Weighted average common shares
    outstanding--basic..............................  174,967,192  175,236,084   171,825,589       (1.80 )        (1.95   )
  Weighted average common shares
    outstanding--diluted............................  175,620,877  175,840,158   172,465,676       (1.80 )        (1.92   )
BALANCE SHEET (END OF PERIOD):
  Total assets......................................  $30,904,567  $32,276,316   $32,347,577        4.67%          0.22%
  Total loans.......................................   22,504,043   24,296,111    24,352,354        8.21           0.23
  Nonperforming assets..............................      132,403       89,850       109,837      (17.04 )        22.24
  Total deposits....................................   23,411,367   24,507,879    23,996,023        2.50          (2.09   )
  Common equity.....................................    2,750,696    3,058,244     2,825,730        2.73          (7.60   )
BALANCE SHEET (PERIOD AVERAGE):
  Total assets......................................  $29,865,256  $31,690,292   $31,727,726        6.24%          0.12%
  Total loans.......................................   22,611,092   24,101,304    24,280,726        7.38           0.74
  Earning assets....................................   26,613,204   28,615,543    28,618,688        7.54           0.01
  Total deposits....................................   22,431,446   23,451,618    23,305,935        3.90          (0.62   )
  Common equity.....................................    2,714,296    3,003,941     2,994,352       10.32          (0.32   )
FINANCIAL RATIOS:
  Return on average assets(3).......................         1.30%        1.43%         1.51%
  Return on average common equity(3)................        14.28        15.07         16.05
  Efficiency ratio(4)...............................        60.15        63.64         63.13
  Net interest margin(1)............................         4.86         4.71          4.83
  Dividend payout ratio.............................        25.45        29.23         27.54
  Tangible equity ratio.............................         8.70         9.30          8.57
  Tier 1 risk-based capital ratio...................         9.16         9.64          9.90
  Total risk-based capital ratio....................        11.23        11.61         11.86
  Leverage ratio....................................         8.94         9.38          9.78
  Allowance for credit losses to total loans........         2.07         1.89          1.84
  Allowance for credit losses to nonaccrual loans...       414.44       585.50        446.10
  Net loans charged off to average total loans(3)...         0.10         0.24          0.27
  Nonperforming assets to total loans and foreclosed
    assets..........................................         0.59         0.37          0.45
  Nonperforming assets to total assets..............         0.43         0.28          0.34
</TABLE>
 
------------------------------
(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. Foreclosed asset expense
       (income) was $(0.2) million in the first quarter of 1998, $(2.1) million
       in the fourth quarter of 1998, and none in the first quarter of 1999.
nm   = not meaningful
 
                                       2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
 
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                            FOR THE THREE MONTHS
                                                                                              ENDED MARCH 31,
                                                                                            --------------------
<S>                                                                                         <C>        <C>
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                                                 1998       1999
------------------------------------------------------------------------------------------  ---------  ---------
INTEREST INCOME
  Loans...................................................................................  $ 448,049  $ 451,492
  Securities..............................................................................     42,895     56,818
  Interest bearing deposits in banks......................................................      8,299      3,188
  Federal funds sold and securities purchased under resale agreements.....................      4,142      1,697
  Trading account assets..................................................................      5,268      3,898
                                                                                            ---------  ---------
      Total interest income...............................................................    508,653    517,093
                                                                                            ---------  ---------
INTEREST EXPENSE
  Domestic deposits.......................................................................    121,300    106,147
  Foreign deposits........................................................................     23,577     16,632
  Federal funds purchased and securities sold under repurchase agreements.................     14,075     19,769
  Commercial paper........................................................................     21,395     19,174
  Subordinated capital notes..............................................................      5,754      4,109
  UnionBanCal Corporation--obligated mandatorily redeemable preferred securities of
    subsidiary grantor trust..............................................................         --      3,291
  Other borrowed funds....................................................................      5,102      8,150
                                                                                            ---------  ---------
      Total interest expense..............................................................    191,203    177,272
                                                                                            ---------  ---------
NET INTEREST INCOME.......................................................................    317,450    339,821
  Provision for credit losses.............................................................     20,000      5,000
                                                                                            ---------  ---------
      Net interest income after provision for credit losses...............................    297,450    334,821
                                                                                            ---------  ---------
NONINTEREST INCOME
  Service charges on deposit accounts.....................................................     33,026     39,651
  Trust and investment management fees....................................................     27,993     32,271
  International commissions and fees......................................................     17,631     17,631
  Merchant transaction processing fees....................................................     14,379     14,512
  Merchant banking fees...................................................................      9,622      7,461
  Securities gains, net...................................................................      4,926      1,261
  Other...................................................................................     20,453     26,521
                                                                                            ---------  ---------
      Total noninterest income............................................................    128,030    139,308
                                                                                            ---------  ---------
NONINTEREST EXPENSE
  Salaries and employee benefits..........................................................    149,204    167,667
  Net occupancy...........................................................................     22,025     22,461
  Equipment...............................................................................     13,839     14,541
  Merchant transaction processing.........................................................     10,080     11,610
  Professional services...................................................................      7,307     10,694
  Communications..........................................................................     11,229      9,933
  Data processing.........................................................................      6,502      8,001
  Printing and office supplies............................................................      6,335      6,672
  Foreclosed asset expense (income).......................................................       (198)       (41)
  Other...................................................................................     42,152     51,455
                                                                                            ---------  ---------
      Total noninterest expense...........................................................    268,475    302,993
                                                                                            ---------  ---------
  Income before income taxes..............................................................    157,005    171,136
  Income tax expense......................................................................     61,428     52,641
                                                                                            ---------  ---------
NET INCOME................................................................................  $  95,577  $ 118,495
                                                                                            ---------  ---------
                                                                                            ---------  ---------
NET INCOME PER COMMON SHARE--BASIC........................................................  $    0.55  $    0.69
                                                                                            ---------  ---------
                                                                                            ---------  ---------
NET INCOME PER COMMON SHARE--DILUTED......................................................  $    0.54  $    0.69
                                                                                            ---------  ---------
                                                                                            ---------  ---------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC.........................................    174,967    171,826
                                                                                            ---------  ---------
                                                                                            ---------  ---------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED.......................................    175,621    172,466
                                                                                            ---------  ---------
                                                                                            ---------  ---------
</TABLE>
 
See accompanying notes to consolidated financial statements.
 
                                       3
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                            (UNAUDITED)                 (UNAUDITED)
                                                                             MARCH 31,    DECEMBER 31,   MARCH 31,
(DOLLARS IN THOUSANDS)                                                          1998          1998          1999
--------------------------------------------------------------------------  ------------  ------------  ------------
<S>                                                                         <C>           <C>           <C>
ASSETS
Cash and due from banks...................................................   $2,449,290    $2,135,380    $2,313,357
Interest bearing deposits in banks........................................      193,578       209,568       256,656
Federal funds sold and securities purchased under resale agreements.......      743,887       333,530       355,050
                                                                            ------------  ------------  ------------
    Total cash and cash equivalents.......................................    3,386,755     2,678,478     2,925,063
Trading account assets....................................................      892,171       267,718       336,089
Securities available for sale.............................................    2,807,124     3,638,532     3,375,255
Securities held to maturity (market value: March 31, 1998, $179,317;
  December 31, 1998, $163,244; March 31, 1999, $141,081)..................      175,696       160,513       139,321
Loans (net of allowance for credit losses: March 31, 1998, $466,043;
  December 31, 1998, $459,328; March 31, 1999, $447,936)..................   22,038,000    23,836,783    23,904,418
Due from customers on acceptances.........................................      535,754       489,480       419,386
Premises and equipment, net...............................................      395,272       421,091       427,697
Other assets..............................................................      673,795       783,721       820,348
                                                                            ------------  ------------  ------------
    Total assets..........................................................   $30,904,567   $32,276,316   $32,347,577
                                                                            ------------  ------------  ------------
                                                                            ------------  ------------  ------------
LIABILITIES
Domestic deposits:
  Noninterest bearing.....................................................   $9,047,869    $9,919,316    $9,332,370
  Interest bearing........................................................   12,201,217    12,609,565    12,643,022
Foreign deposits:
  Noninterest bearing.....................................................      271,250       260,089       341,298
  Interest bearing........................................................    1,891,031     1,718,909     1,679,333
                                                                            ------------  ------------  ------------
    Total deposits........................................................   23,411,367    24,507,879    23,996,023
Federal funds purchased and securities sold under repurchase agreements...    1,009,523     1,307,744     1,073,376
Commercial paper..........................................................    1,588,589     1,444,745     1,737,265
Other borrowed funds......................................................      401,221       331,165       962,416
Acceptances outstanding...................................................      535,754       489,480       419,386
Other liabilities.........................................................      859,417       839,059       685,381
Subordinated capital notes................................................      348,000       298,000       298,000
UnionBanCal Corporation--obligated mandatorily redeemable preferred
  securities of subsidiary grantor trust..................................           --            --       350,000
                                                                            ------------  ------------  ------------
    Total liabilities.....................................................   28,153,871    29,218,072    29,521,847
                                                                            ------------  ------------  ------------
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock:
  Authorized 5,000,000 shares, no shares issued or outstanding as of
    March 31, 1998, December 31, 1998, or March 31, 1999..................           --            --            --
Common stock--no stated value:
  Authorized 300,000,000 shares, issued 174,996,613 shares as of
    March 31, 1998, 175,259,919 shares as of December 31, 1998, and
    164,580,273 shares as of March 31, 1999...............................    1,715,800     1,725,619     1,415,227
Retained earnings.........................................................    1,029,401     1,314,915     1,403,180
Accumulated other comprehensive income....................................        5,495        17,710         7,323
                                                                            ------------  ------------  ------------
    Total shareholders' equity............................................    2,750,696     3,058,244     2,825,730
                                                                            ------------  ------------  ------------
    Total liabilities and shareholders' equity............................   $30,904,567   $32,276,316   $32,347,577
                                                                            ------------  ------------  ------------
                                                                            ------------  ------------  ------------
</TABLE>
 
See accompanying notes to consolidated financial statements.
 
                                       4
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                     FOR THE THREE MONTHS ENDED MARCH 31,
                                                              --------------------------------------------------
(DOLLARS IN THOUSANDS)                                                  1998                      1999
------------------------------------------------------------  ------------------------  ------------------------
<S>                                                           <C>          <C>          <C>          <C>
COMMON STOCK
Balance, beginning of period................................   $1,714,209                $1,725,619
Dividend reinvestment plan..................................           6                        13
Deferred compensation--restricted stock awards..............         109                       (15)
Stock options exercised.....................................       1,476                       594
Common stock repurchased....................................          --                  (310,984)
                                                              -----------               -----------
  Balance, end of period....................................  $1,715,800                $1,415,227
                                                              -----------               -----------
RETAINED EARNINGS
Balance, beginning of period................................  $  957,662                $1,314,915
Net income..................................................      95,577   $   95,577      118,495   $  118,495
Dividends on common stock(1)................................     (24,538 )                 (31,269 )
Deferred compensation--restricted stock awards..............         700                     1,039
                                                              -----------               -----------
  Balance, end of period....................................  $1,029,401                $1,403,180
                                                              -----------               -----------
ACCUMULATED OTHER COMPREHENSIVE INCOME......................
Balance, beginning of period................................  $    7,428                $   17,710
Unrealized holding gains (losses) arising during the period
  on securities available for sale, net of tax expense
  (benefit) of $443 and $(6,071) in the first quarter of
  1998 and 1999, respectively...............................                      651                    (9,797 )
Less:  reclassification adjustment for gains on securities
  available for sale included in net income, net of
  tax expense of $1,995 and $482 in the first
  quarter of 1998 and 1999, respectively....................                   (2,931 )                    (779 )
                                                                           -----------               -----------
Net unrealized gains (losses) on securities available for
  sale......................................................                   (2,280 )                 (10,576 )
Foreign currency translation adjustment, net of tax
  expense (benefit) of $236 and $(297) in the first
  quarter of 1998 and 1999, respectively....................                      347                      (480 )
Minimum pension liability adjustment, net of tax
  expense of $414 in the first quarter of 1999..............                       --                       669
                                                                           -----------               -----------
Other comprehensive income..................................      (1,933 )     (1,933 )    (10,387 )    (10,387 )
                                                              -----------  -----------  -----------  -----------
Total comprehensive income..................................               $   93,644                $  108,108
                                                                           -----------               -----------
                                                                           -----------               -----------
  Balance, end of period....................................  $    5,495                $    7,323
                                                              -----------               -----------
     TOTAL SHAREHOLDERS' EQUITY.............................  $2,750,696                $2,825,730
                                                              -----------               -----------
                                                              -----------               -----------
</TABLE>
 
------------------------------
(1)  Dividends per share were $0.14 and $0.19 in the first quarter of 1998 and
    1999, respectively, and are based on UnionBanCal Corporation's shares
    outstanding as of the declaration date.
 
