MUFG Americas Holdings Corp - FORM 8-K - EX-99.1 - EXHIBIT 99.1

MUFG Americas Holdings Corp - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 24, 2017

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MUFG Americas Holdings Corp Reports

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8-K - 8-K - MUFG Americas Holdings Corp	muah8kq12017.htm

Exhibit 99.1

MUFG Americas Holdings Corporation

A member of MUFG, a global financial group

FOR IMMEDIATE RELEASE (April 24, 2017)

MUFG AMERICAS HOLDINGS CORPORATION REPORTS FIRST QUARTER NET INCOME OF $229 MILLION

NEW YORK - MUFG Americas Holdings Corporation (the Company), parent company of San Francisco-based MUFG Union Bank, N.A. (the Bank), today reported net income for the first quarter of $229 million, compared with $334 million for the prior quarter and $62 million for the year-ago quarter.

First Quarter Results:


◦	Net income for the first quarter was $229 million, down $105 million from the fourth quarter of 2016.


◦	The provision (reversal) for credit losses was $(30) million compared with $(41) million in the fourth quarter of 2016. The current quarter reversal reflects general improvement in portfolio credit quality and composition.


◦	Total revenue was $1.3 billion, down $135 million from the preceding quarter, reflecting the gain on sale of the Bank's legacy principal branch and administrative office in the prior quarter and a decrease in fees from affiliates.


◦	Average loans held for investment during the first quarter of 2017 were $78.0 billion, down $0.6 billion from the fourth quarter of 2016.


◦	Average deposits during the first quarter of 2017 were $86.2 billion, down $0.5 billion from the fourth quarter of 2016.



	1

The following table presents financial highlights for the periods ended March 31, 2017, December 31, 2016 and March 31, 2016:



										Percent Change to
	As of and for the Three Months Ended									March 31, 2017 from
(Dollars in millions)	March 31, 2017			December 31, 2016			March 31, 2016			December 31, 2016		March 31, 2016
Results of operations:
Net interest income	$	795		$	802		$	724		(1	)%	10	%
Noninterest income	488			616			474			(21	)	3
Total revenue	1,283			1,418			1,198			(10	)	7
Noninterest expense	1,006			956			968			5		4
Pre-tax, pre-provision income ⁽¹⁾	277			462			230			(40	)	20
(Reversal of) provision for credit losses	(30		)	(41		)	162			27		(119	)
Income before income taxes and including
noncontrolling interests	307			503			68			(39	)	351
Income tax expense	83			175			18			(53	)	361
Net income including noncontrolling interests	224			328			50			(32	)	348
Deduct: Net loss from noncontrolling interests	5			6			12			(17	)	(58	)
Net income attributable to
MUFG Americas Holdings Corporation (MUAH)	$	229		$	334		$	62		(31	)	269

Balance sheet (end of period):
Total assets	$	149,678		$	148,144		$	156,554		1		(4	)
Total securities	25,299			24,478			23,699			3		7
Securities borrowed or purchased under resale agreements	19,992			19,747			28,110			1		(29	)
Total loans held for investment	78,434			77,551			80,906			1		(3	)
Core deposits ⁽²⁾	80,717			80,482			74,882			—		8
Total deposits	86,533			86,947			89,460			—		(3	)
Securities loaned or sold under repurchase agreements	25,079			24,616			27,211			2		(8	)
Long-term debt	11,333			11,410			13,068			(1	)	(13	)
MUAH stockholders' equity	17,484			17,233			16,684			1		5

Balance sheet (period average):
Total assets	$	149,563		$	150,799		$	154,704		(1	)	(3	)
Total securities	24,900			24,105			23,550			3		6
Securities borrowed or purchased under resale agreements	20,454			21,859			31,698			(6	)	(35	)
Total loans held for investment	77,982			78,615			80,083			(1	)	(3	)
Earning assets	136,489			137,964			142,153			(1	)	(4	)
Total deposits	86,151			86,700			83,968			(1	)	3
Securities loaned or sold under repurchase agreements	25,904			26,147			31,204			(1	)	(17	)
MUAH stockholders' equity	17,487			17,367			16,692			1		5
Net interest margin ^{(3) (7)}	2.37		%	2.35		%	2.06		%

____________________________________

Refer to Exhibit 12 for footnote explanations.



	2

First Quarter Results

First Quarter Total Revenue

For the first quarter of 2017, total revenue (net interest income plus noninterest income) was $1.3 billion, down $135 million from the fourth quarter of 2016. Net interest income for the first quarter of 2017 was $795 million, down $7 million compared with the fourth quarter of 2016. The net interest margin increased 2 basis points to 2.37% during the quarter.

For the first quarter of 2017, noninterest income was $488 million, down $128 million compared with the preceding quarter, largely due to the gain on sale of the Bank's legacy principal branch and administrative office in the prior quarter and lower fee income from revenue sharing activities with BTMU.

Compared with the first quarter of 2016, total revenue increased $85 million, primarily due to an increase in net interest income, driven by an increase in the net interest margin, partially offset by a decrease in earning assets.

First Quarter Noninterest Expense

Noninterest expense for the first quarter of 2017 was $1.0 billion, up $50 million compared with the fourth quarter of 2016 and up $38 million from the first quarter of 2016. The increase from the fourth quarter was driven primarily by increases in professional and outside services, advertising and public relations, and employee benefits expenses. Compared with the first quarter of 2016, the increase in noninterest expense was primarily due to increases in salaries, including incentive accruals, and professional and outside services expense.

