MUFG Americas Holdings Corporation Investor Presentation for the Quarter Ended June 30, 2018 MUFG Americas Holdings Corporation
Forward-Looking Statements and Non-GAAP Financial Measures This presentation describes activities of MUFG Americas Holdings Corporation and its consolidated subsidiaries (the Company) unless otherwise specified. This presentation should be read in conjunction with the financial statements, notes and other information contained in the Company’s most recent annual report on Form 10-K and Quarterly Reports on Forms 10-Q and in any subsequent filings with the Securities and Exchange Commission (SEC). The following appears in accordance with the Private Securities Litigation Reform Act. This presentation includes forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include the words “believe,” “continue,” “expect,” “target,” “anticipate,” “intend,” “plan,” “estimate,” “potential,” “ project,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” They may also consist of annualized amounts based on historical interim period results. There are numerous risks and uncertainties that could and will cause actual results to differ materially from those discussed in the Company’s forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict and could have a material adverse effect on the Company’s financial condition, and results of operations or prospects. For more information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the SEC, including the discussions under “Management’s Discussion & Analysis of Financial Condition and Results of Operations” and “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Forms 10-Q and in any subsequent filings with the SEC and available on the SEC’s website at www.sec.gov. Any factor described above or in our SEC reports could, by itself or together with one or more other factors, adversely affect our financial results and condition. All forward-looking statements contained herein are based on information available at the time of this presentation, and the Company assumes no obligation to update any forward-looking statements. This investor presentation includes additional capital ratios (tangible common equity and Common Equity Tier 1 capital (calculated under the Basel III standardized approach on a fully phased-in basis) to facilitate the understanding of the Company’s capital structure and for use in assessing and comparing the quality and composition of the Company's capital structure to other financial institutions. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies. Please refer to our separate reconciliation of non-GAAP financial measures in our 10-Q for the quarter ended June 30, 2018. MUFG Americas Holdings Corporation Investor Presentation, 2Q18 2
Core Strategic Subsidiary of Mitsubishi UFJ Financial Group (MUFG) MUFG Americas Holdings Corporation (MUAH) and its principal subsidiaries MUFG MUFG Branch / Financial Center Network Union Bank, N.A. (MUB) and MUFG Securities Americas (MUSA) are owned by MUFG Bank, Ltd. (formerly The Bank of Tokyo-Mitsubishi UFJ, Ltd.) and Mitsubishi UFJ Financial Group, Inc. (MUFG). MUFG Bank, Ltd. is a wholly-owned subsidiary of MUFG. • One of the largest regional bank holding companies in the United States • Solid balance sheet with high-quality capital base and strong liquidity • Conservative risk culture resulting in a high quality loan portfolio with strong credit performance • Network of 346 U.S. retail branches • Prominent market share in demographically attractive West Coast markets • Both MUB and MUAH have outstanding, publicly issued debt securities Reference Banks’ Period-End Assets ($bn) 1,2 Company Profile as of June 30, 2018 MUAH MUFG3 Headquarters New York Tokyo $461 Main Banking Office San Francisco Tokyo $381 $364 U.S. Branches4 346 N/A Employees5 Approx. 13,300 Approx. 