Business Segments

The Company has four reportable segments: Regional Bank, U.S. Wholesale & Investment Banking, Transaction Banking, and MUSA. The Company uses various management accounting methodologies to measure the performance of its 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 separate economic entities.

Methodologies that are applied to the measurement of segment profitability, which are enhanced from time to time, include a funds transfer pricing system, an activity-based costing methodology, other indirect costs and a methodology to allocate the provision for credit losses. In the second quarter of 2018, the Company began measuring the performance of its business segments by reporting revenues and expenses from products and services sold entirely within the business segment that manages the customer relationship. The Company previously applied a “market view” perspective in measuring the business segments, which reported revenues and expenses from products and services sold in both the business segment that provided the product and the business segment that managed the customer relationship. Prior period results have been revised to conform to the current period presentation.

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 credit from Corporate Treasury for its funding sources. 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. Certain non-bank subsidiaries, including MUSA, are reported based on their GAAP results.

Regional Bank

The Regional Bank provides banking products and services to individuals, businesses, and trust customers through five lines of business.

Consumer Banking serves consumers and small businesses through 346 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, interest rate risk and commodity risk management products and services.

Real Estate Industries serves professional real estate investors and developers with products such as construction loans, commercial mortgages, bridge financing and unsecured financing. 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, 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 New York, Florida, Illinois and Texas.

U.S. Wholesale & Investment Banking

U.S. Wholesale & Investment Banking delivers the full suite of MUAH products and services to large and mid-corporate customers. 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). U.S. Wholesale & Investment Banking provides customers general corporate credit and structured credit services, including project finance, leasing and equipment finance, commercial finance, funds finance and securitizations. By working with the Company's other segments, U.S. Wholesale & Investment 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.

MUFG Securities Americas

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

"Other" includes the MUFG Fund Services segment, Markets segment, Asian Corporate Banking segment and Corporate Treasury. MUFG Fund Services provides comprehensive investment fund administrative solutions. Markets provides risk management solutions, including foreign exchange, interest rate and energy risk management solutions. 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 MUFG Bank, Ltd. 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.



As of and for the Three Months Ended June 30, 2018:
(Dollars in millions)	Regional Bank			U.S. Wholesale & Investment Banking			Transaction Banking		MUSA		Other			MUFG Americas Holdings Corporation
Results of operations
Net interest income	$	540		$	101		$	67	$	51	$	66		$	825
Noninterest income	116			98			15		77		290			596
Total revenue	656			199			82		128		356			1,421
Noninterest expense	532			103			65		116		267			1,083
(Reversal of) provision for credit losses	(5		)	(5		)	—		—		(9		)	(19		)
Income (loss) before income taxes and including noncontrolling interests	129			101			17		12		98			357
Income tax expense (benefit) ⁽¹⁾	26			(4		)	4		3		(1		)	28
Net income (loss) including noncontrolling interests	103			105			13		9		99			329
Deduct: net (income) loss from noncontrolling interests	—			—			—		—		15			15
Net income (loss) attributable to MUAH	$	103		$	105		$	13	$	9	$	114		$	344

Total assets, end of period	$	70,186		$	19,740		$	991	$	32,904	$	36,552		$	160,373


(1)	Income tax expense (benefit) includes certain management accounting classification adjustments.



As of and for the Three Months Ended June 30, 2017:
(Dollars in millions)	Regional Bank		U.S. Wholesale & Investment Banking			Transaction Banking		MUSA		Other			MUFG Americas Holdings Corporation
Results of operations
Net interest income	$	510	$	112		$	60	$	57	$	55		$	794
Noninterest income	110		95			15		88		181			489
Total revenue	620		207			75		145		236			1,283
Noninterest expense	497		96			56		112		196			957
(Reversal of) provision for credit losses	18		(33		)	—		—		(7		)	(22		)
Income (loss) before income taxes and including noncontrolling interests	105		144			19		33		47			348
Income tax expense (benefit) ⁽¹⁾	29		35			8		13		(22		)	63
Net income (loss) including noncontrolling interests	76		109			11		20		69			285
Deduct: net (income) loss from noncontrolling interests	—		—			—		—		10			10
Net income (loss) attributable to MUAH	$	76	$	109		$	11	$	20	$	79		$	295

Total assets, end of period	$	64,403	$	22,054		$	1,082	$	30,439	$	32,578		$	150,556


(1)	Income tax expense (benefit) includes certain management accounting classification adjustments.




As of and for the Six Months Ended June 30, 2018:
(Dollars in millions)	Regional Bank		U.S. Wholesale & Investment Banking			Transaction Banking			MUSA		Other			MUFG Americas Holdings Corporation
Results of operations
Net interest income	$	1,067	$	203		$	131		$	105	$	144		$	1,650
Noninterest income	227		180			29			165		377			978
Total revenue	1,294		383			160			270		521			2,628
Noninterest expense	1,034		204			121			232		576			2,167
(Reversal of) provision for loan losses	7		(24		)	(1		)	—		(3		)	(21		)
Income (loss) before income taxes and including noncontrolling interests	253		203			40			38		(52		)	482
Income tax expense (benefit) ⁽¹⁾	51		136			11			9		(221		)	(14		)
Net income (loss) including noncontrolling interests	202		67			29			29		169			496
Deduct: net (income) loss from noncontrolling interests	—		—			—			—		14			14
Net income (loss) attributable to MUAH	$	202	$	67		$	29		$	29	$	183		$	510

Total assets, end of period	$	70,186	$	19,740		$	991		$	32,904	$	36,552		$	160,373


(1)	Income tax expense (benefit) includes certain management accounting classification adjustments.




As of and for the Six Months Ended June 30, 2017:
(Dollars in millions)	Regional Bank		U.S. Wholesale & Investment Banking			Transaction Banking		MUSA		Other			MUFG Americas Holdings Corporation
Results of operations
Net interest income	$	1,011	$	226		$	115	$	116	$	121		$	1,589
Noninterest income	218		205			29		172		353			977
Total revenue	1,229		431			144		288		474			2,566
Noninterest expense	996		200			115		217		435			1,963
(Reversal of) provision for loan losses	20		(42		)	—		—		(30		)	(52		)
Income (loss) before income taxes and including noncontrolling interests	213		273			29		71		69			655
Income tax expense (benefit) ⁽¹⁾	56		70			12		27		(19		)	146
Net income (loss) including noncontrolling interests	157		203			17		44		88			509
Deduct: net (income) loss from noncontrolling interests	—		—			—		—		15			15
Net income (loss) attributable to MUAH	$	157	$	203		$	17	$	44	$	103		$	524

Total assets, end of period	$	64,403	$	22,054		$	1,082	$	30,439	$	32,578		$	150,556


(1)	Income tax expense (benefit) includes certain management accounting classification adjustments.