MUFG Americas Holdings Corp - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - UNIONBANCAL CORPORATION 8-K - MUFG Americas Holdings Corp	a6590904.htm

Exhibit 99.1

UnionBanCal Corporation Reports Fourth Quarter Net Income of $172 Million, Full Year Net Income of $573 Million

Fourth Quarter Highlights:

Net income was $172 million, up from $170 million in third quarter 2010, and $42 million a year earlier.
Total provision for credit losses was negative $42 million, compared with zero prior quarter, and positive $195 million prior year.
Asset quality excluding FDIC covered assets improved in fourth quarter:
- Net charge-off ratio was 0.54 percent, down from 0.77 percent prior quarter.
- Nonperforming assets at quarter-end were $890 million, or 1.15 percent of total assets, down from $1,203 million, or 1.54 percent of total assets, prior quarter.
- Allowance for credit losses to nonaccrual loans was 156 percent at quarter-end, up from 125 percent prior quarter.
Net interest margin was 3.53 percent, up 17 basis points from prior quarter, and up 44 basis points from prior year.
Annualized average all-in cost of funds was 0.49 percent for the quarter, down from 0.55 percent prior quarter.
Capital levels strengthened during the quarter:
- Tangible common equity ratio was 9.67 percent at December 31, 2010, versus 9.56 percent at September 30, 2010.
- Tier 1 common capital ratio was 12.42 percent at December 31, 2010, versus 12.25 percent at September 30, 2010.

Full Year Highlights:

Net income was $573 million, compared with net loss of $65 million prior year.
Total provision for credit losses was $168 million, down from $1,165 million prior year.

SAN FRANCISCO--(BUSINESS WIRE)--January 31, 2011--UnionBanCal Corporation (the Company or UB), parent company of San Francisco-based Union Bank, N.A., today reported fourth quarter 2010 results. Net income for the fourth quarter was $172 million, up from $170 million in third quarter 2010, and $42 million a year earlier. Compared with prior quarter, higher revenues and a negative total provision for credit losses were offset primarily by certain reserves for contingencies and an asset impairment charge, all recorded in fourth quarter 2010.

Summary of Fourth Quarter Results

Fourth Quarter Total Revenue and Net Interest Income

For fourth quarter 2010, total revenue (taxable-equivalent net interest income plus noninterest income) was $885 million, up $47 million, or 6 percent, compared with prior quarter. Net interest income increased 2 percent, and noninterest income increased 15 percent.

Net interest income for fourth quarter 2010 was $634 million, up $14 million, or 2 percent, compared with third quarter 2010, primarily reflecting lower rates paid on interest bearing deposits, a decrease in average interest bearing deposit balances due to planned runoff, and an improved mix of securities in the securities portfolio, partially offset by the impact of lower yields on loans and lower loan balances.

Average total loans decreased $153 million, or 0.3 percent, compared with third quarter 2010. Excluding FDIC covered loans, average total loans were flat. Average FDIC covered loans decreased $174 million, or 10 percent. Average noninterest bearing deposits increased $1 billion, or 7 percent. Average interest bearing deposits decreased $4 billion, or 8 percent, primarily due to planned deposit runoff resulting from targeted rate reductions.

The net interest margin was 3.53 percent for fourth quarter 2010, up 17 basis points from third quarter 2010. The margin benefited from an improved earning assets mix, primarily due to the redeployment of interest bearing deposits in banks into securities; a remix of the securities portfolio to generate a meaningful improvement in average yield; and lower rates paid on interest bearing deposits and borrowed funds.

The annualized average all-in cost of funds was 0.49 percent in fourth quarter 2010, compared with 0.55 percent in third quarter 2010. The Company’s average loan-to-deposit ratio was 78 percent in fourth quarter 2010, compared with 74 percent in third quarter 2010.

Compared with fourth quarter 2009, total revenue increased 16 percent, with net interest income up 9 percent and noninterest income up 36 percent. Average total loans were flat, with the acquisition of the loan portfolios of Frontier Bank and Tamalpais Bank in second quarter 2010 and an increase in residential mortgages offsetting declines in all other loan categories. Average noninterest bearing deposits increased $2 billion, or 11 percent. Average interest bearing deposits decreased $6 billion, or 11 percent, primarily due to planned deposit runoff resulting from targeted rate reductions. The net interest margin, which increased 44 basis points compared with prior year, benefited from an improved earning assets mix, including a favorable loan mix change due to the addition of FDIC covered loans; lower rates paid on interest bearing liabilities; and a decreased volume of low-yielding interest bearing deposits in banks.

Fourth Quarter Noninterest Income and Noninterest Expense

For fourth quarter 2010, noninterest income was $251 million, up $33 million, or 15 percent, from prior quarter. The increase was primarily due to a $9 million increase in merchant banking fees and a $22 million increase in gains on the sale of securities.

Noninterest income increased $66 million, or 36 percent, compared with fourth quarter 2009, primarily due to a $9 million increase in fees from trading account activities; a $12 million increase in merchant banking fees; a $21 million increase in gains on the sale of securities; and a $33 million increase in other noninterest income. These increases were partially offset by a $15 million decrease in service charges on deposit accounts, reflecting lower overdraft volumes. The increase in other noninterest income was primarily due to $11 million of accretion income from indemnification assets associated with the Frontier Bank and Tamalpais Bank acquisitions and higher private capital investment income.

Noninterest expense for fourth quarter 2010 was $701 million, up $139 million, or 25 percent, compared with third quarter 2010. The increase was primarily due to a $91 million increase in other noninterest expense and a $45 million increase in salaries and employee benefits expense. The increase in other noninterest expense was primarily due to certain reserves for contingencies and an asset impairment charge, all recorded in fourth quarter 2010. The increase in salaries and employee benefits expense was primarily due to year-end adjustments to compensation accruals. The reversal of provision for losses on off-balance sheet commitments was $2 million in fourth quarter 2010, compared with $8 million in third quarter 2010.

Noninterest expense for fourth quarter 2010 increased $172 million, or 33 percent, compared with fourth quarter 2009. Other noninterest expense increased $93 million, which reflects certain reserves for contingencies and an asset impairment charge, all recorded in fourth quarter 2010. Salaries and employee benefits expense increased $77 million. The reversal of provision for losses on off-balance sheet commitments was $2 million, compared with a provision for losses on off-balance sheet commitments of $4 million in fourth quarter 2009. Expenses attributable to the Frontier Bank and Tamalpais Bank acquisitions, which took place in second quarter 2010, increased $30 million.

Full Year 2010 Results

For full year 2010, net income was $573 million, compared with net loss of $65 million for full year 2009. The $638 million increase in net income was primarily due to the after-tax effect of a $997 million decrease in total provision for credit losses and a $370 million increase in total revenue.