150,000 $223 $208 $160 6 $155 $141 $138 Total Assets $160.4 billion $2,790 billion $125 $118 $105 $72 $66 Total Loans Held for Investment $82.2 billion $983 billion6 Total Deposits $85.5 billion $1,612 billion6 USB PNC COF BBT STI MUAH CFG FITB KEY RF MTB HBAN CMA ZION Common Equity Tier 1 risk-based 16.24%7 12.50%8 capital ratio (fully-phased in) 3. As of March 31, 2018 1. Source: SNL Financial as of August 3, 2018 4.In addition, MUB had 5 commercial branches and 22 PurePoint Financial Centers 2. ‘Reference Banks’, referred to throughout this presentation unless otherwise noted, consist of these 13 CCAR-filing public regional banks, 5. Full-time equivalent staff as of 3/31/18 plus the four largest U.S. money center banks (BAC, C, JPM and WFC) not shown here 6. JPY denominated amounts converted to USD based on an exchange rate of 113.00 JPY/USD; refer to MUFG’s Investor Relations website (http://www.mufg.jp/english/ir/) for additional information 7. Non-GAAP financial measure. Refer to our separate reconciliation of non-GAAP financial measures in our 10-Q for the quarter ended June 30, 2018 8. Calculated in accordance with Japanese banking regulations based on information derived from MUFG’s consolidated financial statements prepared in accordance with Japanese GAAP, as required by the Japanese Financial Services Agency MUFG Americas Holdings Corporation Investor Presentation, 2Q18 3
MUAH is MUFG's Intermediate Holding Company 6/30/18 assets: $123.8bn 6/30/18 assets: $32.9bn 6/30/18 assets: $3.7bn1 The enhanced prudential standards require that all foreign banking organizations with at least $50bn in assets hold ownership of controlled U.S. subsidiaries through an Intermediate Holding Company (IHC). 1. Net of intercompany eliminations MUFG Americas Holdings Corporation Investor Presentation, 2Q18 4
Business Model for Four Key Segments Regional Bank U.S. Wholesale & Investment Banking Branding Five main divisions: Consumer Banking, Wealth Markets, Commercial Banking, Real Estate • Delivers the full suite of MUAH products and services to large and mid-corporate Industries and PurePoint Financial customers Two customer segments: • Employs an industry-focused strategy including dedicated coverage teams in: Consumer: West Coast individuals, including high net worth • General Industries • Products and services include checking and deposit accounts, mortgages, home equity • Power and Utilities loans, consumer loans, credit cards, bill and loan payment services, merchant services, • Oil and Gas wealth planning, trust & estate services, investment management, brokerage and private • Telecom and Media wealth management • Technology • PurePoint serves consumers by offering savings accounts and CD products online with • Healthcare and Nonprofit services provided through a call center and a network of financial centers in New York, • Public Finance Florida, Illinois, and Texas • Financial Institutions (predominantly Insurance and Asset Managers) Coverage Commercial: Institutional clients and businesses with annual revenues up to $1 billion • Provides customers general corporate credit and structured credit services including • Commercial credit products and services include commercial and asset-based loans, project finance, leasing and equipment finance, commercial finance, funds finance, accounts receivable, inventory, and trade financing primarily to West Coast corporate and securitizations customers, and construction loans, commercial mortgages, bridge financing and unsecured funding to professional real estate investors and developers nationwide • Non-credit products and services include global treasury management, capital market • Non-credit products and services include global treasury management, capital solutions, foreign exchange, interest rate risk and commodity risk management products market solutions, and various foreign exchange, interest rate risk and