The effective tax rate for the first quarter of 2017 was 27.0%, down from 34.8% for the fourth quarter of 2016, due to a decrease in state tax expense, an increase in federal tax credits related to renewable energy investments and an adjustment to align estimated income tax expense with actual full year results recorded in the prior quarter.



	3

Support Services Provided to BTMU - First Quarter Summary Impact

For the quarters ended March 31, 2017, December 31, 2016 and March 31, 2016, the Company recorded the following fee income and costs related to support services:



	For the Three Months Ended
(Dollars in millions)	March 31, 2017		December 31, 2016		March 31, 2016

Fees from affiliates - support services ⁽¹⁵⁾	$	158	$	175	$	149

Staff costs associated with fees from
affiliates - support services ⁽¹⁵⁾	147		162		139

Net support services	$	11	$	13	$	10

__________________________

Refer to Exhibit 12 for footnote explanations.

The Company also recognized fees from affiliates through revenue sharing agreements with BTMU for various business and banking services.

Balance Sheet

At March 31, 2017, total assets were $149.7 billion, up $1.5 billion from the prior quarter, driven by an increase in loans held for investment and securities available for sale. Total deposits decreased $0.4 billion to $86.5 billion compared with the prior quarter-end due to a decrease in demand deposits and money market deposits, partially offset by an increase in interest bearing deposits related to the launch of PurePoint Financial, a new online division of the Bank. Core deposits were up $0.2 billion, compared with the prior quarter-end. Commercial paper and other short-term borrowings increased $1.1 billion compared with the prior quarter-end.



	4

Credit Quality

The following table presents credit quality data for the quarters ended March 31, 2017, December 31, 2016 and March 31, 2016:




	As of and for the Three Months Ended
(Dollars in millions)	March 31, 2017			December 31, 2016			March 31, 2016

Total (reversal of) provision for credit losses	$	(30	)	$	(41	)	$	162
Net loans charged-off	56			19			4
Nonaccrual loans	569			689			956
Criticized loans held for investment ⁽¹³⁾	2,151			2,427			3,148

Credit Ratios:
Allowance for loan losses to:
Total loans held for investment	0.73		%	0.82		%	1.09		%
Nonaccrual loans	100.12			92.69			92.17
Allowance for credit losses to ⁽¹⁴⁾:
Total loans held for investment	0.91			1.03			1.30
Nonaccrual loans	125.81			116.20			109.86
Nonaccrual loans to total loans held for investment	0.73			0.89			1.18

____________________________________

Refer to Exhibit 12 for footnote explanations.

In the first quarter of 2017, the provision (reversal) for credit losses was $(30) million, compared with $(41) million for the fourth quarter of 2016 and $162 million for the first quarter of 2016. The current quarter reversal reflects general improvement in portfolio credit quality and composition.



	5

Capital

The following table presents capital ratio data as of March 31, 2017 and December 31, 2016:



	March 31, 2017		December 31, 2016
Capital ratios:

Regulatory:	U.S. Basel III
Common Equity Tier 1 risk-based capital ratio ^{(9) (10)}	15.10	%	14.77	%
Tier 1 risk-based capital ratio ^{(9) (10)}	15.10		14.77
Total risk-based capital ratio ^{(9) (10)}	16.66		16.45
Tier 1 leverage ratio ^{(9) (10)}	10.16		9.92

Other:
Tangible common equity ratio ⁽¹¹⁾	9.65	%	9.58	%
Common Equity Tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully phased-in) ^{(8) (9) (12)}	15.09		14.73

____________________________________

Refer to Exhibit 12 for footnote explanations.

The Company’s stockholders' equity was $17.5 billion at March 31, 2017, compared with $17.2 billion at December 31, 2016.

The Company's preliminary Common Equity Tier 1, Tier 1 and Total risk-based capital ratios, calculated in accordance with U.S. Basel III regulatory capital rules, were 15.10%, 15.10% and 16.66%, respectively, at March 31, 2017. The increase in the Company's risk-based capital ratios was driven by net income and a decrease in risk-weighted assets. The tangible common equity ratio was 9.65% at March 31, 2017.

The Company’s estimated Common Equity Tier 1 risk-based capital ratio under U.S. Basel III regulatory capital rules (standardized approach, fully phased-in) was 15.09% at March 31, 2017.



	6

Non-GAAP Financial Measures

This press release includes additional non-GAAP financial measures and capital ratios (tangible common equity and Common Equity Tier 1 capital (calculated under the U.S. Basel III standardized approach on a fully phased-in basis)) to provide useful supplemental information regarding the Company's business results and 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 that of 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. Please refer to our separate reconciliation of non-GAAP financial measures in Exhibits 10 and 11.

About MUFG Americas Holdings Corporation

Headquartered in New York, MUFG Americas Holdings Corporation is a financial holding company and bank holding company with total assets of $149.7 billion at March 31, 2017. Its main subsidiaries are MUFG Union Bank, N.A. and MUFG Securities Americas Inc. MUFG Union Bank, N.A. provides an array of financial services to individuals, small businesses, middle-market companies, and major corporations. As of March 31, 2017, MUFG Union Bank, N.A. operated 365 branches, comprised primarily of retail banking branches in the West Coast states, along with commercial branches in Texas, Illinois, New York and Georgia, as well as two international offices. MUFG Securities Americas Inc. is a registered securities broker-dealer which engages in capital markets origination transactions, private placements, collateralized financings, securities borrowing and lending transactions, and domestic and foreign debt and equities securities transactions. MUFG Americas Holdings Corporation is owned by The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Mitsubishi UFJ Financial Group, Inc. The Bank of Tokyo-Mitsubishi UFJ, Ltd. is a wholly-owned subsidiary of Mitsubishi UFJ Financial Group, Inc., which is one of the world’s leading financial groups. Visit www.unionbank.com or www.mufgamericas.com for more information.