Total revenue for full year 2010 was $3.4 billion, an increase of $370 million, or 12 percent, compared with 2009. Net interest income increased $174 million, or 8 percent, and noninterest income increased $196 million, or 27 percent. Noninterest expense increased $284 million, or 14 percent, primarily due to a $258 million increase in salaries and employee benefits expense, and an $88 million increase in other noninterest expense, primarily due to certain reserves for contingencies and an asset impairment charge, all recorded in 2010. Partially offsetting these increases were a $77 million decrease in expenses related to the privatization transaction (classified in intangible asset amortization expense and other noninterest expense), and a $65 million decrease in provision for off-balance sheet commitments.

Balance Sheet

At December 31, 2010, the Company had total assets of $79.1 billion, down $0.7 billion, or 1 percent, compared with September 30, 2010, and down $6.5 billion, or 8 percent, compared with December 31, 2009. Total securities at December 31, 2010, were $22 billion, up $2.5 billion, or 13 percent, compared with September 30, 2010, as lower yielding interest bearing deposits in banks were replaced with higher yielding securities.

At December 31, 2010, total deposits were $60 billion, down $1.6 billion, or 3 percent, compared with September 30, 2010, and down $8.6 billion, or 12 percent, compared with December 31, 2009. Core deposits at period-end were $49 billion, down $2 billion, or 4 percent, compared with September 30, 2010, and down $7 billion, or 13 percent, compared with December 31, 2009. The decline in total deposits and core deposits reflect planned runoff of targeted higher rate deposits. At December 31, 2010, the Company’s loan-to-deposit ratio was 80 percent, up from 78 percent at September 30, 2010, and up from 69 percent at December 31, 2009.

Credit Quality

The total provision for credit losses was negative $42 million for fourth quarter 2010, compared with zero for third quarter 2010, as asset quality improved overall. Nonperforming assets, excluding FDIC covered assets, declined $313 million and net charge-offs declined $25 million compared with prior quarter.

Excluding FDIC covered assets, nonperforming assets were $890 million, or 1.15 percent of total assets at December 31, 2010, compared with $1,203 million, or 1.54 percent of total assets, at September 30, 2010, and $1,350 million, or 1.58 percent of total assets, at December 31, 2009.

Net charge-offs for fourth quarter 2010 were $64 million, down from $89 million for third quarter 2010. As a percent of average total loans, excluding FDIC covered assets, net charge-offs for fourth quarter 2010 were 0.54 percent annualized, down from 0.77 percent annualized for third quarter 2010. For fourth quarter 2009, net charge-offs were $95 million, or 0.79 percent annualized of average total loans.

The total provision for credit losses is comprised of the provision for loan losses and the provision for losses on off-balance sheet commitments, which is classified in noninterest expense. In fourth quarter 2010, the provision for loan losses was negative $40 million and the provision for losses on off-balance sheet commitments was negative $2 million, which resulted in a total provision for credit losses of negative $42 million.

The allowance for credit losses as a percent of total loans, excluding FDIC covered loans, was 2.85 percent at December 31, 2010, compared with 3.12 percent at September 30, 2010, and 3.25 percent at December 31, 2009. The allowance for credit losses as a percent of nonaccrual loans, excluding FDIC covered loans, was 156 percent at December 31, 2010, up from 125 percent at September 30, 2010, and up from 116 percent at December 31, 2009.

Capital

Total stockholder’s equity was $10.1 billion and tangible common equity was $7.4 billion at December 31, 2010. The Company’s tangible common equity ratio was 9.67 percent at December 31, 2010, up 11 basis points compared with 9.56 percent at September 30, 2010, and up 138 basis points compared with 8.29 percent at December 31, 2009. The Tier 1 common capital ratio at December 31, 2010, was 12.42 percent, compared with 12.25 percent at September 30, 2010. The Company’s Tier 1 and total risk-based capital ratios at December 31, 2010, were 12.44 percent and 15.01 percent, respectively.

Non-GAAP Financial Measures

This press release contains certain references to financial measures identified as excluding privatization transaction expenses, foreclosed asset expense (income), (reversal of) provision for losses on off-balance sheet commitments, low income housing credit investment amortization expense, expenses of the consolidated variable interest entities, merger costs related to acquisitions, or asset impairment charge, which are adjustments from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial measures, as used herein, differ from financial measures reported under GAAP in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information which is important to a proper understanding of the Company’s core business results. This press release also includes additional capital ratios (the tangible common equity and Tier 1 common capital ratios) to facilitate the understanding of the Company’s capital structure and for use in assessing and comparing the quality and composition of UnionBanCal’s capital structure to other financial institutions. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.

Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $79.1 billion at December 31, 2010. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank operated 401 banking offices in California, Washington, Oregon and Texas, as well as two international offices, on December 31, 2010. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world’s largest financial organizations. Visit www.unionbank.com for more information.

UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 1
																	Percent Change to
	As of and for the Three Months Ended																December 31, 2010 from
	December 31,				September 30,			June 30,			March 31,			December 31,			September 30,			December 31,
(Dollars in millions)	2010				2010			2010			2010			2009			2010			2009
Results of operations:
Net interest income ⁽¹⁾	$	634			$	620		$	603		$	577		$	581		2		%	9		%
Noninterest income		251				218			244			210			185		15			36
Total revenue		885				838			847			787			766		6			16
Noninterest expense		701				562			584			525			529		25			33
Pre-tax, pre-provision income		184				276			263			262			237		(33	)		(22	)
(Reversal of) provision for loan losses		(40	)			8			44			170			191		nm			nm
Income before income taxes and including noncontrolling interests ⁽¹⁾		224				268			219			92			46		(16	)		387
Taxable-equivalent adjustment		3				2			2			3			3		50			-
Income tax expense		58				99			67			15			1		(41	)		nm
Net income including noncontrolling interests		163				167			150			74			42		(2	)		288
Deduct: Net loss from noncontrolling interests		9				3			4			3			-		200			nm
Net income attributable to
UnionBanCal Corporation (UNBC)	$	172			$	170		$	154		$	77		$	42		1			310

Balance sheet (end of period):
Total assets	$	79,097			$	79,840		$	84,310		$	85,471		$	85,598		(1	)		(8	)
Total securities ⁽³⁾		22,114				19,630			23,055			23,413			23,787		13			(7	)
Total loans held for investment		48,094				47,893			48,320			46,718			47,220		-			2
Core deposits ⁽⁴⁾		48,666				50,596			52,935			53,073			55,687		(4	)		(13	)
Total deposits		59,954				61,541			66,271			66,581			68,518		(3	)		(12	)
Long-term debt		5,598				4,458			4,716			4,724			4,226		26			32
UNBC stockholder's equity		10,125				10,134			9,942			9,706			9,580		-			6

