Business Segments

The Company has five reportable segments: Regional Bank, U.S. Wholesale Banking, Transaction Banking, Investment Banking & Markets and MUFG Securities Americas Inc. Below is a detailed description of these reportable segments.

Regional Bank

The Regional Bank provides banking products and services to individual and business customers in California, Washington and Oregon through five major business lines.

Consumer Banking serves consumers and small businesses through 352 full-service branches, digital channels, call centers, ATMs and alliances with other financial institutions. Products and services include checking and deposit accounts; residential mortgage loans; consumer loans; home equity lines of credit; credit cards; bill and loan payment services; and merchant services.

Commercial Banking provides commercial and asset-based loans to clients across a wide range of industries with annual revenues up to $1 billion. Through partnerships with other areas of the Bank, Commercial Banking clients also have access to non-credit products and services including global treasury management, capital markets solutions, foreign exchange and interest rate risk and commodity risk management products and services.

Real Estate Industries provides financing solutions for existing properties and construction projects to professional real estate developers. Property types supported include apartment, office, retail, industrial and single-family residential on the West Coast and in select metropolitan areas across the country. Real Estate Industries also makes tax credit investments in affordable housing projects through its Community Development Finance unit. Through partnerships with other areas of the bank, Real Estate Industries clients also have access to non-credit products and services including global treasury management, capital markets solutions, foreign exchange and interest rate risk and commodity risk management products and services.

Wealth Markets serves corporate, institutional, non-profit and individual clients. Capabilities include Wealth Planning / Trust & Estate Services; Investment Management through HighMark Capital Management, Inc., an SEC-registered investment advisory firm wholly-owned by the bank; Brokerage through UnionBanc Investment Services, LLC, an SEC-registered broker-dealer/investment advisory firm wholly-owned by the bank; and Private Wealth Management.

PurePoint Financial serves consumers through a national deposit platform offering savings accounts and CD products to customers through an online platform with services provided through a call center and a network of financial centers in Florida, Illinois and Texas.

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 revenues generally greater than $1 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, 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.

MUFG Securities Americas Inc.

MUSA is MUAH's broker-dealer subsidiary which engages in capital markets origination transactions, private placements, collateralized financings, securities borrowing and lending transactions, and domestic and foreign debt and equity securities transactions.

Other

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 "Other." Certain of the transferred IHC entities are not measured using a "market view" perspective.

"Other" includes the Asian Corporate Banking segment and Corporate Treasury. 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; 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 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. Beginning with the second quarter of 2016, the Company revised its methodology for allocating certain indirect costs to the segments. Beginning with the third quarter of 2016, the Company revised its funds transfer pricing methodology related to certain deposits. Prior period results have been updated to reflect these changes in methodology. Certain of the transferred IHC entities are not measured using management accounting methodologies.



As of and for the Three Months Ended March 31, 2017:
(Dollars in millions)	Regional Bank		U.S. Wholesale Banking		Transaction Banking		Investment Banking & Markets			MUSA		Other			MUFG Americas Holdings Corporation
Results of operations - Market View ⁽¹⁾
Net interest income (expense)	$	498	$	87	$	137	$	42		$	59	$	(28	)	$	795
Noninterest income (expense)	112		104		39		79			84		70			488
Total revenue	610		191		176		121			143		42			1,283
Noninterest expense	502		53		111		59			105		176			1,006
(Reversal of) provision for credit losses	2		—		—		(10		)	—		(22		)	(30		)
Income (loss) before income taxes and including noncontrolling interests	106		138		65		72			38		(112		)	307
Income tax expense (benefit)	23		55		26		(3		)	15		(33		)	83
Net income (loss) including noncontrolling interests	83		83		39		75			23		(79		)	224
Deduct: net loss from noncontrolling interests	—		—		—		—			—		5			5
Net income (loss) attributable to MUAH	$	83	$	83	$	39	$	75		$	23	$	(74	)	$	229

Total assets, end of period	$	63,950	$	11,179	$	2,094	$	13,778		$	30,472	$	28,205		$	149,678


(1)	The transferred IHC entities are not measured using a "market view" perspective.



As of and for the Three Months Ended March 31, 2016:
(Dollars in millions)	Regional Bank			U.S. Wholesale Banking			Transaction Banking		Investment Banking & Markets			MUSA		Other			MUFG Americas Holdings Corporation
Results of operations - Market View ⁽¹⁾
Net interest income (expense)	$	475		$	107		$	113	$	56		$	25	$	(52	)	$	724
Noninterest income (expense)	114			29			46		47			71		167			474
Total revenue	589			136			159		103			96		115			1,198
Noninterest expense	441			49			120		58			86		214			968
(Reversal of) provision for credit losses	(2		)	130			2		31			—		1			162
Income (loss) before income taxes and including noncontrolling interests	150			(43		)	37		14			10		(100		)	68
Income tax expense (benefit)	42			(17		)	14		(19		)	4		(6		)	18
Net income (loss) including noncontrolling interests	108			(26		)	23		33			6		(94		)	50
Deduct: net loss from noncontrolling interests	—			—			—		1			—		11			12
Net income (loss) attributable to MUAH	$	108		$	(26	)	$	23	$	34		$	6	$	(83	)	$	62

Total assets, end of period	$	62,190		$	15,173		$	2,522	$	14,556		$	32,961	$	29,152		$	156,554


(1)	The transferred IHC entities are not measured using a "market view" perspective.