###



	7

MUFG Americas Holdings Corporation and Subsidiaries

Financial Highlights (Unaudited)



																Percent Change to
	As of and for the Three Months Ended															March 31, 2017 from
(Dollars in millions)	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2016		March 31, 2016
Results of operations:
Net interest income	$	795		$	802		$	773		$	754		$	724		(1	)%	10	%
Noninterest income	488			616			570			565			474			(21	)	3
Total revenue	1,283			1,418			1,343			1,319			1,198			(10	)	7
Noninterest expense	1,006			956			952			906			968			5		4
Pre-tax, pre-provision income ⁽¹⁾	277			462			391			413			230			(40	)	20
(Reversal of) provision for credit losses	(30		)	(41		)	73			(39		)	162			27		(119	)
Income before income taxes and including
noncontrolling interests	307			503			318			452			68			(39	)	351
Income tax expense	83			175			97			129			18			(53	)	361
Net income including noncontrolling interests	224			328			221			323			50			(32	)	348
Deduct: Net loss from noncontrolling interests	5			6			39			11			12			(17	)	(58	)
Net income attributable to
MUFG Americas Holdings Corporation (MUAH)	$	229		$	334		$	260		$	334		$	62		(31	)	269

Balance sheet (end of period):
Total assets	$	149,678		$	148,144		$	151,099		$	147,972		$	156,554		1		(4	)
Total securities	25,299			24,478			24,116			23,188			23,699			3		7
Securities borrowed or purchased under resale agreements	19,992			19,747			21,906			20,363			28,110			1		(29	)
Total loans held for investment	78,434			77,551			79,249			81,045			80,906			1		(3	)
Core deposits ⁽²⁾	80,717			80,482			77,392			75,296			74,882			—		8
Total deposits	86,533			86,947			84,643			82,652			89,460			—		(3	)
Securities loaned or sold under repurchase agreements	25,079			24,616			25,582			23,197			27,211			2		(8	)
Long-term debt	11,333			11,410			11,427			11,737			13,068			(1	)	(13	)
MUAH stockholders' equity	17,484			17,233			17,353			17,133			16,684			1		5

Balance sheet (period average):
Total assets	$	149,563		$	150,799		$	149,056		$	149,447		$	154,704		(1	)	(3	)
Total securities	24,900			24,105			23,503			23,341			23,550			3		6
Securities borrowed or purchased under resale agreements	20,454			21,859			20,668			24,030			31,698			(6	)	(35	)
Total loans held for investment	77,982			78,615			80,469			81,542			80,083			(1	)	(3	)
Earning assets	136,489			137,964			136,051			137,198			142,153			(1	)	(4	)
Total deposits	86,151			86,700			84,194			83,621			83,968			(1	)	3
Securities loaned or sold under repurchase agreements	25,904			26,147			23,872			25,338			31,204			(1	)	(17	)
MUAH stockholders' equity	17,487			17,367			17,311			16,980			16,692			1		5

Performance ratios:
Return on average assets ⁽³⁾	0.62		%	0.89		%	0.70		%	0.89		%	0.16		%
Return on average MUAH stockholders' equity ⁽³⁾	5.27			7.69			6.03			7.87			1.45
Return on average MUAH tangible common equity ^{(3) (4)}	6.64			9.71			7.60			9.92			1.94
Efficiency ratio ⁽⁵⁾	78.39			67.35			70.88			68.67			80.90
Adjusted efficiency ratio ⁽⁶⁾	73.42			64.62			62.46			62.27			73.72
Net interest margin ^{(3) (7)}	2.37			2.35			2.29			2.23			2.06

Capital ratios:

Regulatory ⁽⁸⁾:	U.S. Basel III
Common Equity Tier 1 risk-based capital ratio ^{(9) (10)}	15.10		%	14.77		%	13.97		%	13.58		%	13.33		%
Tier 1 risk-based capital ratio ^{(9) (10)}	15.10			14.77			13.97			13.58			13.33
Total risk-based capital ratio ^{(9) (10)}	16.66			16.45			15.66			15.44			15.32
Tier 1 leverage ratio ^{(9) (10)}	10.16			9.92			9.82			11.59			11.41

Other:
Tangible common equity ratio ⁽¹¹⁾	9.65		%	9.58		%	9.45		%	9.53		%	8.70		%
Common Equity Tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully phased-in) ^{(8) (9) (12)}	15.09			14.73			13.94			13.56			13.31

___________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 1

MUFG Americas Holdings Corporation and Subsidiaries

Credit Quality (Unaudited)



																Percent Change to
	As of and for the Three Months Ended															March 31, 2017 from
(Dollars in millions)	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2016		March 31, 2016

Credit Data:
(Reversal of) provision for loan losses	$	(14	)	$	(32	)	$	68		$	(36	)	$	158		56	%	(109	)%
(Reversal of) provision for losses on unfunded credit commitments	(16		)	(9		)	5			(3		)	4			(78	)	(500	)
Total (reversal of) provision for credit losses	$	(30	)	$	(41	)	$	73		$	(39	)	$	162		27		(119	)

