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Delaware
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13-2614959
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Large accelerated filer [ X ]
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Accelerated filer [ ]
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Non-accelerated filer [ ] (Do not check if a smaller reporting company)
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Smaller reporting company [ ]
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Class
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Outstanding as of
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Sept. 30, 2015
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Common Stock, $0.01 par value
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1,092,952,592
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Page
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Part I - Financial Information
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|
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures About Market Risk:
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Item 1. Financial Statements:
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Quarter ended
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Year-to-date
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|||||||||||||
(dollar amounts in millions, except per common share amounts and unless otherwise noted)
|
Sept. 30, 2015
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June 30,
2015 |
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Sept. 30, 2014
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Sept. 30, 2015
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Sept. 30, 2014
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|||||
Results applicable to common shareholders of The Bank of New York Mellon Corporation:
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||||||||||
Net income
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$
|
820
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$
|
830
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$
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1,070
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$
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2,416
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$
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2,285
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Basic earnings per share
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0.74
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0.74
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0.93
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2.15
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1.98
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|||||
Diluted earnings per share
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0.74
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0.73
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0.93
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2.13
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1.97
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|||||
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||||||||||
Fee and other revenue
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$
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3,053
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$
|
3,067
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$
|
3,851
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$
|
9,132
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$
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9,714
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(Loss) income from consolidated investment management funds
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(22
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)
|
40
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39
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70
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|
121
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|||||
Net interest revenue
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759
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|
779
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721
|
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2,266
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|
2,168
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|||||
Total revenue
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$
|
3,790
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$
|
3,886
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$
|
4,611
|
|
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$
|
11,468
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$
|
12,003
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|
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|
|
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|
||||||||||
Return on common equity
(annualized) (a)
|
9.1
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%
|
9.4
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%
|
11.6
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%
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9.1
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%
|
8.4
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%
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|||||
Non-GAAP
(a)(b)
|
9.7
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%
|
10.3
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%
|
8.5
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%
|
|
9.7
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%
|
8.2
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%
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|||||
|
|
|
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|
||||||||||
Return on tangible common equity
(annualized) –
Non-GAAP
(a)
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20.8
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%
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21.5
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%
|
26.2
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%
|
|
20.9
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%
|
19.6
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%
|
|||||
Non-GAAP adjusted
(a)(b)
|
21.0
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%
|
22.5
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%
|
18.4
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%
|
|
21.2
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%
|
18.1
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%
|
|||||
|
|
|
|
|
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|
||||||||||
Return on average assets
(annualized)
|
0.87
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%
|
0.88
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%
|
1.12
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%
|
|
0.86
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%
|
0.83
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%
|
|||||
|
|
|
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|
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|
||||||||||
Fee revenue as a percentage of total revenue excluding net securities gains
|
80
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%
|
79
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%
|
83
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%
|
|
80
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%
|
81
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%
|
|||||
|
|
|
|
|
|
|
||||||||||
Percentage of non-U.S. total revenue
(c)
|
37
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%
|
36
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%
|
43
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%
|
|
37
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%
|
39
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%
|
|||||
|
|
|
|
|
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|
||||||||||
Pre-tax operating margin
(a)
|
29
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%
|
30
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%
|
36
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%
|
|
29
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%
|
28
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%
|
|||||
Non-GAAP
(a)(b)
|
31
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%
|
33
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%
|
29
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%
|
|
31
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%
|
28
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%
|
|||||
|
|
|
|
|
|
|
||||||||||
Net interest margin (FTE)
|
0.98
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%
|
1.00
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%
|
0.94
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%
|
|
0.98
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%
|
0.99
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Assets under management at period end
(in billions) (d)
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$
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1,625
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$
|
1,700
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$
|
1,620
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$
|
1,625
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$
|
1,620
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|
Assets under custody and/or administration (“AUC/A”) at period end
(in trillions) (e)
|
$
|
28.5
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$
|
28.6
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$
|
28.3
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|
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$
|
28.5
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$
|
28.3
|
|
Market value of securities on loan at period end
(in billions) (f)
