Business Segments

The Company has four reportable segments: Regional Bank, Global Corporate & Investment Banking - U.S., 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. During the second quarter of 2020, certain customer relationships and associated deposits were transferred from Transaction Banking to Global Corporate & Investment Banking - U.S. Prior period results have been revised to conform to the current period presentation.

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 341 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 the Bank and 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 "Market Risk Management" in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2019 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 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, 2020:
(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	$	500		$	95		$	46	$	96	$	50	$	787
Noninterest income	97			117			9		187		399		809
Total revenue	597			212			55		283		449		1,596
Noninterest expense	502			131			44		150		351		1,178
(Reversal of) provision for credit losses	317			41			—		—		3		361
Income (loss) before income taxes and including noncontrolling interests	(222		)	40			11		133		95		57
Income tax expense (benefit) ⁽¹⁾	(65		)	(5		)	—		34		75		39
Net income (loss) including noncontrolling interests	(157		)	45			11		99		20		18
Deduct: net (income) loss from noncontrolling interests	—			—			—		—		4		4
Net income (loss) attributable to MUAH	$	(157	)	$	45		$	11	$	99	$	24	$	22

Total assets, end of period	$	71,941		$	21,735		$	251	$	27,881	$	45,542	$	167,350


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




As of and for the Three Months Ended June 30, 2019:
(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	$	573	$	133	$	52		$	37	$	(18	)	$	777
Noninterest income	118		83		9			85		354			649
Total revenue	691		216		61			122		336			1,426
Noninterest expense	538		125		41			113		337			1,154
(Reversal of) provision for credit losses	32		22		(1		)	—		3			56
Income (loss) before income taxes and including noncontrolling interests	121		69		21			9		(4		)	216
Income tax expense (benefit) ⁽¹⁾	20		—		6			2		(8		)	20
Net income (loss) including noncontrolling interests	101		69		15			7		4			196
Deduct: net (income) loss from noncontrolling interests	—		—		—			—		3			3
Net income (loss) attributable to MUAH	$	101	$	69	$	15		$	7	$	7		$	199

Total assets, end of period	$	75,858	$	20,577	$	648		$	35,131	$	39,796		$	172,010


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




As of and for the Six Months Ended June 30, 2020:
(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	$	1,045		$	220		$	92	$	162	$	42		$	1,561
Noninterest income	226			207			18		238		732			1,421
Total revenue	1,271			427			110		400		774			2,982
Noninterest expense	1,026			263			84		266		740			2,379
(Reversal of) provision for loan losses	684			151			—		—		(4		)	831
Income (loss) before income taxes and including noncontrolling interests	(439		)	13			26		134		38			(228		)
Income tax expense (benefit) ⁽¹⁾	(104		)	(27		)	3		34		158			64
Net income (loss) including noncontrolling interests	(335		)	40			23		100		(120		)	(292		)
Deduct: net (income) loss from noncontrolling interests	—			—			—		—		8			8
Net income (loss) attributable to MUAH	$	(335	)	$	40		$	23	$	100	$	(112	)	$	(284	)

Total assets, end of period	$	71,941		$	21,735		$	251	$	27,881	$	45,542		$	167,350


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




As of and for the Six Months Ended June 30, 2019:
(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	$	1,145	$	249	$	104		$	72	$	(10	)	$	1,560
Noninterest income	249		176		20			178		658			1,281
Total revenue	1,394		425		124			250		648			2,841
Noninterest expense	1,078		246		103			236		661			2,324
(Reversal of) provision for loan losses	80		15		(3		)	—		2			94
Income (loss) before income taxes and including noncontrolling interests	236		164		24			14		(15		)	423
Income tax expense (benefit) ⁽¹⁾	46		16		6			2		(22		)	48
Net income (loss) including noncontrolling interests	190		148		18			12		7			375
Deduct: net (income) loss from noncontrolling interests	—		—		—			—		8			8
Net income (loss) attributable to MUAH	$	190	$	148	$	18		$	12	$	15		$	383

Total assets, end of period	$	75,858	$	20,577	$	648		$	35,131	$	39,796		$	172,010


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