Net loans charged-off (recovered)	$	56		$	19		$	124		$	97		$	4		195		nm
Nonperforming assets	572			692			724			648			974			(17	)	(41	)
Criticized loans held for investment ⁽¹³⁾	2,151			2,427			2,404			2,918			3,148			(11	)	(32	)

Credit Ratios:
Allowance for loan losses to:
Total loans held for investment	0.73		%	0.82		%	0.87		%	0.92		%	1.09		%
Nonaccrual loans	100.12			92.69			96.08			118.30			92.17
Allowance for credit losses to ⁽¹⁴⁾:
Total loans held for investment	0.91			1.03			1.09			1.13			1.30
Nonaccrual loans	125.81			116.20			119.97			144.55			109.86
Net loans charged-off (recovered) to average total loans held for investment ⁽³⁾	0.29			0.09			0.61			0.48			0.02
Nonperforming assets to total loans held for investment and Other Real Estate Owned (OREO)	0.73			0.89			0.91			0.80			1.20
Nonperforming assets to total assets	0.38			0.47			0.48			0.44			0.62
Nonaccrual loans to total loans held for investment	0.73			0.89			0.91			0.78			1.18

____________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 2

MUFG Americas Holdings Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)



			For the Three Months Ended
(Dollars in millions)			March 31, 2017			December 31, 2016			September 30, 2016		June 30, 2016			March 31, 2016
Interest Income
	Loans		$	708		$	703		$	711	$	719		$	706
	Securities		129			137			122		114			110
	Securities borrowed or purchased under resale
	agreements		63			54			47		44			50
	Trading assets		74			62			50		38			22
	Other		10			11			6		4			6
		Total interest income	984			967			936		919			894

Interest Expense
	Deposits		49			47			49		49			49
	Commercial paper and other short-term borrowings		8			15			7		7			3
	Long-term debt		57			47			57		63			73
	Securities loaned or sold under repurchase agreements		59			41			36		31			32
	Trading liabilities		16			15			14		15			13
		Total interest expense	189			165			163		165			170

Net Interest Income			795			802			773		754			724
	(Reversal of) provision for credit losses		(30		)	(41		)	73		(39		)	162
		Net interest income after (reversal of) provision for
		credit losses	825			843			700		793			562

Noninterest Income
	Service charges on deposit accounts		48			49			48		46			49
	Trust and investment management fees		29			29			29		30			32
	Trading account activities		(4		)	12			25		40			28
	Securities gains, net		2			14			23		19			13
	Credit facility fees		26			26			27		28			27
	Brokerage commissions and fees		18			5			15		25			19
	Card processing fees, net		11			11			10		9			9
	Investment banking and syndication fees		88			59			113		79			61
	Fees from affiliates ⁽¹⁵⁾		219			265			222		258			212
	Other, net		51			146			58		31			24
		Total noninterest income	488			616			570		565			474

Noninterest Expense
	Salaries and employee benefits		615			596			592		572			595
	Net occupancy and equipment		82			83			82		79			81
	Professional and outside services		116			99			84		81			105
	Software		46			41			39		37			37
	Regulatory assessments		20			22			22		14			14
	Intangible asset amortization		7			8			7		6			7
	Other		120			107			126		117			129
		Total noninterest expense	1,006			956			952		906			968

	Income before income taxes and including
	noncontrolling interests		307			503			318		452			68
	Income tax expense		83			175			97		129			18
Net Income including Noncontrolling Interests			224			328			221		323			50
	Deduct: Net loss from noncontrolling interests		5			6			39		11			12
Net Income attributable to MUAH			$	229		$	334		$	260	$	334		$	62

____________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 3

MUFG Americas Holdings Corporation and Subsidiaries

Consolidated Balance Sheets (Unaudited)



(Dollars in millions except for per share amount)				March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Assets
Cash and due from banks				$	1,736		$	1,909		$	1,837		$	1,766		$	1,813
Interest bearing deposits in banks				3,091			3,844			3,537			2,306			6,747
Federal funds sold				—			—			—			10			—
		Total cash and cash equivalents		4,827			5,753			5,374			4,082			8,560
Securities borrowed or purchased under resale agreements				19,992			19,747			21,906			20,363			28,110
Trading account assets				8,926			8,942			9,405			8,427			5,629
Securities available for sale				14,925			14,141			13,728			12,929			13,094
Securities held to maturity				10,374			10,337			10,388			10,259			10,605
Loans held for investment				78,434			77,551			79,249			81,045			80,906
	Allowance for loan losses			(570		)	(639		)	(691		)	(748		)	(881		)
		Loans held for investment, net		77,864			76,912			78,558			80,297			80,025
Premises and equipment, net				618			591			591			599			666
Goodwill				3,225			3,225			3,225			3,225			3,225
Other assets				8,927			8,496			7,924			7,791			6,640
			Total assets	$	149,678		$	148,144		$	151,099		$	147,972		$	156,554

Liabilities
Deposits:
	Noninterest bearing			$	35,020		$	35,654		$	34,186		$	32,861		$	38,556
	Interest bearing			51,513			51,293			50,457			49,791			50,904
		Total deposits		86,533			86,947			84,643			82,652			89,460
Securities loaned or sold under repurchase agreements				25,079			24,616			25,582			23,197			27,211
Commercial paper and other short-term borrowings				3,487			2,360			5,865			7,137			3,179
Long-term debt				11,333			11,410			11,427			11,737			13,068
Trading account liabilities				3,233			2,905			3,328			3,053			4,375
Other liabilities				2,383			2,520			2,742			2,863			2,367
			Total liabilities	132,048			130,758			133,587			130,639			139,660

