Business Segments

During the fourth quarter of 2015, the composition of the Company's reportable segments was revised to reflect the realignment of its business model in the Americas, which includes MUAH. The realignment consolidated the customer base of the Commercial Banking operating segment, including its products and services, into the activities performed within various other segments. We now have four reportable segments: Regional Bank, U.S. Wholesale Banking, Transaction Banking, and Investment Banking & Markets. Prior period segment results have been revised to conform to the current period presentation. Below is a detailed description of these reportable segments.

Regional Bank

The Regional Bank offers a range of banking products and services to individuals, including high net worth individuals and institutional clients, and businesses with up to $500 million in annual revenue, delivered generally through a network of branches, private banking offices, ATMs, broker mortgage referrals, relationship managers, 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 Regional Bank also provides a broad spectrum of commercial credit products including commercial loans, accounts receivable, inventory, and trade financing to corporate customers generally on the U.S. West Coast, and commercial real estate financing nationwide. The Regional Bank is comprised of five main divisions: Residential Lending, Retail Banking, Wealth Markets, Commercial Banking and Real Estate Industries.

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

The Retail Banking Division serves its customers through Private Banking, which provides comprehensive relationship management to clients with up to $3 million in deposits and investment balances at MUB; 329 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. Retail Banking provides checking and deposit products and services; bill and loan payment, merchant, various types of financing and investment services; and products including credit cards.

The Wealth Markets Division serves its customers through Private Wealth Management, which provides comprehensive relationship management to clients with over $3 million in deposits and investment balances at MUB; UnionBanc Investment Services LLC, a subsidiary of MUB and a registered broker-dealer and investment advisor; and Asset Management which includes Highmark Capital Management, Inc., a subsidiary of MUB and a registered investment advisor. Wealth Markets 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.

The Commercial Banking Division provides a broad spectrum of commercial credit products including commercial loans, accounts receivable, inventory, and trade financing primarily to corporate customers with annual revenues up to $500 million based on the U.S. West Coast. 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.

The Real Estate Industries Division 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. Wholesale Banking

U.S. Wholesale Banking provides commercial lending products, including commercial loans, lines of credit and project financing, to corporate customers with revenue greater than $500 million. The segment employs an industry-focused strategy including dedicated coverage teams in General Industries, Power and Utilities, Oil and Gas, Telecom and Media, Technology, Healthcare and Nonprofit, Public Finance, and Financial Institutions (predominantly Insurance and Asset Managers). By working with the Company's other segments, U.S. Wholesale Banking offers its customers a range of noncredit services, which include global treasury management, capital market solutions, and various foreign exchange, interest rate risk 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. 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, commercial finance, funds 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.

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; fees from affiliates and noninterest expenses associated with BTMU's U.S. branch banking operations; 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. Certain indirect costs, such as operations and technology expense, are allocated to the segments based on an activity-based costing methodology. 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. During the fourth quarter of 2015, the Company revised its management reporting accounting methodology to exclude the impact of the business integration initiative from the measurement of segment profitability. Fees from affiliates and noninterest expenses associated with BTMU's U.S. branch banking operations are now included within "Other". 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 Regional Bank 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 Twelve Months Ended December 31, 2015:



(Dollars in millions)	Regional Bank		U.S. Wholesale Banking		Transaction Banking		Investment Banking & Markets			Other			Reconciling Items			MUFG Americas Holdings Corporation
Results of operations—Market View
Net interest income (expense)	$	1,934	$	409	$	465	$	245		$	136		$	(374	)	$	2,815
Noninterest income (expense)	450		135		169		182			782			(188		)	1,530
Total revenue	2,384		544		634		427			918			(562		)	4,345
Noninterest expense	1,677		167		410		137			1,223			(176		)	3,438
(Reversal of) provision for credit losses	14		206		1		(22		)	31			(2		)	228
Income (loss) before income taxes and including noncontrolling interests	693		171		223		312			(336		)	(384		)	679
Income tax expense (benefit)	200		66		87		72			(123		)	(151		)	151
Net income (loss) including noncontrolling interest	493		105		136		240			(213		)	(233		)	528
Deduct: net loss from noncontrolling interests	—		—		—		—			45			—			45
Net income (loss) attributable to MUAH	$	493	$	105	$	136	$	240		$	(168	)	$	(233	)	$	573

Total assets, end of period	$	60,743	$	14,841	$	2,122	$	11,897		$	28,916		$	(2,313	)	$	116,206

As of and for the Twelve Months Ended December 31, 2014:



(Dollars in millions)	Regional Bank			U.S. Wholesale Banking			Transaction Banking			Investment Banking & Markets		Other			Reconciling Items			MUFG Americas Holdings Corporation
Results of operations—Market View
Net interest income (expense)	$	2,088		$	362		$	443		$	268	$	62		$	(361	)	$	2,862
Noninterest income (expense)	440			177			158			285		293			(230		)	1,123
Total revenue	2,528			539			601			553		355			(591		)	3,985
Noninterest expense	1,596			154			361			131		735			(154		)	2,823
(Reversal of) provision for credit losses	(2		)	(17		)	(3		)	38		(5		)	(5		)	6
Income (loss) before income taxes and including noncontrolling interests	934			402			243			384		(375		)	(432		)	1,156
Income tax expense (benefit)	305			158			95			104		(133		)	(170		)	359
Net income (loss) including noncontrolling interest	629			244			148			280		(242		)	(262		)	797
Deduct: net loss from noncontrolling interests	—			—			—			—		19			—			19
Net income (loss) attributable to MUAH	$	629		$	244		$	148		$	280	$	(223	)	$	(262	)	$	816

Total assets, end of period	$	62,234		$	12,985		$	1,780		$	10,892	$	27,961		$	(2,229	)	$	113,623

As of and for the Twelve Months Ended December 31, 2013:



(Dollars in millions)	Regional Bank			U.S. Wholesale Banking		Transaction Banking			Investment Banking & Markets		Other			Reconciling Items			MUFG Americas Holdings Corporation
Results of operations—Market View
Net interest income (expense)	$	1,981		$	316	$	447		$	268	$	33		$	(329	)	$	2,716
Noninterest income (expense)	471			161		161			229		64			(210		)	876
Total revenue	2,452			477		608			497		97			(539		)	3,592
Noninterest expense	1,662			127		357			120		570			(123		)	2,713
(Reversal of) provision for credit losses	(35		)	20		(3		)	1		(13		)	1			(29		)
Income (loss) before income taxes and including noncontrolling interests	825			330		254			376		(460		)	(417		)	908
Income tax expense (benefit)	271			130		100			112		(171		)	(163		)	279
Net income (loss) including noncontrolling interest	554			200		154			264		(289		)	(254		)	629
Deduct: net loss from noncontrolling interests	—			—		—			—		18			—			18
Net income (loss) attributable to MUAH	$	554		$	200	$	154		$	264	$	(271	)	$	(254	)	$	647

Total assets, end of period	$	56,777		$	10,218	$	1,575		$	9,438	$	29,473		$	(1,632	)	$	105,849