commodity risk and services management products Transaction Banking • Automated Clearing House • Demand Deposit Account • Payables / Receivables • Cash Management • Institutional Trust and Global Custody • Treasury Management • Commercial Card • Money Market Demand Account • Trade Finance MUFG Securities Americas (MUSA) Products • Capital Markets • Private Placements • Collateralized Financings • Sales & Trading • Domestic and Foreign Debt • Securities Borrowed and Loaned and Equity Securities Transactions • Securitization MUFG Americas Holdings Corporation Investor Presentation, 2Q18 5
2018 Second Quarter MUAH Results For the Three Months Ended June 30, March 31, June 30, (Dollars in millions) 2018 2018 2017 Results of operations: Net interest income $ 825 $ 825 $ 794 Noninterest income 596 382 489 Total revenue 1,421 1,207 1,283 Noninterest expense 1,083 1,084 957 Pre-tax, pre-provision income 1 338 123 326 (Reversal of) provision for credit losses (19) (2) (22) Income before income taxes and including noncontrolling interests 357 125 348 Income tax expense (benefit) 28 (42) 63 Net income including noncontrolling interests 329 167 285 Deduct: Net (income) loss from noncontrolling interests 15 (1) 10 Net income attributable to MUAH $ 344 $ 166 $ 295 Compared with the second quarter of 2017, Net Income increased by $49 million • Total revenue was $1.4 billion, up $138 million from the second quarter of 2017 due to a $107 million increase in noninterest income as a result of higher fees from affiliates and fund administration fees from entities transferred to MUAH on July 1, 2017 and due to a $31 million increase in net interest income from an increase in earning assets. • Increase in noninterest expense for the second quarter of 2018 compared with the second quarter of 2017 was driven largely by the change in presentation of certain expenses and an increase in salaries and employee benefits expense. • The effective tax rates are lower in 2018 than the comparative prior year periods primarily as a result of the Tax Cuts and Jobs Act. The income tax benefit in the first quarter of 2018 is largely due to an adjustment to certain prior period state income taxes. 1. Pre-tax, pre-provision income is total revenue less noninterest expense. Management believes that this is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle. MUFG Americas Holdings Corporation Investor Presentation, 2Q18 6
MUAH Balance Sheet and Profitability Highlights as of Period End As of Period End Compared to the previous quarter: June 30, March 31, June 30, • Total assets increased $3.1 billion (Dollars in millions) 2018 2018 2017 driven by increased loans held for Balance sheet (end of period) investment of $836 million and, Total assets $ 160,373 $ 157,310 $ 150,556 partially offset by a decrease in Total loans held for investment 82,236 81,400 78,388 Total securities 27,014 27,301 26,542 securities loaned or sold under Securities borrowed or purchased under repo 20,048 19,902 19,820 repo, trading account assets and Trading account assets 12,320 12,565 10,013 total securities. Total deposits 85,516 83,532 84,957 Securities loaned or sold under repo 25,579 26,391 24,797 • Loans held for investment Long-term debt 14,192 14,085 10,556 increased largely due to growth in Trading account liabilities 4,991 3,874 3,563 the residential mortgage portfolio MUAH stockholders' equity 18,462 18,193 17,808 and in the home equity and other Performance ratios consumer loans. Net interest margin 1,2 2.30% 2.32% 2.36% • Total deposits increased $2 billion Return on average assets 1 0.64 0.42 0.70 largely due to interest bearing Return on MUAH stockholders' equity 1 5.60 3.66 6.00 1,4 savings and time deposits related Return on tangible common equity 7.09 4.69 7.55 to PurePoint, partially offset by Efficiency ratio 3 82.45 89.84 76.50 lower interest checking and money market account. 1. Annualized based on six months ending June 30. 2. Net interest margin is presented on a taxable-equivalent basis using the federal statutory tax rates of 21% and 35% for 2018 and 2017, respectively 3. The efficiency ratio is total noninterest expense as a percentage of total revenue (net interest income and noninterest income) 4. Non-GAAP financial measure. Refer to our separate reconciliation of non-GAAP financial measures in our 10-Q for the quarter ended June 30, 2018 MUFG Americas Holdings Corporation Investor Presentation, 2Q18 7