Equity
MUAH stockholders' equity:
	Common stock, par value $1 per share:
		Authorized 300,000,000 shares; 144,322,280 shares issued and outstanding as of March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016		144			144			144			144			144
	Additional paid-in capital			7,892			7,884			7,871			7,870			7,878
	Retained earnings			10,331			10,101			9,769			9,509			9,178
	Accumulated other comprehensive loss			(883		)	(896		)	(431		)	(390		)	(516		)
			Total MUAH stockholders' equity	17,484			17,233			17,353			17,133			16,684
Noncontrolling interests				146			153			159			200			210
			Total equity	17,630			17,386			17,512			17,333			16,894
			Total liabilities and equity	$	149,678		$	148,144		$	151,099		$	147,972		$	156,554

____________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 4

MUFG Americas Holdings Corporation and Subsidiaries

Net Interest Income (Unaudited)



	For the Three Months Ended
	March 31, 2017							December 31, 2016
				Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)	Balance			Expense ⁽⁷⁾		Rate ⁽³⁾⁽⁷⁾		Balance			Expense ⁽⁷⁾		Rate ⁽³⁾⁽⁷⁾
Assets
Loans held for investment: ⁽¹⁶⁾
Commercial and industrial	$	25,612		$	220	3.49	%	$	26,935		$	229	3.38	%
Commercial mortgage	14,504			148		4.07		14,816			149		4.02
Construction	2,217			22		4.01		2,211			22		4.08
Lease financing	1,788			16		3.63		1,822			15		3.49
Residential mortgage	30,411			256		3.37		29,271			240		3.28
Home equity and other consumer loans	3,450			49		5.77		3,560			50		5.53
Total loans held for investment	77,982			711		3.67		78,615			705		3.58
Securities	24,900			135		2.16		24,105			142		2.36
Securities borrowed or purchased under resale agreements	20,454			63		1.26		21,859			55		0.99
Interest bearing deposits in banks	3,450			7		0.82		4,441			6		0.53
Federal funds sold	—			—		1.03		2			—		0.71
Trading account assets	9,094			74		3.29		8,283			62		2.96
Other earning assets	609			3		2.12		659			4		2.95
Total earning assets	136,489			993		2.93		137,964			974		2.82
Allowance for loan losses	(647		)					(697		)
Cash and due from banks	1,869							1,878
Premises and equipment, net	592							586
Other assets ⁽¹⁷⁾	11,260							11,068
Total assets	$	149,563						$	150,799
Liabilities
Interest bearing deposits:
Transaction and money market accounts	$	39,905		33		0.34		$	39,523		31		0.31
Savings	6,205			1		0.07		5,925			1		0.04
Time	5,369			15		1.13		5,901			15		1.08
Total interest bearing deposits	51,479			49		0.39		51,349			47		0.37
Commercial paper and other short-term borrowings	3,477			8		0.94		4,109			15		1.38
Securities loaned or sold under repurchase agreements	25,904			59		0.92		26,147			41		0.63
Long-term debt	11,347			57		2.01		11,285			47		1.69
Total borrowed funds	40,728			124		1.22		41,541			103		0.99
Trading account liabilities	2,567			16		2.57		2,552			15		2.28
Total interest bearing liabilities	94,774			189		0.81		95,442			165		0.69
Noninterest bearing deposits	34,672							35,351
Other liabilities ⁽¹⁸⁾	2,487							2,490
Total liabilities	131,933							133,283
Equity
MUAH stockholders' equity	17,487							17,367
Noncontrolling interests	143							149
Total equity	17,630							17,516
Total liabilities and equity	$	149,563						$	150,799

Net interest income/spread (taxable-equivalent basis)				804		2.12	%				809		2.13	%
Impact of noninterest bearing deposits						0.22							0.19
Impact of other noninterest bearing sources						0.03							0.03
Net interest margin						2.37							2.35
Less: taxable-equivalent adjustment				9							7
Net interest income				$	795						$	802

____________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 5

MUFG Americas Holdings Corporation and Subsidiaries

Net Interest Income (Unaudited)



