MUFG Americas Holdings Corporation (Formerly UnionBanCal Corporation) Reports Second Quarter Net Income of $249 Million

By: MUFG Americas Holdings Corporation via Business Wire News Releases

July 29, 2014 at 08:30 AM EDT

MUFG Americas Holdings Corporation (the Company), parent company of San Francisco-based MUFG Union Bank, N.A. (the Bank), which was formerly named Union Bank, N.A., today reported second quarter 2014 results. Net income for the quarter was $249 million, up from $175 million for the prior quarter, and up from $142 million for the year-ago quarter.

Second Quarter Highlights:

Solid loan growth of $2.4 billion, or 3 percent, to $72.4 billion at June 30, 2014 compared with March 31, 2014.
Continued discipline in underwriting standards produced another solid quarter of strong credit quality with low nonperforming assets and charge-offs.
Effective July 1, 2014 UnionBanCal Corporation was renamed MUFG Americas Holdings Corporation (MUAH) and Union Bank, N.A. changed its legal name to MUFG Union Bank, N.A. (MUB). In addition, the U.S. branch banking management and operations of the Bank of Tokyo-Mitsubishi UFJ Ltd. were integrated within MUB. The changes position the Bank to better leverage the strength and global reach of its parent company, Mitsubishi UFJ Financial Group, to provide a broad array of products and services to address our customers’ financial needs.
Effective July 1, 2014, Katsumi Hatao became Chief Executive Officer for the Americas and President and CEO of both MUFG Americas Holdings Corporation and MUFG Union Bank, N.A. Former CEO for the Americas, Masashi Oka, has been appointed Executive Chairman for MUFG Americas Holdings Corporation and MUFG Union Bank, N.A.

Summary of Second Quarter Results

Second Quarter Total Revenue

For the second quarter 2014, total revenue (net interest income plus noninterest income) was $965 million, up $101 million compared with the first quarter 2014.

Both net interest income and noninterest income increased 12 percent. Net interest income for the second quarter 2014 was $763 million, up $80 million, compared with the first quarter 2014. The increase in net interest income was largely due to higher interest income on our purchased credit-impaired (PCI) loan portfolio, mostly due to early payoffs of certain loans, as well as overall growth in loan volume, excluding PCI loans. Average total loans held for investment, excluding PCI loans, increased $2.0 billion, or 3 percent, compared with the first quarter 2014 largely due to growth in residential mortgages and commercial and industrial loans. The net interest margin was 3.15 percent, up 28 basis points from the prior quarter substantially due to higher yields in the PCI loan portfolio as described above. Excluding the impact of the PCI loan portfolio, the net interest margin would have been slightly higher primarily due to marginally higher yields on loans and lower costs of borrowed funds. Average total deposits increased $788 million, or 1 percent, during the quarter compared with the first quarter 2014, substantially due to growth in noninterest-bearing deposits.

For the second quarter 2014, noninterest income was $202 million, up $21 million, or 12 percent, compared with the first quarter 2014, largely due to higher net gains on the sale of certain investments.

Compared to the second quarter 2013, total revenue increased $92 million, with net interest income up 14 percent and noninterest income up less than 1 percent. Net interest income increased $91 million compared with the year-ago quarter substantially due to loan growth, as well as higher interest income on our PCI loan portfolio, which drove a 12 basis point increase in the net interest margin. Average total loans held for investment, excluding PCI loans, increased $7.9 billion, or 13 percent, compared with the second quarter 2013 due to organic loan growth and our PB Capital Corporation acquisition, which closed late in the second quarter of 2013. Average total deposits increased $5.9 billion compared with the second quarter of 2013, substantially due to organic growth, with average interest bearing deposits up $3.3 billion, or 7 percent, and average noninterest bearing deposits up $2.5 billion, or 10 percent.

Second Quarter Noninterest Expense

Noninterest expense for the second quarter 2014 was $649 million, down $11 million compared with the first quarter 2014. This decrease was substantially due to lower current quarter pension expense, lower employee benefit costs and a reversal of provision for losses on unfunded credit commitments (compared with a provision for losses in the prior quarter). Compared with the second quarter 2013, noninterest expense was down $53 million, or 8 percent. This decline was largely driven by lower current quarter merger and business integration costs and pension expense.

Balance Sheet

At June 30, 2014, the Company had total assets of $108.8 billion, up $1.6 billion compared with March 31, 2014, primarily reflecting loan growth. Excluding PCI loans, total loans increased 4 percent compared with the first quarter, reflecting growth in core customer segments within the commercial and industrial loan portfolio and continuing growth in residential mortgage lending in our geographic footprint, with credit quality attributes consistent with the existing portfolio.

At June 30, 2014, total deposits were $81.6 billion, up $387 million compared with March 31, 2014. Core deposits at June 30, 2014 were $72.1 billion compared with $70.7 billion at March 31, 2014.

Credit Quality

Credit quality remained strong in the second quarter 2014 reflected by continued low levels of nonperforming assets and net charge-offs.

Excluding PCI loans and FDIC covered OREO, nonperforming assets at the end of the quarter were $511 million, or 0.47 percent of total assets; compared with $467 million, or 0.44 percent of total assets, at March 31, 2014; and $521 million, or 0.52 percent of total assets at June 30, 2013.

Excluding PCI loans and FDIC covered OREO, net charge-offs were $7 million for the second quarter of 2014 compared with net recoveries of $6 million for the first quarter 2014 and net charge-offs of $10 million for the second quarter 2013.

In the second quarter of 2014, the overall provision for credit losses was $6 million compared with a provision of less than $1 million for the first quarter of 2014 and a provision reversal of $5 million for the second quarter of 2013. The allowance for credit losses as a percentage of total loans, excluding PCI loans, was 0.98 percent at June 30, 2014, compared with 1.02 percent at March 31, 2014, and 1.18 percent at June 30, 2013. The allowance for credit losses as a percentage of nonaccrual loans, excluding PCI loans, was 141.06 percent at June 30, 2014 compared with 156.05 percent at March 31, 2014 and 153.18 percent at June 30, 2013.

Capital

The Company’s stockholder’s equity was $14.8 billion at June 30, 2014 compared with $14.2 billion at December 31, 2013. The Company's Common equity tier 1, Tier 1 and Total risk-based capital ratios, calculated in accordance with the transition guidelines set forth in the U.S. Basel III regulatory capital rules, were 12.59 percent, 12.62 percent and 14.57 percent, respectively, at June 30, 2014. The tangible common equity ratio was 10.84 percent at June 30, 2014.

The Company’s estimated Common equity tier 1 risk-based capital ratio, calculated using the standardized approach on a fully phased-in basis under the U.S. Basel III regulatory capital rules, was 11.63 percent at June 30, 2014.