See accompanying notes to consolidated financial statements.
 
                                       5
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                            FOR THE THREE MONTHS
                                                                                              ENDED MARCH 31,
                                                                                          ------------------------
(DOLLARS IN THOUSANDS)                                                                       1998         1999
----------------------------------------------------------------------------------------  -----------  -----------
<S>                                                                                       <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income............................................................................  $    95,577  $   118,495
  Adjustments to reconcile net income to net cash used by operating activities:
    Provision for credit losses.........................................................       20,000        5,000
    Depreciation, amortization and accretion............................................       16,850       17,815
    Provision for deferred income taxes.................................................       12,467        9,135
    Gain on sales of securities available for sale......................................       (4,926)      (1,261)
    Merger and integration costs less than cash utilized................................       (8,662)      (1,016)
    Net increase in trading account assets..............................................     (456,876)     (68,371)
    Other, net..........................................................................      233,032     (166,369)
                                                                                          -----------  -----------
      Total adjustments.................................................................     (188,115)    (205,067)
                                                                                          -----------  -----------
  Net cash used by operating activities.................................................      (92,538)     (86,572)
                                                                                          -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of securities available for sale..................................      317,209      197,913
  Proceeds from matured and called securities available for sale........................       65,072      213,227
  Purchases of securities available for sale............................................     (668,162)    (163,466)
  Proceeds from matured and called securities held to maturity..........................       13,136       21,262
  Net (increase) decrease in loans......................................................      224,162      (88,272)
  Other, net............................................................................       15,694      (21,247)
                                                                                          -----------  -----------
    Net cash provided (used) by investing activities....................................      (32,889)     159,417
                                                                                          -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net (decrease) increase in deposits...................................................      114,993     (511,856)
  Net decrease in federal funds purchased and securities sold under repurchase
    agreements..........................................................................     (326,361)    (234,368)
  Net increase in commercial paper and other borrowed funds.............................      547,225      923,771
  Common stock repurchased..............................................................           --     (310,984)
  Proceeds from issuance of UnionBanCal Corporation--obligated
    mandatorily redeemable preferred securities of subsidiary grantor trust.............           --      350,000
  Dividends paid........................................................................      (24,528)     (33,299)
  Other, net............................................................................        1,829          127
                                                                                          -----------  -----------
    Net cash provided by financing activities...........................................      313,158      183,391
                                                                                          -----------  -----------
Net increase in cash and cash equivalents...............................................      187,731      256,236
Cash and cash equivalents at beginning of period........................................    3,199,455    2,678,478
Effect of exchange rate changes on cash and cash equivalents............................         (431)      (9,651)
                                                                                          -----------  -----------
Cash and cash equivalents at end of period..............................................  $ 3,386,755  $ 2,925,063
                                                                                          -----------  -----------
                                                                                          -----------  -----------
CASH PAID (RECEIVED) DURING THE PERIOD FOR:
  Interest..............................................................................  $   200,270  $   173,138
  Income taxes..........................................................................       17,843      (34,486)
 
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Loans transferred to foreclosed assets (OREO).........................................  $     6,990  $     1,469
  Dividends declared but unpaid.........................................................       24,538       31,269
</TABLE>
 
See accompanying notes to consolidated financial statements.
 
                                       6
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                                 MARCH 31, 1999
                                  (UNAUDITED)
 
NOTE 1--BASIS OF PRESENTATION AND NATURE OF OPERATIONS
 
    The unaudited consolidated financial statements of UnionBanCal Corporation
and subsidiaries (the Company) have been prepared in accordance with generally
accepted accounting principles (GAAP) for interim financial reporting and the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. However, they do not
include all of the disclosures necessary for annual financial statements in
conformity with GAAP. Accordingly, these unaudited 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,
1998. The preparation of financial statements in conformity with 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.
 
    On March 3, 1999, the Company completed a secondary offering of 28.75
million shares of its Common Stock owned by The Bank of Tokyo-Mitsubishi, Ltd.
(BTM). The Company received no proceeds from this transaction. Concurrent with
the secondary offering, the Company repurchased 8.6 million shares of its
outstanding Common Stock from BTM and 2.1 million shares owned by Meiji Life
Insurance Company with $311 million of the net proceeds from the issuance of
$350 million of 7 3/8 percent redeemable preferred securities that occurred on
February 19, 1999. Upon completion of the secondary offering and the repurchase
of the Company's common stock from BTM, BTM owns 64 percent of the Company, or
105.6 million shares, compared with 82 percent prior to the transactions.
 
    Certain amounts for prior periods have been reclassified to conform to
current financial statement presentation.
 
NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
    On January 1, 1999, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 134, "Accounting for Mortgage-Backed Securities Retained
after the Securitization of Mortgage Loans Held for Sale by a Mortgage Banking
Enterprise". This Statement amends SFAS No. 65, "Accounting for Certain Mortgage
Banking Activities", which established accounting and reporting standards for
certain activities of mortgage banking and other similar enterprises. After
securitization of mortgage loans held for sale, SFAS No. 134 requires an entity
to classify the resulting mortgage-backed securities or other retained interests
based on its ability or intent to sell or hold those investments. Adoption of
this Statement did not impact the Company's financial position or results of
operations.
 
    On January 1, 1999, the Company adopted Statement of Position (SOP) 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use". SOP 98-1 requires the capitalization of eligible costs of
specified activities related to computer software developed or obtained for
internal use. Management determined that the effect of adoption of SOP 98-1 on
the Company's financial position or results of operations was not material.
 
    On January 1, 1999, the Company adopted SOP 98-5, "Reporting on the Costs of
Start-Up Activities". SOP 98-5 requires that entities expense start-up costs and
organization costs as they are incurred. Adoption of SOP 98-5 did not have a
material effect on the Company's financial position or results of operations.
 
                                       7
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1999
                                  (UNAUDITED)
 
NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)
    In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". The Statement
will require the Company to recognize all derivatives on the balance sheet at
fair value. SFAS No. 133 requires that derivative instruments used to hedge be
identified specifically to assets, liabilities, firm commitments or anticipated
transactions and measured as to effectiveness and ineffectiveness when hedging
changes in fair value or cash flows. Derivative instruments that do not qualify
as either a fair value or cash flow hedge will be valued at fair value with the
resultant gain or loss recognized in current earnings. Changes in the effective
portion of fair value hedges will be recognized in current earnings along with
the change in fair value of the hedged item. Changes in the effective portion of
the fair value of cash flow hedges will be recognized in other comprehensive
income until realization of the cash flows of the hedged item through current
earnings. Any ineffective portion of hedges will be recognized in current
earnings. Management believes that, depending upon the accumulated net gain or
loss of the effective portion of cash flow hedges at the date of adoption, the
impact of SFAS No. 133 could have a material impact on other comprehensive
income. However, management believes that any ineffective portion of cash flow
hedges or any other hedges will not have a material impact on the Company's
financial position or results of operations. This Statement is effective for
fiscal years beginning after June 15, 1999, with earlier application encouraged.
The Company expects to adopt SFAS No. 133 as of January 1, 2000.
 
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 ended March 31, 1998 and 1999:
 
<TABLE>
<CAPTION>
                                                                        FOR THE THREE MONTHS ENDED MARCH 31,
                                                                   ----------------------------------------------
                                                                            1998                    1999
                                                                   ----------------------  ----------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                        BASIC      DILUTED      BASIC      DILUTED
-----------------------------------------------------------------  ----------  ----------  ----------  ----------
<S>                                                                <C>         <C>         <C>         <C>
Net Income.......................................................  $   95,577  $   95,577  $  118,495  $  118,495
                                                                   ----------  ----------  ----------  ----------
                                                                   ----------  ----------  ----------  ----------
Weighted average common shares outstanding.......................     174,967     174,967     171,826     171,826
Additional shares due to:
  Assumed conversion of dilutive stock options...................          --         654          --         640
                                                                   ----------  ----------  ----------  ----------
Adjusted weighted average common shares
  outstanding....................................................     174,967     175,621     171,826     172,466
                                                                   ----------  ----------  ----------  ----------
                                                                   ----------  ----------  ----------  ----------
Net income per share.............................................  $     0.55  $     0.54  $     0.69  $     0.69
                                                                   ----------  ----------  ----------  ----------
                                                                   ----------  ----------  ----------  ----------
</TABLE>
 
                                       8
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1999
                                  (UNAUDITED)
 
NOTE 4--COMPREHENSIVE INCOME
 
    The following table presents a summary of the components of accumulated
other comprehensive income:
 
<TABLE>
<CAPTION>
                                   NET UNREALIZED
                                  GAINS (LOSSES) ON            FOREIGN            MINIMUM PENSION
                                SECURITIES AVAILABLE          CURRENCY               LIABILITY          ACCUMULATED OTHER
                                      FOR SALE               TRANSLATION            ADJUSTMENT        COMPREHENSIVE INCOME
                                ---------------------   ---------------------   -------------------   ---------------------
                                                           FOR THE THREE MONTHS ENDED MARCH 31,
                                -------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)            1998        1999        1998        1999        1998       1999       1998        1999
------------------------------  ---------   ---------   ---------   ---------   ---------   -------   ---------   ---------
<S>                             <C>         <C>         <C>         <C>         <C>         <C>       <C>         <C>
Beginning balance.............   $19,886     $29,109     $(12,458)   $(9,651)    $    --    ($1,748)   $ 7,428     $17,710
 
Change during the period......    (2,280)    (10,576)        347        (480)         --       669      (1,933)    (10,387)
                                ---------   ---------   ---------   ---------   ---------   -------   ---------   ---------
 
Ending balance................   $17,606     $18,533     $(12,111)   $(10,131)   $    --    ($1,079)   $ 5,495     $ 7,323
                                ---------   ---------   ---------   ---------   ---------   -------   ---------   ---------
                                ---------   ---------   ---------   ---------   ---------   -------   ---------   ---------
</TABLE>
 
NOTE 5--BUSINESS SEGMENTS
 
    The Company is organized based on the products and services that it offers
and operates in five principal areas:
 
-  The Community Banking Group provides loan products and deposit services
   primarily to consumers and small businesses.
 
-  The Commercial Financial Services Group provides a wide variety of banking
   services, principally loans, to commercial customers.
 
-  The International Banking Group provides trade-finance products to banks, and
   extends primarily short-term credit to corporations engaged in international
   business. The group's revenue predominately relates to foreign customers.
 
-  The Trust and Private Financial Services Group principally provides
   fiduciary, private banking, investment and asset management services for
   individuals and institutions.
 
-  The Global Markets Group manages the Company's securities portfolio, trading
   operations, wholesale funding needs, and interest rate and liquidity risk.
 
    The information set forth in the table on the following page reflects
selected income statement items and a selected balance sheet item by business
unit. The information presented does not necessarily represent the business
units' financial condition and results of operations as if they were independent
entities. Unlike financial accounting, there is no authoritative body of
guidance for management accounting equivalent to generally accepted accounting
principles. Consequently, reported results are not necessarily comparable with
those presented by other companies.
 
