BUSINESS SEGMENT INFORMATION

The Corporation has strategically aligned its operations into three major business segments: the Business Bank, the Retail Bank and Wealth Management. These business segments are differentiated based on the type of customer and the related products and services provided. In addition to the three major business segments, the Finance Division is also reported as a segment. Business segment results are produced by the Corporation’s internal management accounting system. This system measures financial results based on the internal business unit structure of the Corporation. The performance of the business segments is not comparable with the Corporation's consolidated results and is not necessarily comparable with similar information for any other financial institution. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. The management accounting system assigns balance sheet and income statement items to each business segment using certain methodologies, which are regularly reviewed and refined. These methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines. For comparability purposes, amounts in all periods are based on business segments and methodologies in effect at September 30, 2015.

In the second quarter 2014, the Corporation enhanced the approach used to determine the standard reserve factors used in estimating the allowance for credit losses, which had the effect of capturing certain elements in the standard reserve component that had formerly been included in the qualitative assessment. The impact of the change was largely neutral to the total allowance for loan losses at June 30, 2014. However, because standard reserves are allocated to the segments at the loan level, while qualitative reserves are allocated at the portfolio level, the impact of the methodology change on the allowance of each segment reflected the characteristics of the individual loans within each segment's portfolio, causing segment reserves to increase or decrease accordingly. As a result, the current year provision for credit losses within each segment is not comparable to prior period amounts.

The following discussion provides information about the activities of each business segment. A discussion of the financial results and the factors impacting performance can be found in the section entitled "Business Segments" in the financial review.

The Business Bank meets the needs of middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services.

The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. In addition to a full range of financial services provided to small business customers, this business segment offers a variety of consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans.

Wealth Management offers products and services consisting of fiduciary services, private banking, retirement services, investment management and advisory services, investment banking and brokerage services. This business segment also offers the sale of annuity products, as well as life, disability and long-term care insurance products.

The Finance segment includes the Corporation’s securities portfolio and asset and liability management activities. This segment is responsible for managing the Corporation’s funding, liquidity and capital needs, performing interest sensitivity analysis and executing various strategies to manage the Corporation’s exposure to liquidity, interest rate risk and foreign exchange risk.

The Other category includes discontinued operations, the income and expense impact of equity and cash, tax benefits not assigned to specific business segments, charges of an unusual or infrequent nature that are not reflective of the normal operations of the business segments and miscellaneous other expenses of a corporate nature.

For further information on the methodologies which form the basis for these results refer to Note 22 to the consolidated financial statements in the Corporation's 2014 Annual Report.

Business segment financial results are as follows:



(dollar amounts in millions)	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Three Months Ended September 30, 2015	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	380		$	158		$	45		$	(162	)	$	2		$	423
Provision for credit losses	30			2			(3		)	—			(3		)	26
Noninterest income	145			49			59			15			(4		)	264
Noninterest expenses	202			185			74			2			(2		)	461
Provision (benefit) for income taxes (FTE)	99			7			12			(56		)	2			64
Net income (loss)	$	194		$	13		$	21		$	(93	)	$	1		$	136
Net loan charge-offs (recoveries)	$	23		$	1		$	(1	)	$	—		$	—		$	23

Selected average balances:
Assets	$	39,210		$	6,518		$	5,228		$	12,177		$	8,200		$	71,333
Loans	38,113			5,835			5,024			—			—			48,972
Deposits	31,397			23,079			4,188			212			264			59,140

Statistical data:
Return on average assets (a)	1.98		%	0.23		%	1.62		%	N/M			N/M			0.76		%
Efficiency ratio (b)	38.41			89.33			71.11			N/M			N/M			67.08



(dollar amounts in millions)	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Three Months Ended September 30, 2014	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	376		$	153		$	45		$	(166	)	$	7		$	415
Provision for credit losses	(4		)	—			7			—			2			5
Noninterest income	97			42			59			15			2			215
Noninterest expenses	152			185			78			(29		)	11			397
Provision (benefit) for income taxes (FTE)	114			3			7			(49		)	(1		)	74
Net income (loss)	$	211		$	7		$	12		$	(73	)	$	(3	)	$	154
Net loan charge-offs (recoveries)	$	(2	)	$	—		$	5		$	—		$	—		$	3

