Business Segments

The Company has five reportable segments: Retail Banking & Wealth Markets, Commercial Banking, U.S. Corporate Banking, Transaction Banking, and Investment Banking & Markets. Below is a detailed description of these reportable segments.

Retail Banking & Wealth Markets

Retail Banking & Wealth Markets offers a range of banking products and services to individuals and small businesses, including high net worth individuals and institutional clients, delivered generally through a network of branches, private banking offices, ATMs, broker mortgage referrals, telephone services, and web-based and mobile banking applications. These products and services include mortgages, home equity lines of credit, consumer and commercial loans, deposit accounts, financial planning and investments.

The Consumer Lending Division provides the centralized origination, underwriting, processing, servicing, collection and administration for consumer assets including residential mortgages.

The Consumer and Business Banking Division serves its customers through 349 full-service branches in California and 26 full-service branches in Washington and Oregon, as well as through ATMs, call centers, web-based and mobile internet banking applications and through alliances with other financial institutions. Consumer and Business Banking provides checking and deposit products and services; bill and loan payment, merchant, and various types of financing and investment services; and products including credit cards.

The Wealth Markets Division serves its customers through the Private Bank; UnionBanc Investment Services LLC (UBIS), a subsidiary of MUFG Union Bank and a registered broker-dealer and investment advisor; and Asset Management which includes HighMark Capital Management, Inc., a subsidiary of MUFG Union Bank and a registered investment advisor. Wealth Markets Division provides investment management and advisory services to institutional clients, wealth planning, deposits and risk management strategies, trust and estate administration, as well as investment sub-advisory services to unaffiliated funds. Products provided to its customers include traditional brokerage, managed accounts, annuities, mutual funds, fixed income products and insurance and customized lending.

Commercial Banking

Commercial Banking provides a broad spectrum of commercial credit products including commercial loans, accounts receivable, inventory, trade and real estate financing to primarily U.S.-based corporate customers with annual sales generally ranging from $20 million to $2 billion. Commercial Banking offers its customers a range of noncredit services and products, which include global treasury management and capital markets solutions, foreign exchange and various interest rate risk and commodity risk management products through cooperation with other segments.

Commercial Banking is comprised of five main divisions: U.S. Middle Market Banking, which serves companies primarily in California, Oregon and Washington with annual sales up to $500 million; Oil and Gas, which serves oil and gas companies; Mid-Corporate Banking, which serves clients with annual sales up to $2 billion; Specialized Products, which focuses on specific areas on a national basis including Commercial Finance, Funds Finance, Environmental Industries, Transportation, Aerospace/Defense, Entertainment; and Real Estate Industries, which serves professional real estate investors and developers. Real Estate Industries, through its Community Development Finance unit, makes tax credit investments in affordable housing projects, as well as construction and permanent financing.

U.S. Corporate Banking

U.S. Corporate Banking provides commercial lending products, including commercial loans, lines of credit and project financing, to corporate customers with revenues generally greater than $2 billion. The segment employs an industry-focused strategy including dedicated coverage teams in General Industries, Power and Utilities, Oil and Gas, Telecom and Media, Technology, Non-Profits, Healthcare, Public Finance, and Financial Institutions (predominantly Insurance and Asset Managers). By working with the Company's other segments, U.S. Corporate Banking offers its customers a range of noncredit services, which include global treasury management, capital market solutions, and various foreign exchange, interest rate, and commodity risk management products.

Transaction Banking

Transaction Banking works alongside the Company's other segments to provide working capital management and asset servicing solutions, including deposits and treasury management, trade finance, and institutional trust and custody, to the Company's customers. This segment also manages the digital banking channels for retail, small business, wealth management and commercial clients, as well as commercial product development. The client base consists of financial institutions, corporations, government agencies, insurance companies, mutual funds, investment managers and non-profit organizations.

Investment Banking & Markets

Investment Banking & Markets, which includes Global Capital Markets of the Americas, works with the Company's other segments to provide customers structured credit services, including project finance, leasing and equipment finance, and securitizations. Investment Banking & Markets also provides capital markets solutions, including syndicated loans, equity and debt underwriting, tax equity and merchant banking investments; risk management solutions, including foreign exchange, interest rate and energy risk management solutions; and facilitates merchant and investment banking-related transactions.