    "Other" is comprised of goodwill, certain parent company non-bank
subsidiaries, the elimination of the fully taxable-equivalent amounts, the
unallocated allowance and related provision for credit losses, the earnings
associated with the unallocated equity capital, the residual costs of support
groups, and merger and integration expense when applicable. In addition, it
includes two units, the Credit and Compliance Group, which manages nonperforming
assets, and the Pacific Rim Group, which offers financial products
 
                                       9
<PAGE>
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1999
                                  (UNAUDITED)
 
NOTE 5--BUSINESS SEGMENTS (CONTINUED)
to Asian-owned subsidiaries located in the U.S. On an individual basis, none of
the items in "Other" are significant to our business.
 
<TABLE>
<CAPTION>
                                                                                                       TRUST AND
                                                                                                        PRIVATE
                                                                  COMMERCIAL                           FINANCIAL
                                              COMMUNITY           FINANCIAL        INTERNATIONAL        SERVICES
                                            BANKING GROUP       SERVICES GROUP     BANKING GROUP         GROUP
                                          ------------------  ------------------  ----------------  ----------------
                                                             FOR THE THREE MONTHS ENDED MARCH 31,
                                          --------------------------------------------------------------------------
                                            1998      1999      1998      1999     1998     1999     1998     1999
                                          --------  --------  --------  --------  -------  -------  -------  -------
<S>                                       <C>       <C>       <C>       <C>       <C>      <C>      <C>      <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
 
Total revenue...........................  $210,755  $213,815  $140,805  $160,440  $29,989  $30,880  $38,897  $45,014
 
Net income..............................  $ 35,486  $ 33,747  $ 49,519  $ 56,144  $ 7,053  $ 2,540  $ 4,191  $ 4,313
 
Total assets at period end (DOLLARS IN
  MILLIONS).............................  $ 10,720  $ 10,142  $ 11,449  $ 14,084  $ 1,698  $ 1,477  $   282  $   375
</TABLE>
 
<TABLE>
<CAPTION>
                                                              GLOBAL                                   UNIONBANCAL
                                                          MARKETS GROUP             OTHER              CORPORATION
                                                       --------------------  --------------------  --------------------
                                                                     FOR THE THREE MONTHS ENDED MARCH 31,
                                                       ----------------------------------------------------------------
                                                         1998       1999       1998       1999       1998       1999
                                                       ---------  ---------  ---------  ---------  ---------  ---------
<S>                                                    <C>        <C>        <C>        <C>        <C>        <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
 
Total revenue........................................  $  14,143  $  21,861  $  10,891  $   7,119  $ 445,480  $ 479,129
 
Net income...........................................  $   3,195  $   8,276  $  (3,867) $  13,475  $  95,577  $ 118,495
 
Total assets at period end (DOLLARS IN MILLIONS).....  $   4,680  $   4,250  $   2,076  $   2,020  $  30,905  $  32,348
</TABLE>
 
NOTE 6-- UNIONBANCAL CORPORATION--OBLIGATED MANDATORILY REDEEMABLE PREFERRED
      SECURITIES OF SUBSIDIARY GRANTOR TRUST
 
    During the first quarter of 1999, UnionBanCal Finance Trust I issued $350
million preferred securities to the public and $10,824,750 common securities to
the Company. The proceeds of such issuances were invested by UnionBanCal Finance
Trust I in $360,824,750 aggregate principal amount of the Company's 7 3/8
percent debt securities due May 15, 2029 (the Trust Notes). The Trust Notes
represent the sole asset of UnionBanCal Finance Trust I. The Trust Notes mature
on May 15, 2029, bear interest at the rate of 7 3/8 percent, payable quarterly,
and are redeemable by the Company beginning on or after February 19, 2004 at 100
percent of the principal amount thereof, plus any accrued and unpaid interest to
the redemption date.
 
    Holders of the preferred securities and common securities are entitled to
cumulative cash distributions at an annual rate of 7 3/8 percent of the
liquidation amount of $25 per security. The preferred securities are subject to
mandatory redemption upon repayment of the Trust Notes and are callable by the
Company at 100 percent of the liquidation amount beginning on or after February
19, 2004. The Trust exists for the sole purpose of issuing the preferred
securities and investing the proceeds in the Trust Notes issued by the Company.
 
                                       10
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
    THIS DOCUMENT MAY CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE INDICATED. FOR A DISCUSSION OF FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER, PLEASE SEE THE DISCUSSION CONTAINED HEREIN AND IN OUR
PUBLICLY AVAILABLE SECURITIES AND EXCHANGE COMMISSION FILINGS AND PRESS
RELEASES.
 
INTRODUCTION
 
    We are a California-based commercial bank holding company with consolidated
assets of $32.3 billion at March 31, 1999. Our wholly-owned subsidiary, Union
Bank of California, N.A., was the third largest commercial bank in California,
based on total assets and total deposits in California, and one of the 30
largest commercial banks in the United States. At March 31, 1999, we operated
244 banking offices in California, 6 banking offices in Oregon and Washington,
and 17 overseas facilities. At March 31, 1999, we were 64 percent owned by The
Bank of Tokyo-Mitsubishi, Ltd. and 36 percent owned by other shareholders. See
Note 1 of the accompanying notes to our Consolidated Financial Statements for
further information.
 
    Our interim financial information should be read in conjunction with our
Form 10-K for the year ended December 31, 1998. Certain amounts for prior
periods have been reclassified to conform to current financial statement
presentation.
 
SUMMARY
 
    Net income was $95.6 million, or $0.54 per diluted common share, in the
first quarter of 1998, compared with $118.5 million, or $0.69 per diluted common
share, in the first quarter of 1999. This increase in diluted earnings per share
of 28 percent over the first quarter of 1998 was due to a 7 percent increase in
net interest income, a $15.0 million decrease in the provision for credit
losses, a 9 percent increase in noninterest income, and a 8 percent decrease in
the effective income tax rate, partially offset by a 13 percent increase in
noninterest expense. Excluding a federal income tax benefit of $6.3 million as
described below, net income was $112.2 million, or $0.65 per diluted common
share, in the first quarter of 1999. Other highlights of the first quarter of
1999 include:
 
    -  Net interest income, on a taxable-equivalent basis, was $340.7 million in
       the first quarter of 1999, an increase of $22.1 million, or 7 percent,
       over the first quarter of 1998. Net interest margin in the first quarter
       of 1999 was 4.83 percent, a decrease of 3 basis points from the first
       quarter of 1998.
 
    -  A provision for credit losses of $20.0 million was recorded in the first
       quarter of 1998, compared with $5.0 million in the first quarter of 1999.
       This resulted from management's regular assessment of overall credit
       quality, loan portfolio composition and growth and economic conditions in
       relation to the level of the allowance for credit losses. The allowance
       for credit losses was $466.0 million, or 414 percent of total nonaccrual
       loans, at March 31, 1998, compared with $447.9 million, or 446 percent of
       total nonaccrual loans, at March 31, 1999. Net loans charged off in the
       first quarter of 1999 was $16.3 million.
 
    -  Nonperforming assets declined $22.6 million, or 17 percent, from March
       31, 1998 to $109.8 million at March 31, 1999. Nonperforming assets as a
       percentage of total assets declined to 0.34 percent at March 31, 1999,
       compared with 0.43 percent a year earlier. Total nonaccrual loans were
       $112.5 million at March 31, 1998, compared with $100.4 million at March
       31, 1999, resulting in a reduction in the ratio of nonaccrual loans to
       total loans from 0.50 percent at March 31, 1998 to 0.41 percent at March
       31, 1999.
 
                                       11
<PAGE>
    -  Noninterest income was $139.3 million in the first quarter of 1999, an
       increase of $11.3 million, or 9 percent, over the first quarter of 1998.
       Service charges on deposit accounts grew $6.6 million, or 20 percent,
       trust and investment management fees increased $4.3 million, or 15
       percent, and other noninterest income increased $4.6 million, or 41
       percent. These increases were partially offset by a decrease in merchant
       banking fees of $2.2 million, or 22 percent, and a decrease in net
       securities gains of $3.7 million, or 74 percent.
 
    -  Noninterest expense was $303.0 million in the first quarter of 1999, an
       increase of $34.5 million, or 13 percent, over the first quarter of 1998.
       Personnel-related expense increased $18.5 million, or 12 percent,
       professional services increased $3.4 million, or 46 percent, and other
       noninterest expense increased $6.4 million, or 30 percent.
 
    -  Our effective tax rate for the first quarter of 1998 was 39 percent,
       compared with 31 percent for the first quarter of 1999. In March 1999, we
       recognized a $6.3 million federal tax benefit as the result of an
       Internal Revenue Service (IRS) settlement with respect to refund claims
       we filed for the years 1992 through 1994. The lower effective tax rate in
       the first quarter of 1999 also reflects our intention to file our 1999
       California franchise tax returns on a worldwide unitary reporting basis,
       which incorporates the results of our majority shareholder, The Bank of
       Tokyo-Mitsubishi, Ltd. and their worldwide affiliates. Excluding the $6.3
       million federal tax benefit, our effective tax rate would have been 34
       percent in the first quarter of 1999.
 
    -  In the first quarter of 1999, our return on average assets increased to
       1.51 percent from 1.30 percent a year earlier, and our return on average
       common equity increased to 16.05 percent from 14.28 percent a year
       earlier.
 
    -  Total loans at March 31, 1999 were $24.4 billion, an increase of $1.8
       billion, or 8 percent, over March 31, 1998.
 
    -  Our Tier 1 and total risk-based capital ratios were 9.16 percent and
       11.23 percent, respectively, at March 31, 1998, compared with 9.90
       percent and 11.86 percent, respectively, at March 31, 1999. Our first
       quarter 1998 leverage ratio was 8.94 percent, compared with 9.78 percent
       for the first quarter of 1999.
 
BUSINESS SEGMENTS
 
    We segregate our operations into five primary business units for the purpose
of management reporting, as shown in the table on the following page. The
results show the financial performance of our major business units.
 
    The information reflects the condensed income statements, selected balance
sheet items and selected financial ratios 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 generally accepted accounting principles. Consequently, reported
results are not necessarily comparable with those presented by other companies.
 
    Business unit results are based on an internal management reporting system
used by management to measure the performance of the units and the Company as a
whole. The management reporting system assigns 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 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 unit are
assigned to that business. Indirect costs, such as overhead, operation, and
technology expense, are allocated to the business units based on studies of
billable unit costs for product or data processing. The provision for credit
losses is allocated based on the formula and specific reserves and the net
chargeoffs for
 
                                       12
<PAGE>
each respective business unit. Equity is allocated based on a combination of
regulatory requirements and management's assessment of economic risk factors,
primarily credit, operating, foreign exchange and interest rate risk.
 
    We are in the process of developing a model for measuring profitability on a
risk adjusted return on equity basis. When fully implemented, this methodology
will be adopted and all prior periods will be restated.
 
