UnionBanCal Corporation Announces Settlement With State of California Franchise Tax Board

  
    
  
  
    
      UnionBanCal Corporation (NYSE:UB) announced that on December 4, 
      2006, its primary subsidiary, Union Bank of California (UBOC), was 
      advised that the State of California Franchise Tax Board (FTB) approved 
      a settlement between UBOC and the State of California to recover taxes 
      paid for the calendar years 1989 through 1995. UBOC will receive a 
      refund of tax and interest of approximately $113.7 million 
      (approximately $72.6 million net of the effect of federal and state 
      taxes applicable to the refund).
    
    
      The settlement was made in response to claims for refund filed by UBOC 
      in 2001 with respect to the proper tax treatment of losses from loans 
      and securities during 1989 through 1995. The losses were incurred by the 
      group of affiliated corporations included in UBOC’s 
      California tax filing. After an initial denial of the claims by the FTB 
      Audit Division, UBOC filed a suit for refund in San Francisco Superior 
      Court. The settlement agreement settles all claims for the years at 
      issue and the lawsuit will be dismissed.
    
    
      The refund will be included in net income in the fourth quarter of 2006.
    
    
      Based in San Francisco, UnionBanCal Corporation is a bank holding 
      company with assets of $52 billion at September 30, 2006. Its primary 
      subsidiary, Union Bank of California, N.A., had 320 banking offices in 
      California, Oregon and Washington, and 2 international offices at 
      September 30, 2006.