A combination of chargeoffs and a challenging economic environment weighed on UnionBanCal in San Francisco in the third quarter.

Earnings fell 28%, to $124 million, from a year earlier, the $88 billion-asset company said Friday.

Provision for loan losses rose to $45 million compared with a credit in the third quarter of 2011. The swing primarily resulted from regulatory guidance on treatment of certain residential loans and macroeconomic uncertainty, according to the company.

Noninterest income fell 14.9%, to $566 million, from a year earlier. Noninterest expense rose 5.8%, to $638 million.

UnionBanCal, a subsidiary of The Bank of Tokyo-Mitsubishi UFJ, had some good lending-related news. It recorded net interest income of $654 million, up 7.9% from the third quarter of 2011. Its net interest margin rose by 1 basis point, to 3.32%. Loans rose 8.8%, to $55.4 million. Commercial lending grew 10.7%, to $24.8 million, while consumer lending increased 9.2%, to $24.8 million.

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