<TABLE>
<CAPTION>
                                                                                                TRUST AND
                                                        COMMERCIAL                               PRIVATE
                                    COMMUNITY           FINANCIAL         INTERNATIONAL         FINANCIAL
                                  BANKING GROUP       SERVICES GROUP      BANKING GROUP       SERVICES GROUP
                                ------------------  ------------------  ------------------  ------------------
                                                     FOR THE THREE MONTHS ENDED MARCH 31,
                                ------------------------------------------------------------------------------
                                  1998      1999      1998      1999      1998      1999      1998      1999
                                --------  --------  --------  --------  --------  --------  --------  --------
<S>                             <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
RESULTS OF OPERATIONS (DOLLARS
  IN THOUSANDS):
  Net interest income.........  $172,393  $171,586  $109,937  $133,882  $ 13,956  $ 12,831  $  5,571  $  5,836
  Noninterest income..........    38,362    42,229    30,868    26,558    16,033    18,049    33,326    39,178
                                --------  --------  --------  --------  --------  --------  --------  --------
  Total revenue...............   210,755   213,815   140,805   160,440    29,989    30,880    38,897    45,014
 
  Noninterest expense.........   146,845   156,714    57,817    66,861    16,382    17,565    32,066    38,101
  Credit expense (income).....     7,951     3,932     3,173     5,844     1,120     8,478         7       (68)
                                --------  --------  --------  --------  --------  --------  --------  --------
  Income (loss) before income
    tax expense
    (benefit) and performance
    center
    earnings (expense)........    55,959    53,169    79,815    87,735    12,487     4,837     6,824     6,981
  Performance center earnings
    (expense)(1)..............     2,034     1,580     1,112       468      (961)     (716)       25        16
                                --------  --------  --------  --------  --------  --------  --------  --------
  Income (loss) before income
    tax expense (benefit).....    57,993    54,749    80,927    88,203    11,526     4,121     6,849     6,997
  Income tax expense
    (benefit).................    22,507    21,002    31,408    32,059     4,473     1,581     2,658     2,684
                                --------  --------  --------  --------  --------  --------  --------  --------
  Net income (loss)...........  $ 35,486  $ 33,747  $ 49,519  $ 56,144  $  7,053  $  2,540  $  4,191  $  4,313
                                --------  --------  --------  --------  --------  --------  --------  --------
                                --------  --------  --------  --------  --------  --------  --------  --------
AVERAGE BALANCES (DOLLARS IN
  MILLIONS):
  Total loans before
    performance centers(2)....  $  9,588  $  9,096  $ 10,196  $ 12,731  $  1,442  $  1,146  $    232  $    302
  Total assets................    10,620    10,101    11,352    13,974     2,306     1,779       288       379
  Total deposits before
    performance centers(2)....    12,789    13,539     4,938     5,534       928       781       808       620
FINANCIAL RATIOS:
  Return on average assets....      1.36%     1.35%     1.77%     1.63%     1.24%     0.58%     5.90%     4.62%
  Efficiency ratio before
    performance centers.......     69.68     73.29     41.06     41.67     54.63     56.88     82.44     84.64
</TABLE>
 
<TABLE>
<CAPTION>
                                                                         GLOBAL                                   UNIONBANCAL
                                                                     MARKETS GROUP             OTHER              CORPORATION
                                                                  --------------------  --------------------  --------------------
                                                                                FOR THE THREE MONTHS ENDED MARCH 31,
                                                                  ----------------------------------------------------------------
                                                                    1998       1999       1998       1999       1998       1999
                                                                  ---------  ---------  ---------  ---------  ---------  ---------
<S>                                                               <C>        <C>        <C>        <C>        <C>        <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
  Net interest income...........................................  $   6,159  $  14,177  $   9,434  $   1,509  $ 317,450  $ 339,821
  Noninterest income............................................      7,984      7,684      1,457      5,610    128,030    139,308
                                                                  ---------  ---------  ---------  ---------  ---------  ---------
  Total revenue.................................................     14,143     21,861     10,891      7,119    445,480    479,129
  Noninterest expense...........................................      6,705      6,672      8,660     17,080    268,475    302,993
  Credit expense (income).......................................         --         --      7,749    (13,186)    20,000      5,000
                                                                  ---------  ---------  ---------  ---------  ---------  ---------
  Income (loss) before income tax expense (benefit) and
    performance center earnings (expense).......................      7,438     15,189     (5,518)     3,225    157,005    171,136
  Performance center earnings (expense)(1)......................     (2,217)    (1,762)         7        414         --         --
                                                                  ---------  ---------  ---------  ---------  ---------  ---------
  Income (loss) before income tax expense (benefit).............      5,221     13,427     (5,511)     3,639    157,005    171,136
  Income tax expense (benefit)..................................      2,026      5,151     (1,644)    (9,836)    61,428     52,641
                                                                  ---------  ---------  ---------  ---------  ---------  ---------
  Net income (loss).............................................  $   3,195  $   8,276  $  (3,867) $  13,475  $  95,577  $ 118,495
                                                                  ---------  ---------  ---------  ---------  ---------  ---------
                                                                  ---------  ---------  ---------  ---------  ---------  ---------
AVERAGE BALANCES (DOLLARS IN MILLIONS):
  Total loans before performance centers(2).....................  $      --  $      --  $   1,153  $   1,006  $  22,611  $  24,281
  Total assets..................................................      3,805      4,118      1,494      1,377     29,865     31,728
  Total deposits before performance centers(2)..................      2,915      2,891         53        (59)    22,431     23,306
FINANCIAL RATIOS:
  Return on average assets......................................       0.34%      0.82%        na         na       1.30%      1.51%
  Efficiency ratio..............................................      47.41      30.52         na         na      60.15      63.13
</TABLE>
 
------------------------------
 
(1)  Performance center earnings (expense) represent the allocation of net
    interest income, noninterest income and noninterest expense between the
    business segments for products and services originated in one segment but
    managed by another.
 
(2)  Represents loans and deposits for each business segment before allocation
    between the segments of loans and deposits originated in one segment but
    managed by another.
 
                                       13
<PAGE>
    COMMUNITY BANKING GROUP
 
    The Community Banking Group provides its customers with a full line of
checking and savings, investment, loan and fee-based banking products. In the
first quarter of 1999, average assets in this group were $10.1 billion, and
average deposits were $13.5 billion. The decrease in average loans from the
first quarter of 1998 was primarily due to the sale of the credit card portfolio
and the increase in refinancing activity as further discussed on page 21.
 
    The group focuses on four major markets:
 
    -  consumers,
 
    -  businesses with sales under $3 million,
 
    -  businesses with sales between $3 million and $20 million, and
 
    -  middle market companies, including agricultural firms, in central
       California and in selected parts of Oregon and Washington.
 
    COMMERCIAL FINANCIAL SERVICES GROUP
 
    The Commercial Financial Services Group offers a variety of commercial
financial services, including:
 
    -  commercial and project loans,
 
    -  real estate financing,
 
    -  commercial financing based on accounts receivable, inventory, or other
       short-term assets,
 
    -  trade financing, which is the short-term extension of credit to support
       export/import transactions, including letters of credit,
 
    -  lease financing,
 
    -  customized cash management services, and
 
    -  selected capital markets products.
 
    The group's customers provide a significant source of opportunities for us
to sell products and services of other units of Union Bank of California, N.A.,
including treasury, trust, and retail banking services. In the first quarter of
1999, average assets in this group were $14.0 billion, and average deposits were
$5.5 billion. The increase in the group's net income over the first quarter of
1998 was primarily due to the growth in commercial, financial and industrial
lending as discussed on page 20.
 
    INTERNATIONAL BANKING GROUP
 
    The International Banking Group primarily provides correspondent banking and
trade finance-related products and services to financial institutions worldwide,
particularly in Brazil, Hong Kong, Japan, Korea, and Taiwan. This includes the
delivery of products and services that facilitate trade finance transactions,
including payments, collection and the extension of short-term credit. The group
also serves selected foreign firms and U.S. corporate clients in selected
countries worldwide, particularly in Asia. In the U.S., the group serves
subsidiaries and affiliates of non-Japanese Asian companies and U.S. branches
and agencies of foreign banks. The group also provides international services to
domestic corporate clients along the West Coast. The group's revenue
predominately relates to foreign customers. In the first quarter of 1999,
average assets in this group were $1.8 billion and average deposits were $781
million.
 
                                       14
<PAGE>
    TRUST AND PRIVATE FINANCIAL SERVICES GROUP
 
    The Trust and Private Financial Services Group offers investment management
and administration services for a broad range of individuals and institutions.
The group:
 
    -  services individual client needs through its trust and private banking,
       investment management and brokerage products and services,
 
    -  services institutional client needs through traditional employee benefit
       and 401(k) programs, global and domestic securities custody programs,
       securities lending programs and corporate trust products, and
 
    -  provides investment management services for both individual and
       institutional clients through HighMark Capital Management, Inc. and its
       family of proprietary HighMark mutual funds.
 
    As of March 31, 1999, the group had over $99.7 billion in assets under
administration.
 
    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 and interest
rate swaps, caps and floors. Additionally, it trades money market and other
securities in the secondary market, including the placement of Union Bank of
California, N.A.'s own liabilities with institutional investors. This group also
manages our market-related risks as part of its responsibilities for
asset/liability management. The group is also responsible for maintaining Union
Bank of California, N.A.'s investment securities portfolio. In the first quarter
of 1999, average assets in this group were $4.1 billion and average deposits
were $2.9 billion.
 
    The group manages our securities portfolio, trading operations, wholesale
funding needs, and interest rate and liquidity risk. The group includes products
that support corporate lending, customer interest rate risk management needs and
foreign exchange.
 
    OTHER
 
    "Other" includes the following items, none of which, on an individual basis,
are significant to our business:
 
    -  Corporate activities that are not directly attributable to one of the
       five major business units. Included in this category are goodwill,
       certain parent company non-bank subsidiaries, the elimination of the
       fully taxable-equivalent amounts, and merger and integration expense when
       applicable.
 
    -  The unallocated allowance and related provision for credit losses and
       earnings associated with unallocated equity capital.
 
    -  The Credit and Compliance Group, which includes $172 million of average
       assets, primarily loans with special credit conditions.
 
    -  The Pacific Rim Corporate Group, which offers a range of credit, deposit,
       and investment management products and services to companies in the U.S.
       which are affiliated with companies headquartered outside the U.S.,
       mostly in Japan.
 
    -  The residual costs of support groups.
 
                                       15
<PAGE>
NET INTEREST INCOME
 
    The table below shows the major components of net interest income and net
interest margin.
 
<TABLE>
<CAPTION>
                                                                              FOR THE THREE MONTHS ENDED
                                                      --------------------------------------------------------------------------
                                                                 MARCH 31, 1998                        MARCH 31, 1999
                                                      ------------------------------------  ------------------------------------
                                                                   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........................................  $21,193,940  $ 424,538         8.10%  $23,140,810  $ 433,113         7.57%
    Foreign(3)......................................   1,417,152      23,717         6.79    1,139,916      18,530         6.59
Securities - taxable(4).............................   2,571,452      41,019         6.41    3,534,633      55,387         6.29
Securities - tax-exempt(4)..........................     112,809       2,826        10.02       84,883       2,130        10.04
Interest bearing deposits in banks..................     533,462       8,299         6.31      215,568       3,188         6.00
Federal funds sold and securities
    purchased under resale agreements...............     298,288       4,142         5.63      139,274       1,697         4.94
Trading account assets..............................     486,101       5,308         4.43      363,604       3,938         4.39
                                                      ----------  -----------               ----------  -----------
      Total earning assets..........................  26,613,204     509,849         7.77   28,618,688     517,983         7.34
                                                                  -----------                           -----------
Allowance for credit losses.........................    (458,761)                             (457,277)
Cash and due from banks.............................   1,953,427                             1,982,326
Premises and equipment, net.........................     402,392                               427,603
Other assets........................................   1,354,994                             1,156,386
                                                      ----------                            ----------
      Total assets..................................  $29,865,256                           $31,727,726
                                                      ----------                            ----------
                                                      ----------                            ----------
LIABILITIES
Domestic deposits:
  Interest bearing..................................  $5,447,502      38,448         2.86   $5,509,002      34,707         2.56
  Savings and consumer time.........................   3,079,386      29,212         3.85    3,335,641      27,261         3.31
  Large time........................................   3,917,627      53,640         5.55    3,998,778      44,179         4.48
Foreign deposits(3).................................   1,837,349      23,577         5.20    1,521,529      16,632         4.43
                                                      ----------  -----------               ----------  -----------
      Total interest bearing deposits...............  14,281,864     144,877         4.11   14,364,950     122,779         3.47
                                                      ----------  -----------               ----------  -----------
Federal funds purchased and securities
    sold under repurchase agreements................   1,080,828      14,075         5.28    1,703,531      19,769         4.71
Commercial paper....................................   1,568,756      21,395         5.53    1,596,643      19,174         4.87
Other borrowed funds................................     365,488       5,102         5.66      637,065       8,150         5.19
Subordinated capital notes..........................     349,111       5,754         6.68      298,000       4,109         5.59
UnionBanCal Corporation - obligated mandatorily
    redeemable preferred securities of subsidiary
    grantor trust...................................          --          --           --      159,444       3,291         8.26
                                                      ----------  -----------               ----------  -----------
      Total borrowed funds..........................   3,364,183      46,326         5.58    4,394,683      54,493         5.03
                                                      ----------  -----------               ----------  -----------
      Total interest bearing liabilities............  17,646,047     191,203         4.39   18,759,633     177,272         3.83
                                                                  -----------                           -----------
Noninterest bearing deposits........................   8,149,582                             8,940,985
Other liabilities...................................   1,355,331                             1,032,756
                                                      ----------                            ----------
      Total liabilities.............................  27,150,960                            28,733,374
SHAREHOLDERS' EQUITY
Common equity.......................................   2,714,296                             2,994,352
                                                      ----------                            ----------
      Total shareholders' equity....................   2,714,296                             2,994,352
                                                      ----------                            ----------
      Total liabilities and shareholders'
        equity......................................  $29,865,256                           $31,727,726
                                                      ----------                            ----------
                                                      ----------                            ----------
Net interest income/margin
    (taxable-equivalent basis)......................                 318,646         4.86%                 340,711         4.83%
Less: taxable-equivalent adjustment.................                   1,196                                   890
                                                                  -----------                           -----------
      Net interest income...........................              $  317,450                            $  339,821
                                                                  -----------                           -----------
                                                                  -----------                           -----------
</TABLE>
 
------------------------------
 
(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 and
    renegotiated 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.
 