Strong and High Quality Capital Base MUAH's capital ratios exceed the average of the Reference Banks1 Reference Banks' MUAH Capital Ratios Average1 Capital ratios: June 30, 2018 June 30, 2018 March 31, 2018 Regulatory: Common Equity Tier 1 risk-based capital ratio 10.91% 16.24% 16.30% Tier 1 risk-based capital ratio 12.03% 16.24 16.30 Total risk-based capital ratio 14.11 17.15 17.75 Tier 1 leverage ratio 9.71% 10.28 10.20 Other: Tangible common equity ratio2 8.46 9.51 9.52 Common Equity Tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully N/A 16.24 16.30 phased-in)2 MUAH reports its regulatory capital ratios under the standardized approach of the U.S. Basel III rules, with certain provisions subject to phase-in periods. 1. Reference Banks consist of 13 CCAR-filing public regional banks depicted on slide 3 plus the four largest U.S. money center banks. Reference Banks’ average based on reporting through August 3, 2018 (Source: SNL Financial) 2. Non-GAAP financial measures. Refer to our separate reconciliation of non-GAAP financial measures in our 10-Q for the quarter ended June 30, 2018 MUFG Americas Holdings Corporation Investor Presentation, 2Q18 8
Robust Liquidity Profile MUB MUAH Deposit franchise reduces reliance on wholesale funding Holding company maintains liquidity to meet expected Substantial available liquidity includes: obligations for at least 20 months without access to funding • Excess Reserves1: $4.8 billion MUAH consolidated is compliant with modified LCR • Unpledged securities: $23.1 billion Double leverage ratio is 103%2 • Unused FHLB and Fed capacity: $23.7 billion MUB's Investment Portfolio, Carrying Value3 ($ billions) MUAH Consolidated Funding Sources ($ billions) Medium- and Long-term Debt: U.S. $14.2 Treasury Commercial Paper and Other Short-term Borrowings: $9.8 Agency $1.5 RMBS $0.9 Agency $1.0 CMBS $17.0 Securities loaned or $1.5 sold under repo: $25.6 RMBS $1.6 Deposits: $85.5 CMBS CLO $4.1 Other 1. Interest bearing deposits in banks 2. Source: MUAH FR Y-9LP as of March 31, 2018; defined as the Total Equity Investment in Subsidiaries divided by Total Equity. Management believes that this is a useful measure because it enables investors and others to assess the extent to which the Company is using debt to fund its equity investment in its subsidiaries 3. Amortized Cost / Carrying Amount reflects amortized cost except for balances transferred from AFS to HTM. Those balances reflect amortized cost plus any unrealized gains or losses at the date of transfer MUFG Americas Holdings Corporation Investor Presentation, 2Q18 9
Securities Financing Portfolio Securities Financing Maturity Profile Securities financing activity largely conducted through MUSA 30,000 Securities financing portfolio is primarily 25,000 $22,952 collateralized by high quality, liquid assets 20,000 ) s n • Approximately 88% is collateralized by o i l l $13,822 i 15,000 M ( $11,021 U.S. Treasuries and Agency MBS and $ $9,450 10,000 12% is backed by equities, credit and $4,737 $5,002 other 5,000 $2,878 $1,115 0 Robust risk management framework 1 O/N and Continuous 2-30 days 31-90 days > 90 days governs secured financing profile including Assets Liabilities guidelines and limits for tenor gaps, Assets Liabilities counterparty concentration and stressed 3.4% 4.0% liquidity outflows 1.7% 1.7% 6.5% 6.1% 36.6% 50.7% 37.1% 52.2% 1. Includes continuous maturities which include open trades and term evergreen transactions that are primarily used to fund inventory MUFG Americas Holdings Corporation Investor Presentation, 2Q18 10