Other

"Other" includes the Asian Corporate Banking segment, Corporate Treasury and the impact of certain corporate activities. The Asian Corporate Banking segment offers a range of credit, deposit, and investment management products and services to companies located primarily in the U.S. that are affiliated with companies headquartered in Japan and other Asian countries. Corporate Treasury is responsible for ALM, wholesale funding and the ALM investment and derivatives hedging portfolios. These Treasury management activities are carried out to manage the net interest rate and liquidity risks of the Company's balance sheet and to manage those risks within the guidelines established by ALCO. For additional discussion regarding these risk management activities, see Part I, Item 3. “Quantitative and Qualitative Disclosures About Market Risk” in this Form 10-Q.

Additionally, "Other" is comprised of certain corporate activities of the Company; the net impact of funds transfer pricing charges and credits allocated to the reportable segments; the residual costs of support groups; the unallocated allowance; goodwill, intangible assets, and the related amortization/accretion associated with the Company's privatization transaction; the elimination of the fully taxable-equivalent basis amount; the difference between the marginal tax rate and the consolidated effective tax rate; and the FDIC covered assets.

The information, set forth in the tables that follow, is prepared using various management accounting methodologies to measure the performance of the individual segments. Unlike GAAP there is no standardized or authoritative guidance for management accounting. Consequently, reported results are not necessarily comparable with those presented by other companies and they are not necessarily indicative of the results that would be reported by the business units if they were unique economic entities. The management reporting accounting methodologies, which are enhanced from time to time, measure segment profitability by assigning balance sheet and statements of income items to each operating segment. Methodologies that are applied to the measurement of segment profitability include a funds transfer pricing system, an activity-based costing methodology, other indirect costs and a methodology to allocate the provision for credit losses. The funds transfer pricing system assigns a cost of funds or a credit for funds to assets or liabilities based on their type, maturity or repricing characteristics between Corporate Treasury and the operating segments. A segment receives a funding credit from Corporate Treasury for its liabilities. Conversely, a segment is assigned a charge by Corporate Treasury to fund its assets. The activity-based costing methodology allocates certain indirect costs, such as operations and technology expense, to the segments based on studies of billable unit costs for product or data processing. Other indirect costs, such as corporate overhead, are allocated to the segments based on internal surveys and metrics that serve as proxies for estimated usage. During the normal course of business, the Company occasionally changes or updates its management accounting methodologies or organizational structure. During 2014, the Company revised the funds transfer pricing methodology with respect to reference rates for certain commercial deposits. The Company also continued to refine its organizational structure resulting from the internal management structure implemented as part of the BTMU Americas Holdings business integration initiative established in 2013. In addition, effective January 1, 2015, the Company adopted ASU 2014-01, "Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects", which was required to be applied retrospectively upon adoption. These investments are part of our Commercial Banking segment. Prior period results have been adjusted to reflect these changes.

The Company generally applies a "market view" perspective in measuring the business segments. The market view is a measurement of customer markets aggregated to show all revenues generated and expenses incurred from all products and services sold to those customers regardless of where product areas organizationally report. Therefore, revenues and expenses are included in both the business segment that provides the service and the business segment that manages the customer relationship. The duplicative results from this internal management accounting view are eliminated in "Reconciling Items."



As of and for the Three Months Ended September 30, 2015:
(Dollars in millions)	Retail Banking & Wealth Markets		Commercial Banking		U.S. Corporate Banking		Transaction Banking		Investment Banking & Markets			Other			Reconciling Items			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	332	$	235	$	54	$	114	$	33		$	36		$	(99	)	$	705
Noninterest income (expense)	96		46		39		47		70			149			(50		)	397
Total revenue	428		281		93		161		103			185			(149		)	1,102
Noninterest expense	348		97		46		108		58			244			(46		)	855
(Reversal of) provision for credit losses	1		8		4		—		(1		)	6			—			18
Income (loss) before income taxes and including noncontrolling interests	79		176		43		53		46			(65		)	(103		)	229
Income tax expense (benefit)	31		51		17		20		7			(22		)	(40		)	64
Net income (loss) including noncontrolling interests	48		125		26		33		39			(43		)	(63		)	165
Deduct: net loss from noncontrolling interests	—		—		—		—		—			21			—			21
Net income (loss) attributable to MUAH	$	48	$	125	$	26	$	33	$	39		$	(22	)	$	(63	)	$	186

