Business Segments

The Company has four reportable segments: Regional Bank, Global Corporate & Investment Banking - U.S. (previously 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.

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, 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. 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. 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 individual and business customers in California, Washington, and Oregon through five major business lines.

Consumer Banking serves consumers and small businesses through 342 full-service branches, digital channels, call centers, ATMs and alliances with other financial institutions. Products and services include checking and other 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 $2 billion. By working with the Company's other segments, Commercial Banking clients also have access to global treasury management and capital markets solutions and foreign exchange, interest rate, and commodity risk management products.

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 referenced as LIHC investments. By working with the Company's other segments, Real Estate Industries also offers its clients global treasury management and capital markets solutions and foreign exchange, interest rate, and commodity risk management products.

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

PurePoint Financial is a national online direct bank deposit platform offering consumer savings accounts and CD products with services provided through the online platform and a call center.

Global Corporate & Investment Banking - U.S.

Global Corporate & Investment Banking - U.S. 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). Global Corporate & Investment Banking - U.S. provides customers general corporate credit and structured credit services, including project finance, leasing and equipment finance, funds finance and asset-based finance. By working with the Company's other segments, Global Corporate & Investment Banking - U.S. 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, domestic and foreign debt and equity securities transactions, private placements, collateralized financings, and securities borrowing and lending transactions.

Other

"Other" includes the MUFG Fund Services segment, Markets segment, Japanese 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 Japanese 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. 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 information regarding these risk management activities, see Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in this Form 10-K.

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 when we became a privately held company in 2008; the goodwill impairment recorded in the third quarter of 2019 (see Note 5 to these Consolidated Financial Statements); 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 Twelve Months Ended December 31, 2019:



(Dollars in millions)	Regional Bank		Global Corporate & Investment Banking - U.S.		Transaction Banking			MUSA		Other ⁽¹⁾			MUFG Americas Holdings Corporation
Results of operations
Net interest income (expense)	$	2,294	$	424	$	259		$	167	$	(51	)	$	3,093
Noninterest income	520		353		56			384		1,392			2,705
Total revenue	2,814		777		315			551		1,341			5,798
Noninterest expense	2,130		458		244			476		2,907			6,215
(Reversal of) provision for credit losses	209		51		(2		)	—		(6		)	252
Income (loss) before income taxes and including noncontrolling interests	475		268		73			75		(1,560		)	(669		)
Income tax expense (benefit) ⁽²⁾	93		12		25			18		(66		)	82
Net income (loss) including noncontrolling interest	382		256		48			57		(1,494		)	(751		)
Deduct: net loss from noncontrolling interests	—		—		—			—		17			17
Net income (loss) attributable to MUAH	$	382	$	256	$	48		$	57	$	(1,477	)	$	(734	)

Total assets, end of period	$	74,980	$	20,822	$	1,015		$	34,445	$	39,548		$	170,810


(1)	Other includes goodwill impairment. See Note 5 to these Consolidated Financial Statements.


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

As of and for the Twelve Months Ended December 31, 2018:



(Dollars in millions)	Regional Bank		Global Corporate & Investment Banking - U.S.		Transaction Banking			MUSA		Other			MUFG Americas Holdings Corporation
Results of operations
Net interest income (expense)	$	2,195	$	415	$	264		$	200	$	233		$	3,307
Noninterest income	451		373		59			300		994			2,177
Total revenue	2,646		788		323			500		1,227			5,484
Noninterest expense	2,058		418		255			443		1,103			4,277
(Reversal of) provision for credit losses	65		42		(3		)	—		2			106
Income (loss) before income taxes and including noncontrolling interests	523		328		71			57		122			1,101
Income tax expense (benefit) ⁽¹⁾	105		122		19			17		(211		)	52
Net income (loss) including noncontrolling interest	418		206		52			40		333			1,049
Deduct: net loss from noncontrolling interests	—		—		—			—		24			24
Net income (loss) attributable to MUAH	$	418	$	206	$	52		$	40	$	357		$	1,073

Total assets, end of period	$	73,554	$	20,933	$	941		$	33,844	$	38,828		$	168,100


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

As of and for the Twelve Months Ended December 31, 2017:



(Dollars in millions)	Regional Bank		Global Corporate & Investment Banking - U.S.			Transaction Banking		MUSA		Other			MUFG Americas Holdings Corporation
Results of operations
Net interest income (expense)	$	2,051	$	417		$	247	$	234	$	255		$	3,204
Noninterest income	442		370			64		351		783			2,010
Total revenue	2,493		787			311		585		1,038			5,214
Noninterest expense	1,961		403			229		445		946			3,984
(Reversal of) provision for credit losses	22		(104		)	1		—		(22		)	(103		)
Income (loss) before income taxes and including noncontrolling interests	510		488			81		140		114			1,333
Income tax expense (benefit) ⁽¹⁾	178		(197		)	33		59		226			299
Net income (loss) including noncontrolling interest	332		685			48		81		(112		)	1,034
Deduct: net loss from noncontrolling interests	—		—			—		—		43			43
Net income (loss) attributable to MUAH	$	332	$	685		$	48	$	81	$	(69	)	$	1,077

Total assets, end of period	$	67,804	$	20,461		$	1,063	$	32,062	$	33,160		$	154,550


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