(4)  Yields on securities available for sale are based on fair value. The
    difference between these yields and those based on amortized cost was not
    significant.
 
                                       16
<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.
 
    Net interest income, on a taxable-equivalent basis, was $318.6 million in
the first quarter of 1998, compared with $340.7 million in the first quarter of
1999. This increase of $22.1 million, or 7 percent, was primarily attributable
to a $2.0 billion, or 8 percent, increase in average earning assets largely
funded by a $791.4 million, or 10 percent, increase in average noninterest
bearing deposits. The net interest margin decreased 3 basis points to 4.83
percent as a result of a lower interest rate environment that contributed to
lower yields on loans and other average earning assets as well as a lower
effective cost of funding those assets.
 
    Average earning assets were $26.6 billion in the first quarter of 1998,
compared with $28.6 billion in the first quarter of 1999. This growth was
primarily attributable to a $1.7 billion, or 7 percent, increase in average
loans and a $935.3 million, or 35 percent, increase in average securities,
partially offset by a $317.9 million, or 60 percent, decrease in average
interest bearing deposits in banks. The growth in average loans was mostly due
to the increase in average commercial, financial and industrial loans of $2.4
billion, partially offset by the decrease in average residential mortgage loans
of $349.5 million, primarily related to continued mortgage refinancing activity,
and the decrease in average consumer loans of $553.1 million, primarily related
to the sale of the credit card portfolio which took place in the second quarter
of 1998. See "Loans" on page 20 for additional commentary on growth in the loan
portfolio. The increase in primarily fixed rate securities reflected interest
rate risk management actions to reduce our exposure to declines in interest
rates.
 
    The $2.0 billion, or 8 percent, growth in average earning assets over the
first quarter of 1998 was partially funded by a $791.4 million increase in
average noninterest bearing deposits. The increase in average noninterest
bearing deposits was primarily due to the efforts of our institutional and
deposit markets group coupled with an influx of new customer relationships,
arising from the merger and acquisition activities of other financial
institutions in the California market during the past year.
 
NONINTEREST INCOME
 
<TABLE>
<CAPTION>
                                                                                FOR THE THREE MONTHS ENDED
                                                                       --------------------------------------------
                                                                                               INCREASE (DECREASE)
                                                                       MARCH 31,   MARCH 31,   --------------------
(DOLLARS IN THOUSANDS)                                                    1998        1999      AMOUNT     PERCENT
---------------------------------------------------------------------  ----------  ----------  ---------  ---------
<S>                                                                    <C>         <C>         <C>        <C>
Service charges on deposit accounts..................................  $   33,026  $   39,651  $   6,625      20.06%
Trust and investment management fees.................................      27,993      32,271      4,278      15.28
International commissions and fees...................................      17,631      17,631         --         --
Merchant transaction processing fees.................................      14,379      14,512        133       0.93
Merchant banking fees................................................       9,622       7,461     (2,161)    (22.46)
Brokerage commissions and fees.......................................       4,373       5,596      1,223      27.97
Foreign exchange trading gains, net..................................       4,851       5,112        261       5.38
Securities gains, net................................................       4,926       1,261     (3,665)    (74.40)
Other................................................................      11,229      15,813      4,584      40.82
                                                                       ----------  ----------  ---------
  Total noninterest income...........................................  $  128,030  $  139,308  $  11,278       8.81%
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
</TABLE>
 
    In the first quarter of 1999, noninterest income was $139.3 million, an
increase of $11.3 million, or 9 percent, over the same period in 1998. This
included a $6.6 million increase in service charges on deposit accounts, a $4.3
million increase in trust and investment management fees, and a $4.6 million
increase in other noninterest income, partially offset by a $2.2 million
decrease in merchant banking fees and a $3.7 million decrease in net securities
gains, related to securities available for sale.
 
                                       17
<PAGE>
    Revenue from service charges on deposit accounts was $39.7 million, an
increase of 20 percent over the first quarter of 1998. The increase was
primarily attributable to a 4 percent increase in average deposits coupled with
the expansion of several products and services.
 
    Trust and investment management fees were $32.3 million, an increase of 15
percent over the first quarter of 1998. The increase was due to strong growth in
trust accounts and assets under management, which resulted in higher mutual fund
management fees.
 
    Other noninterest income was $15.8 million, an increase of 41 percent over
the first quarter of 1998. The increase was mostly due to a $2.3 million gain
related to the sale of Argentine bonds and a $1.1 million gain related to the
sale of a leased asset in the first quarter of 1999.
 
    Merchant banking fees were $7.5 million, a decrease of 22 percent from the
first quarter of 1998. The decrease was due to lower syndication fees of $3.2
million, partly offset by higher investment banking fees of $1.1 million.
 
NONINTEREST EXPENSE
 
<TABLE>
<CAPTION>
                                                                                FOR THE THREE MONTHS ENDED
                                                                       --------------------------------------------
                                                                                               INCREASE (DECREASE)
                                                                       MARCH 31,   MARCH 31,   --------------------
(DOLLARS IN THOUSANDS)                                                    1998        1999      AMOUNT     PERCENT
---------------------------------------------------------------------  ----------  ----------  ---------  ---------
<S>                                                                    <C>         <C>         <C>        <C>
Salaries and other compensation......................................  $  118,699  $  131,074  $  12,375      10.43%
Employee benefits....................................................      30,505      36,593      6,088      19.96
                                                                       ----------  ----------  ---------
  Personnel-related expense..........................................     149,204     167,667     18,463      12.37
Net occupancy........................................................      22,025      22,461        436       1.98
Equipment............................................................      13,839      14,541        702       5.07
Merchant transaction processing......................................      10,080      11,610      1,530      15.18
Professional services................................................       7,307      10,694      3,387      46.35
Communications.......................................................      11,229       9,933     (1,296)    (11.54)
Data processing......................................................       6,502       8,001      1,499      23.05
Printing and office supplies.........................................       6,335       6,672        337       5.32
Software.............................................................       4,440       6,413      1,973      44.44
Advertising and public relations.....................................       6,051       6,106         55       0.91
Travel...............................................................       3,762       4,079        317       8.43
Intangible asset amortization........................................       3,338       3,509        171       5.12
Armored car..........................................................       2,859       3,227        368      12.87
Foreclosed asset expense (income)....................................        (198)        (41)       157     (79.29)
Other................................................................      21,702      28,121      6,419      29.58
                                                                       ----------  ----------  ---------
   Total noninterest expense.........................................  $  268,475  $  302,993  $  34,518      12.86%
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
</TABLE>
 
    In the first quarter of 1999, noninterest expense was $303.0 million, an
increase of $34.5 million, or 13 percent, over the same period in 1998. This
included a $18.5 million increase in personnel-related expense, a $3.4 million
increase in professional services expense, a $2.0 million increase in software
expense, and a $6.4 million increase in other noninterest expense.
 
    Personnel-related expense was $167.7 million, an increase of 12 percent over
the first quarter of 1998. This increase was mostly due to $6.2 million in merit
increases, an increase of $2.3 million in contract labor, an increase of $2.1
million in performance-based incentive compensation, and a $2.3 million increase
in benefits expense arising from a loss in the fair value of assets underlying
postretirement benefit plans.
 
    Professional services expense was $10.7 million, an increase of 46 percent
over the first quarter of 1998, due to costs related to the year 2000 effort.
 
                                       18
<PAGE>
    Software expense was $6.4 million, an increase of 44 percent over the first
quarter of 1998, primarily due to increased purchases of computer software
products related to system upgrades and increased software maintenance
contracts.
 
    Other noninterest expense was $28.1 million, an increase of 30 percent over
the first quarter of 1998, primarily attributable to an increase of $4.5 million
in expenses incurred to support higher deposit volumes and an increase of $2.7
million in other outside service expenses.
 
    We continue to make preparations for the year 2000. (See "Year 2000" on page
27 for a detailed discussion of the year 2000 program.) We estimate that the
total cost of the year 2000 project will be approximately $50.0 million, of
which $10.0 million relates to capital expenditures which we will capitalize and
depreciate over their useful lives. The remaining $40.0 million will be included
in noninterest expense in the period incurred. As of March 31, 1999, we have
spent $28.6 million on the year 2000 project, $2.2 million in 1997, $21.6
million in 1998 and $4.8 million in the first quarter of 1999. Of the $28.6
million spent as of March 31, 1999, $6.5 million related to capital
expenditures, $0.8 million in 1997, $5.2 million in 1998, and $0.5 million in
the first quarter of 1999. Of the estimated $21.4 million remaining to be spent,
an estimated $3.5 million is expected to be for capital expenditures and $17.9
million is expected to be included in noninterest expense over the next 21
months. Of the $17.9 million to be included in noninterest expense, we expect
that approximately $10.1 million will be spent on salaries and contract labor.
This assumes that the current mix of internal staff and contract labor remains
the same, the hours and the person-days needed to complete the projects are not
materially exceeded, and that preparations for the year 2000 remain on schedule.
The remaining $7.8 million is expected to relate to other operating expenses. We
are funding the cost of the year 2000 project with normal operating cash and are
staffing it with external resources as well as internal staff re-deployed from
less time-sensitive assignments. Estimated total cost could change further as
analysis continues.
 
INCOME TAX EXPENSE
 
    The effective tax rates for the first quarter of 1998 and 1999 were 39
percent and 31 percent, respectively. We recognized a $6.3 million federal tax
benefit as the result of an IRS settlement with respect to refund claims we
filed for the years 1992 through 1994. The lower effective tax rate in the first
quarter of 1999 also reflects our ability to file our 1999 California franchise
tax returns on a worldwide unitary reporting basis, which incorporates the
financial results of our majority shareholder, The Bank of Tokyo-Mitsubishi,
Ltd. and their worldwide affiliates. Excluding the $6.3 million federal tax
benefit, our effective tax rate for the first quarter of 1999 would have been 34
percent.
 
                                       19
<PAGE>
LOANS
 
    The following table shows loans outstanding by loan type.
 