|
$
|
288
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$
|
283
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|
$
|
282
|
|
|
$
|
288
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|
$
|
282
|
|
|
|
|
|
|
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||||||||||
Average common shares and equivalents outstanding
(in thousands)
:
|
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||||||||||
Basic
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1,098,003
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1,113,790
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1,126,946
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1,110,056
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1,133,006
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|||||
Diluted
|
1,105,645
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1,122,135
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1,134,871
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1,117,975
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1,139,718
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|||||
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||||||||||
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|
||||||||||
Capital ratios
|
Sept. 30, 2015
|
|
June 30, 2015
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|
Dec. 31, 2014
|
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|
|||||||
Consolidated regulatory capital ratios:
(g)
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|
|
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|
||||||||||
Common equity Tier 1 (“CET1”) ratio
|
10.5
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%
|
10.9
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%
|
11.2
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%
|
|
|
|
|||||||
Tier 1 capital ratio
|
11.9
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%
|
12.5
|
%
|
12.2
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%
|
|
|
|
|||||||
Total (Tier 1 plus Tier 2) capital ratio
|
12.2
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%
|
12.8
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%
|
12.5
|
%
|
|
|
|
|||||||
Leverage capital ratio
|
5.9
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%
|
5.8
|
%
|
5.6
|
%
|
|
|
|
|||||||
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|
||||||||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
(a)
|
10.1
|
%
|
9.7
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%
|
9.7
|
%
|
|
|
|
|||||||
BNY Mellon common shareholders’ equity to total assets ratio – GAAP
(a)
|
9.4
|
%
|
9.0
|
%
|
9.3
|
%
|
|
|
|
|||||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
(a)
|
6.2
|
%
|
6.2
|
%
|
6.5
|
%
|
|
|
|
|||||||
|
|
|
|
|
|
|
||||||||||
Selected regulatory capital ratios – fully phased-in – Non-GAAP:
|
|
|
|
|
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|
||||||||||
Estimated CET1 ratio:
(h)
|
|
|
|
|
|
|
||||||||||
Standardized Approach
|
9.9
|
%
|
10.0
|
%
|
10.6
|
%
|
|
|
|
|||||||
Advanced Approach
|
9.3
|
%
|
9.9
|
%
|
9.8
|
%
|
|
|
|
|||||||
|
|
|
|
|
|
|
||||||||||
Estimated supplementary leverage ratio (“SLR”)
(i)
|
4.8
|
%
|
4.6
|
%
|
4.4
|
%
|
|
|
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(dollar amounts in millions, except per common share amounts and unless otherwise noted)
|
Sept. 30, 2015
|
|
June 30,
2015 |
|
Sept. 30, 2014
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|||||
Selected average balances
|
|
|
|
|
|
|
||||||||||
Interest-earning assets
|
$
|
315,672
|
|
$
|
318,596
|
|
$
|
311,603
|
|
|
$
|
314,152
|
|
$
|
299,064
|
|
Assets of operations
|
$
|
371,328
|
|
$
|
375,999
|
|
$
|
370,167
|
|
|
$
|
371,156
|
|
$
|
357,301
|
|
Total assets
|
$
|
373,453
|
|
$
|
378,279
|
|
$
|
380,409
|
|
|
$
|
373,400
|
|
$
|
368,297
|
|
Interest-bearing deposits
|
$
|
169,753
|
|
$
|
170,716
|
|
$
|
164,233
|
|
|
$
|
166,700
|
|
$
|
160,006
|
|
Noninterest-bearing deposits
|
$
|
85,046
|
|
$
|
84,890
|
|
$
|
82,334
|
|
|
$
|
86,493
|
|
$
|
80,531
|
|
Preferred stock
|
$
|
2,552
|
|
$
|
2,313
|
|
$
|
1,562
|
|
|
$
|
2,146
|
|
$
|
1,562
|
|
Total The Bank of New York Mellon Corporation common shareholders’ equity
|
$
|
35,588
|
|
$
|
35,516
|
|
$
|
36,751
|
|
|
$
|
35,530
|
|
$
|
36,537
|
|
|
|
|
|
|
|
|
||||||||||
Other information at period end
|
|
|
|
|
|
|
||||||||||
Cash dividends per common share
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
|
$
|
0.51
|
|
$
|
0.49
|
|
Common dividend payout ratio
|
23
|
%
|
23
|
%
|
18
|
%
|
|
24
|
%
|
25
|
%
|
|||||
Common dividend yield
(annualized)
|
1.7
|
%
|
1.6
|
%
|
1.7
|
%
|
|
1.7
|
%
|
1.7
|
%
|
|||||
Closing stock price per common share
|
$
|
39.15
|
|
$
|
41.97
|
|
$
|
38.73
|
|
|
$
|
39.15
|
|
$
|
38.73
|
|
Market capitalization
|
$
|
42,789
|
|
$
|
46,441
|
|
$
|
43,599
|
|
|
$
|
42,789
|
|
$
|
43,599
|
|
Book value per common share – GAAP
(a)
|
$
|
32.59
|
|
$
|
32.28
|
|
$
|
32.77
|
|
|
$
|
32.59
|
|
$
|
32.77
|
|
Tangible book value per common share – Non-GAAP
(a)
|
$
|
15.16
|
|
$
|
14.86
|
|
$
|
15.30
|
|
|
$
|
15.16
|
|
$
|
15.30
|
|
Full-time employees
|
51,300
|
|
50,700
|
|
50,900
|
|
|
51,300
|
|
50,900
|
|
|||||
Common shares outstanding
(in thousands)
|
1,092,953
|
|
1,106,518
|
|
1,125,710
|
|
|
1,092,953
|
|
1,125,710
|
|
(a)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
52
for a reconciliation of Non-GAAP measures.
|
(b)
|
Non-GAAP excludes the gains on the sales of our equity investment in Wing Hang Bank Limited (“Wing Hang”) and our One Wall Street building, net (loss) income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets, M&I, litigation and restructuring charges (recoveries) and the charge related to investment management funds, net of incentives, if applicable.
|
(c)
|
Includes fee revenue, net interest revenue and income of consolidated investment management funds, net of net income attributable to noncontrolling interests.
|
(d)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business.
In the third quarter of 2015, prior period AUM was restated to reflect the reclassification of Meriten from the Investment Management business to the Other segment.
|
(e)
|
Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of
$1.0 trillion
at
Sept. 30, 2015
,
$1.1 trillion
at
June 30, 2015
and
$1.2 trillion
at
Sept. 30, 2014
.
|
(f)
|
Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled
$61 billion
at
Sept. 30, 2015
,
$68 billion
at
June 30, 2015
and
$65 billion
at
Sept. 30, 2014
.
|
(g)
|
The CET1, Tier 1 and Total risk-based consolidated regulatory capital ratios are based on Basel III components of capital, as phased-in, and credit risk asset risk-weightings using the U.S. capital rules’ advanced approaches framework (the “Advanced Approach”). The leverage capital ratios are based on Basel III’s definition of Tier 1 capital, as phased-in, and quarterly average total assets. For additional information on these ratios, see “Capital” beginning on page
42
.
|
(h)
|
The estimated fully phased-in CET1 ratios (Non-GAAP) are based on our interpretation of U.S. capital rules, which are being gradually phased-in over a multi-year period. For additional information on these Non-GAAP ratios, see “Capital” beginning on page
42
.
|
(i)
|
The estimated fully phased-in SLR (Non-GAAP) is based on our interpretation of the U.S. capital rules. When the SLR becomes effective, we expect to maintain an SLR of over 5%. The minimum required SLR is 3% and there is a 2% buffer, in addition to the minimum, that is applicable to U.S. global systemically important banks (“G-SIBs”). For additional information on these Non-GAAP ratios, see “Capital” beginning on page
42
.
|
Part I - Financial Information
|
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk
|
•
|
AUC/A totaled
$28.5 trillion
compared with
$28.3 trillion
at
Sept. 30, 2014
. The increase primarily reflects net new business, partially offset by the unfavorable impact of a stronger U.S. dollar and lower equity market values. (See “Investment Services business” beginning on page
21
).
|
•
|
AUM, excluding securities lending cash management assets and assets managed in the Investment Services business, totaled
$1.63 trillion
compared with
$1.62 trillion
at
Sept. 30, 2014
. The increase resulted from
higher market values, the Cutwater acquisition and net new business
offset by
the unfavorable impact of a stronger U.S. dollar.
(See “Investment Management business” beginning on page
18
).
|
•
|
Investment services fees totaled
$1.85 billion
, an increase of
2%
compared with
$1.82 billion
in the
third quarter of 2014
. The increase reflects net new business and organic growth, primarily in Global Collateral Services, Broker-Dealer Services and Asset Servicing, and higher clearing services revenue, partially offset by the unfavorable impact of a stronger U.S. dollar. (See “Investment Services business” beginning on page
21
).
|
•
|
Investment management and performance fees totaled
$829 million
compared with
$881 million
in the
third quarter of 2014
, a decrease of
6%
, or a decrease of
2%
on a constant currency basis (Non-GAAP). The decrease was primarily driven by lower performance fees, lower equity market values, net outflows and the sale of Meriten, partially offset by the impact of the acquisition of Cutwater Asset Management (“Cutwater”) in the first quarter of 2015 and strategic initiatives. (See “Investment Management business” beginning on page
18
).
|
•
|
Foreign exchange and other trading revenue totaled
$179 million
compared with
$153 million
in the
third quarter of 2014
. Foreign exchange revenue totaled
$180 million
, an increase of
17%
compared with
$154 million
in the
third quarter of 2014
. The increase was driven by higher volatility and volumes. (See “Fee and other revenue” beginning on page
7
).
|
•
|
Financing-related fees totaled
$71 million
compared with
$44 million
in the
third quarter of 2014
. The increase was primarily driven by higher fees related to secured intraday credit provided to dealers in connection with their tri-party repo activity and higher underwriting fees. (See “Fee and other revenue” beginning on page
7
).