Balance sheet (period average):
Total assets	$	80,182			$	82,265		$	85,511		$	84,810		$	81,965		(3	)		(2	)
Total securities ⁽³⁾		21,560				22,487			23,089			23,546			20,231		(4	)		7
Total loans held for investment		47,952				48,105			47,827			46,848			47,872		-			-
Earning assets		71,517				73,603			77,412			77,660			75,063		(3	)		(5	)
Core deposits ⁽⁴⁾		50,778				52,299			54,381			54,588			53,996		(3	)		(6	)
Total deposits		61,728				64,822			68,104			67,838			65,698		(5	)		(6	)
UNBC stockholder's equity		10,034				9,913			9,631			9,532			9,406		1			7

Performance ratios:
Return on average assets ⁽²⁾		0.85		%		0.82	%		0.72	%		0.37	%		0.20	%
Return on average UNBC stockholder's equity ⁽²⁾		6.81				6.80			6.40			3.29			1.77
Core efficiency ratio ⁽⁵⁾		70.88				63.69			64.86			64.98			66.36
Net interest margin ^{(1) (2)}		3.53				3.36			3.11			2.98			3.09

Capital ratios:
Tier 1 risk-based capital ratio ⁽⁸⁾		12.44		%		12.27	%		11.95	%		11.98	%		11.82	%
Total risk-based capital ratio ⁽⁸⁾		15.01				14.97			14.64			14.70			14.54
Leverage ratio ⁽⁸⁾		10.34				9.86			9.23			9.22			9.45
Tier 1 common capital ratio ^{(7) (8)}		12.42				12.25			11.93			11.96			11.80
Tangible common equity ratio ⁽⁶⁾		9.67				9.56			8.79			8.47			8.29

Selected financial ratios excluding impact of privatization transaction ⁽¹²⁾:
From net income attributable to UNBC:
Return on average assets ⁽²⁾		0.92		%		0.89	%		0.78	%		0.44	%		0.28	%
Return on average stockholder's equity ⁽²⁾		9.32				9.43			9.01			5.10			3.15
Core efficiency ratio⁽⁵⁾		68.83				61.13			62.39			61.51			62.29

Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 2
								Percent Change to
	As of and for the Years Ended							December 31, 2010 from
	December 31,			December 31,				December 31,
(Dollars in millions)	2010 ⁽¹⁾			2009 ⁽¹⁾				2009
Results of operations:
Net interest income ⁽¹⁾	$	2,434		$	2,260				8		%
Noninterest income		923			727				27
Total revenue		3,357			2,987				12
Noninterest expense		2,372			2,088				14
Pre-tax, pre-provision income		985			899				10
Provision for loan losses		182			1,114				(84	)
Income (loss) before income taxes and including noncontrolling interests ⁽¹⁾		803			(215	)			nm
Taxable-equivalent adjustment		10			11				(9	)
Income tax expense (benefit)		239			(161	)			nm
Net income (loss) including noncontrolling interests		554			(65	)			nm
Deduct: Net loss from noncontrolling interests		19			-				nm
Net income (loss) attributable to UNBC	$	573		$	(65	)			nm

Balance sheet (end of period):
Total assets	$	79,097		$	85,598				(8	)
Total securities ⁽³⁾		22,114			23,787				(7	)
Total loans held for investment		48,094			47,220				2
Core deposits ⁽⁴⁾		48,666			55,687				(13	)
Total deposits		59,954			68,518				(12	)
Long-term debt		5,598			4,226				32
UNBC stockholder's equity		10,125			9,580				6

Balance sheet (period average):
Total assets	$	83,176		$	73,766				13
Total securities ⁽³⁾		22,664			12,026				88
Total loans held for investment		47,687			48,990				(3	)
Total earning assets		75,028			66,531				13
Core deposits ⁽⁴⁾		52,998			47,756				11
Total deposits		65,604			56,595				16
UNBC stockholder's equity		9,780			7,855				25

Performance ratios:
Return on average assets		0.69	%		(0.09	)	%
Return on average UNBC stockholder's equity		5.86			(0.83	)
Core efficiency ratio ⁽⁵⁾		66.18			66.34
Net interest margin ⁽¹⁾		3.24			3.40

Capital ratios:
Tier 1 risk-based capital ratio ⁽⁸⁾		12.44	%		11.82		%
Total risk-based capital ratio ⁽⁸⁾		15.01			14.54
Leverage ratio ⁽⁸⁾		10.34			9.45
Tier 1 common capital ratio ^{(7) (8)}		12.42			11.80
Tangible common equity ratio ⁽⁶⁾		9.67			8.29

Selected financial ratios excluding impact of privatization transaction ⁽¹²⁾:
From net income (loss) attributable to UNBC:
Return on average assets		0.76	%		(0.01	)	%
Return on average stockholder's equity		8.27			(0.11	)
Core efficiency ratio ⁽⁵⁾		63.57			61.44

Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Credit Quality (Unaudited)
Exhibit 3
																			Percent Change to
	As of and for the Three Months Ended																		December 31, 2010 from
	December 31,				September 30,				June 30,			March 31,				December 31,			September 30,			December 31,
(Dollars in millions)	2010				2010				2010			2010				2009			2010			2009

Credit Data:
(Reversal of) provision for loan losses, excluding FDIC covered loans	$	(48	)		$	8			$	44		$	170			$	191		nm		%	nm
Provision for FDIC covered loan losses not subject to FDIC indemnification		8				-				-			-				-		nm			nm
(Reversal of) provision for off-balance sheet commitments		(2	)			(8	)			1			(5	)			4		75			nm
Total (reversal of) provision for credit losses	$	(42	)		$	-		`	$	45		$	165			$	195		nm			nm
Net charge-offs	$	64			$	89			$	94		$	119			$	95		(28	)		(33	)
Nonperforming assets		1,142				1,487				1,561			1,467				1,350		(23	)		(15	)

Credit Ratios:
Allowance for loan losses to:
Total loans held for investment		2.48		%		2.67		%		2.81	%		3.01		%		2.87	%
Nonaccrual loans		123.40				98.38				100.38			99.06				103.03
Allowances for credit losses to ⁽⁹⁾:
Total loans held for investment		2.81				3.01				3.17			3.38				3.25
Nonaccrual loans		140.23				111.04				113.13			111.11				116.42
Net charge-offs to average total loans held for investment ⁽²⁾		0.52				0.74				0.78			1.03				0.79
Nonperforming assets to total loans held for investment
and OREO		2.37				3.09				3.22			3.14				2.86
Nonperforming assets to total assets		1.44				1.86				1.85			1.72				1.58
Nonaccrual loans to total loans held for investment		2.01				2.71				2.80			3.04				2.79