<TABLE>
<CAPTION>
                                                                                          PERCENT CHANGE TO
                                                                                         MARCH 31, 1999 FROM:
                                                                                       ------------------------
                                                MARCH 31,   DECEMBER 31,   MARCH 31,   MARCH 31,   DECEMBER 31,
(DOLLARS IN THOUSANDS)                            1998          1998          1999       1998          1998
---------------------------------------------  -----------  ------------   ----------  ---------   ------------
<S>                                            <C>          <C>            <C>         <C>         <C>
Domestic:
   Commercial, financial and industrial......  $10,908,882   $13,119,534   $13,393,019    22.77%        2.08%
   Construction..............................      270,210       439,806      535,015     98.00        21.65
   Mortgage:
       Residential...........................    2,923,174     2,627,668    2,543,801    (12.98)       (3.19)
       Commercial............................    2,971,186     2,975,484    3,011,719      1.36         1.22
                                               -----------  ------------   ----------
         Total mortgage......................    5,894,360     5,603,152    5,555,520     (5.75)       (0.85)
   Consumer:
       Installment...........................    2,067,372     1,984,941    1,968,849     (4.77)       (0.81)
       Home equity...........................      934,857       818,199      744,783    (20.33)       (8.97)
       Credit card and other lines of
        credit...............................      254,525            --           --   (100.00)          --
                                               -----------  ------------   ----------
         Total consumer......................    3,256,754     2,803,140    2,713,632    (16.68)       (3.19)
   Lease financing...........................      888,846     1,032,148    1,066,134     19.95         3.29
                                               -----------  ------------   ----------
         Total loans in domestic offices.....   21,219,052    22,997,780   23,263,320      9.63         1.15
Loans originated in foreign branches.........    1,284,991     1,298,331    1,089,034    (15.25)      (16.12)
                                               -----------  ------------   ----------
         Total loans.........................  $22,504,043   $24,296,111   $24,352,354     8.21%        0.23%
                                               -----------  ------------   ----------
                                               -----------  ------------   ----------
</TABLE>
 
    Our lending activities are predominantly domestic, with such loans
comprising 96 percent of the total loan portfolio at March 31, 1999. Total loans
at March 31, 1999 were $24.4 billion, an increase of $1.8 billion, or 8 percent,
from March 31, 1998. The increase was primarily attributable to growth in the
commercial, financial and industrial loan portfolio, which increased $2.5
billion, and the construction loan portfolio, which increased $264.8 million,
partially offset by the residential mortgage loan portfolio, which decreased
$379.4 million, and by the consumer loan portfolio, which decreased $543.1
million.
 
    Commercial, financial and industrial loans represent the largest category in
the loan portfolio. These loans are extended principally to major corporations,
middle market businesses, and small businesses, with no industry concentration
exceeding 10 percent of total commercial, financial and industrial loans. At
March 31, 1998 and 1999, the commercial, financial and industrial loan portfolio
was $10.9 billion, or 48 percent of total loans, and $13.4 billion, or 55
percent of total loans, respectively. The increase of $2.5 billion, or 23
percent, from March 31, 1998 was primarily attributable to loans extended to
businesses with revenues exceeding $20 million. The growth continued to reflect
the results of initiatives to increase participation in larger syndicated loan
positions as lead manager and as agent, especially in the communications, media,
and entertainment and energy capital services industries in which we have
developed specialized lending expertise.
 
    The construction loan portfolio totaled $270.2 million, or 1 percent of
total loans, at March 31, 1998, compared with $535.0 million, or 2 percent of
total loans, at March 31, 1999. This growth of $264.8 million, or 98 percent,
from March 31, 1998 was primarily attributable to the favorable California real
estate market coupled with the continuing improvement in the West Coast economy.
 
    Mortgage loans were $5.9 billion, or 26 percent of total loans, at March 31,
1998, compared with $5.6 billion, or 23 percent of total loans, at March 31,
1999. The mortgage loan portfolio consists of loans on commercial and industrial
projects and residential loans, secured by one-to-four family residential
 
                                       20
<PAGE>
properties, primarily in California. Despite the sale of $123.0 million in
commercial real estate mortgages during the second quarter of 1998, commercial
mortgage loans slightly increased by $40.5 million, or 1 percent, from March 31,
1998, reflecting both the favorable California real estate market and the
continued improvement in the West Coast economy. Residential mortgage loans
decreased $379.4 million, or 13 percent, principally due to prepayments arising
from the lower interest rate environment.
 
    Consumer loans totaled $3.3 billion, or 14 percent of total loans, at March
31, 1998, compared with $2.7 billion, or 11 percent of total loans, at March 31,
1999. The decrease of $543.1 million, or 17 percent, was attributable to the
sale of the $253.0 million credit card loan portfolio in April 1998, and to a
reduction in home equity loans as customers refinanced to take advantage of
favorable long-term, fixed mortgage rates.
 
    Lease financing totaled $888.8 million, or 4 percent of total loans, at
March 31, 1998, compared with $1.1 billion, or 4 percent of total loans, at
March 31, 1999. During 1998, management created new initiatives for lending,
especially in the lease financing segment. This continued refocus on leasing
resulted in a $177.3 million, or 20 percent, increase in lease financing over
the first quarter of 1998.
 
    Loans originated in foreign branches totaled $1.3 billion, or 6 percent of
total loans, at March 31, 1998 and $1.1 billion, or 4 percent of total loans, at
March 31, 1999. The decrease of $196.0 million, or 15 percent, is attributable
to the contraction of our exposure to key Asian markets, primarily Japan, Korea,
Indonesia and Thailand, in response to the Asian economic crisis.
 
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 March 31, 1998, December 31, 1998, and March 31, 1999 for each country
where such outstandings exceeded 1 percent of total assets. The cross-border
outstandings were compiled based upon category and domicile of ultimate risk and
are comprised of balances with banks, trading account assets, securities
available for sale, securities purchased under resale agreements, loans, accrued
interest receivable, acceptances outstanding and investments with foreign
entities. The amounts outstanding for each country exclude local currency
outstandings. For those individual countries shown in the table below, most of
our local currency outstandings are hedged or are 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>
March 31, 1998
Japan.........................................................    $     100     $      --      $     424        $     524
Korea.........................................................          379             1            168              548
 
December 31, 1998
Japan.........................................................          173            --            464              637
Korea.........................................................          448             1            117              566
 
March 31, 1999
Japan.........................................................          182            --            445              627
Korea.........................................................          472             2            119              593
</TABLE>
 
    The economic condition and the ability of some countries, to which we have
cross-border exposure, to manage their external debt obligations have been
impacted by the Asian economic crisis that began in the second half of 1997. The
Asian economic crisis appears to have stabilized somewhat, though the timing of
full recovery is still uncertain. Our exposure in all affected countries
continues to be primarily short-term in nature and substantially related to the
finance of trade. For further discussion on the actions
 
                                       21
<PAGE>
taken by management to reduce our credit exposure in Asia and Latin America, see
"Allowance for Credit
Losses" below.
 
PROVISION FOR CREDIT LOSSES
 
    We recorded a $20.0 million provision for credit losses in the first quarter
of 1998, compared with $5.0 million provision for credit losses in the first
quarter of 1999. Provisions for credit losses are charged to income to bring our
allowance for credit losses to a level deemed appropriate by management based on
the factors discussed under "Allowance for Credit Losses" below.
 
ALLOWANCE FOR CREDIT LOSSES
 
    RESERVE POLICY AND METHODOLOGY
 
    We maintain an allowance for credit losses to absorb losses inherent in the
loan portfolio. The allowance is based on ongoing, quarterly assessments of the
probable estimated losses inherent in the loan portfolio, and to a lesser
extent, unused commitments to provide financing. Our methodology for assessing
the appropriateness of the allowance consists of 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, pools of loans, leases or commitments. Changes in risk
grades of both performing and nonperforming loans affect the amount of the
formula allowance. Loss factors are based on our historical loss experience and
may be adjusted for significant factors that, in management's judgment, affect
the collectibility of the portfolio as of the evaluation date. Loss factors are
described as follows:
 
    -  Problem graded loan loss factors are derived from a migration model that
       tracks five years of historical loss experience. The periods used by the
       migration model are being increased in order to eventually cover a full
       business cycle period.
 
    -  Pass graded loan loss factors are based on the average annual net
       chargeoff rate over an eight-year period.
 
    -  Pooled loan loss factors (not individually graded loans) are based on
       expected net chargeoffs for one year. Pooled loans are loans that are
       homogeneous in nature, such as consumer installment and residential
       mortgage loans and automobile leases.
 
    Specific allowances are established in cases where management has identified
significant conditions or circumstances related to a credit that management
believes indicate the probability that a loss has been incurred in excess of the
amount determined by the application of the formula allowance.
 
    The unallocated allowance is composed of two elements. The first element,
which is based on our credit policy, consists of an amount that is at least 20
percent to 25 percent of the formula allowance and the specific allowance. This
element recognizes the model and estimation risk associated with the formula and
specific allowances. The second element is based upon management's evaluation of
various conditions, the effects of which are not directly measured in the
determination of the formula and specific allowances. The evaluation of the
inherent loss with respect to these conditions is subject to a higher degree of
uncertainty because they are not identified with specific problem credits or
portfolio segments. The conditions evaluated in connection with the unallocated
allowance include the following conditions that existed as of the balance sheet
date:
 
    -  general economic and business conditions affecting our key lending areas,
 
    -  credit quality trends (including trends in nonperforming loans expected
       to result from existing conditions),
 
                                       22
<PAGE>
    -  collateral values,
 
    -  loan volumes and concentrations,
 
    -  seasoning of the loan portfolio,
 
    -  specific industry conditions within portfolio segments,
 
    -  recent loss experience in particular segments of the portfolio
 
    -  duration of the current business cycle,
 
    -  bank regulatory examination results and
 
    -  findings of 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 amount actually observed in respect of these
losses can vary significantly 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 is designed to be self-correcting
by taking into account our recent loss experience. Similarly, by basing the pass
graded loan loss factors on loss experience over the last eight years, the
methodology is designed to take our recent loss experience into account. Pooled
loan loss factors are adjusted quarterly based upon the level of net chargeoffs
expected by management in the next twelve months. Furthermore, our methodology
permits adjustments to any loss factor used in the computation of the formula
allowance in the event that, in management's judgment, significant factors which
affect the collectibility of the portfolio as of the evaluation date 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 any more recent information that
has become available.
 
    COMPARISON OF THE TOTAL ALLOWANCE AND RELATED PROVISION FOR CREDIT LOSSES
 
    At December 31, 1998, our allowance for credit losses was $459.3 million, or
1.89 percent of total loans, and 586 percent of total nonaccrual loans, compared
with an allowance for credit losses at March 31, 1999 of $447.9 million, or 1.84
percent of total loans, and 446 percent of total nonaccrual loans.
 
    In addition, the allowance incorporates the results of measuring impaired
loans as provided in Statement of Financial Accounting Standards (SFAS) No. 114,
"Accounting by Creditors for Impairment of a Loan" and SFAS No. 118, "Accounting
by Creditors for Impairment of a Loan--Income Recognition and Disclosures".
These accounting standards prescribe the measurement methods, income recognition
and disclosures related to impaired loans. At December 31, 1998, total impaired
loans were $78.5 million and the associated impairment allowance was $11.2
million, compared with $100.4 million and $20.8 million, respectively, at March
31, 1999.
 
    During the first quarter of 1999, there were no changes in estimation
methods or assumptions that affected our methodology for assessing the
appropriateness of the allowance for credit losses except for the increase in
the periods utilized by the migration model, which had an immaterial impact on
the allowance. Changes in 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. In addition, as
 
                                       23
<PAGE>
described below, we allocated a portion of the unallocated allowance to foreign
loans amid concerns that the Asian financial turmoil had adversely impacted
companies and financial institutions in Asian markets in which we operate.
 
    In our assessment as of March 31, 1999, management has continued to focus,
in particular, on factors affecting elements of the oil and gas, agriculture and
technology industries, and the continuing effects of the global financial
turmoil on companies and financial institutions in domestic and foreign markets
in which we operate and the growth in, and changes in the composition of, the
loan portfolio.
 
    CHANGES IN THE FORMULA, SPECIFIC AND UNALLOCATED ALLOWANCES
 
    At March 31, 1999, the formula allowance decreased by $7 million from
December 31, 1998, primarily due to a decline in this allowance related to
criticized assets.
 
    At March 31, 1999, the specific allowance increased by $9 million from
December 31, 1998, primarily due to the increase in impaired loans.
 
    At March 31, 1999, the unallocated allowance decreased by $13 million from
December 31, 1998 due to a slight increase in the specific allowance. In
addition, management believes that the inherent losses related to certain
conditions considered in its evaluation of the unallocated allowance have
remained relatively stable except for the $14.1 million one-time chargeoff taken
on a single Taiwanese credit, which is described after the reconciliation of the
allowance for credit losses on the following page.
 