Non-GAAP Financial Measures

This press release contains certain references to financial measures identified as excluding PCI loans, FDIC covered OREO, privatization transaction impact, foreclosed asset expense, other credit costs, (reversal of) provision for losses on unfunded credit commitments, productivity initiative costs and gains, low income housing credit (LIHC) investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger and business integration costs , or intangible asset amortization, which are adjustments from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial measures, as used herein, differ from financial measures reported under GAAP in that they exclude unusual or non-recurring charges, losses or credits. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information which is important to a proper understanding of the Company’s business results. This press release also includes additional capital ratios (Basel I Tier 1 common capital, the tangible common equity and the fully phased-in Basel III Common equity tier 1 capital ratios) to facilitate the understanding of the Company’s capital structure and for use in assessing and comparing the quality and composition of the Company's capital structure to other financial institutions. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.

Headquartered in New York, MUFG Americas Holdings Corporation is a financial holding company and bank holding company with assets of $108.8 billion at June 30, 2014. Its principal subsidiary, MUFG Union Bank, N.A., provides an array of financial services to individuals, small businesses, middle-market companies, and major corporations. As of June 30, 2014, MUFG Union Bank, N.A. operated 422 branches, comprised primarily of retail banking branches in the West Coast states, along with branches in Texas, Illinois, New York and Georgia, as well as two international offices. MUFG Americas Holdings Corporation is a wholly owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd. which is a wholly owned subsidiary of Mitsubishi UFJ Financial Group, Inc., one of the world’s largest and most diversified financial groups. Visit www.unionbank.com for more information.


MUFG Americas Holdings Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 1

																Percent Change to
	As of and for the Three Months Ended															June 30, 2014 from
	June 30,			March 31,			December 31,			September 30,			June 30,			March 31,		June 30,
(Dollars in millions)	2014			2014			2013			2013			2013 (1)			2014		2013
Results of operations:
Net interest income	$	763		$	683		$	706		$	685		$	672		12	%	14	%
Noninterest income	202			181			190			234			201			12		—
Total revenue	965			864			896			919			873			12		11
Noninterest expense	649			660			689			689			702			(2	)	(8	)
Pre-tax, pre-provision income (2)	316			204			207			230			171			55		85
(Reversal of) provision for loan losses	9			(16		)	(23		)	(16		)	(3		)	(156	)	(400	)
Income before income taxes and including
noncontrolling interests	307			220			230			246			174			40		76
Income tax expense	62			50			55			55			35			24		77
Net income including noncontrolling interests	245			170			175			191			139			44		76
Deduct: Net loss from noncontrolling interests	4			5			4			7			3			(20	)	33
Net income attributable to
MUFG Americas Holdings Corporation (MUAH)	$	249		$	175		$	179		$	198		$	142		42		75

Balance sheet (end of period):
Total assets	$	108,820		$	107,237		$	105,894		$	105,484		$	102,279		1		6
Total securities	22,847			23,192			22,326			22,318			24,415			(1	)	(6	)
Total loans held for investment	72,369			69,933			68,312			67,170			65,843			3		10
Core deposits (3)	72,058			70,665			69,155			68,334			65,533			2		10
Total deposits	81,566			81,179			80,101			79,415			77,356			—		5
Long-term debt	6,995			6,545			6,547			7,803			6,058			7		15
MUAH Stockholder's equity	14,815			14,460			14,215			12,549			12,371			2		20

Balance sheet (period average):
Total assets	$	107,871		$	106,491		$	104,424		$	101,534		$	98,714		1		9
Total securities	22,865			22,611			22,282			22,909			23,183			1		(1	)
Total loans held for investment	71,104			69,293			67,619			66,608			63,673			3		12
Earning assets	97,405			96,100			94,707			92,035			89,292			1		9
Total deposits	81,221			80,433			79,747			77,434			75,350			1		8
MUAH Stockholder's equity	14,657			14,390			12,604			12,210			12,599			2		16

Performance ratios:
Return on average assets (4)	0.92		%	0.66		%	0.68		%	0.78		%	0.58		%
Return on average MUAH stockholder's equity (4)	6.80			4.87			5.66			6.50			4.53
Return on average assets excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5)	0.97			0.72			0.75			0.81			0.66
Return on average MUAH stockholder's equity excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5)	8.19			6.11			7.41			8.01			6.17
Efficiency ratio (6)	67.23			76.38			76.89			75.01			80.37
Adjusted efficiency ratio (7)	60.30			67.95			67.08			67.21			69.45
Net interest margin (4) (8)	3.15			2.87			2.99			2.99			3.03

Capital ratios:	U.S. Basel III						U.S. Basel I

Common equity tier 1 risk-based capital ratio(9) (10)	12.59		%	12.59		%	n/a			n/a			n/a
Tier 1 common capital ratio (9) (10) (11) (12)	n/a			n/a			12.34		%	11.10		%	11.47		%
Tier 1 risk-based capital ratio (9) (10) (11)	12.62			12.62			12.41			11.17			11.55
Total risk-based capital ratio (9) (10) (11)	14.57			14.75			14.61			13.11			13.63
Tier 1 leverage ratio (9) (10)	11.35			11.26			11.27			10.22			10.36
Tangible common equity ratio (13)	10.84			10.65			10.54			9.01			9.08

Common equity tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully phased-in) (9) (14)	11.63			11.42			11.14			n/a			n/a

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Financial Highlights (Unaudited)
Exhibit 2

	As of and for the Six Months Ended						Percent Change to
	June 30,			June 30,			June 30, 2014 from
(Dollars in millions)	2014			2013 (1)			June 30, 2013
Results of operations:
Net interest income	$	1,446		$	1,325		9	%
Noninterest income	383			452			(15	)
Total revenue	1,829			1,777			3
Noninterest expense	1,309			1,415			(7	)
Pre-tax, pre-provision income (2)	520			362			44
(Reversal of) provision for loan losses	(7		)	(6		)	17
Income before income taxes and including
noncontrolling interests	527			368			43
Income tax expense	112			85			32
Net income including noncontrolling interests	415			283			47
Deduct: Net loss from noncontrolling interests	9			7			29
Net income attributable to MUAH	$	424		$	290		46

Balance sheet (end of period):
Total assets	$	108,820		$	102,279		6
Total securities	22,847			24,415			(6	)
Total loans held for investment	72,369			65,843			10
Core deposits (3)	72,058			65,533			10
Total deposits	81,566			77,356			5
Long-term debt	6,995			6,058			15
MUAH stockholder's equity	14,815			12,371			20

Balance sheet (period average):
Total assets	$	107,185		$	97,687		10
Total securities	22,739			22,507			1
Total loans held for investment	70,203			62,122			13
Earning assets	96,756			88,179			10
Total deposits	80,829			74,807			8
MUAH stockholder's equity	14,524			12,591			15

