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 seven major business lines.

Consumer Banking serves consumers through 341 full-service branches, digital channels, call centers, ATMs and alliances with other financial institutions. It offers traditional banking products and services, including checking and other deposit accounts, residential mortgage loans, consumer loans, home equity lines of credit, credit cards, and bill and loan payment services.

Small Business serves small businesses with annual revenues up to $10 million through 341 full-service branches, digital channels, and call centers. Products and services include business and corporate deposit accounts, small business loans, branch direct loans, merchant services, and access to Wealth Markets and Consumer Banking.

Business Banking provides business and asset-based loans to clients across a wide range of industries with annual revenues from $10 million to $50 million. Products and services include checking and other deposit accounts, small business administration loans, and owner-occupied real estate loans. By working with the Company’s other segments, Business Banking clients also have access to global treasury management and capital markets solutions, trade finance, and foreign exchange, interest rate, and commodity risk management products, and Wealth Markets.

Commercial Banking provides commercial and asset-based loans to clients across a wide range of industries with annual revenues from $50 million to $2 billion. By working with the Company's other segments in a strategic and coordinated approach, Commercial Banking clients can engage in a fully integrated platform of products and services, including global treasury management, investment banking, corporate capital markets and advisory services, foreign exchange, interest rate, and commodity risk management products, and Wealth Markets.

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 high-net worth and affluent 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 goodwill impairments recorded in the third quarters of 2020 and 2019; the elimination of the fully taxable-equivalent basis amount; and the difference between the marginal tax rate and the consolidated effective tax rate.




As of and for the Three Months Ended September 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	$	528	$	105		$	50	$	74	$	2		$	759
Noninterest income	110		153			10		110		384			767
Total revenue	638		258			60		184		386			1,526
Noninterest expense	497		126			46		131		723			1,523
Provision for credit losses	52		(11		)	—		—		—			41
Income (loss) before income taxes and including noncontrolling interests	89		143			14		53		(337		)	(38		)
Income tax expense (benefit) ⁽¹⁾	21		25			4		13		(218		)	(155		)
Net income (loss) including noncontrolling interests	68		118			10		40		(119		)	117
Deduct: net (income) loss from noncontrolling interests	—		—			—		—		4			4
Net income (loss) attributable to MUAH	$	68	$	118		$	10	$	40	$	(115	)	$	121

Total assets, end of period	$	69,317	$	22,936		$	250	$	28,407	$	43,119		$	164,029


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




As of and for the Three Months Ended September 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	$	582	$	116		$	45	$	39	$	(28	)	$	754
Noninterest income	127		92			10		111		377			717
Total revenue	709		208			55		150		349			1,471
Noninterest expense	532		129			43		119		1,947			2,770
Provision for credit losses	72		24			—		—		(1		)	95
Income (loss) before income taxes and including noncontrolling interests	105		55			12		31		(1,597		)	(1,394		)
Income tax expense (benefit) ⁽¹⁾	19		(4		)	9		7		(49		)	(18		)
Net income (loss) including noncontrolling interests	86		59			3		24		(1,548		)	(1,376		)
Deduct: net (income) loss from noncontrolling interests	—		—			—		—		4			4
Net income (loss) attributable to MUAH	$	86	$	59		$	3	$	24	$	(1,544	)	$	(1,372	)

Total assets, end of period	$	75,446	$	20,964		$	653	$	35,199	$	40,971		$	173,233


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




As of and for the Nine Months Ended September 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	$	1,573		$	325		$	142	$	236	$	44		$	2,320
Noninterest income	336			360			28		348		1,116			2,188
Total revenue	1,909			685			170		584		1,160			4,508
Noninterest expense	1,523			389			130		397		1,463			3,902
Provision for loan losses	736			140			—		—		(4		)	872
Income (loss) before income taxes and including noncontrolling interests	(350		)	156			40		187		(299		)	(266		)
Income tax expense (benefit) ⁽¹⁾	(83		)	(2		)	7		47		(60		)	(91		)
Net income (loss) including noncontrolling interests	(267		)	158			33		140		(239		)	(175		)
Deduct: net (income) loss from noncontrolling interests	—			—			—		—		12			12
Net income (loss) attributable to MUAH	$	(267	)	$	158		$	33	$	140	$	(227	)	$	(163	)

Total assets, end of period	$	69,317		$	22,936		$	250	$	28,407	$	43,119		$	164,029


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




As of and for the Nine Months Ended September 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	$	1,727	$	365	$	149		$	111	$	(38	)	$	2,314
Noninterest income	375		268		30			289		1,036			1,998
Total revenue	2,102		633		179			400		998			4,312
Noninterest expense	1,608		375		146			355		2,610			5,094
Provision for loan losses	155		39		(3		)	—		(2		)	189
Income (loss) before income taxes and including noncontrolling interests	339		219		36			45		(1,610		)	(971		)
Income tax expense (benefit) ⁽¹⁾	66		12		15			9		(72		)	30
Net income (loss) including noncontrolling interests	273		207		21			36		(1,538		)	(1,001		)
Deduct: net (income) loss from noncontrolling interests	—		—		—			—		12			12
Net income (loss) attributable to MUAH	$	273	$	207	$	21		$	36	$	(1,526	)	$	(989	)

Total assets, end of period	$	75,446	$	20,964	$	653		$	35,199	$	40,971		$	173,233


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