Internal TLAC1 Requirement to be Effective January 1, 2019 MUAH has sufficient aggregate capital and debt to achieve quantitative TLAC requirements; some modifications are required TLAC-related implications to MUAH due to MUFG's status as a single point of entry G-SIB are: • 18.5% of RWA overall Internal TLAC requirement; minimum 6% must be issued as eligible long-term debt • Internal TLAC must be issued by MUAH to a foreign affiliate (MUFG Bank); internal TLAC instruments may not be issued to third party investors • TLAC-eligible long-term debt will contain a contractual conversion ("bail-in") trigger while remaining external debt will not • Clean Holding Company requirements limit MUAH's external liabilities including debt, derivatives and guarantees • Compliance mandatory by January 1, 2019 MUFG is expected to be the external TLAC issuing entity for the global organization Note: MUAH is currently evaluating the impact of the NPR issued in April 2018 by the Federal Reserve and OCC which is intended to recalibrate the enhanced supplementary leverage ratio 1. "Total Loss-Absorbing Capacity, Long-Term Debt, and Clean Holding Company Requirements for Systemically Important U.S. Bank Holding Companies and Intermediate Holding Companies of Systemically Important Foreign Banking Organizations," Federal Register Vol. 82, No. 14, January 24, 2017; does not include FHLB balances MUFG Americas Holdings Corporation Investor Presentation, 2Q18 11
MUAH Long-Term Debt Outstanding and Maturity Schedule1 As of June 30, 2018 Long-Term Debt Redemption Schedule - Next 10 Years 1. Excludes nonrecourse debt, junior subordinated debt, FHLB Loans and capital leases MUFG Americas Holdings Corporation Investor Presentation, 2Q18 12
Deposit Trends Average deposit balances have been steady over the last year Average Quarterly Deposit Breakdown ($ billions)3 86 85 85 34 33 33 6 5 6 • PurePoint Financial, a division of MUFG 8 9 9 Union Bank, N.A., is a hybrid digital bank 38 37 36 aimed at committed savers • PurePoint offers savings accounts and 2Q17 1Q18 2Q18 certificates of deposit (CDs), combining the Transaction & Money Market Savings convenience of online banking with in- person client service at PurePoint Financial Time Noninterest Bearing Centers Major Deposit Share in Key California Locations1,2 Metropolitan Statistical Area (MSA) / Rank Share (%) • This model enables PurePoint to deliver State Santa Maria-Santa Barbara, CA 2 17.9 competitive rates and an exceptional client San Diego-Carlsbad, CA 4 14.1 Los Angeles-Long Beach-Anaheim, CA 4 8.6 experience the way clients want to bank - Fresno, CA 4 7.9 online, over the phone or in person Oxnard-Thousand Oaks-Ventura, CA 5 6.0 Salinas, CA 5 9.1 • As of June 30, 2018 PurePoint deposit Riverside-San Bernardino-Ontario, CA 5 4.2 Sacramento--Roseville--Arden-Arcade, CA 5 4.3 balances were $4.5 billion San Francisco-Oakland-Hayward, CA 7 2.8 Seattle-Tacoma-Bellevue, WA 9 2.4 • There are currently 22 PurePoint Financial San Jose-Sunnyvale-Santa Clara, CA 9 2.4 centers Overall California 4 6.1 Overall Washington 13 1.7 1. Source: SNL Financial as of September 30, 2017; updated annually 2. The above balances do not include PurePoint deposits which are primarily placed with customers outside MUB's West Coast markets 3. Average quarterly balances may not total due to rounding MUFG Americas Holdings Corporation Investor Presentation, 2Q18 13