Performance ratios:
Return on average assets (4)	0.79		%	0.59		%
Return on average MUAH stockholder's equity (4)	5.84			4.61
Return on average assets excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5)	0.84			0.69
Return on average MUAH stockholders' equity excluding the impact of privatization transaction and merger costs related to acquisitions (4) (5)	7.16			6.42
Efficiency ratio (6)	71.56			79.59
Adjusted efficiency ratio (7)	63.91			68.56
Net interest margin (4) (8)	3.02			3.03

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Credit Quality (Unaudited)
Exhibit 3

																		Percent Change to
	As of and for the Three Months Ended																	June 30, 2014 from
	June 30,				March 31,				December 31,			September 30,			June 30,			March 31,		June 30,
(Dollars in millions)	2014				2014				2013			2013			2013			2014		2013

Credit Data:
(Reversal of) provision for loan losses, excluding purchased credit-impaired loans	$	9			$	(18	)		$	(22	)	$	(16	)	$	(3	)	150	%	400	%
(Reversal of) provision for purchased credit-impaired loan losses not subject to FDIC indemnification	—				2				(1		)	—			—			(100	)	-
(Reversal of) provision for losses on unfunded credit commitments	(3		)		16				2			1			(2		)	(119	)	(50	)
Total (reversal of) provision for credit losses	$	6			$	—			$	(21	)	$	(15	)	$	(5	)	nm		220

Net loans charged-off (recovered)	$	7			$	(6	)		$	11		$	(1	)	$	8		217		(13	)
Nonperforming assets	547				506				499			574			589			8		(7	)
Criticized loans held for investment (15)	1,450				1,317				1,274			1,270			1,362			10		6

Credit Ratios:
Allowance for loan losses to:
Total loans held for investment	0.77		%		0.80		%		0.83		%	0.91		%	0.95		%
Nonaccrual loans	108.90				119.58				128.42			119.04			120.11
Allowance for credit losses to (16):
Total loans held for investment	0.97				1.01				1.02			1.10			1.16
Nonaccrual loans	137.13				151.35				158.30			144.63			146.34
Net loans charged-off (recovered) to average total loans held for investment (4)	0.04				(0.04		)		0.07			(0.01		)	0.05
Nonperforming assets to total loans held for investment and Other Real Estate Owned (OREO)	0.75				0.72				0.74			0.85			0.89
Nonperforming assets to total assets	0.50				0.47				0.48			0.54			0.58
Nonaccrual loans to total loans held for investment	0.71				0.67				0.65			0.76			0.79

Excluding purchased credit-impaired loans and FDIC covered OREO (17):
Allowance for loan losses to:
Total loans held for investment	0.78		%		0.80		%		0.84		%	0.92		%	0.97		%
Nonaccrual loans	111.88				123.14				132.82			123.53			125.69
Allowance for credit losses to (16):
Total loans held for investment	0.98				1.02				1.04			1.12			1.18
Nonaccrual loans	141.06				156.05				163.78			150.14			153.18
Net loans charged-off (recovered) to average total loans held for investment (4)	0.04				(0.04		)		0.11			0.01			0.06
Nonperforming assets to total loans held for investment and OREO	0.71				0.68				0.66			0.78			0.81
Nonperforming assets to total assets	0.47				0.44				0.43			0.49			0.52
Nonaccrual loans to total loans held for investment	0.69				0.65				0.63			0.75			0.77

	As of and for the Six Months Ended								Percent Change
	June 30,				June 30,				to June 30, 2014
(Dollars in millions)	2014				2013				from June 30, 2013
Credit Data:
(Reversal of) provision for loan losses, excluding purchased credit-impaired loans	$	(9	)		$	(6	)		nm			%
(Reversal of) provision for purchased credit-impaired loan losses not subject to FDIC indemnification	2				—				nm
(Reversal of) provision for losses on unfunded credit commitments	13				13				—
Total (reversal of) provision for credit losses	$	6			$	7			(14		)

Net loans charged-off	$	1			$	22			(95		)
Nonperforming assets	547				589				(7		)
Credit Ratios:
Net loans charged-off to average total loans held for investment (4)	—			%	0.07			%
Nonperforming assets to total assets	0.50				0.58

Excluding purchased credit-impaired loans and FDIC covered OREO (17):
Net loans charged-off to average total loans held for investment (4)	—			%	0.07			%
Nonperforming assets to total assets	0.47				0.52

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
Exhibit 4

	For the Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in millions)	2014			2014			2013			2013			2013 (1)
Interest Income
Loans	$	749		$	667		$	695		$	668		$	649
Securities	115			115			115			118			118
Other	3			5			6			2			2
Total interest income	867			787			816			788			769

Interest Expense
Deposits	61			62			64			63			61
Commercial paper and other short-term borrowings	2			1			1			2			1
Long-term debt	41			41			45			38			35
Total interest expense	104			104			110			103			97

Net Interest Income	763			683			706			685			672
(Reversal of) provision for loan losses	9			(16		)	(23		)	(16		)	(3		)
Net interest income after (reversal of) provision for loan losses	754			699			729			701			675

Noninterest Income
Service charges on deposit accounts	50			51			51			53			52
Trust and investment management fees	26			26			28			34			38
Trading account activities	14			16			20			15			21
Securities gains, net	1			2			8			47			27
Credit facility fees	31			28			28			31			26
Merchant banking fees	27			24			25			29			23
Brokerage commissions and fees	13			13			12			12			11
Card processing fees, net	9			8			8			8			9
Other, net	31			13			10			5			(6		)
Total noninterest income	202			181			190			234			201

Noninterest Expense
Salaries and employee benefits	378			388			406			391			413
Net occupancy and equipment	75			71			70			77			84
Professional and outside services	63			55			64			66			62
Intangible asset amortization	13			13			16			16			17
Regulatory assessments	16			15			14			20			20
(Reversal of) provision for losses on unfunded credit commitments	(3		)	16			2			1			(2		)
Other	107			102			117			118			108
Total noninterest expense	649			660			689			689			702

Income before income taxes and including
noncontrolling interests	307			220			230			246			174
Income tax expense	62			50			55			55			35
Net Income including Noncontrolling Interests	245			170			175			191			139
Deduct: Net loss from noncontrolling interests	4			5			4			7			3
Net Income attributable to MUAH	$	249		$	175		$	179		$	198		$	142

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
Exhibit 5

	For the Six Months Ended
(Dollars in millions)	June 30, 2014			June 30, 2013 (1)
Interest Income
Loans	$	1,416		$	1,278
Securities	230			236
Other	8			5
Total interest income	1,654			1,519

Interest Expense
Deposits	123			121
Commercial paper and other short-term borrowings	3			2
Long-term debt	82			71
Total interest expense	208			194