	For the Three Months Ended
	March 31, 2017							March 31, 2016
				Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in millions)	Balance			Expense ⁽⁷⁾		Rate ⁽³⁾⁽⁷⁾		Balance			Expense ⁽⁷⁾		Rate ⁽³⁾⁽⁷⁾
Assets
Loans held for investment: ⁽¹⁶⁾
Commercial and industrial	$	25,612		$	220	3.49	%	$	30,475		$	248	3.27	%
Commercial mortgage	14,504			148		4.07		14,604			148		4.04
Construction	2,217			22		4.01		2,272			22		3.94
Lease financing	1,788			16		3.63		1,890			15		3.15
Residential mortgage	30,411			256		3.37		27,479			233		3.40
Home equity and other consumer loans	3,450			49		5.77		3,363			41		4.96
Total loans held for investment	77,982			711		3.67		80,083			707		3.54
Securities	24,900			135		2.16		23,550			115		1.95
Securities borrowed or purchased under resale agreements	20,454			63		1.26		31,698			50		0.64
Interest bearing deposits in banks	3,450			7		0.82		2,412			3		0.53
Federal funds sold	—			—		1.03		42			—		0.53
Trading account assets	9,094			74		3.29		3,951			22		2.24
Other earning assets	609			3		2.12		417			3		2.54
Total earning assets	136,489			993		2.93		142,153			900		2.54
Allowance for loan losses	(647		)					(727		)
Cash and due from banks	1,869							1,888
Premises and equipment, net	592							643
Other assets ⁽¹⁷⁾	11,260							10,747
Total assets	$	149,563						$	154,704
Liabilities
Interest bearing deposits:
Transaction and money market accounts	$	39,905		33		0.34		$	38,355		28		0.30
Savings	6,205			1		0.07		5,715			1		0.06
Time	5,369			15		1.13		7,577			20		1.08
Total interest bearing deposits	51,479			49		0.39		51,647			49		0.39
Commercial paper and other short-term borrowings	3,477			8		0.94		3,536			3		0.42
Securities loaned or sold under repurchase agreements	25,904			59		0.92		31,204			32		0.41
Long-term debt	11,347			57		2.01		13,410			73		2.14
Total borrowed funds	40,728			124		1.22		48,150			108		0.90
Trading account liabilities	2,567			16		2.57		2,716			13		1.96
Total interest bearing liabilities	94,774			189		0.81		102,513			170		0.67
Noninterest bearing deposits	34,672							32,321
Other liabilities ⁽¹⁸⁾	2,487							3,006
Total liabilities	131,933							137,840
Equity
MUAH stockholders' equity	17,487							16,692
Noncontrolling interests	143							172
Total equity	17,630							16,864
Total liabilities and equity	$	149,563						$	154,704

Net interest income/spread (taxable-equivalent basis)				804		2.12	%				730		1.87	%
Impact of noninterest bearing deposits						0.22							0.16
Impact of other noninterest bearing sources						0.03							0.03
Net interest margin						2.37							2.06
Less: taxable-equivalent adjustment				9							6
Net interest income				$	795						$	724

____________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 6

MUFG Americas Holdings Corporation and Subsidiaries

Loans and Nonperforming Assets (Unaudited)



(Dollars in millions)					March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016

Loans held for investment
	Loans held for investment:
		Commercial and industrial			$	25,602	$	25,379	$	27,662	$	29,831	$	30,721
		Commercial mortgage			14,468		14,625		15,024		15,238		15,029
		Construction			2,040		2,283		2,257		2,255		2,251
		Lease financing			1,779		1,819		1,840		1,878		1,870
			Total commercial portfolio		43,889		44,106		46,783		49,202		49,871

		Residential mortgage			31,162		29,922		28,873		28,343		27,604
		Home equity and other consumer loans			3,383		3,523		3,593		3,500		3,431
			Total consumer portfolio		34,545		33,445		32,466		31,843		31,035
				Total loans held for investment	$	78,434	$	77,551	$	79,249	$	81,045	$	80,906

Nonperforming Assets
	Nonaccrual loans:
		Commercial and industrial			$	400	$	458	$	487	$	397	$	702
		Commercial mortgage			33		31		31		26		30
			Total commercial portfolio		433		489		518		423		732

		Residential mortgage			110		171		172		177		186
		Home equity and other consumer loans			26		29		29		32		38
			Total consumer portfolio		136		200		201		209		224
				Total nonaccrual loans	569		689		719		632		956

	OREO				3		3		5		16		18

				Total nonperforming assets	$	572	$	692	$	724	$	648	$	974

	Loans 90 days or more past due and still accruing				$	24	$	23	$	23	$	18	$	34



	Exhibit 7

MUFG Americas Holdings Corporation and Subsidiaries

Allowance for Credit Losses (Unaudited)



	As of and for the Three Months Ended
(Dollars in millions)	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016

Analysis of Allowance for Credit Losses
Allowance for loan losses, beginning of period	$	639		$	691		$	748		$	881		$	723
(Reversal of) provision for loan losses	(14		)	(32		)	68			(36		)	158
Other	1			(1		)	(1		)	—			4
Loans charged-off:
Commercial and industrial	(49		)	(26		)	(66		)	(46		)	(8		)
Commercial and industrial - transfer to held for sale	(6		)	(2		)	(60		)	(51		)	—
Total commercial portfolio	(55		)	(28		)	(126		)	(97		)	(8		)
Residential mortgage	—			—			2			—			1
Home equity and other consumer loans	(11		)	(7		)	(4		)	(2		)	(2		)
Total consumer portfolio	(11		)	(7		)	(2		)	(2		)	(1		)
Total loans charged-off	(66		)	(35		)	(128		)	(99		)	(9		)
Recoveries of loans previously charged-off:
Commercial and industrial	8			15			2			2			1
Commercial mortgage	1			—			1			—			3
Total commercial portfolio	9			15			3			2			4
Home equity and other consumer loans	1			1			1			—			1
Total consumer portfolio	1			1			1			—			1
Total recoveries of loans previously charged-off	10			16			4			2			5
Net loans (charged-off) recovered	(56		)	(19		)	(124		)	(97		)	(4		)
Ending balance of allowance for loan losses	570			639			691			748			881
Allowance for losses on unfunded credit commitments	146			162			171			166			169
Total allowance for credit losses	$	716		$	801		$	862		$	914		$	1,050



	Exhibit 8

MUFG Americas Holdings Corporation and Subsidiaries

Securities (Unaudited)