Selected average balances:
Assets	$	37,751		$	6,273		$	4,998		$	11,023		$	6,353		$	66,398
Loans	36,746			5,605			4,808			—			—			47,159
Deposits	28,815			22,042			3,924			128			254			55,163

Statistical data:
Return on average assets (a)	2.24		%	0.12		%	0.98		%	N/M			N/M			0.93		%
Efficiency ratio b)	32.12			94.64			75.00			N/M			N/M			62.87


(a)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

(b) Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE – Fully Taxable Equivalent

N/M – not meaningful



(dollar amounts in millions)	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Nine Months Ended September 30, 2015	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	1,123		$	466		$	133		$	(470	)	$	7		$	1,259
Provision for credit losses	115			(14		)	(12		)	—			(2		)	87
Noninterest income	427			137			177			42			(3		)	780
Noninterest expenses	578			542			225			7			4			1,356
Provision (benefit) for income taxes (FTE)	292			26			34			(162		)	1			191
Net income (loss)	$	565		$	49		$	63		$	(273	)	$	1		$	405
Net loan charge-offs (recoveries)	$	54		$	3		$	(8	)	$	—		$	—		$	49

Selected average balances:
Assets	$	39,002		$	6,449		$	5,137		$	12,013		$	7,087		$	69,688
Loans	37,950			5,767			4,938			—			—			48,655
Deposits	30,594			22,746			4,082			159			270			57,851

Statistical data:
Return on average assets (a)	1.93		%	0.28		%	1.64		%	N/M			N/M			0.78		%
Efficiency ratio (b)	37.27			89.91			71.97			N/M			N/M			66.41



(dollar amounts in millions)	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Nine Months Ended September 30, 2014	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	1,120		$	454		$	135		$	(485	)	$	19		$	1,243
Provision for credit losses	48			(5		)	(11		)	—			(7		)	25
Noninterest income	288			124			181			44			6			643
Noninterest expenses	440			533			231			(24		)	27			1,207
Provision (benefit) for income taxes (FTE)	314			17			34			(160		)	5			210
Net income (loss)	$	606		$	33		$	62		$	(257	)	$	—		$	444
Net loan charge-offs	$	18		$	6		$	—		$	—		$	—		$	24

Selected average balances:
Assets	$	36,936		$	6,241		$	4,972		$	11,069		$	6,117		$	65,335
Loans	35,964			5,572			4,791			—			—			46,327
Deposits	27,727			21,854			3,708			246			246			53,781

Statistical data:
Return on average assets (a)	2.19		%	0.20		%	1.65		%	N/M			N/M			0.91		%
Efficiency ratio (b)	31.28			92.03			73.40			N/M			N/M			63.99


(a)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

(b) Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE – Fully Taxable Equivalent

N/M – not meaningful

The Corporation operates in three primary markets - Texas, California, and Michigan, as well as in Arizona and Florida, with select businesses operating in several other states, and in Canada and Mexico. The Corporation produces market segment results for the Corporation’s three primary geographic markets as well as Other Markets. Other Markets includes Florida, Arizona, the International Finance division and businesses with a national perspective. The Finance & Other category includes the Finance segment and the Other category as previously described. Market segment results are provided as supplemental information to the business segment results and may not meet all operating segment criteria as set forth in GAAP. For comparability purposes, amounts in all periods are based on market segments and methodologies in effect at September 30, 2015.

A discussion of the financial results and the factors impacting performance can be found in the section entitled "Market Segments" in the financial review.

Market segment financial results are as follows:



(dollar amounts in millions)	Michigan			California			Texas			Other Markets			Finance & Other			Total
Three Months Ended September 30, 2015	Michigan			California			Texas			Other Markets			Finance & Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	180		$	187		$	129		$	87		$	(160	)	$	423
Provision for credit losses	6			24			10			(11		)	(3		)	26
Noninterest income	85			38			34			96			11			264
Noninterest expenses	152			102			97			110			—			461
Provision (benefit) for income taxes (FTE)	36			37			20			25			(54		)	64
Net income (loss)	$	71		$	62		$	36		$	59		$	(92	)	$	136
Net loan charge-offs	$	9		$	10		$	4		$	—		$	—		$	23