|
•
|
Investment and other income totaled
$59 million
compared with
$890 million
in the
third quarter of 2014
. The decrease primarily reflects gains on the sales of our equity investment in Wing Hang and our One Wall Street building in the
third quarter of 2014
. (See “Fee and other revenue” beginning on page
7
).
|
•
|
Net interest revenue totaled
$759 million
compared with
$721 million
in the
third quarter of 2014
. The increase primarily reflects higher securities and loans due to higher deposits and a shift out of cash, and lower interest expense on deposits. (See “Net interest revenue” beginning on page
10
).
|
•
|
The provision for credit losses was
$1 million
in the
third quarter of 2015
and a credit of
$19 million
in the
third quarter of 2014
. (See “Asset quality and allowance for credit losses” beginning on page
34
).
|
•
|
Noninterest expense totaled
$2.68 billion
compared with
$2.97 billion
in the
third quarter of 2014
. The decrease reflects lower expenses in all categories, except other expense. The lower expenses primarily reflect the favorable impact of a stronger U.S. dollar, lower legal and consulting expenses and the benefit of the business improvement process which focuses on reducing structural costs. The decrease was partially offset by higher consulting expenses associated with regulatory requirements. (See “Noninterest expense” beginning on page
13
).
|
•
|
The provision for income taxes was
$282 million
(
25.4%
effective tax rate). (See “Income taxes” on page
14
).
|
•
|
The net unrealized pre-tax gain on the investment securities portfolio was
$1.0 billion
compared with $
752 million
at
June 30, 2015
. The increase was primarily driven by a decline in interest rates. (See “Investment securities” beginning on page
29
).
|
•
|
Our estimated CET1 ratio (Non-GAAP) calculated under the Advanced Approach on a fully phased-in basis was
9.3%
at
Sept. 30, 2015
and
9.9%
at
June 30, 2015
. Our estimated CET1 ratio (Non-GAAP) calculated under the Standardized Approach on a fully phased-in basis was
9.9%
at
Sept. 30, 2015
and
10.0%
at
June 30, 2015
. (See “Capital” beginning on page
42
).
|
(a)
|
Asset servicing fees include securities lending revenue of
$38 million
in the
third quarter of 2015
,
$49 million
in the
second quarter of 2015
,
$37 million
in the
third quarter of 2014
,
$130 million
in the
first nine months of 2015
and
$121 million
in the
first nine months of 2014
.
|
(b)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business. In the third quarter of 2015, prior period AUM was restated to reflect the reclassification of Meriten from the Investment Management business to the Other segment.
|
(c)
|
Includes the AUC/A of CIBC Mellon of
$1.0 trillion
at
Sept. 30, 2015
,
$1.1 trillion
at
June 30, 2015
and
$1.2 trillion
at
Sept. 30, 2014
.
|
•
|
Asset servicing fees increased
3%
compared with the
third quarter of 2014
and were flat compared with the
second quarter of 2015
.
The year-over-year increase primarily reflects organic growth in the Global Collateral Services, Broker-Dealer
|
•
|
Clearing services fees increased
2%
compared with the
third quarter of 2014
and decreased
1%
(unannualized) compared with the
second quarter of 2015
.
The year-over-year increase was primarily driven by higher mutual fund and asset-based fees.
|
•
|
Issuer services fees decreased
1%
compared with the
third quarter of 2014
and increased
34%
(unannualized) compared with the
second quarter of 2015
.
The year-over-year decrease primarily reflects lower fees in Depositary Receipts and the unfavorable impact of a stronger U.S. dollar in Corporate Trust, partially offset by net new business in Corporate Trust.
The sequential increase primarily reflects seasonally higher fees in Depositary Receipts.
|
•
|
Treasury services fees decreased
4%
compared with the
third quarter of 2014
and
5%
(unannualized) compared with the
second quarter
|
Foreign exchange and other trading revenue
|
Year-to-date
|
||||||||||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
2015
|
|
2014
|
|
|||||
Foreign exchange
|
$
|
180
|
|
$
|
181
|
|
$
|
154
|
|
$
|
578
|
|
$
|
413
|
|
Other trading revenue (loss)
|
(1
|
)
|
6
|
|
(1
|
)
|
17
|
|
6
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
179
|
|
$
|
187
|
|
$
|
153
|
|
$
|
595
|
|
$
|
419
|
|
Investment and other income
|
|
|
Year-to-date
|
||||||||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
2015
|
|
2014
|
|
|||||
Corporate/bank-owned life insurance
|
$
|
32
|
|
$
|
31
|
|
$
|
34
|
|
$
|
96
|
|
$
|
94
|
|
Lease residual gains
|
—
|
|
54
|
|
5
|
|
53
|
|
44
|
|
|||||
Expense reimbursements from joint venture
|
16
|
|
17
|
|
13
|
|
47
|
|
40
|
|
|||||
Seed capital gains
(losses)
(a)
|
7
|
|
2
|
|
(1
|
)
|
25
|
|
20
|
|
|||||
Private equity gains
|
1
|
|
3
|
|
2
|
|
1
|
|
5
|
|
|||||
Asset-related gains (losses)
|
(9
|
)
|
1
|
|
836
|
|
(5
|
)
|
852
|
|
|||||
Equity investment revenue (loss)
|
(6
|
)
|
(7
|
)
|
(9
|
)
|
(17
|
)
|
6
|
|
|||||
Other income
|
18
|
|
3
|
|
10
|
|
23
|
|
73
|
|
|||||
Total investment and other income
|
$
|
59
|
|
$
|
104
|
|
$
|
890
|
|
$
|
223
|
|
$
|
1,134
|
|
(a)
|
Does not include the gain (loss) on seed capital investments in consolidated investment management funds which are reflected in operations of consolidated investment management funds, net of noncontrolling interests.
|
Net interest revenue
|
|
|
|
|
|
|
|
YTD15
|
||||||||||||||
|
|
|
|
3Q15 vs.
|
|
Year-to-date
|
vs.