Earning Asset Mix MUB's loan portfolio is primarily residential mortgage and commercial; MUSA contributes trading and securities financing assets. 2 Earning Asset Mix 1 Loan Portfolio Composition Trading Assets & Home Equity & Other Other: 8.7% Consumer 4.7% Securities Purchased under Repo and Securities Borrowed: 13.9% Commercial & Industrial 28.0% Cash and equivalents: Residential Mortgage 2.7% 45.7% Loans: 56.1% Securities: 18.6% Commercial Mortgage 18.0% Lease Financing 1.8% Construction 1.9% 1. Average balance for the quarter ended June 30, 2018. May not total 100% due to rounding. 2. Period-end total loans held for investment, including all nonperforming loans and purchased credit-impaired loans. May not total 100% due to rounding. MUFG Americas Holdings Corporation Investor Presentation, 2Q18 14
Commercial Loan Portfolio Commercial loan balance remains stable in 2Q2018 after recent declines in loan balances. Net charge-offs declined by $13 million quarter-over-quarter. Commercial and Corporate Loan Portfolio Period-end Loan Balances and Net Charge-offs ($mm) MUFG Americas Holdings Corporation Investor Presentation, 2Q18 15
Consumer Loan Portfolio Consumer portfolio continues to exhibit strong credit quality. Residential Mortgage Loan Portfolio Home Equity & Other Consumer Portfolio Period-end Loan Balances and Net Charge-offs ($mm) Period-end Loan Balances and Net Charge-offs ($mm) $37,552 $36,660 $35,643 $34,205 $32,523 $2 $1 $1 $— $— 2Q17 3Q17 4Q17 1Q18 2Q18 Net Charge-offs Residential Mortgage MUFG Americas Holdings Corporation Investor Presentation, 2Q18 16
Net Interest Margin Impacted by Low Rate Environment Net interest margin decreased 7 basis points during the second quarter of 2018, compared with the same period in 2017, due primarily to an increase in funding costs resulting from an increase in borrowed funds. Net Interest Income & Margin ($mm) Earning Assets ($bn) $816 $825 $825 $794 $799 $145 $144 $146 $137 $139 $4 $3 $4 2.35% 2.37% $2 2.33% 2.32% 2.28% $2 11 12 13 10 10 22 21 20 21 21 27 25 27 28 27 79 79 80 81 82 1 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 1 2 Net Interest Margin Net Interest Income Loans Securities Securities Purchased under Repo and Borrowed Trading Assets & Other Cash and Equivalents 1. Net interest margin is presented on a taxable-equivalent basis using the federal statutory tax rates of 21% and 35% for 2018 and 2017, respectively 2. Total loans held for investment MUFG Americas Holdings Corporation Investor Presentation, 2Q18 17
Interest Rate Risk Management of Exposures Other Than Trading Net Interest Income (NII) Sensitivity ($mm) +200 bps 12-month horizon Gradual parallel yield curve shift over -100 bps MUFG Americas Holdings Corporation Investor Presentation, 2Q18 18
Asset Quality Trends Nonperforming Assets / Total Loans1 Net Charge-offs (Recoveries) / Average Loans1,3 2.0% 1.0% 1.51% 1.47% 1.29% 0.47% 0.48% 0.44% 0.5% 0.42% 0.39% 1.15% 1.07% 0.18% 1.0% 0.01% 0.05% 0.04% 0.63% 0.59% 0.58% 0.49% 0.0% 0.43% 0.03% 0.0% -0.5% 2Q2017 3Q2017 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 2 2 MUAH Reference Banks' Average MUAH Reference Banks' Average Criticized4 & Nonaccrual Loans / Total Loans Nonperforming Assets by Loan Type ($mm) $1,000 5.00% $900 Commercial & 4.00% $800 Industrial 3.00% $700 Commercial 2.38% 2.35% Mortgage 1.95% 1.94% 1.82% $600 2.00% Residential $500 25 Mortgage 1.00% 0.63% 23 22 0.59% 0.58% 0.43% 0.49% $400 128 23 112 104 Home Equity and 24 20 22 100 Other Consumer 0.00% $300 22 102 11 2Q17 3Q17 4Q17 1Q18 2Q18 0.33% 0.30% 0.30% 15 Other (OREO) $200 0.25% 321 308 319 0.22% 270 Criticized Percent of Total Loans Held For Investment $100 211 NPA / Total Assets $0 Nonaccrual Loans % Of Total Loans Held For Investment 2Q17 3Q17 4Q17 1Q18 2Q18 1. Source: SNL Financial and company reports 2. Reference Banks consist of 13 CCAR-filing public regional banks depicted on slide 3 plus the four largest U.S. money center banks. Reference Banks’ average based on reporting through August 3, 2018 (Source: SNL Financial) 3. Annualized ratio 4. Criticized loans held for investment reflect loans in the commercial portfolio segment that are monitored for credit quality based on regulatory ratings. Amounts exclude small business loans, which are monitored by business credit score and delinquency status MUFG Americas Holdings Corporation Investor Presentation, 2Q18 19