Selected average balances:
Assets	$	13,856		$	17,060		$	11,578		$	8,462		$	20,377		$	71,333
Loans	13,223			16,789			10,997			7,963			—			48,972
Deposits	21,946			18,372			10,753			7,593			476			59,140

Statistical data:
Return on average assets (a)	1.23		%	1.27		%	1.16		%	2.82		%	N/M			0.76		%
Efficiency ratio (b)	57.49			45.28			59.54			59.86			N/M			67.08



(dollar amounts in millions)	Michigan			California			Texas			Other Markets			Finance & Other			Total
Three Months Ended September 30, 2014	Michigan			California			Texas			Other Markets			Finance & Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	179		$	182		$	130		$	83		$	(159	)	$	415
Provision for credit losses	(8		)	14			3			(6		)	2			5
Noninterest income	83			37			36			42			17			215
Noninterest expenses	166			102			96			51			(18		)	397
Provision (benefit) for income taxes (FTE)	38			40			25			21			(50		)	74
Net income (loss)	$	66		$	63		$	42		$	59		$	(76	)	$	154
Net loan charge-offs (recoveries)	$	3		$	6		$	—		$	(6	)	$	—		$	3

Selected average balances:
Assets	$	13,724		$	15,768		$	11,835		$	7,695		$	17,376		$	66,398
Loans	13,248			15,509			11,147			7,255			—			47,159
Deposits	21,214			16,350			10,633			6,584			382			55,163

Statistical data:
Return on average assets (a)	1.19		%	1.47		%	1.40		%	3.07		%	N/M			0.93		%
Efficiency ratio (b)	62.91			46.49			57.91			41.46			N/M			62.87


(a)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

(b) Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE – Fully Taxable Equivalent

N/M – not meaningful



(dollar amounts in millions)	Michigan			California			Texas			Other Markets			Finance & Other			Total
Nine Months Ended September 30, 2015	Michigan			California			Texas			Other Markets			Finance & Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	537		$	543		$	390		$	252		$	(463	)	$	1,259
Provision for credit losses	(15		)	24			74			6			(2		)	87
Noninterest income	251			112			101			277			39			780
Noninterest expenses	436			300			287			322			11			1,356
Provision (benefit) for income taxes (FTE)	124			124			48			56			(161		)	191
Net income (loss)	$	243		$	207		$	82		$	145		$	(272	)	$	405
Net loan charge-offs	$	10		$	16		$	12		$	11		$	—		$	49

Selected average balances:
Assets	$	13,815		$	16,741		$	11,881		$	8,151		$	19,100		$	69,688
Loans	13,245			16,473			11,260			7,677			—			48,655
Deposits	21,788			17,500			10,907			7,227			429			57,851

Statistical data:
Return on average assets (a)	1.42		%	1.48		%	0.88		%	2.38		%	N/M			0.78		%
Efficiency ratio (b)	55.27			45.88			58.38			60.61			N/M			66.41



(dollar amounts in millions)	Michigan			California			Texas			Other Markets			Finance & Other			Total
Nine Months Ended September 30, 2014	Michigan			California			Texas			Other Markets			Finance & Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	544		$	531		$	403		$	231		$	(466	)	$	1,243
Provision for credit losses	(13		)	39			32			(26		)	(7		)	25
Noninterest income	256			110			104			123			50			643
Noninterest expenses	486			298			275			145			3			1,207
Provision (benefit) for income taxes (FTE)	118			115			72			60			(155		)	210
Net income (loss)	$	209		$	189		$	128		$	175		$	(257	)	$	444
Net loan charge-offs	$	13		$	21		$	7		$	(17	)	$	—		$	24

Selected average balances:
Assets	$	13,797		$	15,543		$	11,525		$	7,284		$	17,186		$	65,335
Loans	13,400			15,259			10,829			6,839			—			46,327
Deposits	20,853			15,506			10,743			6,187			492			53,781

Statistical data:
Return on average assets (a)	1.27		%	1.53		%	1.42		%	3.20		%	N/M			0.91		%
Efficiency ratio (b)	60.67			46.57			54.13			41.16			N/M			63.99


(a)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

(b) Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE – Fully Taxable Equivalent

N/M – not meaningful