|
|||||||||||||||
(dollars in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
2Q15
|
|
3Q14
|
|
|
2015
|
|
2014
|
|
YTD14
|
||||||
Net interest revenue (non-FTE)
|
$
|
759
|
|
$
|
779
|
|
$
|
721
|
|
(3
|
)%
|
5
|
%
|
|
$
|
2,266
|
|
$
|
2,168
|
|
5
|
%
|
Tax equivalent adjustment
|
14
|
|
15
|
|
15
|
|
(7
|
)
|
(7
|
)
|
|
44
|
|
48
|
|
(8
|
)
|
|||||
Net interest revenue (FTE) – Non-GAAP
|
$
|
773
|
|
$
|
794
|
|
$
|
736
|
|
(3
|
)%
|
5
|
%
|
|
$
|
2,310
|
|
$
|
2,216
|
|
4
|
%
|
Average interest-earning assets
|
$
|
315,672
|
|
$
|
318,596
|
|
$
|
311,603
|
|
(1
|
)%
|
1
|
%
|
|
$
|
314,152
|
|
$
|
299,064
|
|
5
|
%
|
Net interest margin (FTE)
|
0.98
|
%
|
1.00
|
%
|
0.94
|
%
|
(2
|
) bps
|
4
|
bps
|
|
0.98
|
%
|
0.99
|
%
|
(1
|
) bps
|
Average balances and interest rates
|
Quarter ended
|
|||||||||||||||||||
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|||||||||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average balance
|
|
|
Average rates
|
|
|
Average balance
|
|
|
Average rates
|
|
|
Average balance
|
|
|
Average rates
|
|
|||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
20,549
|
|
|
0.45
|
%
|
|
$
|
20,235
|
|
|
0.56
|
%
|
|
$
|
34,882
|
|
|
0.66
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
84,175
|
|
|
0.20
|
|
|
81,846
|
|
|
0.21
|
|
|
88,713
|
|
|
0.23
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
25,366
|
|
|
0.61
|
|
|
23,545
|
|
|
0.61
|
|
|
15,683
|
|
|
0.61
|
|
|||
Margin loans
|
19,839
|
|
|
1.05
|
|
|
20,467
|
|
|
1.01
|
|
|
18,108
|
|
|
1.04
|
|
|||
Non-margin loans:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic offices
|
27,411
|
|
|
2.15
|
|
|
26,716
|
|
|
2.06
|
|
|
23,826
|
|
|
2.20
|
|
|||
Foreign offices
|
14,407
|
|
|
1.13
|
|
|
13,893
|
|
|
1.19
|
|
|
12,901
|
|
|
1.30
|
|
|||
Total non-margin loans
|
41,818
|
|
|
1.80
|
|
|
40,609
|
|
|
1.77
|
|
|
36,727
|
|
|
1.88
|
|
|||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Government obligations
|
23,935
|
|
|
1.52
|
|
|
28,331
|
|
|
1.42
|
|
|
23,067
|
|
|
1.38
|
|
|||
U.S. Government agency obligations
|
55,624
|
|
|
1.76
|
|
|
56,332
|
|
|
1.77
|
|
|
46,186
|
|
|
1.67
|
|
|||
State and political subdivisions – tax-exempt
|
4,465
|
|
|
2.81
|
|
|
5,021
|
|
|
2.67
|
|
|
5,830
|
|
|
2.54
|
|
|||
Other securities
|
37,164
|
|
|
1.28
|
|
|
38,957
|
|
|
1.24
|
|
|
36,972
|
|
|
1.37
|
|
|||
Trading securities
|
2,737
|
|
|
2.74
|
|
|
3,253
|
|
|
2.63
|
|
|
5,435
|
|
|
2.36
|
|
|||
Total securities
|
123,925
|
|
|
1.63
|
|
|
131,894
|
|
|
1.59
|
|
|
117,490
|
|
|
1.59
|
|
|||
Total interest-earning assets
|
$
|
315,672
|
|
|
1.08
|
%
|
|
$
|
318,596
|
|
|
1.08
|
%
|
|
$
|
311,603
|
|
|
1.05
|
%
|
Allowance for loan losses
|
(184
|
)
|
|
|
|
(190
|
)
|
|
|
|
(187
|
)
|
|
|
||||||
Cash and due from banks
|
6,140
|
|
|
|
|
6,785
|
|
|
|
|
6,225
|
|
|
|
||||||
Other assets
|
49,700
|
|
|
|
|
50,808
|
|
|
|
|
52,526
|
|
|
|
||||||
Assets of consolidated investment management funds
|
2,125
|
|
|
|
|
2,280
|
|
|
|
|
10,242
|
|
|
|
||||||
Total assets
|
$
|
373,453
|
|
|
|
|
$
|
378,279
|
|
|
|
|
$
|
380,409
|
|
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Money market rate accounts
|
$
|
7,518
|
|
|
0.08
|
%
|
|
$
|
7,213
|
|
|
0.09
|
%
|
|
$
|
5,320
|
|
|
0.11
|
%
|
Savings
|
1,279
|
|
|
0.27
|
|
|
1,326
|
|
|
0.27
|
|
|
1,258
|
|
|
0.28
|
|
|||
Demand deposits
|
3,105
|
|
|
0.25
|
|
|
3,109
|
|
|
0.20
|
|
|
2,566
|
|
|
0.21
|
|
|||
Time deposits
|
43,529
|
|
|
0.04
|
|
|
46,807
|
|
|
0.03
|
|
|
41,248
|
|
|
0.04
|
|
|||
Foreign offices
|
114,322
|
|
|
—
|
|
|
112,261
|
|
|
—
|
|
|
113,841
|
|
|
0.05
|
|
|||
Total interest-bearing deposits
|
169,753
|
|
|
0.02
|
|
|
170,716
|
|
|
0.02
|
|
|
164,233
|
|
|
0.06
|
|
|||
Federal funds purchased and securities sold under repurchase agreements
|
14,796
|
|
|
(0.04
|
)
|
|
16,732
|
|
|
(0.02
|
)
|
|
20,620
|
|
|
(0.07
|
)
|
|||
Trading liabilities
|
475
|
|
|
1.42
|
|
|
632
|
|
|
1.84
|
|
|
2,806
|
|
|
0.84
|
|
|||
Other borrowed funds
|
628
|
|
|
1.18
|
|
|
903
|
|
|
1.26
|
|
|
933
|
|
|
0.47
|
|
|||
Commercial paper
|
2,195
|
|
|
0.11
|
|
|
2,892
|
|
|
0.10
|
|
|
3,654
|
|
|
0.07
|
|
|||
Payables to customers and broker-dealers
|
11,504
|
|
|
0.06
|
|
|
11,234
|
|
|
0.07
|
|
|
9,705
|
|
|
0.10
|
|
|||
Long-term debt
|
21,070
|
|
|
1.21
|
|
|
20,625
|
|
|
0.99
|
|
|
20,429
|
|
|
1.12
|
|
|||
Total interest-bearing liabilities
|
$
|
220,421
|
|
|
0.14
|
%
|
|
$
|
223,734
|
|
|
0.12
|
%
|
|
$
|
222,380
|
|
|
0.16
|
%
|
Total noninterest-bearing deposits
|
85,046
|
|
|
|
|
84,890
|
|
|
|
|
82,334
|
|
|
|
||||||
Other liabilities
|
27,880
|
|
|
|
|
29,840
|
|
|
|
|
27,369
|
|
|
|
||||||
Liabilities and obligations of consolidated investment management funds
|
841
|
|
|
|
|
857
|
|
|
|
|
8,879
|
|
|
|
||||||
Total liabilities
|
334,188
|
|
|
|
|
339,321
|
|
|
|
|
340,962
|
|
|
|
||||||
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Redeemable noncontrolling interests
|
252
|
|
|
|
|
235
|
|
|
|
|
244
|
|
|
|
||||||
Permanent equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total BNY Mellon shareholders’ equity
|
38,140
|
|
|
|
|
37,829
|
|
|
|
|
38,313
|
|
|
|
||||||
Noncontrolling interests
|
873
|
|
|
|
|
894
|
|
|
|
|
890
|
|
|
|
||||||
Total permanent equity
|
39,013
|
|
|
|
|
38,723
|
|
|
|
|
39,203
|
|
|
|
||||||
Total liabilities, temporary equity and
permanent equity
|
$
|
373,453
|
|
|
|
|
$
|
378,279
|
|
|
|
|
$
|
380,409
|
|
|
|
|||
Net interest margin (FTE)
|
|
|
0.98
|
%
|
|
|
|
1.00
|
%
|
|
|
|
0.94
|
%
|
Note:
|
Interest and average rates were calculated on a taxable equivalent basis, at tax rates approximating 35%, using dollar amounts in thousands and actual number of days in the year.