Excluding FDIC covered assets ⁽¹³⁾:
Allowance for loan losses to:
Total loans held for investment		2.50		%		2.76		%		2.92	%	na				na
Nonaccrual loans		137.32				110.48				102.17		na				na
Allowances for credit losses to ⁽⁹⁾:
Total loans held for investment		2.85				3.12				3.29		na				na
Nonaccrual loans		156.44				124.70				115.14		na				na
Net charge-offs to average total loans held for investment ⁽²⁾		0.54				0.77				0.81		na				na
Nonperforming assets to total loans held for investment
and OREO		1.91				2.60				2.97		na				na
Nonperforming assets to total assets		1.15				1.54				1.68		na				na
Nonaccrual loans to total loans held for investment		1.82				2.50				2.86		na				na


	As of and for the							Percent Change to
	Years Ended							December 31, 2010 from
	December 31,				December 31,			December 31,
(Dollars in millions)	2010				2009			2009

Credit Data:
Provision for loan losses, excluding FDIC covered loans	$	174			$	1,114		(84	)	%
Provision for FDIC covered loan losses not subject to FDIC indemnification ⁽¹⁶⁾		8				-		nm
(Reversal of) provision for off-balance sheet commitments		(14	)			51		nm
Total provision for credit losses	$	168			$	1,165		(86	)
Net charge-offs	$	366			$	499		(27	)
Nonperforming assets		1,142				1,350		(15	)

Credit Ratios:
Net charge-offs to average total loans held for investment		0.77		%		1.02	%
Nonperforming assets to total assets		1.44				1.58

Excluding FDIC covered assets ⁽¹³⁾:
Net charge-offs to average total loans held for investment		0.79		%	na
Nonperforming assets to total assets		1.15			na

Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
Exhibit 4

			For the Three Months Ended
			December 31,			September 30,			June 30,		March 31,			December 31,
(Dollars in millions)			2010			2010			2010		2010			2009
Interest Income
	Loans		$	576		$	582		$	568	$	540		$	557
	Securities			137			132			135		143			145
	Interest bearing deposits in banks			1			1			4		4			4
	Federal funds sold and securities purchased under resale agreements			-			1			-		-			-
	Trading account assets			-			-			1		1			-
		Total interest income		714			716			708		688			706

Interest Expense
	Deposits			56			70			78		86			101
	Commercial paper			-			-			1		-			-
	Other borrowed funds			-			1			1		1			1
	Long-term debt			27			27			27		27			26
		Total interest expense		83			98			107		114			128

Net Interest Income				631			618			601		574			578
	(Reversal of) provision for loan losses			(40	)		8			44		170			191
		Net interest income after (reversal of) provision for loan losses		671			610			557		404			387

Noninterest Income
	Service charges on deposit accounts			58			62			64		66			73
	Trust and investment management fees			34			33			35		31			32
	Trading account activities			33			32			25		21			24
	Merchant banking fees			28			19			22		14			16
	Securities gains, net			33			11			27		34			12
	Brokerage commissions and fees			10			11			10		9			8
	Card processing fees, net			10			10			12		9			8
	Other			45			40			49		26			12
		Total noninterest income		251			218			244		210			185

Noninterest Expense
	Salaries and employee benefits			338			293			319		280			261
	Net occupancy and equipment			64			65			64		59			55
	Professional and outside services			56			54			50		39			42
	Intangible asset amortization			31			31			30		32			40
	Regulatory agencies			26			30			30		30			32
	(Reversal of) provision for losses on off-balance sheet commitments			(2	)		(8	)		1		(5	)		4
	Other			188			97			90		90			95
		Total noninterest expense		701			562			584		525			529

	Income before income taxes and including noncontrolling interests			221			266			217		89			43
	Income tax expense			58			99			67		15			1

Net Income including Noncontrolling Interests				163			167			150		74			42

	Deduct: Net loss from noncontrolling interests			9			3			4		3			-
Net Income attributable to UNBC			$	172		$	170		$	154	$	77		$	42


UnionBanCal Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
Exhibit 5

			For the Years Ended
			December 31,			December 31,
(Dollars in millions)			2010			2009
Interest Income
	Loans		$	2,266		$	2,320
	Securities			547			455
	Interest bearing deposits in banks			10			14
	Federal funds sold and securities purchased under resale agreements			1			-
	Trading account assets			2			1
		Total interest income		2,826			2,790

Interest Expense
	Deposits			290			408
	Commercial paper			1			3
	Other borrowed funds			3			19
	Long-term debt			108			111
		Total interest expense		402			541

Net Interest Income				2,424			2,249
	Provision for loan losses			182			1,114
		Net interest income after provision for loan losses		2,242			1,135

Noninterest Income
	Service charges on deposit accounts			250			291
	Trust and investment management fees			133			135
	Trading account activities			111			74
	Securities gains, net			105			24
	Merchant banking fees			83			65
	Card processing fees, net			41			32
	Brokerage commissions and fees			40			34
	Other			160			72
		Total noninterest income		923			727

Noninterest Expense
	Salaries and employee benefits			1,230			972
	Net occupancy and equipment			252			233
	Professional and outside services			199			159
	Intangible asset amortization			124			162
	Regulatory agencies			116			134
	(Reversal of) provision for losses on off-balance sheet commitments			(14	)		51
	Other			465			377
		Total noninterest expense		2,372			2,088

	Income (loss) before income taxes and including noncontrolling interests			793			(226	)
	Income tax expense (benefit)			239			(161	)

Net Income (Loss) including Noncontrolling Interests				554			(65	)

	Deduct: Net loss from noncontrolling interests			19			-
Net Income (Loss) attributable to UNBC			$	573		$	(65	)