Net Interest Income	1,446			1,325
(Reversal of) provision for loan losses	(7		)	(6		)
Net interest income after (reversal of) provision for loan losses	1,453			1,331

Noninterest Income
Service charges on deposit accounts	101			105
Trust and investment management fees	52			73
Trading account activities	30			26
Securities gains, net	3			123
Credit facility fees	59			52
Merchant banking fees	51			39
Brokerage commissions and fees	26			22
Card processing fees, net	17			18
Other, net	44			(6		)
Total noninterest income	383			452

Noninterest Expense
Salaries and employee benefits	766			834
Net occupancy and equipment	146			159
Professional and outside services	118			120
Intangible asset amortization	26			33
Regulatory assessments	31			40
(Reversal of) provision for losses on unfunded credit commitments	13			13
Other	209			216
Total noninterest expense	1,309			1,415

Income before income taxes and including
noncontrolling interests	527			368
Income tax expense	112			85
Net Income including Noncontrolling Interests	415			283
Deduct: Net loss from noncontrolling interests	9			7
Net Income attributable to MUAH	$	424		$	290

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
Exhibit 6

	June 30,			March 31,			December			September			June 30,
(Dollars in millions except for per share amount)	2014			2014			31, 2013			30, 2013			2013 (1)
Assets
Cash and due from banks	$	1,911		$	1,792		$	1,863		$	1,719		$	1,405
Interest bearing deposits in banks	2,353			2,883			4,329			5,471			1,899
Federal funds sold and securities purchased under resale agreements	65			32			11			122			50
Total cash and cash equivalents	4,329			4,707			6,203			7,312			3,354
Trading account assets (includes $25 at June 30, 2014, $9 at March
31, 2014; $8 at December 31, 2013; $13 at September 30, 2013;
and $4 at June 30, 2013 of assets pledged as collateral)	941			841			851			776			844
Securities available for sale	14,670			15,366			15,817			16,872			23,510
Securities held to maturity (Fair value: June 30, 2014, $8,251;
March 31, 2014, $7,810; December 31, 2013, $6,439; September 30,
2013, $5,450; and June 30, 2013, $891)	8,177			7,826			6,509			5,446			905
Loans held for investment	72,369			69,933			68,312			67,170			65,843
Allowance for loan losses	(559		)	(557		)	(568		)	(608		)	(625		)
Loans held for investment, net	71,810			69,376			67,744			66,562			65,218
Premises and equipment, net	632			641			688			685			699
Goodwill	3,227			3,227			3,228			3,168			3,186
Other assets	5,034			5,253			4,854			4,663			4,563
Total assets	$	108,820		$	107,237		$	105,894		$	105,484		$	102,279

Liabilities
Deposits:
Noninterest bearing	$	27,446		$	26,881		$	26,495		$	26,126		$	25,655
Interest bearing	54,120			54,298			53,606			53,289			51,701
Total deposits	81,566			81,179			80,101			79,415			77,356
Commercial paper and other short-term borrowings	2,870			2,660			2,563			3,078			3,792
Long-term debt	6,995			6,545			6,547			7,803			6,058
Trading account liabilities	664			531			540			614			566
Other liabilities	1,666			1,611			1,675			1,767			1,866
Total liabilities	93,761			92,526			91,426			92,677			89,638

Equity
MUAH Stockholder's Equity:
Common stock, par value $1 per share:
Authorized 300,000,000 shares; 136,330,830 shares issued and
outstanding as of June 30, 2014, March 31, 2014,
December 31, 2013, September 30, 2013, and June 30, 2013	136			136			136			136			136
Additional paid-in capital	7,184			7,196			7,191			5,985			5,979
Retained earnings	7,936			7,687			7,512			7,333			7,135
Accumulated other comprehensive loss	(441		)	(559		)	(624		)	(905		)	(879		)
Total MUAH stockholder's equity	14,815			14,460			14,215			12,549			12,371
Noncontrolling interests	244			251			253			258			270
Total equity	15,059			14,711			14,468			12,807			12,641
Total liabilities and equity	$	108,820		$	107,237		$	105,894		$	105,484		$	102,279

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 7

	For the Three Months Ended
	June 30, 2014							March 31, 2014
				Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)	Balance			Expense (8)		Rate (4)(8)		Balance			Expense (8)		Rate (4)(8)
Assets
Loans held for investment: (18)
Commercial and industrial	$	24,421		$	202	3.33	%	$	23,969		$	198	3.34	%
Commercial mortgage	13,529			124		3.66		13,230			119		3.61
Construction	1,146			10		3.24		946			8		3.67
Lease financing	840			14		6.74		849			11		5.41
Residential mortgage	27,063			247		3.66		25,990			238		3.66
Home equity and other consumer loans	3,191			32		4.04		3,233			32		3.99
Loans, before purchased credit-impaired loans	70,190			629		3.59		68,217			606		3.58
Purchased credit-impaired loans	914			120		52.45		1,076			61		22.90
Total loans held for investment	71,104			749		4.22		69,293			667		3.88
Securities	22,865			120		2.10		22,611			120		2.12
Interest bearing deposits in banks	2,878			2		0.25		3,565			2		0.25
Federal funds sold and securities purchased under resale agreements	102			—		0.02		131			—		0.18
Trading account assets	194			1		1.04		267			2		3.08
Other earning assets	262			—		0.83		233			1		1.40
Total earning assets	97,405			872		3.58		96,100			792		3.31
Allowance for loan losses	(561		)					(577		)
Cash and due from banks	1,450							1,499
Premises and equipment, net	642							645
Other assets	8,935							8,824
Total assets	$	107,871						$	106,491
Liabilities
Interest bearing deposits:
Transaction and money market accounts	$	37,646		35		0.38		$	37,519		36		0.38
Savings	5,590			1		0.09		5,572			1		0.11
Time	10,761			25		0.91		11,214			25		0.92
Total interest bearing deposits	53,997			61		0.45		54,305			62		0.47
Commercial paper and other short-term borrowings (19)	2,521			2		0.20		2,632			1		0.21
Long-term debt	6,923			41		2.39		6,546			41		2.47
Total borrowed funds	9,444			43		1.80		9,178			42		1.82
Total interest bearing liabilities	63,441			104		0.65		63,483			104		0.66
Noninterest bearing deposits	27,224							26,128
Other liabilities	2,298							2,237
Total liabilities	92,963							91,848
Equity
MUAH Stockholder's equity	14,657							14,390
Noncontrolling interests	251							253
Total equity	14,908							14,643
Total liabilities and equity	$	107,871						$	106,491

Net interest income/spread (taxable-equivalent basis)				768		2.93	%				688		2.65	%
Impact of noninterest bearing deposits						0.19							0.19
Impact of other noninterest bearing sources						0.03							0.03
Net interest margin						3.15							2.87
Less: taxable-equivalent adjustment				5							5
Net interest income				$	763						$	683