|
Average balances and interest rates
|
Year-to-date
|
||||||||||||
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
||||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average balance
|
|
|
Average rates
|
|
|
Average balance
|
|
|
Average rates
|
|
||
Assets
|
|
|
|
|
|
|
|
||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
20,946
|
|
|
0.52
|
%
|
|
$
|
39,283
|
|
|
0.71
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
82,405
|
|
|
0.21
|
|
|
82,939
|
|
|
0.25
|
|
||
Federal funds sold and securities purchased under resale agreements
|
23,127
|
|
|
0.61
|
|
|
13,413
|
|
|
0.60
|
|
||
Margin loans
|
20,118
|
|
|
1.02
|
|
|
17,008
|
|
|
1.05
|
|
||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||
Domestic offices
|
26,469
|
|
|
2.11
|
|
|
22,804
|
|
|
2.27
|
|
||
Foreign offices
|
13,649
|
|
|
1.18
|
|
|
13,510
|
|
|
1.30
|
|
||
Total non-margin loans
|
40,118
|
|
|
1.80
|
|
|
36,314
|
|
|
1.91
|
|
||
Securities:
|
|
|
|
|
|
|
|
||||||
U.S. Government obligations
|
26,560
|
|
|
1.44
|
|
|
19,269
|
|
|
1.52
|
|
||
U.S. Government agency obligations
|
54,911
|
|
|
1.74
|
|
|
44,034
|
|
|
1.73
|
|
||
State and political subdivisions – tax-exempt
|
4,897
|
|
|
2.70
|
|
|
6,328
|
|
|
2.54
|
|
||
Other securities
|
38,059
|
|
|
1.28
|
|
|
35,081
|
|
|
1.52
|
|
||
Trading securities
|
3,011
|
|
|
2.61
|
|
|
5,395
|
|
|
2.38
|
|
||
Total securities
|
127,438
|
|
|
1.60
|
|
|
110,107
|
|
|
1.71
|
|
||
Total interest-earning assets
|
$
|
314,152
|
|
|
1.08
|
%
|
|
$
|
299,064
|
|
|
1.11
|
%
|
Allowance for loan losses
|
(188
|
)
|
|
|
|
(198
|
)
|
|
|
||||
Cash and due from banks
|
6,376
|
|
|
|
|
5,726
|
|
|
|
||||
Other assets
|
50,816
|
|
|
|
|
52,709
|
|
|
|
||||
Assets of consolidated investment management funds
|
2,244
|
|
|
|
|
10,996
|
|
|
|
||||
Total assets
|
$
|
373,400
|
|
|
|
|
$
|
368,297
|
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
||||||
Money market rate accounts
|
$
|
7,186
|
|
|
0.09
|
%
|
|
$
|
5,384
|
|
|
0.12
|
%
|
Savings
|
1,344
|
|
|
0.28
|
|
|
1,160
|
|
|
0.27
|
|
||
Demand deposits
|
3,138
|
|
|
0.22
|
|
|
2,878
|
|
|
0.13
|
|
||
Time deposits
|
44,533
|
|
|
0.03
|
|
|
41,871
|
|
|
0.04
|
|
||
Foreign offices
|
110,499
|
|
|
0.01
|
|
|
108,713
|
|
|
0.06
|
|
||
Total interest-bearing deposits
|
166,700
|
|
|
0.03
|
|
|
160,006
|
|
|
0.06
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
15,139
|
|
|
(0.04
|
)
|
|
18,073
|
|
|
(0.08
|
)
|
||
Trading liabilities
|
633
|
|
|
1.41
|
|
|
2,595
|
|
|
1.08
|
|
||
Other borrowed funds
|
841
|
|
|
1.12
|
|
|
1,080
|
|
|
0.49
|
|
||
Commercial paper
|
2,071
|
|
|
0.10
|
|
|
1,922
|
|
|
0.07
|
|
||
Payables to customers and broker-dealers
|
11,225
|
|
|
0.06
|
|
|
9,171
|
|
|
0.09
|
|
||
Long-term debt
|
20,635
|
|
|
1.14
|
|
|
20,404
|
|
|
1.12
|
|
||
Total interest-bearing liabilities
|
$
|
217,244
|
|
|
0.14
|
%
|
|
$
|
213,251
|
|
|
0.16
|
%
|
Total noninterest-bearing deposits
|
86,493
|
|
|
|
|
80,531
|
|
|
|
||||
Other liabilities
|
30,004
|
|
|
|
|
25,620
|
|
|
|
||||
Liabilities and obligations of consolidated investment management funds
|
900
|
|
|
|
|
9,724
|
|
|
|
||||
Total liabilities
|
334,641
|
|
|
|
|
329,126
|
|
|
|
||||
Temporary equity
|
|
|
|
|
|
|
|
||||||
Redeemable noncontrolling interests
|
240
|
|
|
|
|
238
|
|
|
|
||||
Permanent equity
|
|
|
|
|
|
|
|
||||||
Total BNY Mellon shareholders’ equity
|
37,676
|
|
|
|
|
38,099
|
|
|
|
||||
Noncontrolling interests
|
843
|
|
|
|
|
834
|
|
|
|
||||
Total permanent equity
|
38,519
|
|
|
|
|
38,933
|
|
|
|
||||
Total liabilities, temporary equity and permanent equity
|
$
|
373,400
|
|
|
|
|
$
|
368,297
|
|
|
|
||
Net interest margin (FTE)
|
|
|
0.98
|
%
|
|
|
|
0.99
|
%
|
Note:
|
Interest and average rates were calculated on a taxable equivalent basis, at tax rates approximating 35%, using dollar amounts in thousands and actual number of days in the year.
|
Noninterest expense
|
|
|
|
|
|
|
|
YTD15
|
||||||||||||||
|
|
|
|
3Q15 vs.
|
|
Year-to-date
|
vs.
