Union Bank of California (NYSE:UB): -0- *T WHAT: Keitaro Matsuda, senior economist for Union Bank of California, today released his August 2006 Economic Report, which points out that a healthy California economy may be masking old state budget challenges that will eventually resurface. The report, titled "Economic Growth Diminishes the Prospect for a Long-term Budget Fix," is part of a monthly series produced by Union Bank of California on the California, Pacific Northwest and U.S. economies. WHY: The August 2006 Economic Report discusses specific challenges to a budget solution: -- California derives much of its revenues from income taxes, resulting in significant year-to-year variances -- Major expenditures, such as education and social programs, are stable and gradually rising with a growing population -- Borrowing has been a more palatable solution to recent budget shortfalls than structural reform -- The 2006-2007 state budget assumes that a strong economy will again deliver big increases in revenue, but high energy costs and rising interests rates are expected to cool state and national economies WHO: Keitaro Matsuda has served as senior economist for Union Bank of California since 1997. He monitors economic trends and developments for Union Bank management and customers. Mr. Matsuda is also a member of the economic advisory committee of the American Bankers Association. Union Bank of California, the wholly owned subsidiary of UnionBanCal Corporation (NYSE:UB), provides a broad range of financial services to consumers, small businesses, middle market and large corporations. AVAILABILITY: The August 2006 Economic Report is available upon request. INTERVIEW: Keitaro Matsuda is available for interviews to share his insights about local, state and national economies. Please contact Katie Pandes or Stephanie Goddard to schedule an appointment. *T