Total assets, end of period	$	36,480	$	37,336	$	8,187	$	1,835	$	6,213		$	29,297		$	(4,191	)	$	115,157



As of and for the Three Months Ended September 30, 2014:
(Dollars in millions)	Retail Banking & Wealth Markets			Commercial Banking		U.S. Corporate Banking			Transaction Banking			Investment Banking & Markets			Other			Reconciling Items			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	340		$	242	$	53		$	110		$	45		$	19		$	(102	)	$	707
Noninterest income (expense)	83			55		46			44			138			86			(64		)	388
Total revenue	423			297		99			154			183			105			(166		)	1,095
Noninterest expense	329			92		42			91			54			197			(41		)	764
(Reversal of) provision for credit losses	(1		)	5		(4		)	(6		)	(8		)	6			9			1
Income (loss) before income taxes and including noncontrolling interests	95			200		61			69			137			(98		)	(134		)	330
Income tax expense (benefit)	38			62		24			27			42			(53		)	(52		)	88
Net income (loss) including noncontrolling interests	57			138		37			42			95			(45		)	(82		)	242
Deduct: net loss from noncontrolling interests	—			—		—			—			—			5			—			5
Net income (loss) attributable to MUAH	$	57		$	138	$	37		$	42		$	95		$	(40	)	$	(82	)	$	247

Total assets, end of period	$	37,235		$	35,296	$	6,965		$	1,753		$	6,160		$	27,220		$	(3,762	)	$	110,867



As of and for the Nine Months Ended September 30, 2015:

(Dollars in millions)	Retail Banking & Wealth Markets		Commercial Banking		U.S. Corporate Banking			Transaction Banking		Investment Banking & Markets			Other			Reconciling Items			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	977	$	706	$	162		$	340	$	104		$	113		$	(295	)	$	2,107
Noninterest income (expense)	265		136		121			139		247			360			(151		)	1,117
Total revenue	1,242		842		283			479		351			473			(446		)	3,224
Noninterest expense	1,063		282		138			312		173			717			(138		)	2,547
(Reversal of) provision for loan losses	9		41		(10		)	1		(24		)	14			5			36
Income (loss) before income taxes and including noncontrolling interests	170		519		155			166		202			(258		)	(313		)	641
Income tax expense (benefit)	66		152		61			65		41			(93		)	(123		)	169
Net income (loss) including noncontrolling interests	104		367		94			101		161			(165		)	(190		)	472
Deduct: net loss from noncontrolling interests	—		—		—			—		—			32			—			32
Net income (loss) attributable to MUAH	$	104	$	367	$	94		$	101	$	161		$	(133	)	$	(190	)	$	504

Total assets, end of period	$	36,480	$	37,336	$	8,187		$	1,835	$	6,213		$	29,297		$	(4,191	)	$	115,157



As of and for the Nine Months Ended September 30, 2014:

(Dollars in millions)	Retail Banking & Wealth Markets			Commercial Banking		U.S. Corporate Banking			Transaction Banking			Investment Banking & Markets		Other			Reconciling Items			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	1,049		$	746	$	143		$	324		$	134	$	47		$	(290	)	$	2,153
Noninterest income (expense)	249			155		92			123			245		73			(166		)	771
Total revenue	1,298			901		235			447			379		120			(456		)	2,924
Noninterest expense	1,005			262		77			266			109		421			(114		)	2,026
(Reversal of) provision for loan losses	(9		)	11		(12		)	(3		)	23		7			(10		)	7
Income (loss) before income taxes and including noncontrolling interests	302			628		170			184			247		(308		)	(332		)	891
Income tax expense (benefit)	119			201		67			72			63		(150		)	(130		)	242
Net income (loss) including noncontrolling interests	183			427		103			112			184		(158		)	(202		)	649
Deduct: net loss from noncontrolling interests	—			—		—			—			—		14			—			14
Net income (loss) attributable to MUAH	$	183		$	427	$	103		$	112		$	184	$	(144	)	$	(202	)	$	663

Total assets, end of period	$	37,235		$	35,296	$	6,965		$	1,753		$	6,160	$	27,220		$	(3,762	)	$	110,867