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 8

	For the Three Months Ended
	June 30, 2014							June 30, 2013
				Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)	Balance			Expense (8)		Rate (4)(8)		Balance			Expense (1)(8)		Rate (1)(4)(8)
Assets
Loans held for investment: (18)
Commercial and industrial	$	24,421		$	202	3.33	%	$	21,701		$	185	3.42	%
Commercial mortgage	13,529			124		3.66		11,851			112		3.79
Construction	1,146			10		3.24		800			7		3.30
Lease financing	840			14		6.74		1,056			9		3.53
Residential mortgage	27,063			247		3.66		23,428			220		3.77
Home equity and other consumer loans	3,191			32		4.04		3,500			33		3.85
Loans, before purchased credit-impaired loans	70,190			629		3.59		62,336			566		3.64
Purchased credit-impaired loans	914			120		52.45		1,337			83		24.69
Total loans held for investment	71,104			749		4.22		63,673			649		4.08
Securities	22,865			120		2.10		23,183			121		2.11
Interest bearing deposits in banks	2,878			2		0.25		1,923			1		0.25
Federal funds sold and securities purchased under resale agreements	102			—		0.02		123			—		0.16
Trading account assets	194			1		1.04		162			—		0.36
Other earning assets	262			—		0.83		228			1		0.53
Total earning assets	97,405			872		3.58		89,292			772		3.47
Allowance for loan losses	(561		)					(642		)
Cash and due from banks	1,450							1,355
Premises and equipment, net	642							704
Other assets	8,935							8,005
Total assets	$	107,871						$	98,714
Liabilities
Interest bearing deposits:
Transaction and money market accounts	$	37,646		35		0.38		$	32,296		26		0.32
Savings	5,590			1		0.09		5,666			2		0.13
Time	10,761			25		0.91		12,710			33		1.06
Total interest bearing deposits	53,997			61		0.45		50,672			61		0.49
Commercial paper and other short-term borrowings (19)	2,521			2		0.20		3,224			1		0.18
Long-term debt	6,923			41		2.39		5,326			35		2.64
Total borrowed funds	9,444			43		1.80		8,550			36		1.71
Total interest bearing liabilities	63,441			104		0.65		59,222			97		0.66
Noninterest bearing deposits	27,224							24,678
Other liabilities	2,298							1,945
Total liabilities	92,963							85,845
Equity
MUAH Stockholder's equity	14,657							12,599
Noncontrolling interests	251							270
Total equity	14,908							12,869
Total liabilities and equity	$	107,871						$	98,714

Net interest income/spread (taxable-equivalent basis)				768		2.93	%				675		2.81	%
Impact of noninterest bearing deposits						0.19							0.19
Impact of other noninterest bearing sources						0.03							0.03
Net interest margin						3.15							3.03
Less: taxable-equivalent adjustment				5							3
Net interest income				$	763						$	672

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Net Interest Income (Unaudited)
Exhibit 9

	For the Six Months Ended
	June 30, 2014							June 30, 2013
				Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)	Balance			Expense (8)		Rate (4)(8)		Balance			Expense (1)(8)		Rate (1)(4)(8)
Assets
Loans held for investment: (18)
Commercial and industrial	$	24,196		$	400	3.34	%	$	21,522		$	362	3.39	%
Commercial mortgage	13,380			243		3.63		10,880			213		3.93
Construction	1,047			18		3.43		725			15		4.15
Lease financing	845			25		6.07		1,059			16		3.01
Residential mortgage	26,529			485		3.66		23,145			442		3.82
Home equity and other consumer loans	3,212			64		4.01		3,551			67		3.84
Loans, before purchased credit-impaired loans	69,209			1,235		3.58		60,882			1,115		3.68
Purchased credit-impaired loans	994			181		36.49		1,240			163		26.36
Total loans held for investment	70,203			1,416		4.05		62,122			1,278		4.13
Securities	22,739			240		2.11		22,507			243		2.16
Interest bearing deposits in banks	3,219			4		0.25		2,986			4		0.25
Federal funds sold and securities purchased under resale agreements	116			—		0.11		147			—		0.18
Trading account assets	231			3		2.21		156			—		0.33
Other earning assets	248			1		1.10		261			1		0.46
Total earning assets	96,756			1,664		3.45		88,179			1,526		3.47
Allowance for loan losses	(569		)					(647		)
Cash and due from banks	1,475							1,377
Premises and equipment, net	643							704
Other assets	8,880							8,074
Total assets	$	107,185						$	97,687
Liabilities
Interest bearing deposits:
Transaction and money market accounts	37,583			71		0.38		32,002			48		0.30
Savings	5,581			2		0.10		5,760			4		0.13
Time	10,986			50		0.92		12,514			69		1.11
Total interest bearing deposits	54,150			123		0.46		50,276			121		0.49
Commercial paper and other short-term borrowings (19)	2,576			3		0.21		2,534			2		0.19
Long-term debt	6,736			82		2.43		5,366			71		2.66
Total borrowed funds	9,312			85		1.82		7,900			73		1.86
Total interest bearing liabilities	63,462			208		0.66		58,176			194		0.67
Noninterest bearing deposits	26,679							24,531
Other liabilities	2,268							2,122
Total liabilities	92,409							84,829
Equity
MUAH Stockholder's equity	14,524							12,591
Noncontrolling interests	252							267
Total equity	14,776							12,858
Total liabilities and equity	$	107,185						$	97,687

Net interest income/spread (taxable-equivalent basis)				1,456		2.79	%				1,332		2.80	%
Impact of noninterest bearing deposits						0.19							0.20
Impact of other noninterest bearing sources						0.04							0.03
Net interest margin						3.02							3.03
Less: taxable-equivalent adjustment				10							7
Net interest income				$	1,446						$	1,325

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Loans and Nonperforming Assets (Unaudited)
Exhibit 10

	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in millions)	2014		2014		2013		2013		2013

Loans held for investment (period end)
Loans held for investment:
Commercial and industrial	$	25,162	$	23,654	$	23,528	$	23,125	$	22,266
Commercial mortgage	13,549		13,568		13,092		12,905		13,008
Construction	1,248		1,019		905		855		808
Lease financing	829		845		854		972		984
Total commercial portfolio	40,788		39,086		38,379		37,857		37,066

Residential mortgage	27,619		26,602		25,547		24,714		23,835
Home equity and other consumer loans	3,178		3,194		3,280		3,336		3,456
Total consumer portfolio	30,797		29,796		28,827		28,050		27,291
Loans held for investment, before purchased credit-impaired loans	71,585		68,882		67,206		65,907		64,357
Purchased credit-impaired loans	784		1,051		1,106		1,263		1,486