Commercial Real Estate Overview Largely secured, California-focused commercial real estate-purposed loans1 with strong credit performance Q2 2018 Property Type Breakdown Q2 2018 Geographic Distribution2 Unsecured: Other: 13% 8% Los Angeles: 21% New Jersey: 2% Other: 13% llinois: 3% Multi-Family: 36% Washington: 7% California Orange: 9% Industrial: New York: 7% 66% 12% Secured 92% San Diego: 10% Other: 16% Santa Clara: 5% Retail: 15% Alameda: 3% Office: 16% San Francisco: 2% Commercial Real Estate Statistics December 31, ($ MM) June 30, 2017' 2017 June 30, 2018 Commitments $ 21,522 $ 21,141 $ 21,550 Commercial and Industrial 3,829 3,540 3,770 Commercial Mortgage 14,436 14,529 14,999 Construction 3,256 3,071 2,780 Outstandings 17,957 17,714 17,927 Commercial and Industrial 1,775 1,645 1,598 Commercial Mortgage 14,262 14,294 14,767 Construction 1,921 1,775 1,562 Nonperforming Loans 24 21 12 1. Commercial real estate-purposed loans are comprised of commercial mortgage loans, construction loans and C&I loans to borrowers with real estate-exposed businesses. Does not include CMBS in the investment or trading portfolios 2. Excludes loans not secured by real estate; subsets of California reported by Metropolitan Statistical Area (MSA); may not add to 100% due to rounding. MUFG Americas Holdings Corporation Investor Presentation, 2Q18 20
Consumer Loans Performed Well Through the Crisis Residential Mortgage Performance Trends Home Equity and Other Consumer 3 (30 days Past Due + in Foreclosure) Total Delinquency (30 Days + Past Due) 3,4 40.0% 5.0% 4.0% 30.0% 3.0% 20.0% 2.0% 10.0% 1.0% 0.0% 0.0% 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 MUAH MBA-CA Conventional National Conventional MUAH National (SA) CA HE 30+ (NSA) MBA-CA Conventional ARM Residential Mortgage Portfolio as of June 30, 2018: • 35% interest-only (non-amortizing) • 65% weighted average LTV1 for the I/O portfolio • No subprime programs or option ARM loans • Low delinquency rate due to focus on prime loans, high FICO scores, and low LTVs • 82% of the consumer portfolio has a refreshed FICO score of 720 and above2 • 98% has an LTV less than or equal to 80% 1. At origination 2. Excluding loans serviced by third-party service providers and loans covered by FDIC loss share agreements, includes PCI loans 3. Data Source: Consumer Lending Monthly Summary and Key Statistics; Source: Residential – Mortgage Bankers Association, Home Equity-American Bankers Association 4. National (SA) is seasonally adjusted American Bankers Association data; Benchmark metrics are reported on a one quarter lag MUFG Americas Holdings Corporation Investor Presentation, 2Q18 21
MUAH's Capital, Asset Quality and Ratings Compare Favorably Nonperforming Assets / Total Loans1 Net Charge-offs / Average Loans1,2 1.8% 0.6% 1.5% 1.07% 0.39% 1.2% 0.4% 0.9% 0.49% 0.6% 0.2% 0.3% 0.04% 0.0% 0.0% 2Q18 2Q18 MUAH Reference Banks' Average MUAH Reference Banks' Average Common Equity Tier 1 (Basel 3) Ratio1 Reference Banks’ Credit Ratings1,3 Holding Company Ratings Bank Ratings Long-term ratings S&P Moody's Fitch S&P Moody's Fitch 20% U.S. Bancorp A+ A1 AA- AA- A1 AA- Wells Fargo & Company A- A2 A+ A+ Aa2 AA- 18% MUAH A- A2 A A A2 A 16.24% BB&T Corporation A- A2 A+ A A1 A+ 16% JPMorgan Chase & Co. A- A3 AA- A+ Aa3 AA PNC Financial Services A- A3 A+ A A2 A+ 14% M&T Bank A- A3 A A A3 A Comerica BBB+ A3 A A- A3 A 12% 10.91% Fifth Third Bancorp BBB+ Baa1 A- A- A3 A- Bank of America Corp. A- A3 A+ A+ Aa3 AA- 10% Citigroup Inc. BBB+ Baa1 A A+ A1 A+ KeyCorp BBB+ Baa1 A- A- A3 A- 8% SunTrust Banks BBB+ Baa1 A- A- Baa1 A- Citizens