    We do not weight the unallocated allowance among segments of the portfolio.
At March 31, 1999, we had a $202 million unallocated allowance in our allowance
for credit losses. In evaluating the appropriateness of the unallocated
allowance, we considered the following factors:
 
    -  the approximately $49 million to $61 million margin for model and
       estimation risk prescribed by our credit policy,
 
    -  the effects of the decline in oil prices on borrowers in the oil and gas
       industry, which could be in the range of $15 million to $22 million,
 
    -  the effects of abnormal weather conditions and export market conditions
       on agricultural borrowers, which could be in the range of $12 million to
       $18 million,
 
    -  the effects of export market conditions and cyclical overcapacity on
       borrowers in the technology industry, which could be in the range of $19
       million to $28 million,
 
    -  the continued effects of the global financial turmoil on borrowers in
       Asia/Pacific countries, which could be in the range of $35 million to $65
       million, and
 
    -  the continued effects of the global financial turmoil on borrowers in
       Latin American countries, which could be in the range of $10 million to
       $15 million.
 
    There can be no assurance that the adverse impact of any of these conditions
on us will not be in excess of the range set forth above. See paragraph on
forward-looking statements on page 11.
 
                                       24
<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
                                                                           ENDED MARCH 31,
                                                                         --------------------
(DOLLARS IN THOUSANDS)                                                     1998       1999
-----------------------------------------------------------------------  ---------  ---------
<S>                                                                      <C>        <C>
Balance, beginning of period...........................................   $451,692   $459,328
Loans charged off:
    Commercial, financial and industrial...............................      3,988      3,732
    Construction.......................................................          3         --
    Mortgage...........................................................        814        409
    Consumer...........................................................     12,438      4,397
    Lease financing....................................................        657        892
    Foreign(1).........................................................         --     14,127
                                                                         ---------  ---------
       Total loans charged off.........................................     17,900     23,557
Recoveries of loans previously charged off:
    Commercial, financial and industrial...............................      7,745      4,562
    Construction.......................................................          3         --
    Mortgage...........................................................        528         96
    Consumer...........................................................      3,895      2,414
    Lease financing....................................................         77        149
                                                                         ---------  ---------
       Total recoveries of loans previously charged off................     12,248      7,221
                                                                         ---------  ---------
         Net loans charged off.........................................      5,652     16,336
Provision for credit losses............................................     20,000      5,000
Foreign translation adjustment and other net additions (deductions)....          3        (56)
                                                                         ---------  ---------
Balance, end of period.................................................   $466,043   $447,936
                                                                         ---------  ---------
                                                                         ---------  ---------
Allowance for credit losses to total loans.............................       2.07%      1.84%
Provision for credit losses to net loans charged off...................     353.86      30.61
Recoveries of loans to loans charged off in the previous period........      33.84      30.53
Net loans charged off to average loans outstanding for the period(2)...       0.10       0.27
</TABLE>
 
------------------------
 
(1)  Foreign loans are those loans originated in foreign branches.
 
(2)  Annualized.
 
    Total loans charged off in the first quarter of 1999 increased by $5.7
million over the first quarter of 1998, primarily due to a $14.1 million
chargeoff of a loan from a single foreign relationship, partially offset by a
$8.0 million decrease in consumer loans charged off, primarily due to the sale
of the credit card portfolio in the second quarter of 1998. Chargeoffs reflect
the realization of losses in the portfolio that were recognized previously
through provisions for credit losses.
 
    Recoveries of loans previously charged off decreased by $5.0 million from
March 31, 1998, while the percentage of net loans charged off to average loans
increased from 0.10 percent in the first quarter of 1998 to 0.27 percent in the
first quarter of 1999. At March 31, 1999, the allowance for credit losses
exceeded the net loans charged off during the first quarter of 1999, reflecting
management's belief, based on the foregoing analysis, that there were additional
losses inherent in the portfolio.
 
    At March 31, 1999, our average annual net chargeoffs for the past five years
and the three months ended March 31, 1999, were $87.3 million, which represents
5.1 years of losses based on the level of the allowance for credit losses at
that date. Historical net chargeoffs are not necessarily indicative of the
amount of net chargeoffs that we will realize in the future.
 
                                       25
<PAGE>
NONPERFORMING ASSETS
 
<TABLE>
<CAPTION>
                                                                         MARCH 31,    DECEMBER 31,   MARCH 31,
(DOLLARS IN THOUSANDS)                                                      1998          1998          1999
----------------------------------------------------------------------  ------------  ------------  ------------
<S>                                                                     <C>           <C>           <C>
Commercial, financial and industrial..................................  $     65,540   $   60,703   $     89,814
Construction..........................................................         4,389        4,359          4,370
Mortgage:
    Residential.......................................................           951           --             --
    Commercial........................................................        41,571        8,254          6,227
                                                                        ------------  ------------  ------------
      Total mortgage..................................................        42,522        8,254          6,227
Other.................................................................            --        5,134             --
                                                                        ------------  ------------  ------------
      Total nonaccrual loans..........................................       112,451       78,450        100,411
Foreclosed assets.....................................................        19,952       11,400          9,426
                                                                        ------------  ------------  ------------
      Total nonperforming assets......................................  $    132,403   $   89,850   $    109,837
                                                                        ------------  ------------  ------------
                                                                        ------------  ------------  ------------
Allowance for credit losses...........................................  $    466,043   $  459,328   $    447,936
                                                                        ------------  ------------  ------------
                                                                        ------------  ------------  ------------
Nonaccrual loans to total loans.......................................          0.50%        0.32%          0.41%
Allowance for credit losses to nonaccrual loans.......................        414.44       585.50         446.10
Nonperforming assets to total loans and foreclosed assets.............          0.59         0.37           0.45
Nonperforming assets to total assets..................................          0.43         0.28           0.34
</TABLE>
 
    At March 31, 1999, nonperforming assets totaled $109.8 million, a decrease
of $22.6 million, or 17 percent, from a year earlier. The decrease was primarily
the result of reductions of $35.3 million in nonaccrual commercial mortgage
loans, due to third quarter 1998 note sales totaling $29.8 million, repayments
and restorations to accrual status, and $10.5 million in foreclosed assets, due
to sales of individual assets, partially offset by a $24.3 million increase in
nonaccrual commercial, financial and industrial loans, due to the placement on
nonaccrual status of a few large loans made to upper-middle market and large
businesses.
 
    Nonaccrual loans as a percentage of total loans were 0.50 percent at March
31, 1998, compared with 0.41 percent at March 31, 1999. Nonperforming assets as
a percentage of total loans and foreclosed assets improved to 0.45 percent at
March 31, 1999 from 0.59 percent at March 31, 1998.
 
LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING
 
<TABLE>
<CAPTION>
                                                                               MARCH 31,   DECEMBER 31,   MARCH 31,
(DOLLARS IN THOUSANDS)                                                           1998          1998         1999
----------------------------------------------------------------------------  -----------  ------------  -----------
<S>                                                                           <C>          <C>           <C>
Commercial, financial and industrial........................................   $   1,159    $      913    $   1,241
Mortgage:
   Residential..............................................................       8,886         9,338        8,767
   Commercial...............................................................         404        13,955          831
                                                                              -----------  ------------  -----------
       Total mortgage.......................................................       9,290        23,293        9,598
Consumer and other..........................................................       7,500         7,292        3,420
                                                                              -----------  ------------  -----------
  Total loans 90 days or more past due
    and still accruing......................................................   $  17,949    $   31,498    $  14,259
                                                                              -----------  ------------  -----------
                                                                              -----------  ------------  -----------
</TABLE>
 
LIQUIDITY
 
    Liquidity refers to 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. 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.
 
                                       26
<PAGE>
    Core deposits provide us with a sizable source of relatively stable and
low-cost funds. In the first quarter of 1999, lower cost sources of funds, which
include noninterest bearing deposits and interest bearing core deposits, funded
62 percent of average earning assets. Most of the remaining funding was provided
by short-term borrowings in the form of negotiable certificates of deposit,
foreign deposits, federal funds purchased and securities sold under repurchase
agreements, commercial paper and other borrowings.
 
REGULATORY CAPITAL
 
    The following table summarizes our risk-based capital, risk-weighted assets,
and risk-based capital ratios.
 
<TABLE>
<CAPTION>
                                                                                                         MINIMUM
                                                      MARCH 31,      DECEMBER 31,     MARCH 31,        REGULATORY
(DOLLARS IN THOUSANDS)                                   1998            1998            1999          REQUIREMENT
--------------------------------------------------  --------------  --------------  --------------  -----------------
<S>                                                 <C>             <C>             <C>             <C>
CAPITAL COMPONENTS
Tier 1 capital....................................  $    2,663,606  $    2,965,865  $    3,097,234
Tier 2 capital....................................         604,145         604,938         611,254
                                                    --------------  --------------  --------------
Total risk-based capital..........................  $    3,267,751  $    3,570,803  $    3,708,488
                                                    --------------  --------------  --------------
                                                    --------------  --------------  --------------
Risk-weighted assets..............................  $   29,094,505  $   30,753,030  $   31,276,042
                                                    --------------  --------------  --------------
                                                    --------------  --------------  --------------
Quarterly average assets..........................  $   29,795,772  $   31,627,022  $   31,667,763
                                                    --------------  --------------  --------------
                                                    --------------  --------------  --------------
CAPITAL RATIOS
Total risk-based capital..........................           11.23%          11.61%          11.86%            8.0   %
Tier 1 risk-based capital.........................            9.16            9.64            9.90             4.0
Leverage ratio(1).................................            8.94            9.38            9.78             4.0
</TABLE>
 
------------------------
 
(1)  Tier 1 capital divided by quarterly average assets (excluding certain
    intangible assets).
 
    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, 1998, our Tier 1 risk-based capital ratio at
March 31, 1999 increased 26 basis points to 9.90 percent, the total risk-based
capital ratio increased 25 basis points to 11.86 percent, and the leverage ratio
increased 40 basis points to 9.78 percent. The increase in the capital ratios
was primarily attributable to the issuance of $350 million in redeemable
preferred securities.
 
    As of March 31, 1999, management believes the capital ratios of Union Bank
of California, N.A. met all regulatory minimums of a "well-capitalized"
institution.
 
YEAR 2000
 
    The year 2000 problem exists because many computer programs use only the
last two digits to refer to a year. This convention could affect date-sensitive
calculations that treat "00" as the year 1900, rather than as the year 2000.
Another issue is that the year 2000 is a leap year and some programs may not
properly provide for February 29, 2000.
 
                                       27
<PAGE>
    This discussion of the implications of the year 2000 problem for us contains
numerous forward-looking statements based on inherently uncertain information.
The cost of the project and the date on which we plan to complete the internal
year 2000 modifications are based on management's best estimates of future
events. See details with respect to costs for year 2000 on page 19. The material
assumptions underlying the estimated cost are:
 
    -  the continued availability of internal and external resources,
 
    -  the cost of these resources,
 
    -  the time required to accomplish the tasks, and
 
    -  the cost of needed equipment.
 
    We cannot guarantee, however, these estimates, and actual results could
differ. Moreover, although management believes it will be able to make the
necessary modifications in advance, failure to modify the systems may have a
material adverse effect on us.
 
    In addition, we place a high degree of reliance on computer systems of third
parties, such as customers, vendors, and other financial and governmental
institutions. Although we are assessing the readiness of these third parties and
preparing contingency plans, the failure of these third parties to modify their
systems in advance of December 31, 1999 may have a material adverse effect on
us.
 
    READINESS PREPARATION
 
    Resolution of the year 2000 problem is among our highest priorities, and we
are preparing for the century change with a comprehensive enterprise-wide year
2000 program. We have identified all of the major systems and have sought
external and internal resources to renovate and test the systems. We are testing
purchased software, internally developed systems and systems supported by
external parties as part of the program. We are evaluating customers and vendors
that have significant relationships with us to determine whether they are
adequately preparing for the year 2000. In addition, we are developing
contingency plans to reduce the impact of some potential events that may occur.
We cannot guarantee, however, that the systems of vendors or customers with whom
we do business will be completed on a timely basis, or that contingency plans
will shield operations from failures that may occur.
 
    Our year 2000 program is comprised of numerous individual projects that
address the following broad areas:
 
    -  data processing systems,
 
    -  telecommunications and data networks,
 
    -  building facilities and security systems,
 
    -  vendor risk,
 
    -  customer risk,
 
    -  contingency planning, and
 
    -  communications.
 