Total loans held for investment	$	72,369	$	69,933	$	68,312	$	67,170	$	65,843

Nonperforming Assets (period end)
Nonaccrual loans:
Commercial and industrial	$	161	$	89	$	44	$	62	$	69
Commercial mortgage	47		46		51		88		62
Total commercial portfolio	208		135		95		150		131

Residential mortgage	243		266		286		293		315
Home equity and other consumer loans	46		49		46		48		50
Total consumer portfolio	289		315		332		341		365

Nonaccrual loans, before purchased credit-impaired loans	497		450		427		491		496
Purchased credit-impaired loans	17		16		15		20		24
Total nonaccrual loans	514		466		442		511		520

OREO	14		17		20		22		25
FDIC covered OREO	19		23		37		41		44

Total nonperforming assets	$	547	$	506	$	499	$	574	$	589

Total nonperforming assets, excluding purchased credit-impaired loans and FDIC covered OREO	$	511	$	467	$	447	$	513	$	521

Loans 90 days or more past due and still accruing (20)	$	11	$	4	$	5	$	8	$	7

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Allowance for Credit Losses (Unaudited)
Exhibit 11

	As of and for the Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in millions)	2014			2014			2013			2013			2013

Analysis of Allowance for Credit Losses
Balance, beginning of period	$	557		$	568		$	608		$	625		$	638
(Reversal of) provision for loan losses, excluding purchased credit-impaired loans	9			(18		)	(22		)	(16		)	(3		)
(Reversal of) provision for purchased credit-impaired loan losses not subject to FDIC indemnification	—			2			(1		)	—			—
Increase/(decrease) in allowance covered by FDIC indemnification	—			—			(6		)	(2		)	(2		)
Other	—			(1		)	—			—			—
Loans charged off:
Commercial and industrial	(6		)	(5		)	(18		)	(6		)	(11		)
Commercial mortgage	(2		)	(1		)	(2		)	(2		)	(1		)
Construction	—			—			—			(1		)	—
Total commercial portfolio	(8		)	(6		)	(20		)	(9		)	(12		)
Residential mortgage	(2		)	(1		)	(1		)	(2		)	(3		)
Home equity and other consumer loans	(2		)	(2		)	(4		)	(2		)	(5		)
Total consumer portfolio	(4		)	(3		)	(5		)	(4		)	(8		)
Total loans charged-off	(12		)	(9		)	(25		)	(13		)	(20		)
Recoveries of loans previously charged-off:
Commercial and industrial	3			11			6			5			7
Commercial mortgage	1			—			—			4			2
Construction	—			3			—			1			—
Lease financing	—			—			1			—			—
Total commercial portfolio	4			14			7			10			9
Home equity and other consumer loans	1			1			—			2			1
Total consumer portfolio	1			1			—			2			1
Purchased credit-impaired loans	—			—			—			2			2
Total recoveries of loans previously charged-off	5			15			14			14			12
Net loans recovered (charged-off)	(7		)	6			(11		)	1			(8		)

Ending balance of allowance for loan losses	559			557			568			608			625
Allowance for losses on unfunded credit commitments	145			148			132			131			136
Total allowance for credit losses	$	704		$	705		$	700		$	739		$	761

Components of allowance for loan losses and credit losses:
Allowance for loan losses, excluding allowance on purchased credit-impaired loans	$	556		$	554		$	567		$	607		$	624
Allowance for loan losses on purchased credit-impaired loans	3			3			1			1			1
Total allowance for loan losses	$	559		$	557		$	568		$	608		$	625


MUFG Americas Holdings Corporation and Subsidiaries
Securities (Unaudited)
Exhibit 12

Securities Available for Sale

	June 30, 2014				March 31, 2014				Fair Value			Fair Value
	Amortized		Fair		Amortized		Fair		Change from			% Change from
(Dollars in millions)	Cost		Value		Cost		Value		March 31, 2014			March 31, 2014
Asset Liability Management securities:
U.S. government-sponsored agencies	$	—	$	—	$	72	$	72	$	(72	)	(100	)%
Residential mortgage-backed securities:
U.S. government agency and government-sponsored agencies	8,281		8,157		8,754		8,529		(372		)	(4	)
Privately issued	188		191		207		210		(19		)	(9	)
Privately issued - commercial mortgage-backed securities	1,824		1,813		1,876		1,830		(17		)	(1	)
Collateralized loan obligations	2,543		2,534		2,642		2,642		(108		)	(4	)
Asset-backed and other	18		19		24		25		(6		)	(24	)
Asset Liability Management securities	12,854		12,714		13,575		13,308		(594		)	(4	)
Other debt securities:
Direct bank purchase bonds	1,888		1,897		1,986		1,987		(90		)	(5	)
Other	54		52		67		63		(11		)	(17	)
Equity securities	6		7		7		8		(1		)	(13	)
Total securities available for sale	$	14,802	$	14,670	$	15,635	$	15,366	$	(696	)	(5	)

Securities Held to Maturity

	June 30, 2014				March 31, 2014				Carrying Amount			Carrying Amount
	Carrying		Fair		Carrying		Fair		Change from			% Change from
(Dollars in millions)	Amount (21)		Value		Amount (21)		Value		March 31, 2014			March 31, 2014
U.S. government agency and government-sponsored agencies - residential mortgage-backed securities	$	5,669	$	5,698	$	5,466	$	5,443	$	203		4	%
U.S. government agency and government-sponsored agencies - commercial mortgage-backed securities	1,749		1,792		1,751		1,762		(2		)	—
U.S. Treasury	484		486		484		481		—			—
U.S. government-sponsored agencies	275		275		125		124		150			120
Total securities held to maturity	$	8,177	$	8,251	$	7,826	$	7,810	$	351		4

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Reconciliation of Non-GAAP Measures (Unaudited)
Exhibit 13

The following table presents a reconciliation between certain Generally Accepted Accounting Principles (GAAP) amounts and specific non-GAAP measures as used to compute selected non-GAAP financial ratios.

