Business Segments

The Company has five reportable segments: Regional Bank, U.S. Wholesale Banking, Transaction Banking, Investment Banking & Markets and MUFG Securities Americas Inc. Below is a detailed description of these reportable segments.

Regional Bank

The Regional Bank provides banking products and services to individual and business customers in California, Washington and Oregon through four major business lines.

Consumer Banking serves consumers and small businesses through 352 full-service branches, digital channels, call centers, ATMs and alliances with other financial institutions. Products and services include checking and 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 $500 million. Through partnerships with other areas of the bank, Commercial Banking clients also have access to non-credit products and services including global treasury management, capital markets solutions, foreign exchange and interest rate risk and commodity risk management products and services.

Real Estate Industries provides financing solutions for existing properties and construction projects to professional real estate developers. Property types supported include apartment, office, retail, industrial, single-family residential and hotels 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. Through partnerships with other areas of the bank, Real Estate Industries clients also have access to non-credit products and services including global treasury management, capital markets solutions, foreign exchange and interest rate risk and commodity risk management products and services.

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

U.S. Wholesale Banking

U.S. Wholesale Banking provides commercial lending products, including commercial loans, lines of credit and project financing, to corporate customers with revenue greater than $500 million. 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). By working with the Company's other segments, U.S. Wholesale Banking 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.

Investment Banking & Markets

Investment Banking & Markets, which includes Global Capital Markets of the Americas, works with the Company's other segments to provide customers structured credit services, including project finance, leasing and equipment finance, commercial finance, funds finance and securitizations. Investment Banking & Markets also provides capital markets solutions, including syndicated loans, equity and debt underwriting, tax equity and merchant banking investments; risk management solutions, including foreign exchange, interest rate and energy risk management solutions; and facilitates merchant and investment banking-related transactions.

MUFG Securities Americas Inc.

MUSA is MUAH's broker-dealer subsidiary which engages in capital markets origination transactions, private placements, collateralized financings, securities borrowing and lending transactions, and domestic and foreign debt and equity securities transactions.

Other

The Company generally applies a "market view" perspective in measuring the business segments. The market view is a measurement of customer markets aggregated to show all revenues generated and expenses incurred from all products and services sold to those customers regardless of where product areas organizationally report. Therefore, revenues and expenses are included in both the business segment that provides the service and the business segment that manages the customer relationship. The duplicative results from this internal management accounting view are eliminated in "Other." Certain of the transferred IHC entities are not measured using a "market view" perspective.

"Other" includes the Asian Corporate Banking segment and Corporate Treasury. The Asian 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 and other Asian countries. 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.

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 BTMU's U.S. branch banking operations; the unallocated allowance; goodwill, intangible assets, and the related amortization/accretion associated with the Company's privatization transaction; the elimination of the fully taxable-equivalent basis amount; the difference between the marginal tax rate and the consolidated effective tax rate; and the FDIC covered assets.

The information, set forth in the tables that follow, is prepared using various management accounting methodologies to measure the performance of the individual 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 unique 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 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 between Corporate Treasury and the operating segments. A segment receives a funding credit from Corporate Treasury for its liabilities. 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. Beginning with the second quarter of 2016, the Company revised its methodology for allocating certain indirect costs to the segments. Beginning with the third quarter of 2016, the Company revised its funds transfer pricing methodology related to certain deposits. Prior period results have been updated to reflect these changes in methodology. Certain of the transferred IHC entities are not measured using management accounting methodologies.

As of and for the Year Ended December 31, 2016:



(Dollars in millions)	Regional Bank		U.S. Wholesale Banking		Transaction Banking		Investment Banking & Markets		MUSA		Other			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	1,923	$	417	$	486	$	213	$	164	$	(150	)	$	3,053
Noninterest income (expense)	469		285		167		349		302		653			2,225
Total revenue	2,392		702		653		562		466		503			5,278
Noninterest expense	1,750		199		461		223		362		787			3,782
(Reversal of) provision for credit losses	30		50		—		53		—		22			155
Income (loss) before income taxes and including noncontrolling interests	612		453		192		286		104		(306		)	1,341
Income tax expense (benefit)	172		178		75		22		42		(70		)	419
Net income (loss) including noncontrolling interest	440		275		117		264		62		(236		)	922
Deduct: net loss from noncontrolling interests	—		—		—		1		—		67			68
Net income (loss) attributable to MUAH	$	440	$	275	$	117	$	265	$	62	$	(169	)	$	990

Total assets, end of period	$	63,291	$	12,164	$	2,036	$	13,851	$	29,252	$	27,550		$	148,144

As of and for the Year Ended December 31, 2015:



(Dollars in millions)	Regional Bank		U.S. Wholesale Banking		Transaction Banking		Investment Banking & Markets			MUSA		Other			MUFG Americas Holdings Corporation
Results of operations—Market View
Net interest income (expense)	$	1,896	$	418	$	441	$	249		$	72	$	(184	)	$	2,892
Noninterest income (expense)	451		135		169		294			300		501			1,850
Total revenue	2,347		553		610		543			372		317			4,742
Noninterest expense	1,839		211		437		243			315		702			3,747
(Reversal of) provision for credit losses	13		206		1		(22		)	—		29			227
Income (loss) before income taxes and including noncontrolling interests	495		136		172		322			57		(414		)	768
Income tax expense (benefit)	123		54		67		59			22		(156		)	169
Net income (loss) including noncontrolling interest	372		82		105		263			35		(258		)	599
Deduct: net loss from noncontrolling interests	—		—		—		—			—		45			45
Net income (loss) attributable to MUAH	$	372	$	82	$	105	$	263		$	35	$	(213	)	$	644

Total assets, end of period	$	60,767	$	15,064	$	2,121	$	14,445		$	34,167	$	26,506		$	153,070

As of and for the Year Ended December 31, 2014:



(Dollars in millions)	Regional Bank		U.S. Wholesale Banking			Transaction Banking			Investment Banking & Markets		MUSA		Other			MUFG Americas Holdings Corporation
Results of operations—Market View
Net interest income (expense)	$	2,057	$	368		$	423		$	250	$	55	$	(248	)	$	2,905
Noninterest income (expense)	431		186			158			461		255		(21		)	1,470
Total revenue	2,488		554			581			711		310		(269		)	4,375
Noninterest expense	1,714		180			381			390		266		325			3,256
(Reversal of) provision for credit losses	—		(18		)	(3		)	43		—		(14		)	8
Income (loss) before income taxes and including noncontrolling interests	774		392			203			278		44		(580		)	1,111
Income tax expense (benefit)	242		154			79			66		17		(210		)	348
Net income (loss) including noncontrolling interest	532		238			124			212		27		(370		)	763
Deduct: net loss from noncontrolling interests	—		—			—			—		—		19			19
Net income (loss) attributable to MUAH	$	532	$	238		$	124		$	212	$	27	$	(351	)	$	782

Total assets, end of period	$	62,187	$	13,278		$	1,778		$	13,607	$	32,313	$	25,734		$	148,897