Securities Available for Sale

			March 31, 2017				December 31, 2016				Fair Value			Fair Value
			Amortized		Fair		Amortized		Fair		Change from			% Change from
(Dollars in millions)			Cost		Value		Cost		Value		December 31, 2016			December 31, 2016
Asset Liability Management securities:
U.S. Treasury			$	2,920	$	2,813	$	2,625	$	2,505	$	308		12	%
Residential mortgage-backed securities:
	U.S. government agency and government-sponsored agencies		7,474		7,378		6,814		6,695		683			10
	Privately issued		431		426		333		327		99			30
Privately issued - commercial mortgage-backed securities			664		663		666		664		(1		)	—
Collateralized loan obligations			1,985		1,997		2,219		2,218		(221		)	(10	)
Other			7		7		7		7		—			—
		Asset Liability Management securities	13,481		13,284		12,664		12,416		868			7
Other debt securities:
Direct bank purchase bonds			1,528		1,543		1,601		1,613		(70		)	(4	)
Other			94		93		108		107		(14		)	(13	)
Equity securities			5		5		5		5		—			—
		Total securities available for sale	$	15,108	$	14,925	$	14,378	$	14,141	$	784		6	%

Securities Held to Maturity

			March 31, 2017				December 31, 2016				Carrying Amount			Carrying Amount
			Carrying		Fair		Carrying		Fair		Change from			% Change from
(Dollars in millions)			Amount ⁽¹⁹⁾		Value		Amount ⁽¹⁹⁾		Value		December 31, 2016			December 31, 2016
U.S. Treasury			$	493	$	497	$	492	$	497	$	1		—	%
U.S. government agency and government-sponsored agencies-residential mortgage-backed securities			8,306		8,240		8,263		8,201		43			1
U.S. government agency and government-sponsored agencies-commercial mortgage-backed securities			1,575		1,611		1,582		1,618		(7		)	—
		Total securities held to maturity	$	10,374	$	10,348	$	10,337	$	10,316	$	37		—	%

___________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 9

MUFG Americas Holdings Corporation and Subsidiaries

Reconciliation of Non-GAAP Measures (Unaudited)

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
(Dollars in millions)	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Net income attributable to MUAH	$	229		$	334		$	260		$	334		$	62
Add: intangible asset amortization, net of tax	4			5			4			4			4
Net income attributable to MUAH, excluding intangible asset amortization (a)	$	233		$	339		$	264		$	338		$	66

Average MUAH stockholders' equity	$	17,487		$	17,367		$	17,311		$	16,980		$	16,692
Less: Goodwill	3,225			3,225			3,225			3,225			3,225
Less: Intangible assets, except mortgage servicing rights (MSRs)	220			226			193			179			186
Less: Deferred tax liabilities related to goodwill and intangible assets	(75		)	(50		)	(50		)	(48		)	(44		)
Average tangible common equity (b)	$	14,117		$	13,966		$	13,943		$	13,624		$	13,325
Return on average MUAH tangible common equity ^{(3) (4)}(a)/(b)	6.64		%	9.71		%	7.60		%	9.92		%	1.94		%

Noninterest expense	$	1,006		$	956		$	952		$	906		$	968
Less: Staff costs associated with fees from affiliates - support services	147			162			139			137			139
Less: Foreclosed asset expense and other credit costs	—			1			1			—			(1		)
Less: Productivity initiative costs	14			26			18			4			12
Less: Low income housing credit (LIHC) investment amortization expense	2			3			2			2			1
Less: Expenses of the LIHC consolidated VIEs	5			5			40			11			12
Less: Merger and business integration costs	3			5			3			5			5
Less: Net adjustments related to privatization transaction	3			3			4			5			5
Less: Intangible asset amortization	4			5			3			2			3
Less: Contract termination fee	2			3			(2		)	—			—
Noninterest expense, as adjusted (c)	$	826		$	743		$	744		$	740		$	792

Total revenue	$	1,283		$	1,418		$	1,343		$	1,319		$	1,198
Add: Net interest income taxable-equivalent adjustment	9			7			8			8			6
Less: Fees from affiliates - support services	158			175			150			147			149
Less: Productivity initiative gains	4			71			—			—			—
Less: Accretion related to privatization-related fair value adjustments	2			1			2			3			5
Less: Other credit costs	(1		)	23			4			(9		)	(13		)
Less: Impairment on private equity investments	5			1			3			—			(12		)
Less: Gains on sale of fixed assets	—			3			—			—			—
Total revenue, as adjusted (d)	$	1,124		$	1,151		$	1,192		$	1,186		$	1,075
Adjusted efficiency ratio (c)/(d) ⁽⁶⁾	73.42		%	64.62		%	62.46		%	62.27		%	73.72		%

____________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 10

MUFG Americas Holdings Corporation and Subsidiaries

Reconciliation of Non-GAAP Measures (Unaudited)

The following table presents a reconciliation between certain GAAP amounts and specific non-GAAP measures as used to compute selected non-GAAP financial ratios.