    We have identified over 2,000 individual projects. The projects vary in
size, importance and materiality, from large undertakings, such as remediating
complicated data systems, to smaller, but still important, projects such as
installing compliant computer utility systems or assuring that building
equipment will perform properly. The program continues to evolve as we identify
new projects to keep up with increased understanding of year 2000 implications
and evolving external requirements. Virtually all of the projects currently
identified have begun, and more than 80 percent have been completed.
 
                                       28
<PAGE>
    We assign projects a priority, indicating the importance of the function to
our continuing operation. This prioritization facilitates reporting on projects
based on their relative importance. We have prioritized projects as "Critical"
and "Non-Critical". Critical projects are further prioritized as "Mission
Critical" and "Other Critical".
 
    "Mission Critical" projects are defined as:
 
    -  systems vital to the continuance of a broad core business activity;
 
    -  functions, the interruption of which for longer than 3 days would
       threaten our viability; or
 
    -  functions that provide the environment and infrastructure necessary to
       continue the broad core business activities.
 
    "Other Critical" projects are defined as:
 
    -  other customer and accounting systems;
 
    -  functions supporting delivery of information and service to customers;
 
    -  administrative systems, the interruption of which for longer than 2 weeks
       would cause severe business impact; or
 
    -  functions that provide the environment and infrastructure necessary for
       delivery of the above systems and functions.
 
    We plan to complete all projects currently identified prior to the year
2000, with special emphasis placed on those prioritized as "Mission Critical" or
"Other Critical". Failure to complete an "Other Critical" project would not
necessarily have a material adverse effect on us.
 
    The most important projects are the "Mission Critical" application systems
upon which we rely for our principal business functions. Remediation of the
Mission Critical Systems is now complete as indicated in the following table.
 
                    MISSION CRITICAL APPLICATION COMPLETION
 
<TABLE>
<CAPTION>
                                                                                                        % COMPLETED
                                                                                                      ---------------
<S>                                                                                                   <C>
June 1998...........................................................................................            10%
September 1998......................................................................................            38%
December 1998.......................................................................................            90%
March 1999..........................................................................................           100%
</TABLE>
 
    We have also achieved substantial progress with systems prioritized as
"Other Critical". As of March 31, 1999, 90 percent of these systems were
complete. Substantially all are expected to be complete by June 30, 1999.
 
    In addition to testing individual systems, we have begun integrated
contingency testing of our "Mission Critical" and many other systems in a
separate computer environment where dates are set forward in order to identify
and correct problems that might not otherwise become evident until processing in
the new century begins. This testing, referred to as "Time Machine Integrated
Contingency Testing", is well underway and will extend throughout 1999.
 
    We do not significantly rely on "embedded technology" in our critical
processes. "Embedded technology", which means microprocessor-controlled devices
as opposed to multi-purpose computers, does control some building security and
operations, such as power management, ventilation, and building access. All
building facilities are presently being evaluated, and we expect all systems
using embedded technology to be confirmed as year 2000 ready by June 1999.
 
                                       29
<PAGE>
    We rely on vendors and customers, and we are addressing year 2000 issues
with both groups. We have identified over 300 vendors and have made inquiries
about their year 2000 readiness plans and status. Risk assessments have been
made and we are undertaking appropriate measures to minimize risk as much as
possible for those vendors that we have assigned a risk rating of medium or
high. Presently, approximately 15 percent are rated as medium or high risk, and
risk mitigation planning is underway. We have, however, no viable alternatives
for some suppliers, such as power distribution and local telephone companies. We
are still evaluating these companies, and we will use the results as information
for system-wide contingency planning. As with all financial institutions, we
place a high degree of reliance on the systems of other institutions, including
governmental agencies, to settle transactions. We will test principal settlement
methods associated with major payment systems as part of their associated system
projects.
 
    We also rely on our customers to make necessary preparations for the year
2000 so that their business operations will not be interrupted, thus threatening
their ability to honor their financial commitments. We have identified over
2,700 borrowers, capital market counterparties, funding sources, and large
depositors that constitute our customers as having financial volumes
sufficiently large to warrant our inquiry and assessment of their year 2000
preparation. The financial volumes included loans and unused commitments,
collected deposit balances, automated clearing house transactions, foreign
exchange, and derivatives. We have completed initial and follow-up inquiries and
written assessments for approximately 99 percent of the identified financial
volume.
 
    Our borrowers, the population of customers with loans and unused commitments
outstanding, pose the highest level of concern. As of March 31, 1999, our
ongoing assessment of these borrowers resulted in the following assignments of
risk: 87 percent low risk, 12 percent medium risk and 1 percent high risk. We
have established individual risk mitigation plans for substantially all
customers rated as high risk. The risk mitigation plans further evaluate whether
year 2000 issues will materially affect the customer's cash flow, asset values,
and collateral pledged to us. They seek to implement specific actions that will
keep the borrowers focused on corrective measures to reduce potential credit
risk. The risk mitigation plans use the normal credit process that we employ to
manage credit risk and require the concurrence of a credit administrator.
 
    We will make ongoing assessments of customers at all levels of risk. Those
with low risk will be reassessed semi-annually, while customers with medium and
high risk will be reassessed quarterly.
 
    RISKS
 
    The principal risks associated with the year 2000 problem can be grouped
into three categories:
 
    -  incomplete preparation of our operations for the next century,
 
    -  disruption of our operations due to operational failures of third
       parties, and
 
    -  business interruption among fund providers and obligors such that
       expected funding and repayment does not take place.
 
    The only risk largely under our control is preparing our internal operations
for the year 2000. We, like other financial institutions, are heavily dependent
on our computer systems. The complexity of these systems and their
interdependence make it impractical to convert to alternative systems without
interruptions if necessary modifications are not completed on schedule.
Management believes we will be able to make the necessary modifications on
schedule.
 
                                       30
<PAGE>
    Failure of third parties may jeopardize our operations, but the seriousness
of this risk depends on the nature and duration of the failures. The most
serious impact on our operations from vendors would result if basic services
such as telecommunications, electric power, and services provided by other
financial institutions and governmental agencies were disrupted. Some public
disclosure about readiness preparation among basic infrastructure and other
suppliers is now available. We are unable, however, to estimate the likelihood
of significant disruptions among our basic infrastructure suppliers. In view of
the unknown probability of occurrence and impact on operations, we consider the
loss of basic infrastructure services to be the most reasonably likely worst
case year 2000 scenario.
 
    Operational failures among our customers could affect their ability to
continue to provide funding or meet obligations when due. The information we
develop in the customer assessments described earlier allows us to identify
those customers that exhibit a risk of not making adequate preparations for the
century change. We are taking appropriate actions to manage these risks.
 
    PROGRAM ASSESSMENT
 
    The year 2000 program office reports on progress monthly to our Executive
Management Committee and quarterly to the Audit and Examining Committee of the
Board. The Internal Audit Division and the National Bank Examiners regularly
assess our year 2000 preparations and report quarterly to the Audit and
Examining Committee.
 
    CONTINGENCY PLANS
 
    We are developing year 2000 remediation contingency plans and business
resumption contingency plans specific to the year 2000. Remediation contingency
plans address the actions we would take if the current approach to remediating a
system is falling behind schedule or otherwise appears in jeopardy of failing to
deliver a year 2000-ready system when needed. Business resumption contingency
plans address the actions that we would take if critical business functions
cannot be carried out in the normal manner upon entering the next century due to
system or supplier failure.
 
    Our business resumption contingency planning is following a four-phase
process:
 
    -  Organizational Planning Guidelines,
 
    -  Business Impact Analysis,
 
    -  Plan Development, and
 
    -  Validation of Plans
 
    During the first two phases, which have been completed, we assigned
responsibilities, specified scenarios and determined which scenarios were
significant for each critical business unit. The second two phases call for the
development of plans to meet the significant scenarios and testing the
effectiveness of the plans.
 
    We are developing plans for system-wide or regional failures and for
individual critical operating units where necessary. We expect to complete
development of plans for the operating units and their validation in June 1999.
We expect to complete development of plans to address system-wide or regional
failures, and their validation, in September 1999.
 
                                       31
<PAGE>
    To determine where plans are necessary for individual operating units, we
identified the following areas of concern, assigned to each a level of potential
risk and a probability of occurrence. The areas of concern are:
 
    -  telecommunications or data network outage,
 
    -  enterprise information systems failure,
 
    -  operational disruptions,
 
    -  vendor or service provider failure,
 
    -  staff unavailability,
 
    -  utility or facility failure, and
 
    -  personal computer or local area network failure.
 
    We rated the level of potential risk as high, moderate or low, and we rated
the probability of occurrence as high, moderate or low. Critical operating units
with a low or moderate level of potential risk and a low probability of
occurrence do not require a contingency plan for the area of concern. For any
other combination, the development of a contingency plan is required. Plans have
been developed and are now being reviewed.
 
    OTHER RELATED DISCLOSURES
 
    HighMark Capital Management, Inc. is a registered investment advisor and
Union Bank of California Investment Services, Inc. is a broker-dealer. Each of
these subsidiaries makes publicly available separate year 2000 reports. You can
find additional year 2000 information in those reports.
 
ITEM 3. MARKET RISK
 
    Information concerning our exposure to market risk, which has remained
relatively unchanged from December 31, 1998, 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, 1998.
 
                                       32
<PAGE>
                           PART II. OTHER INFORMATION
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
(a)  Exhibits Index:
 
<TABLE>
<CAPTION>
   NO.                                                    DESCRIPTION
---------  ----------------------------------------------------------------------------------------------------------
<C>        <S>
     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   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, 1997)*(3)
    10.4   Richard C. Hartnack Employment Agreement. (Effective January 1, 1998)*(5)
    10.5   Robert M. Walker Employment Agreement. (Effective January 1, 1998)*(5)
    10.6   Union Bank of California Supplemental Executive Retirement Plan. (Effective January 1, 1988) (Amended and
             restated as of January 1, 1997)*(3)
    10.7   Union Bank Executive Wellness Plan. (Effective January 1, 1994)*(6)
    10.8   Union Bank Financial Services Reimbursement Program. (Effective January 1, 1996)*(7)
    10.9   Performance Share Plan. (Effective January 1, 1997)*(3)
    10.10  Service Agreement Between Union Bank of California and The Bank of Tokyo-Mitsubishi Ltd. (Effective
             October 1, 1997)*(3)
    27     Financial Data Schedule(2)
</TABLE>
 
------------------------
 
(1)  Incorporated by reference to Form 10-K for the year ended December 31,
    1998.
 
(2)  Filed herewith.
 
(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 10-Q for the quarter ended September 30,
    1998.
 
(6)  Incorporated by reference to Form 8-K dated April 1, 1996 (filed as exhibit
    10.12).
 
(7)  Incorporated by reference to Form 8-K dated April 1, 1996 (filed as exhibit
    10.14).
 
*   Management contract or compensatory plan, contract or arrangement.
 
(b)  Reports on Form 8-K
 
    We filed a report on Form 8-K on January 11, 1999 under Item 5, to restate
the Consolidated Financial Statements for the years ended December 31, 1995,
1996 and 1997, and for the nine months ended September 30, 1997 (unaudited) and
1998 (unaudited), to give retroactive effect to the 3-for-1 common stock split.
 
    We filed a report on Form 8-K on February 5, 1999 under Item 5 containing
the following items: audited September 30, 1998 Consolidated Financial
Statements, a press release of our financial results for the year and for the
quarter ended December 31, 1998, and an update of our progress with respect to
our year 2000 project since the quarter ended September 30, 1998.
 
    We filed a report on Form 8-K on February 19, 1999 under Item 5, which
included the underwriting agreement that we entered into in connection with the
simultaneous offering of trust preferred securities by our subsidiary,
UnionBanCal Finance Trust I, and the purchase by the trust of 7 3/8 percent
junior subordinated debentures issued by us.
 
                                       33
<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
 
                                          By        /s/ DAVID A. ANDERSON
 
                                            ------------------------------------
 
                                                     David A. Anderson
                                            SENIOR VICE PRESIDENT AND CONTROLLER
 
                                          Dated: May 17, 1999
 
                                       34