|
|||||||||||||||
(dollars in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
2Q15
|
|
3Q14
|
|
|
2015
|
2014
|
YTD14
|
||||||||
Staff:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Compensation
|
$
|
905
|
|
$
|
877
|
|
$
|
909
|
|
3
|
%
|
—
|
%
|
|
$
|
2,653
|
|
$
|
2,737
|
|
(3
|
)%
|
Incentives
|
326
|
|
349
|
|
340
|
|
(7
|
)
|
(4
|
)
|
|
1,100
|
|
1,012
|
|
9
|
|
|||||
Employee benefits
|
206
|
|
208
|
|
228
|
|
(1
|
)
|
(10
|
)
|
|
603
|
|
678
|
|
(11
|
)
|
|||||
Total staff
|
1,437
|
|
1,434
|
|
1,477
|
|
—
|
|
(3
|
)
|
|
4,356
|
|
4,427
|
|
(2
|
)
|
|||||
Professional, legal and other purchased services
|
301
|
|
299
|
|
323
|
|
1
|
|
(7
|
)
|
|
902
|
|
949
|
|
(5
|
)
|
|||||
Software
|
154
|
|
158
|
|
154
|
|
(3
|
)
|
—
|
|
|
470
|
|
460
|
|
2
|
|
|||||
Net occupancy
|
152
|
|
149
|
|
154
|
|
2
|
|
(1
|
)
|
|
452
|
|
460
|
|
(2
|
)
|
|||||
Distribution and servicing
|
95
|
|
96
|
|
107
|
|
(1
|
)
|
(11
|
)
|
|
289
|
|
326
|
|
(11
|
)
|
|||||
Sub-custodian
|
65
|
|
75
|
|
67
|
|
(13
|
)
|
(3
|
)
|
|
210
|
|
216
|
|
(3
|
)
|
|||||
Furniture and equipment
|
72
|
|
70
|
|
80
|
|
3
|
|
(10
|
)
|
|
212
|
|
247
|
|
(14
|
)
|
|||||
Business development
|
59
|
|
72
|
|
61
|
|
(18
|
)
|
(3
|
)
|
|
192
|
|
193
|
|
(1
|
)
|
|||||
Other
|
268
|
|
250
|
|
250
|
|
7
|
|
7
|
|
|
760
|
|
820
|
|
(7
|
)
|
|||||
Amortization of intangible assets
|
66
|
|
65
|
|
75
|
|
2
|
|
(12
|
)
|
|
197
|
|
225
|
|
(12
|
)
|
|||||
M&I, litigation and restructuring charges
|
11
|
|
59
|
|
220
|
|
N/M
|
N/M
|
|
67
|
|
330
|
|
N/M
|
||||||||
Total noninterest expense – GAAP
|
$
|
2,680
|
|
$
|
2,727
|
|
$
|
2,968
|
|
(2
|
)%
|
(10
|
)%
|
|
$
|
8,107
|
|
$
|
8,653
|
|
(6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total staff expense as a percentage of total revenue
|
38
|
%
|
37
|
%
|
32
|
%
|
|
|
|
38
|
%
|
37
|
%
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Full-time employees at period end
|
51,300
|
|
50,700
|
|
50,900
|
|
1
|
%
|
1
|
%
|
|
51,300
|
|
50,900
|
|
1
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Memo:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total noninterest expense excluding amortization of intangible assets, M&I, litigation and restructuring charges and the charge related to investment management funds, net of incentives – Non-GAAP
|
$
|
2,603
|
|
$
|
2,603
|
|
$
|
2,673
|
|
—
|
%
|
(3
|
)%
|
|
$
|
7,843
|
|
$
|
7,994
|
|
(2
|
)%
|
(a)
|
Period end.
|
(b)
|
Unhedged in U.S. dollar terms.
|
(c)
|
The JPMorgan G7 Volatility Index is based on the implied volatility in 3-month currency options.
|
For the quarter ended Sept. 30, 2015
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
846
|
|
(a)
|
$
|
2,087
|
|
|
$
|
103
|
|
|
$
|
3,036
|
|
(a)
|
Net interest revenue
|
83
|
|
|
628
|
|
|
48
|
|
|
759
|
|
|
||||
Total revenue
|
929
|
|
(a)
|
2,715
|
|
|
151
|
|
|
3,795
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
||||
Noninterest expense
|
692
|
|
|
1,863
|
|
|
124
|
|
|
2,679
|
|
(b)
|
||||
Income before taxes
|
$
|
237
|
|
(a)
|
$
|
852
|
|
|
$
|
26
|
|
|
$
|
1,115
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
26
|
%
|
|
31
|
%
|
|
N/M
|
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,960
|
|
|
$
|
282,159
|
|
|
$
|
60,334
|
|
|
$
|
373,453
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
668
|
|
|
$
|
1,822
|
|
|
$
|
123
|
|
|
$
|
2,613
|
|
|
Income before taxes
|
261
|
|
(a)
|
893
|
|
|
27
|
|
|
1,181
|
|
(a)(b)
|
||||
Pre-tax operating margin
(c)
|
28
|
%
|
|
33
|
%
|
|
N/M
|
|
|
31
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include the net loss from consolidated investment management funds of
$17 million
, representing
$22 million
of losses and a loss attributable to noncontrolling interests of
$5 million
. Income before taxes is net of a loss attributable to noncontrolling interests of
$5 million
.
|
(b)
|
Includes a loss attributable to noncontrolling interest of
$1 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the quarter ended June 30, 2015
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
913
|
|
(a)
|
$
|
2,020
|
|
|
$
|
137
|
|
|
$
|
3,070
|
|
(a)
|
Net interest revenue
|
78
|
|
|
636
|
|
|
65
|
|
|
779
|
|
|
||||
Total revenue
|
991
|
|
(a)
|
2,656
|
|
|
202
|
|
|
3,849
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|
||||
Noninterest expense
|
728
|
|
|
1,880
|
|
|
118
|
|
|
2,726
|
|
(b)
|
||||
Income before taxes
|
$
|
263
|
|
(a)
|
$
|
776
|
|
|
$
|
90
|
|
|
$
|
1,129
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
27
|
%
|
|
29
|
%
|
|
N/M
|
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,414
|
|
|
$
|
290,102
|
|
|
$
|
57,763
|
|
|
$
|
378,279
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
703
|
|
|
$
|
1,840
|
|
|
$
|
118
|
|
|
$
|
2,661
|
|
|
Income before taxes
|
288
|
|
(a)
|
816
|
|
|
90
|
|
|
1,194
|
|
(a)(b)
|
||||
Pre-tax operating margin
(c)
|
29
|
%
|
|
31
|
%
|
|
N/M
|
|
|
31
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include the net income from consolidated investment management funds of
$3 million
, representing
$40 million
of income and noncontrolling interests of
$37 million
. Income before taxes is net of noncontrolling interests of
$37 million
.