UnionBanCal Corporation and Subsidiaries
Consolidated Balance Sheets
Exhibit 6

					(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
					December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in millions)					2010			2010			2010			2010			2009
Assets
		Cash and due from banks			$	997		$	1,172		$	1,221		$	1,110		$	1,198
		Interest bearing deposits in banks (includes $11 at December 31, 2010, $9 at September 30, 2010, $13 at June 30, 2010 and $10 at March 31, 2010 related to consolidated variable interest entities (VIEs))				166			2,419			2,873			6,874			6,585
		Federal funds sold and securities purchased under resale agreements				11			595			288			489			443
				Total cash and cash equivalents		1,174			4,186			4,382			8,473			8,226
Trading account assets:
		Pledged as collateral				43			37			64			54			15
		Held in portfolio				956			1,134			1,055			776			710
Securities available for sale:
		Pledged as collateral				10			-			-			-			3
		Held in portfolio				20,781			18,327			21,789			22,165			22,556
Securities held to maturity (Fair value: December 31, 2010 $1,560; September 30, 2010, $1,481; June 30, 2010, $1,434; March 31, 2010, $1,501 and December 31, 2009, $1,458)						1,323			1,303			1,266			1,248			1,228
Loans held for investment:
	Loans, excluding FDIC covered loans					46,584			46,214			46,496			46,718			47,220
	FDIC covered loans					1,510			1,679			1,824			-			-
		Total loans held for investment				48,094			47,893			48,320			46,718			47,220
			Allowance for loan losses			(1,191	)		(1,277	)		(1,358	)		(1,408	)		(1,357	)
				Loans held for investment, net		46,903			46,616			46,962			45,310			45,863
Due from customers on acceptances						8			7			11			8			9
Premises and equipment, net						712			674			671			671			674
Intangible assets, net						457			487			517			529			561
Goodwill						2,456			2,456			2,456			2,369			2,369
FDIC indemnification asset						783			824			907			-			-
Other assets (includes $283 at December 31, 2010, $291 at September 30, 2010, $294 at June 30, 2010 and $298 at March 31, 2010 related to consolidated VIEs)						3,491			3,789			4,230			3,868			3,384
			Total assets		$	79,097		$	79,840		$	84,310		$	85,471		$	85,598

Liabilities
		Noninterest bearing			$	16,343		$	15,426		$	15,319		$	14,389		$	14,559
		Interest bearing				43,611			46,115			50,952			52,192			53,959
			Total deposits			59,954			61,541			66,271			66,581			68,518
Federal funds purchased and securities sold under repurchase agreements						170			140			102			576			150
Commercial paper						745			701			611			799			889
Other borrowed funds						441			136			286			834			592
Trading account liabilities						774			1,010			815			737			539
Acceptances outstanding						8			7			11			8			9
Other liabilities (includes $2 at December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010 related to consolidated VIEs)						1,016			1,440			1,278			1,224			1,095
Long-term debt (includes $8 at December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010 related to consolidated VIEs)						5,598			4,458			4,716			4,724			4,226
			Total liabilities			68,706			69,433			74,090			75,483			76,018


Equity
UNBC Stockholder's Equity:
	Common stock, par value $1 per share:
		Authorized 300,000,000 shares; 136,330,829 shares issued				136			136			136			136			136
	Additional paid-in capital					5,198			5,195			5,195			5,195			5,195
	Retained earnings					5,468			5,296			5,131			4,977			4,900
	Accumulated other comprehensive loss					(677	)		(493	)		(520	)		(602	)		(651	)
			Total UNBC stockholder's equity			10,125			10,134			9,942			9,706			9,580
	Noncontrolling interests					266			273			278			282			-
			Total equity			10,391			10,407			10,220			9,988			9,580
			Total liabilities and equity		$	79,097		$	79,840		$	84,310		$	85,471		$	85,598

Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Loans and Nonperforming Assets (Unaudited)
Exhibit 7

				December 31,		September 30,		June 30,		March 31,		December 31,
(Dollars in millions)				2010		2010		2010		2010		2009

Loans held for investment (period end)
	Loans held for investment, excluding FDIC covered loans:
		Commercial, financial and industrial		$	15,162	$	14,650	$	14,675	$	14,870	$	15,258
		Construction			1,460		1,850		2,114		2,151		2,429
		Residential mortgage			17,531		17,295		17,089		16,893		16,716
		Commercial mortgage			7,816		7,893		8,062		8,249		8,246
		Consumer			3,858		3,891		3,914		3,914		3,917
		Lease financing			757		635		642		641		654

			Total loans held for investment, excluding FDIC covered loans		46,584		46,214		46,496		46,718		47,220
	FDIC covered loans:
		Commercial, financial and industrial			433		495		554		-		-
		Construction			222		251		273		-		-
		Residential mortgage			81		88		117		-		-
		Commercial mortgage			733		796		818		-		-
		Consumer			41		49		62		-		-
			Total FDIC covered loans		1,510		1,679		1,824		-		-

			Total loans held for investment	$	48,094	$	47,893	$	48,320	$	46,718	$	47,220

Nonperforming Assets (period end)
	Nonaccrual loans:
		Commercial, financial and industrial		$	115	$	167	$	176	$	257	$	342
		Construction			140		244		373		412		336
		Residential mortgage			243		237		245		227		205
		Commercial mortgage			329		481		510		501		414
		Consumer			22		27		25		24		20

			Total nonaccrual loans, excluding FDIC covered loans		849		1,156		1,329		1,421		1,317
		FDIC covered loans			116		142		24		-		-
			Total nonaccrual loans		965		1,298		1,353		1,421		1,317

	OREO				41		47		52		46		33
	FDIC covered OREO				136		142		156		-		-

			Total nonperforming assets ⁽¹⁴⁾	$	1,142	$	1,487	$	1,561	$	1,467	$	1,350

			Total nonperforming assets, excluding FDIC covered assets	$	890	$	1,203	$	1,381	$	1,467	$	1,350

	Loans 90 days or more past due and still accruing ⁽¹⁵⁾			$	2	$	17	$	6	$	15	$	5
	Restructured loans that are still accruing			$	22	$	25	$	9	$	7	$	4
	Restructured nonaccrual loans (included in total nonaccrual loans above)			$	198	$	149	$	88	$	16	$	17

Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Allowances for Credit Losses (Unaudited)
Exhibit 8

					As of and for the Three Months Ended
					December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in millions)					2010			2010			2010			2010			2009

Analysis of Allowances for Credit Losses
	Balance, beginning of period				$	1,277		$	1,358		$	1,408		$	1,357		$	1,260
	(Reversal of) provision for loan losses, excluding FDIC covered loans					(48	)		8			44			170			191
	Provision for FDIC covered loan losses not subject to FDIC indemnification					8			-			-			-			-
	Increase in allowance covered by FDIC indemnification					17			-			-			-			-
	Other					1			-			-			-			1

	Loans charged off:
		Commercial, financial and industrial				(18	)		(37	)		(30	)		(67	)		(46	)
		Construction				(4	)		(2	)		(10	)		(16	)		(32	)
		Residential mortgage				(8	)		(25	)		(12	)		(10	)		(11	)
		Commercial mortgage				(51	)		(27	)		(51	)		(32	)		(19	)
		Consumer				(15	)		(11	)		(9	)		(10	)		(10	)
			Total loans charged off			(96	)		(102	)		(112	)		(135	)		(118	)