	As of and for the Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in millions)	2014			2014			2013			2013			2013 (1)
Net income attributable to MUAH	$	249		$	175		$	179		$	198		$	142
Net adjustments for merger costs related to acquisitions, net of tax	15			11			12			15			27
Net adjustments for privatization transaction, net of tax	(9		)	1			2			(14		)	(8		)
Net income attributable to MUAH, excluding impact of
privatization transaction and merger costs related to acquisitions	$	255		$	187		$	193		$	199		$	161

Average total assets	$	107,871		$	106,491		$	104,424		$	101,534		$	98,714
Less: Net adjustments related to privatization transaction	2,260			2,272			2,297			2,309			2,318
Average total assets, excluding impact of privatization transaction	$	105,611		$	104,219		$	102,127		$	99,225		$	96,396
Return on average assets (4)	0.92		%	0.66		%	0.68		%	0.78		%	0.58		%
Return on average assets, excluding impact of privatization
transaction and merger costs related to acquisitions (4) (5)	0.97			0.72			0.75			0.81			0.66

Average MUAH stockholder's equity	$	14,657		$	14,390		$	12,604		$	12,210		$	12,599
Less: Adjustments for merger costs related to acquisitions	(132		)	(118		)	(105		)	(93		)	(64		)
Less: Net adjustments for privatization transaction	2,297			2,302			2,306			2,319			2,337
Average MUAH stockholder's equity, excluding impact of privatization
transaction and merger costs related to acquisitions	$	12,492		$	12,206		$	10,403		$	9,984		$	10,326
Return on average MUAH stockholder's equity (4)	6.80		%	4.87		%	5.66		%	6.50		%	4.53			%
Return on average MUAH stockholder's equity, excluding impact of
privatization transaction and merger costs related to acquisitions (4) (5)	8.19			6.11			7.41			8.01			6.17

Noninterest expense	$	649		$	660		$	689		$	689		$	702
Less: Foreclosed asset expense and other credit costs	1			—			2			(2		)	(3		)
Less: (Reversal of) provision for losses on unfunded credit commitments	(3		)	16			2			1			(2		)
Less: Productivity initiative costs	4			1			20			14			13
Less: Low income housing credit (LIHC) investment amortization expense	20			20			24			17			20
Less: Expenses of the LIHC consolidated VIEs	8			8			6			11			6
Less: Merger and business integration costs	25			17			25			25			44
Less: Net adjustments related to privatization transaction	10			10			14			13			14
Less: Intangible asset amortization	3			3			3			3			4
Noninterest expense, as adjusted (a)	$	581		$	585		$	593		$	607		$	606

Total revenue	$	965		$	864		$	896		$	919		$	873
Add: Net interest income taxable-equivalent adjustment	5			5			4			4			3
Less: Productivity initiative gains	—			—			6			11			—
Less: Accretion related to privatization-related fair value adjustments	9			6			8			8			3
Less: Other credit costs	(2		)	2			1			1			2
Total revenue, as adjusted (b)	$	963		$	861		$	885		$	903		$	871
Adjusted efficiency ratio (a)/(b) (7)	60.30		%	67.95		%	67.08		%	67.21		%	69.45			%

Total MUAH stockholder's equity	$	14,815		$	14,460		$	14,215		$	12,549		$	12,371
Less: Goodwill	3,227			3,227			3,228			3,168			3,186
Less: Intangible assets, except mortgage servicing rights (MSRs)	262			275			288			287			321
Less: Deferred tax liabilities related to goodwill and intangible assets	(99		)	(102		)	(105		)	(110		)	(118		)
Tangible common equity (c)	$	11,425		$	11,060		$	10,804		$	9,204		$	8,982
Total assets	$	108,820		$	107,237		$	105,894		$	105,484		$	102,279
Less: Goodwill	3,227			3,227			3,228			3,168			3,186
Less: Intangible assets, except MSRs	262			275			288			287			321
Less: Deferred tax liabilities related to goodwill and intangible assets	(99		)	(102		)	(105		)	(110		)	(118		)
Tangible assets (d)	$	105,430		$	103,837		$	102,483		$	102,139		$	98,890
Tangible common equity ratio (c)/(d) (13)	10.84		%	10.65		%	10.54		%	9.01		%	9.08			%

Tier 1 capital, determined in accordance with U.S. Basel I regulatory requirements	n/a			n/a			$	11,471		$	10,153		$	9,931
Less: Junior subordinated debt payable to trusts	n/a			n/a			66			66			66
Basel I Tier 1 common capital (e)	n/a			n/a			$	11,405		$	10,087		$	9,865
Common equity tier 1 capital under U.S. Basel III (transitional)	$	11,900		$	11,640		n/a			n/a			n/a
Accumulated other comprehensive loss related to securities available for
sale and pension and other benefits (10)	(377		)	(449		)	(522		)	n/a			n/a
Other (10)	(130		)	(138		)	(95		)	n/a			n/a

Common equity tier 1 capital estimated under U.S. Basel III (standardized approach; fully phased-in) (f)	$	11,393		$	11,053		$	10,788		n/a			n/a
Risk-weighted assets, determined in accordance with regulatory requirements (g) (10)	$	94,552		$	92,476		$	92,410		$	90,900		$	85,979
Add: Adjustments (10)	3,407			4,293			4,444			n/a			n/a

Total risk-weighted assets, estimated under U.S. Basel III (standardized approach; fully phased-in) (h)	$	97,959		$	96,769		$	96,854		n/a			n/a
Common equity tier 1 risk-based capital ratio (f)/(h) (9) (14)	11.63		%	11.42		%	11.14		%	n/a			n/a
Tier 1 common capital ratio (e)/(g) (9) (10) (11) (12)	n/a			n/a			12.34		%	11.10		%	11.47			%
Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Reconciliation of Non-GAAP Measures (Unaudited)
Exhibit 14

The following table presents a reconciliation between certain Generally Accepted Accounting Principles (GAAP) amounts and specific non-GAAP measures as used to compute selected non-GAAP financial ratios.

	For the Six Months Ended
	June 30,			June 30,
(Dollars in millions)	2014			2013 (1)

Net income attributable to MUAH	$	424		$	290
Net adjustments for merger costs related to acquisitions, net of tax	26			51
Net adjustments for privatization transaction, net of tax	(8		)	(9		)
Net income attributable to MUAH, excluding impact of
privatization transaction and merger costs related to acquisitions	$	442		$	332

Average total assets	$	107,185		$	97,687
Less: Net adjustments related to privatization transaction	2,266			2,324
Average total assets, excluding impact of privatization transaction	$	104,919		$	95,363
Return on average assets (4)	0.79		%	0.59		%
Return on average assets, excluding impact of privatization
transaction and merger costs related to acquisitions (4) (5)	0.84			0.69

Average MUAH stockholder's equity	$	14,524		$	12,591
Less: Adjustments for merger costs related to acquisitions	(125		)	(80		)
Less: Net adjustments for privatization transaction	2,299			2,345
Average MUAH stockholder's equity, excluding impact of privatization
transaction and merger costs related to acquisitions	$	12,350		$	10,326
Return on average MUAH stockholder's equity (4)	5.84		%	4.61		%
Return on average MUAH stockholder's equity, excluding impact of
privatization transaction and merger costs related to acquisitions (4) (5)	7.16			6.42

Noninterest expense	$	1,309		$	1,415
Less: Foreclosed asset expense and other credit costs	—			(4		)
Less: (Reversal of) provision for losses on unfunded credit commitments	13			13
Less: Productivity initiative costs	5			17
Less: Low income housing credit (LIHC) investment amortization expense	40			35
Less: Expenses of the LIHC consolidated VIEs	16			12
Less: Merger and business integration costs	42			84
Less: Net adjustments related to privatization transaction	20			28
Less: Intangible asset amortization	7			7
Noninterest expense, as adjusted (a)	$	1,166		$	1,223

Total revenue	$	1,829		$	1,777
Add: Net interest income taxable-equivalent adjustment	10			7
Less: Accretion related to privatization-related fair value adjustments	16			8
Less: Other credit costs	1			(7		)
Total revenue, as adjusted (b)	$	1,822		$	1,783
Adjusted efficiency ratio (a)/(b) (7)	63.91		%	68.56		%

Refer to Exhibit 15 for footnote explanations.