|
(b)
|
Includes a loss attributable to noncontrolling interest of
$1 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the quarter ended Sept. 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
920
|
|
(a)
|
$
|
2,005
|
|
|
$
|
942
|
|
|
$
|
3,867
|
|
(a)
|
Net interest revenue
|
69
|
|
|
583
|
|
|
69
|
|
|
721
|
|
|
||||
Total revenue
|
989
|
|
(a)
|
2,588
|
|
|
1,011
|
|
|
4,588
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|
||||
Noninterest expense
|
744
|
|
|
1,875
|
|
|
349
|
|
|
2,968
|
|
|
||||
Income before taxes
|
$
|
245
|
|
(a)
|
$
|
713
|
|
|
$
|
681
|
|
|
$
|
1,639
|
|
(a)
|
Pre-tax operating margin
(b)
|
25
|
%
|
|
28
|
%
|
|
N/M
|
|
|
36
|
%
|
|
||||
Average assets
|
$
|
36,542
|
|
|
$
|
266,466
|
|
|
$
|
77,401
|
|
|
$
|
380,409
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
715
|
|
|
$
|
1,831
|
|
|
$
|
347
|
|
|
$
|
2,893
|
|
|
Income before taxes
|
274
|
|
(a)
|
757
|
|
|
683
|
|
|
1,714
|
|
(a)
|
||||
Pre-tax operating margin
(b)
|
28
|
%
|
|
29
|
%
|
|
N/M
|
|
|
37
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$16 million
, representing
$39 million
of income and noncontrolling interests of
$23 million
. Income before taxes is net of noncontrolling interests of
$23 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
For the nine months ended Sept. 30, 2015
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
2,682
|
|
(a)
|
$
|
6,100
|
|
|
$
|
357
|
|
|
$
|
9,139
|
|
(a)
|
Net interest revenue
|
235
|
|
|
1,863
|
|
|
168
|
|
|
2,266
|
|
|
||||
Total revenue
|
2,917
|
|
(a)
|
7,963
|
|
|
525
|
|
|
11,405
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
||||
Noninterest expense
|
2,154
|
|
|
5,578
|
|
|
373
|
|
|
8,105
|
|
(b)
|
||||
Income before taxes
|
$
|
763
|
|
(a)
|
$
|
2,385
|
|
|
$
|
155
|
|
|
$
|
3,303
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
26
|
%
|
|
30
|
%
|
|
N/M
|
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,910
|
|
|
$
|
285,747
|
|
|
$
|
56,743
|
|
|
$
|
373,400
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
2,081
|
|
|
$
|
5,456
|
|
|
$
|
371
|
|
|
$
|
7,908
|
|
|
Income before taxes
|
836
|
|
(a)
|
2,507
|
|
|
157
|
|
|
3,500
|
|
(a)(b)
|
||||
Pre-tax operating margin
(c)
|
29
|
%
|
|
31
|
%
|
|
N/M
|
|
|
31
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include the net income from consolidated investment management funds of
$7 million
, representing
$70 million
of income and noncontrolling interests of
$63 million
. Income before taxes is net of noncontrolling interests of
$63 million
.
|
(b)
|
Includes a loss attributable to noncontrolling interest of
$2 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the nine months ended Sept. 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
2,760
|
|
(a)
|
$
|
5,811
|
|
|
$
|
1,204
|
|
|
$
|
9,775
|
|
(a)
|
Net interest revenue
|
205
|
|
|
1,766
|
|
|
197
|
|
|
2,168
|
|
|
||||
Total revenue
|
2,965
|
|
(a)
|
7,577
|
|
|
1,401
|
|
|
11,943
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
|
||||
Noninterest expense
|
2,304
|
|
|
5,564
|
|
|
785
|
|
|
8,653
|
|
|
||||
Income before taxes
|
$
|
661
|
|
(a)
|
$
|
2,013
|
|
|
$
|
665
|
|
|
$
|
3,339
|
|
(a)
|
Pre-tax operating margin
(b)
|
22
|
%
|
|
27
|
%
|
|
N/M
|
|
|
28
|
%
|
|
||||
Average assets
|
$
|
37,821
|
|
|
$
|
263,084
|
|
|
$
|
67,392
|
|
|
$
|
368,297
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
2,215
|
|
|
$
|
5,432
|
|
|
$
|
781
|
|
|
$
|
8,428
|
|
|
Income before taxes
|
750
|
|
(a)
|
2,145
|
|
|
669
|
|
|
3,564
|
|
(a)
|
||||
Pre-tax operating margin
(b)
|
25
|
%
|
|
28
|
%
|
|
N/M
|
|
|
30
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$61 million
, representing
$121 million
of income and noncontrolling interests of
$60 million
. Income before taxes is net of noncontrolling interests of
$60 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
|
|
|
|
|
|
|
|
|
|
|
YTD15
|
|||||||||||||||||
(dollar amounts in millions)
|
|
|
|
|
|
3Q15 vs.
|
|
Year-to-date
|
vs.
|
|||||||||||||||||||
3Q15
|
|
2Q15
|
|
1Q15
|
|
4Q14
|
|
3Q14
|
|
2Q15
|
|
3Q14
|
|
|
2015
|
2014
|
YTD14
|
|||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment management fees:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Mutual funds
|
$
|
301
|
|
$
|
312
|
|
$
|
301
|
|
$
|
306
|
|
$
|
315
|
|
(4
|
)%
|
(4
|
)%
|
|
$
|
914
|
|
$
|
925
|
|
(1
|
)%
|
Institutional clients
|
347
|
|
363
|
|
365
|
|
364
|
|
370
|
|
(4
|
)
|
(6
|
)
|
|
1,075
|
|
1,102
|
|
(2
|
)
|
|||||||
Wealth management
|
156
|
|
160
|
|
159
|
|
157
|
|
158
|
|
(3
|
)
|
(1
|
)
|
|
475
|
|
467
|
|
2
|
|
|||||||
Investment management fees
|
804
|
|
835
|
|
825
|
|
827
|
|
843
|
|
(4
|
)
|
(5
|
)
|
|
2,464
|
|
2,494
|
|
(1
|
)
|
|||||||
Performance fees
|
7
|
|
20
|
|
15
|
|
40
|
|
22
|
|
N/M
|
(68
|
)
|
|
42
|
|
71
|
|
(41
|
)
|
||||||||
Investment management and performance fees
|
811
|
|
855
|
|
840
|
|
867
|
|
865
|
|
(5
|
)
|
(6
|
)
|
|
2,506
|
|
2,565
|
|
(2
|
)
|
|||||||
Distribution and servicing
|
37
|
|
38
|
|
38
|
|
39
|
|
40
|
|
(3
|
)
|
(8
|
)
|
|
113
|
|
118
|
|
(4
|
)
|
|||||||
Other
(a)
|
(2
|
)
|
20
|
|
45
|
|
6
|
|
15
|
|
N/M
|
N/M
|
|
63
|
|
77
|
|
N/M
|
|
|||||||||
Total fee and other revenue
(a)
|
846
|
|
913
|
|
923
|
|
912
|
|
920
|
|
(7
|
)
|
(8
|
)
|
|
2,682
|
|
2,760
|
|
(3
|
)
|
|||||||
Net interest revenue
|
83
|
|
78
|
|
74
|
|
69
|
|
69
|
|
6
|
|
20
|
|
|
235
|
|
205
|
|
15
|
|
|||||||
Total revenue
|
929