Financial Group BBB+ NR BBB+ A- Baa1 BBB+ 6% Huntington BBB+ Baa1 A- A- A3 A- 2Q18 Capital One Financial Corp. BBB Baa1 A- BBB+ Baa1 A- Regions Financial Corp. BBB+ Baa2 BBB+ A- Baa2 BBB+ Zions Bancorporation BBB (P)Baa3 BBB BBB+ Baa3 NR MUAH Reference Banks' Average 1. Reference Banks consist of the 13 CCAR-filing public regional banks depicted on slide 3 plus the four largest U.S. money center banks. Reference Banks’ average based on reporting through August 3, 2018 (Source: SNL Financial) 2. Annualized ratio 3. Ratings as of July 25, 2018 MUFG Americas Holdings Corporation Investor Presentation, 2Q18 22
Key MUFG Group Credit Ratings MUFG Securities MUFG Americas Mitsubishi UFJ MUFG Union Bank, N.A. Americas Inc. Holdings Corporation MUFG Bank, Ltd. Financial Group, Inc. Deposits Senior Debt Senior Debt Senior Debt Senior Debt Senior Debt Long-Term Aa2 A2 — A2 A1 A1 Moody’s Short-Term P-1 P-1 — — P-1 P-1 Long-Term — A* A* A-* A* A-* Standard & Poor’s Short-Term — A-1 A-1 A-2 A-1 — Long-Term A+ A A A A A Fitch Short-Term F1 F1 F1 F1 F1 F1 - means not rated * outlook is positive On April 16, 2018, S&P revised MUAH and MUB's outlook to positive from stable. • The change in outlook followed S&P's revision to MUFG Group's outlook to positive from stable • S&P views MUAH as a core banking subsidiary of MUFG Group therefore MUAH's and MUB's ratings are tied to the rating of the group • The change in MUFG's outlook is a result of S&P revising the long-term sovereign rating of Japan's outlook to positive from stable as a result of healthier economic prospects MUFG Americas Holdings Corporation Investor Presentation, 2Q18 23
2018 DFAST Results The Federal Reserve did not object to MUAH's 2018 Annual Capital Plan and proposed capital actions MUAH's DFAST stress test results demonstrate MUAH's capital cushion in excess of regulatory minimums The 2018 Severely Adverse scenario is characterized by a severe global recession that is accompanied by a global aversion to long-term fixed income assets. As a result, long-term rates do not fall and yield curves steepen. This leads to a broad-based and deep correction in asset prices, including the corporate bond and real estate markets. The unemployment rate also rises significantly. MUAH Actual and Projected Capital Ratios Using Dodd-Frank Capital Actions Actual Stressed Capital Ratios Regulatory December 31, 2017 Post-Stress March 31, 2020 Minimum1 Minimums2 Common Equity Tier 1 Capital Ratio 16.3% 15.0% 14.2% 4.5% Tier 1 Risk-based Capital Ratio 16.3% 15.0% 14.2% 6.0% Total Risk-based Capital Ratio 17.8% 16.8% 16.2% 8.0% Tier 1 Leverage Ratio 10.1% 8.8% 8.7% 4.0% MUAH Actual and Projected Risk-Weighted Assets (RWA) ($ in billions) Actual – December 31, 2017 Projected – March 31, 2020 Risk-Weighted Assets (Standardized) $96.3 $89.0 1 Represents minimum projected capital ratio from 1Q18 through 1Q20 2 Minimum post-stress regulatory ratios as defined in the Comprehensive Capital Analysis and Review 2018 Summary Instructions for LISCC and Large and Complex Firms, February 1, 2018 MUFG Americas Holdings Corporation Investor Presentation, 2Q18 24
Conclusion MUAH, MUB and MUSA carry solid credit ratings and benefit from ownership by MUFG, one of the world’s largest financial organizations Strong local management team with a majority of independent board members Solid balance sheet with high-quality capital base and strong liquidity Conservative risk culture resulting in a high quality loan portfolio with historically strong credit performance There are many risks facing the banking industry and MUAH; please refer to Item 1A., Risk Factors, in our 2017 Form 10-K and our June 30, 2018 10-Q Contacts Alan Gulick Marcy Morita Managing Director Director 425-423-7317 415-273-2452 alan.gulick@unionbank.com marcy.morita@unionbank.com MUFG Americas Holdings Corporation Investor Presentation, 2Q18 25