MUFG Americas Holdings Corporation and Subsidiaries
Footnotes
Exhibit 15

(1)			During the third quarter of 2013, the Company corrected prior period errors related to the recognition of income and expense associated with market-linked certificates of deposits. The Company concluded that these errors were not material to the periods in which the corrections were made.
(2)			Pre-tax, pre-provision income is total revenue less noninterest expense. Management believes that this is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover loan losses through a credit cycle.
(3)			Core deposits exclude brokered deposits, foreign time deposits and domestic time deposits greater than $250,000.
(4)			Annualized.
(5)			These ratios exclude the impact of the privatization transaction and merger costs related to acquisitions. Management believes that these ratios provide useful supplemental information regarding the Company's business results. Please refer to Exhibits 13 and 14 for reconciliations between certain GAAP amounts and these non-GAAP measures.
(6)			The efficiency ratio is total noninterest expense as a percentage of total revenue (net interest income and noninterest income).
(7)			The adjusted efficiency ratio, a non-GAAP financial measure, is adjusted noninterest expense (noninterest expense excluding foreclosed asset expense and other credit costs, (reversal of) provision for losses on unfunded credit commitments, certain costs related to productivity initiatives, low income housing credit (LIHC) investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger and business integration costs, privatization-related expenses, and intangible asset amortization) as a percentage of adjusted total revenue (net interest income (taxable-equivalent basis) and noninterest income), excluding the impact of gains from productivity initiatives related to the sale of certain business units and premises, accretion related to privatization-related fair value adjustments, and other credit costs. Management discloses the adjusted efficiency ratio as a measure of the efficiency of our operations, focusing on those costs most relevant to our business activities. Please refer to Exhibits 13 and 14 for reconciliations between certain GAAP amounts and these non-GAAP measures.
(8)			Yields, interest income and net interest margin are presented on a taxable-equivalent basis using the federal statutory tax rate of 35 percent.
(9)			Estimated as of June 30, 2014.
(10)			The capital ratios displayed as of June 30, 2014 and March 31, 2014 are calculated in accordance with the transition guidelines set forth in the U.S. federal banking agencies' revised capital framework for implementing the final U.S. Basel III regulatory capital rules. The capital ratios as of and prior to December 31, 2013 are calculated under Basel I rules.
(11)			Effective September 30, 2013, the Company updated the methodologies applied to the calculation of its regulatory capital ratios as the result of regulatory correspondence, which clarified the treatment of certain off-balance sheet credit exposures. If the Company had applied the new methodology on a retrospective basis, the Tier 1 risk-based capital ratio would have been 11.04% as of June 30, 2013; the Total risk-based capital ratio would have been 13.03% as of June 30, 2013; and the Tier 1 common capital ratio would have been 10.97% as of June 30, 2013.
(12)			The Tier 1 common capital ratio is the ratio, calculated under Basel I rules, of Tier 1 capital, less qualifying trust preferred securities, to risk-weighted assets. The Tier 1 common capital ratio, a non-GAAP financial measure, facilitates the understanding of the Company's capital structure and is used to assess and compare the quality and composition of the Company's capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures.
(13)			The tangible common equity ratio, a non-GAAP financial measure, is calculated as tangible common equity divided by tangible assets. The methodology for determining tangible common equity may differ among companies. The tangible common equity ratio facilitates the understanding of the Company's capital structure and is used to assess and compare the quality and composition of the Company's capital structure to other financial institutions. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures.
(14)			Common equity tier 1 risk-based capital is a non-GAAP financial measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies as if the U.S. Basel III rules (standardized approach on a fully phased-in basis, which includes accumulated other comprehensive loss elements as prescribed by the U.S. Basel III rules) were effective at December 31, 2013. Management reviews common equity tier 1 risk-based capital along with other measures of capital as part of its financial analyses and has included this non-GAAP financial information, and the corresponding reconciliation from Tier 1 capital determined in accordance with Basel I regulatory requirements, because of current interest in such information on the part of market participants. Please refer to Exhibit 13 for a reconciliation between certain GAAP amounts and these non-GAAP measures.
(15)			Criticized loans held for investment reflects loans in the commercial portfolio segment that are monitored for credit quality based on internal ratings. Amounts exclude small business loans, which are monitored by business credit score and delinquency status.
(16)			The allowance for credit losses ratios include the allowances for loan losses and losses on unfunded credit commitments against end of period total loans held for investment or total nonaccrual loans, as appropriate.
(17)			These ratios exclude the impact of all purchased credit-impaired loans and FDIC covered OREO. Purchased credit-impaired loans and OREO related to the April 2010 acquisitions of certain assets and assumption of certain liabilities of Frontier Bank and Tamalpais Bank are covered under loss share agreements between the Bank and the Federal Deposit Insurance Corporation. Management believes the exclusion of purchased credit-impaired loans and FDIC covered OREO from certain asset quality ratios that include nonaccrual loans, nonperforming assets, net loans charged-off, total loans held for investment and the allowance for loan losses or credit losses in the numerator or denominator provides a better perspective into underlying asset quality trends.
(18)			Average balances on loans held for investment include all nonperforming loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield.
(19)			Includes interest bearing trading liabilities.
(20)			Excludes loans totaling $103 million, $123 million, $124 million, $203 million, and $210 million that are 90 days or more past due and still accruing at June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013, respectively, which consist of loans accounted for within loan pools in accordance with the accounting standards for purchased credit-impaired loans. The past due status of individual loans within the pools is not a meaningful indicator of credit quality, as potential credit losses are measured at the loan pool level.
(21)			Carrying amount reflects amortized cost except for balances transferred from available for sale to held to maturity securities. Those balances reflect amortized cost plus any unrealized gains or losses at the date of transfer.
nm = not meaningful
n/a = not applicable

Contacts:

MUFG Americas Holdings Corporation
Thomas Taggart
Corporate Communications
415-765-2249
or
Doug Lambert
Investor Relations
212-782-5911