	Recoveries of loans previously charged off:
		Commercial, financial and industrial				19			5			8			13			21
		Construction				3			7			8			2			1
		Residential mortgage				1			-			-			-			-
		Commercial mortgage				8			1			2			-			-
		Consumer				1			-			-			1			1
			Total recoveries of loans previously charged off			32			13			18			16			23
				Net loans charged off		(64	)		(89	)		(94	)		(119	)		(95	)

	Ending balance of allowance for loan losses					1,191			1,277			1,358			1,408			1,357
	Allowance for losses on off-balance sheet commitments					162			164			172			171			176
	Allowances for credit losses				$	1,353		$	1,441		$	1,530		$	1,579		$	1,533

Components of allowance for loan losses:
	Allowance for loan losses, excluding allowance on FDIC covered loans				$	1,166		$	1,277		$	1,358		$	1,408		$	1,357
	Allowance for loan losses on FDIC covered loans					25			-			-			-			-
	Total allowance for loan losses				$	1,191		$	1,277		$	1,358		$	1,408		$	1,357

Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 9

			For the Three Months Ended
			December 31, 2010							December 31, 2009
						Interest		Average					Interest		Average
			Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)			Balance			Expense ⁽¹⁾		Rate ⁽¹⁾⁽²⁾		Balance			Expense ⁽¹⁾		Rate ⁽¹⁾⁽²⁾
Assets
Loans held for investment: ⁽¹⁰⁾
	Commercial, financial and industrial		$	14,848		$	170	4.56	%	$	15,762		$	176	4.43	%
	Construction			1,724			18	4.13			2,591			20	2.99
	Residential mortgage			17,400			222	5.11			16,675			230	5.52
	Commercial mortgage			7,851			84	4.29			8,268			87	4.22
	Consumer			3,872			43	4.36			3,912			44	4.47
	Lease financing			641			5	2.89			664			3	1.56
		Total loans, excluding FDIC covered loans		46,336			542	4.66			47,872			560	4.66
	FDIC covered loans			1,616			37	9.03			-			-	-
		Total loans held for investment		47,952			579	4.81			47,872			560	4.66
Securities - taxable				21,530			137	2.53			20,186			144	2.85
Securities - tax-exempt				30			-	8.90			45			1	8.85
Interest bearing deposits in banks				1,653			1	0.26			6,662			4	0.24
Federal funds sold and securities purchased under resale agreements				174			-	0.19			145			-	0.06
Trading account assets				178			-	1.10			153			-	1.13
		Total earning assets		71,517			717	4.00			75,063			709	3.77
Allowance for loan losses				(1,273	)						(1,237	)
Cash and due from banks				1,271							1,258
Premises and equipment, net				682							674
Other assets				7,985							6,207
		Total assets	$	80,182						$	81,965
Liabilities
Deposits:
	Transaction and money market accounts		$	28,697			21	0.30		$	37,759			74	0.78
	Savings and consumer time			7,773			14	0.74			5,281			14	1.08
	Large time			8,777			21	0.93			7,868			13	0.66
		Total interest bearing deposits		45,247			56	0.50			50,908			101	0.79
Federal funds purchased and securities sold under repurchase agreements				119			-	0.14			137			-	0.07
Commercial paper				790			-	0.22			386			-	0.20
Other borrowed funds ⁽¹¹⁾				337			-	0.55			314			1	0.78
Long-term debt				5,109			27	2.05			4,495			26	2.28
		Total borrowed funds		6,355			27	1.71			5,332			27	1.99
		Total interest bearing liabilities		51,602			83	0.65			56,240			128	0.91
Noninterest bearing deposits				16,481							14,790
Other liabilities				1,793							1,529
		Total liabilities		69,876							72,559
Equity
UNBC Stockholder's equity				10,034							9,406
Noncontrolling interests				272							-
		Total equity		10,306							9,406
		Total liabilities and equity	$	80,182						$	81,965

Net interest income/spread (taxable-equivalent basis)							634	3.35	%					581	2.86	%
Impact of noninterest bearing deposits								0.16							0.19
Impact of other noninterest bearing sources								0.02							0.04
Net interest margin								3.53							3.09
Less: taxable-equivalent adjustment							3							3
		Net interest income				$	631						$	578


Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 10

			For the Three Months Ended
			December 31, 2010							September 30, 2010
						Interest		Average					Interest		Average
			Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)			Balance			Expense ⁽¹⁾		Rate ⁽¹⁾⁽²⁾		Balance			Expense ⁽¹⁾		Rate ⁽¹⁾⁽²⁾
Assets
Loans held for investment: ⁽¹⁰⁾
	Commercial, financial and industrial		$	14,848		$	170	4.56	%	$	14,628		$	176	4.78	%
	Construction			1,724			18	4.13			1,946			16	3.12
	Residential mortgage			17,400			222	5.11			17,196			226	5.26
	Commercial mortgage			7,851			84	4.29			8,006			85	4.23
	Consumer			3,872			43	4.36			3,900			43	4.43
	Lease financing			641			5	2.89			639			6	3.77
		Total loans, excluding FDIC covered loans		46,336			542	4.66			46,315			552	4.75
	FDIC covered loans			1,616			37	9.03			1,790			32	7.17
		Total loans held for investment		47,952			579	4.81			48,105			584	4.84
Securities - taxable				21,530			137	2.53			22,442			131	2.34
Securities - tax-exempt				30			-	8.90			45			1	8.21
Interest bearing deposits in banks				1,653			1	0.26			2,407			1	0.25
Federal funds sold and securities purchased under resale agreements				174			-	0.19			390			1	0.15
Trading account assets				178			-	1.10			214			-	1.10
		Total earning assets		71,517			717	4.00			73,603			718	3.89
Allowance for loan losses				(1,273	)						(1,375	)
Cash and due from banks				1,271							1,184
Premises and equipment, net				682							672
Other assets				7,985							8,181
		Total assets	$	80,182						$	82,265
Liabilities
Deposits:
	Transaction and money market accounts		$	28,697			21	0.30		$	32,722			34	0.40
	Savings and consumer time			7,773			14	0.74			7,945			17	0.83
	Large time			8,777			21	0.93			8,723			19	0.89
		Total interest bearing deposits		45,247			56	0.50			49,390			70	0.56
Federal funds purchased and securities sold under repurchase agreements				119			-	0.14			168			-	0.17
Commercial paper				790			-	0.22			662			-	0.24
Other borrowed funds ⁽¹¹⁾				337			-	0.55			196			1	0.88
Long-term debt				5,109			27	2.05			4,528			27	2.40
		Total borrowed funds		6,355			27	1.71			5,554			28	2.02
		Total interest bearing liabilities		51,602			83	0.65			54,944			98	0.71
Noninterest bearing deposits				16,481							15,432
Other liabilities				1,793							1,698
		Total liabilities		69,876							72,074
Equity
UNBC Stockholder's equity				10,034							9,913
Noncontrolling interests				272							278
		Total equity		10,306							10,191
		Total liabilities and equity	$	80,182						$	82,265