		As of and for the Three Months Ended
(Dollars in millions)		March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Total MUAH stockholders' equity		$	17,484		$	17,233		$	17,353		$	17,133		$	16,684
Less: Goodwill		3,225			3,225			3,225			3,225			3,225
Less: Intangible assets, except MSRs		216			223			224			175			182
Less: Deferred tax liabilities related to goodwill and intangible assets		(72		)	(79		)	(52		)	(48		)	(49		)
	Tangible common equity (e)	$	14,115		$	13,864		$	13,956		$	13,781		$	13,326
Total assets		$	149,678		$	148,144		$	151,099		$	147,972		$	156,554
Less: Goodwill		3,225			3,225			3,225			3,225			3,225
Less: Intangible assets, except MSRs		216			223			224			175			182
Less: Deferred tax liabilities related to goodwill and intangible assets		(72		)	(79		)	(52		)	(48		)	(49		)
	Tangible assets (f)	$	146,309		$	144,775		$	147,702		$	144,620		$	153,196
Tangible common equity ratio (e)/(f) ⁽¹¹⁾		9.65		%	9.58		%	9.45		%	9.53		%	8.70		%

Common Equity Tier 1 capital under U.S. Basel III (standardized transitional) (g)		$	14,977		$	14,757		$	14,426		$	13,233		$	12,936
Other		(29		)	(58		)	(55		)	(38		)	(40		)
	Common Equity Tier 1 capital estimated under U.S. Basel III (standardized approach; fully phased-in) (h)	$	14,948		$	14,699		$	14,371		$	13,195		$	12,896
Risk-weighted assets, estimated under U.S. Basel III (standardized transitional) (i)		$	99,155		$	99,904		$	103,265		$	97,412		$	97,011
Add: Adjustments		(101		)	(137		)	(142		)	(118		)	(122		)
	Total risk-weighted assets, estimated under U.S. Basel III (standardized approach; fully phased-in) (j)	$	99,054		$	99,767		$	103,123		$	97,294		$	96,889
Common Equity Tier 1 risk-based capital ratio (U.S. Basel III standardized approach; fully phased-in) (h)/(j) ^{(8) (9) (12)}		15.09		%	14.73		%	13.94		%	13.56		%	13.31		%

____________________________________________

Refer to Exhibit 12 for footnote explanations.



	Exhibit 11

MUFG Americas Holdings Corporation and Subsidiaries

Footnotes


(1)	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 credit losses through a credit cycle.


(2)	Core deposits exclude brokered deposits, foreign time deposits, domestic time deposits greater than $250,000 and certain other deposits not considered to be core customer relationships.


(3)	Annualized.

(4)

Return on tangible common equity, a non-GAAP financial measure, is net income excluding intangible asset amortization divided by average tangible common equity. Management believes that this ratio provides useful supplemental information regarding the Company's business results. The methodology for determining tangible common equity may differ among companies. Please refer to Exhibit 10 for reconciliations between certain GAAP amounts and this non-GAAP measure.


(5)	The efficiency ratio is total noninterest expense as a percentage of total revenue (net interest income and noninterest income).

(6)

The adjusted efficiency ratio, a non-GAAP financial measure, is adjusted noninterest expense (noninterest expense excluding staff costs associated with fees from affiliates - support services, foreclosed asset expense and other credit costs, certain costs related to productivity initiatives, LIHC investment amortization expense, expenses of the LIHC consolidated variable interest entities, merger and business integration costs, privatization-related expenses, intangible asset amortization, and a contract termination fee) as a percentage of adjusted total revenue (net interest income (taxable-equivalent basis) and noninterest income), excluding the impact of fees from affiliates - support services, productivity initiatives related to the sale of certain premises, accretion related to privatization-related fair value adjustments, other credit costs, impairment on private equity investments and gains on sale of fixed assets. 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 Exhibit 10 for reconciliations between certain GAAP amounts and this non-GAAP measure.


(7)	Yields, interest income and net interest margin are presented on a taxable-equivalent basis using the federal statutory tax rate of 35%.


(8)	Ratios calculated at March 31, 2017, December 31, 2016 and September 30, 2016 reflect the designation of MUAH as the U.S. Intermediate Holding Company (IHC) of MUFG on July 1, 2016. Prior period ratios have not been revised to include the transferred IHC entities.


(9)	Preliminary as of March 31, 2017.


(10)	These capital ratios are calculated in accordance with the transition guidelines set forth in the U.S. federal banking agencies' final U.S. Basel III regulatory capital rules.

(11)

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 11 for a reconciliation between certain GAAP amounts and these non-GAAP measures.

(12)

Common Equity Tier 1 risk-based capital (standardized, fully phased-in basis) 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 transition provisions of the U.S. Basel III rules were fully phased in for the periods in which the ratio is disclosed. Management reviews this ratio, which excludes accumulated other comprehensive loss, along with other measures of capital as part of its financial analyses and has included this non-GAAP information because of current interest in such information by market participants. Please refer to Exhibit 11 for a reconciliation between certain GAAP amounts and this non-GAAP measure.


(13)	Criticized loans held for investment reflect 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.


(14)	The allowance for credit losses ratios include the allowances for loan losses and losses on unfunded credit commitments as a percentage of end of period total loans held for investment or total nonaccrual loans, as appropriate.


(15)	Fees from affiliates primarily represents income from BTMU pursuant to a master services agreement whereby the Bank provides BTMU with support services for its U.S. branch banking operations in exchange for fee income.


(16)	Average balances on loans held for investment include all nonaccrual loans. The amortized portion of net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yield.


(17)	Includes noninterest bearing trading account assets.


(18)	Includes noninterest bearing trading account liabilities.


(19)	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



	Exhibit 12

Alan Gulick

Doug Lambert

Corporate Communications

Investor Relations

(425) 423-7317

(212) 782-6872