Net interest income/spread (taxable-equivalent basis)							634	3.35	%					620	3.18	%
Impact of noninterest bearing deposits								0.16							0.16
Impact of other noninterest bearing sources								0.02							0.02
Net interest margin								3.53							3.36
Less: taxable-equivalent adjustment							3							2
		Net interest income				$	631						$	618


Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 11

			For the Years Ended
			December 31, 2010							December 31, 2009
						Interest		Average					Interest		Average
			Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)			Balance			Expense ⁽¹⁾		Rate ⁽¹⁾		Balance			Expense ⁽¹⁾		Rate ⁽¹⁾
Assets
Loans held for investment: ⁽¹⁰⁾
	Commercial, financial and industrial		$	14,754		$	676	4.58	%	$	17,240		$	754	4.37	%
	Construction			2,029			66	3.24			2,721			80	2.95
	Residential mortgage			17,093			902	5.28			16,270			925	5.68
	Commercial mortgage			8,067			341	4.23			8,259			370	4.48
	Consumer			3,902			172	4.41			3,840			179	4.66
	Lease financing			642			23	3.59			660			21	3.23
		Total loans, excluding FDIC covered loans		46,487			2,180	4.69			48,990			2,329	4.75
	FDIC covered loans			1,200			95	7.88			-			-	-
		Total loans held for investment		47,687			2,275	4.77			48,990			2,329	4.75
Securities - taxable				22,624			545	2.41			11,944			451	3.78
Securities - tax-exempt				40			3	8.40			82			6	7.33
Interest bearing deposits in banks				4,128			10	0.25			5,168			14	0.26
Federal funds sold and securities purchased under resale agreements				353			1	0.14			207			-	0.18
Trading account assets				196			2	1.31			140			1	0.78
		Total earning assets		75,028			2,836	3.78			66,531			2,801	4.21
Allowance for loan losses				(1,378	)						(959	)
Cash and due from banks				1,214							1,248
Premises and equipment, net				675							672
Other assets				7,637							6,274
		Total assets	$	83,176						$	73,766
Liabilities
Deposits:
	Transaction and money market accounts		$	34,686			166	0.48		$	30,758			275	0.89
	Savings and consumer time			7,284			58	0.80			4,618			56	1.22
	Large time			8,351			66	0.79			7,286			77	1.06
		Total interest bearing deposits		50,321			290	0.58			42,662			408	0.96
Federal funds purchased and securities sold under repurchase agreements				157			-	0.12			180			-	0.08
Commercial paper				651			1	0.21			536			3	0.58
Other borrowed funds ⁽¹¹⁾				481			3	0.68			1,928			19	0.95
Long-term debt				4,736			108	2.28			4,881			111	2.27
		Total borrowed funds		6,025			112	1.87			7,525			133	1.76
		Total interest bearing liabilities		56,346			402	0.72			50,187			541	1.08
Noninterest bearing deposits				15,283							13,933
Other liabilities				1,535							1,791
		Total liabilities		73,164							65,911
Equity
UNBC Stockholder's equity				9,780							7,855
Noncontrolling interests				232							-
		Total equity		10,012							7,855
		Total liabilities and equity	$	83,176						$	73,766

Net interest income/spread (taxable-equivalent basis)							2,434	3.06	%					2,260	3.13	%
Impact of noninterest bearing deposits								0.16							0.24
Impact of other noninterest bearing sources								0.02							0.03
Net interest margin								3.24							3.40
Less: taxable-equivalent adjustment							10							11
		Net interest income				$	2,424						$	2,249


Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries
Reconciliation of Non-GAAP Measures (Unaudited)
Exhibit 12

The following table presents a reconciliation between certain Generally Accepted Accounting Principles (GAAP) amounts and specific non-GAAP measures as used to compute selected non-GAAP financial ratios.

		As of and for the Three Months Ended																				For the Years Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(Dollars in millions)		2010				2010				2010				2010				2009				2010				2009

Net income (loss) attributable to UNBC		$	172			$	170			$	154			$	77			$	42			$	573			$	(65	)
Privatization-related expense, net of tax			-				-				1				3				3				4				23
Net accretion and amortization related to privatization-related fair value adjustments, net of tax			7				8				8				9				11				32				36
Net income (loss) attributable to UNBC, excluding impact of privatization transaction		$	179			$	178			$	163			$	89			$	56			$	609			$	(6	)

Average total assets		$	80,182			$	82,265			$	85,511			$	84,810			$	81,965			$	83,176			$	73,766
Net adjustments related to privatization transaction			2,488				2,509				2,529				2,547				2,569				2,518				2,598
Average total assets, excluding impact of privatization transaction		$	77,694			$	79,756			$	82,982			$	82,263			$	79,396			$	80,658			$	71,168
Return on average assets ⁽²⁾			0.85		%		0.82		%		0.72		%		0.37		%		0.20		%		0.69		%		(0.09	)	%
Return on average assets, excluding impact of privatization transaction ^{(2) (12)}			0.92				0.89				0.78				0.44				0.28				0.76				(0.01	)

Average UNBC stockholder's equity		$	10,034			$	9,913			$	9,631			$	9,532			$	9,406			$	9,780			$	7,855
Net adjustments related to privatization transaction			2,401				2,405				2,409				2,412				2,417				2,407				2,412
Average UNBC stockholder's equity, excluding impact of privatization transaction		$	7,633			$	7,508			$	7,222			$	7,120			$	6,989			$	7,373			$	5,443
Return on average UNBC stockholder's equity ⁽²⁾			6.81		%		6.80		%		6.40		%		3.29		%		1.77		%		5.86		%		(0.83	)	%
Return on average UNBC stockholder's equity, excluding impact of privatization transaction ^{(2) (12)}			9.32				9.43				9.01				5.10				3.15				8.27				(0.11	)

Noninterest expense		$	701			$	562			$	584			$	525			$	529			$	2,372			$	2,088
Less: Foreclosed asset expense			4				6				1				-				2				11				6
Less: (Reversal of) provision for losses on off-balance sheet commitments			(2	)			(8	)			1				(5	)			4				(14	)			51
Less: Low income housing credit investment amortization expense			19				13				14				14				15				60				49
Less: Expenses of the consolidated VIEs			15				6				6				5				-				32				-
Less: Merger costs related to acquisitions			9				11				13				-				-				33				-
Less: Asset impairment charge			30				-				-				-				-				30				-
	Net noninterest expense before privatization adjustments (a)	$	626			$	534			$	549			$	511			$	508			$	2,220			$	1,982
Privatization-related expense			-				1				-				5				5				6				46
Amortization related to privatization-related fair value adjustments			32				32				32				34				40				130				167
	Net noninterest expense, excluding impact of privatization transaction (b)	$	594			$	501			$	517			$	472			$	463			$	2,084			$	1,769

Total revenue (c)		$	885			$	838			$	847			$	787			$	766			$	3,357			$	2,987
Accretion related to privatization-related fair value adjustments			21				18				19				19				22				77				107
Total revenue, excluding impact of privatization transaction (d)		$	864			$	820			$	828			$	768			$	744			$	3,280			$	2,880
Core efficiency ratio (a)/(c) ⁽⁵⁾			70.88		%		63.69		%		64.86		%		64.98		%		66.36		%		66.18		%		66.34		%
Core efficiency ratio, excluding impact of privatization transaction (b)/(d) ⁽¹²⁾			68.83				61.13				62.39				61.51				62.29				63.57				61.44

Total UNBC stockholder's equity		$	10,125			$	10,134			$	9,942			$	9,706			$	9,580
Less: Goodwill			2,456				2,456				2,456				2,369				2,369
Less: Intangible assets			457				487				517				529				561
Less: Deferred tax liabilities related to goodwill and intangible assets			(168	)			(180	)			(192	)			(203	)			(216	)
Tangible common equity (e)		$	7,380			$	7,371			$	7,161			$	7,011			$	6,866
Tier 1 capital, determined in accordance with regulatory requirements ⁽⁸⁾		$	8,029			$	7,861			$	7,682			$	7,581			$	7,485
Less: Trust preferred securities			13				13				13				13				13
Tier 1 common equity (f)		$	8,016			$	7,848			$	7,669			$	7,568			$	7,472
Total assets		$	79,097			$	79,840			$	84,310			$	85,471			$	85,598
Less: Goodwill			2,456				2,456				2,456				2,369				2,369
Less: Intangible assets			457				487				517				529				561
Less: Deferred tax liabilities related to goodwill and intangible assets			(168	)			(180	)			(159	)			(169	)			(179	)
Tangible assets (g)		$	76,353			$	77,077			$	81,496			$	82,742			$	82,847
Risk-weighted assets, determined in accordance with regulatory requirements (h) ⁽⁸⁾		$	64,532			$	64,080			$	64,301			$	63,294			$	63,298
Tangible common equity ratio (e)/(g) ⁽⁶⁾			9.67		%		9.56		%		8.79		%		8.47		%		8.29		%
Tier 1 common capital ratio (f)/(h) ⁽⁸⁾			12.42				12.25				11.93				11.96				11.80

Refer to Exhibit 13 for footnote explanations.


UnionBanCal Corporation and Subsidiaries

Footnotes
Exhibit 13


⁽¹⁾	Yields and interest income are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent.
⁽²⁾	Annualized.
⁽³⁾	Total securities consist of securities available for sale and securities held to maturity.
⁽⁴⁾	Core deposits consist of total deposits, excluding brokered deposits and time deposits of $100,000 and over.
⁽⁵⁾	The core efficiency ratio, a non-GAAP financial measure, is net noninterest expense (noninterest expense excluding foreclosed asset expense, the (reversal of) provision for losses on off-balance sheet commitments, low income housing credit investment amortization expense, expenses of the consolidated VIEs and merger costs related to the acquisitions of certain assets and assumption of certain liabilities of Frontier Bank and Tamalpais Bank) as a percentage of total revenue (net interest income (taxable-equivalent basis) and noninterest income). Management discloses the core efficiency ratio as a measure of the efficiency of our operations, focusing on those costs most relevant to our core activities. Please refer to Exhibit 12 for a reconciliation between certain GAAP amounts and these non-GAAP measures.
⁽⁶⁾	The tangible common equity ratio, a non-GAAP financial measure, is calculated as tangible equity divided by tangible assets. The methodology of determining tangible common equity may differ among companies. The tangible common equity ratio has been included to facilitate the understanding of the Company's capital structure and for use in assessing and comparing the quality and composition of UnionBanCal's capital structure to other financial institutions. Please refer to Exhibit 12 for a reconciliation between certain GAAP amounts and these non-GAAP measures.
⁽⁷⁾	The Tier 1 common capital ratio is the ratio of Tier 1 capital, less qualifying trust preferred securities, to risk weighted assets. The Tier 1 common capital ratio, a non-GAAP financial measure, has been included to facilitate the understanding of the Company's capital structure and for use in assessing and comparing the quality and composition of UnionBanCal's capital structure to other financial institutions. Please refer to Exhibit 12 for a reconciliation between certain GAAP amounts and these non-GAAP measures.
⁽⁸⁾	Estimated as of December 31, 2010.
⁽⁹⁾	The allowance for credit losses ratios include the allowances for loan losses and losses on off-balance sheet commitments.
⁽¹⁰⁾	Average balances on loans outstanding include all nonperforming loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield.
⁽¹¹⁾	Includes interest bearing trading liabilities.
⁽¹²⁾	These ratios exclude the impact of the privatization transaction. Management believes that these ratios, which exclude the push-down accounting effects of the privatization transaction, provide useful supplemental information, which is important to a proper understanding of the Company's core business results. Please refer to Exhibit 12 for a reconciliation between certain GAAP amounts and these non-GAAP measures.
⁽¹³⁾	These ratios exclude the impact of the FDIC covered loans, the related allowance for loan losses and FDIC covered OREO, which are covered under loss share agreements between Union Bank, N.A. and the Federal Deposit Insurance Corporation. Such agreements are related to the April 2010 acquisitions of certain assets and assumption of certain liabilities of Frontier Bank and Tamalpais Bank. Management believes the exclusion of FDIC covered loans and FDIC covered OREO in certain asset quality ratios that include nonperforming loans, nonperforming assets, average total loans held for investments and the allowance for loan losses in the numerator or denominator provides a better perspective into underlying asset quality trends and comparability to the periods presented that were not impacted by the April 2010 acquisitions.
⁽¹⁴⁾	Excludes distressed loans held for sale of $5 million as of December 31, 2010.
⁽¹⁵⁾	Excludes loans totaling $312 million, $297 million and $255 million that are 90 days or more past due and still accruing at December 31, 2010, September 30, 2010 and June 30, 2010, respectively, which consisted of FDIC covered loans accounted in accordance with the accounting standards for purchased credit impaired loans.
nm = not meaningful
na = not applicable for periods prior to the April 2010 Frontier and Tamalpais transactions.

CONTACT:
UnionBanCal Corporation
Thomas Taggart, 415-765-2249 (Public Relations)
Michelle Crandall, 415-765-2780 (Investor Relations)

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