|
|
991
|
|
997
|
|
981
|
|
989
|
|
(6
|
)
|
(6
|
)
|
|
2,917
|
|
2,965
|
|
(2
|
)
|
|||||||
Noninterest expense (ex. amortization of intangible assets and the charge related to investment management funds, net of incentives)
|
668
|
|
703
|
|
710
|
|
716
|
|
715
|
|
(5
|
)
|
(7
|
)
|
|
2,081
|
|
2,111
|
|
(1
|
)
|
|||||||
Income before taxes (ex. amortization of intangible assets and the charge related to investment management funds, net of incentives)
|
261
|
|
288
|
|
287
|
|
265
|
|
274
|
|
(9
|
)
|
(5
|
)
|
|
836
|
|
854
|
|
(2
|
)
|
|||||||
Amortization of intangible assets
|
24
|
|
25
|
|
24
|
|
29
|
|
29
|
|
(4
|
)
|
(17
|
)
|
|
73
|
|
89
|
|
(18
|
)
|
|||||||
Charge related to investment management funds, net of incentives
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
104
|
|
N/M
|
|
|||||||||
Income before taxes
|
$
|
237
|
|
$
|
263
|
|
$
|
263
|
|
$
|
236
|
|
$
|
245
|
|
(10
|
)%
|
(3
|
)%
|
|
$
|
763
|
|
$
|
661
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Pre-tax operating margin
|
26
|
%
|
27
|
%
|
26
|
%
|
24
|
%
|
25
|
%
|
|
|
|
26
|
%
|
22
|
%
|
|
||||||||||
Adjusted pre-tax operating
margin
(b)
|
34
|
%
|
34
|
%
|
34
|
%
|
33
|
%
|
33
|
%
|
|
|
|
34
|
%
|
35
|
%
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average balances:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average loans
|
$
|
12,779
|
|
$
|
12,298
|
|
$
|
11,634
|
|
$
|
11,124
|
|
$
|
10,772
|
|
4
|
%
|
19
|
%
|
|
$
|
12,241
|
|
$
|
10,408
|
|
18
|
%
|
Average deposits
|
$
|
15,282
|
|
$
|
14,638
|
|
$
|
15,217
|
|
$
|
14,602
|
|
$
|
13,762
|
|
4
|
%
|
11
|
%
|
|
$
|
15,046
|
|
$
|
14,004
|
|
7
|
%
|
(a)
|
Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
52
for the reconciliation of Non-GAAP measures. Additionally, other revenue includes asset servicing, treasury services, foreign exchange and other trading revenue and investment and other income.
|
(b)
|
Excludes the net negative impact of money market fee waivers, amortization of intangible assets and the charge related to investment management funds, net of incentives, and is net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
52
for the reconciliation of this Non-GAAP measure.
|
AUM trends
(a)
|
|
|
|
|
|
3Q15 vs.
|
|||||||||||||
(dollar amounts in billions)
|
3Q15
|
|
2Q15
|
|
1Q15
|
|
4Q14
|
|
3Q14
|
|
2Q15
|
|
3Q14
|
|
|||||
AUM at period end, by product type:
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
$
|
224
|
|
$
|
248
|
|
$
|
259
|
|
$
|
260
|
|
$
|
263
|
|
(10
|
)%
|
(15
|
)%
|
Fixed income
|
216
|
|
215
|
|
211
|
|
204
|
|
201
|
|
—
|
|
7
|
|
|||||
Index
|
325
|
|
366
|
|
382
|
|
356
|
|
344
|
|
(11
|
)
|
(6
|
)
|
|||||
Liability-driven investments
(b)
|
520
|
|
520
|
|
510
|
|
504
|
|
455
|
|
—
|
|
14
|
|
|||||
Alternative investments
|
62
|
|
62
|
|
58
|
|
65
|
|
64
|
|
—
|
|
(3
|
)
|
|||||
Cash
|
278
|
|
289
|
|
297
|
|
297
|
|
293
|
|
(4
|
)
|
(5
|
)
|
|||||
Total AUM
|
$
|
1,625
|
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
$
|
1,620
|
|
(4
|
)%
|
—
|
%
|
|
|
|
|
|
|
|
|
||||||||||||
AUM at period end, by client type:
|
|
|
|
|
|
|
|
||||||||||||
Institutional
|
$
|
1,129
|
|
$
|
1,163
|
|
$
|
1,188
|
|
$
|
1,164
|
|
$
|
1,106
|
|
(3
|
)%
|
2
|
%
|
Mutual funds
|
419
|
|
454
|
|
445
|
|
438
|
|
430
|
|
(8
|
)
|
(3
|
)
|
|||||
Private client
|
77
|
|
83
|
|
84
|
|
84
|
|
84
|
|
(7
|
)
|
(8
|
)
|
|||||
Total AUM
|
$
|
1,625
|
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
$
|
1,620
|
|
(4
|
)%
|
—
|
%
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in AUM:
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance of AUM
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
$
|
1,620
|
|
$
|
1,609
|
|
|
|
||
Net inflows (outflows):
|
|
|
|
|
|
|
|
||||||||||||
Long-term:
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
(4
|
)
|
(13
|
)
|
(5
|
)
|
(5
|
)
|
(2
|
)
|
|
|
|||||||
Fixed income
|
(3
|
)
|
(2
|
)
|
3
|
|
4
|
|
—
|
|
|
|
|||||||
Index
|
(10
|
)
|
(9
|
)
|
8
|
|
1
|
|
(3
|
)
|
|
|
|||||||
Liability-driven investments
(b)
|
11
|
|
5
|
|
8
|
|
24
|
|
19
|
|
|
|
|||||||
Alternative investments
|
1
|
|
3
|
|
1
|
|
2
|
|
—
|
|
|
|
|||||||
Total long-term inflows (outflows)
|
(5
|
)
|
(16
|
)
|
15
|
|
26
|
|
14
|
|
|
|
|||||||
Short term:
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
(10
|
)
|
(11
|
)
|
1
|
|
6
|
|
18
|
|
|
|
|||||||
Total net inflows (outflows)
|
(15
|
)
|
(27
|
)
|
16
|
|
32
|
|
32
|
|
|
|
|||||||
Net market/currency impact/acquisition
|
(60
|
)
|
10
|
|
15
|
|
34
|
|
(21
|
)
|
|
|
|||||||
Ending balance of AUM
|
$
|
1,625
|
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
$
|
1,620
|
|
(4
|
)%
|
—
|
%
|
(a)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business. In the third quarter of 2015, prior period AUM was restated to reflect the reclassification of Meriten from the Investment Management business to the Other segment.
|
(b)
|
Includes currency overlay assets under management.
|
|
|
|
|
|
|
|
|
|
|
|
YTD15
|
|||||||||||||||||
(dollars in millions, unless otherwise noted)
|
|
|
|
|
|
3Q15 vs.
|
|
Year-to-date
|
vs.
|
|||||||||||||||||||
3Q15
|
|
2Q15
|
|
1Q15
|
|
4Q14
|
|
3Q14
|
|
2Q15
|
3Q14
|
|
2015
|
2014
|
YTD14
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Asset servicing
|
$
|
1,031
|
|
$
|
1,035
|
|
$
|
1,013
|
|
$
|
992
|
|
$
|
998
|
|
—
|
%
|
3
|
%
|
|
$
|
3,079
|
|
$
|
2,976
|
|
3
|
%
|
Clearing services
|
345
|
|
346
|
|
342
|
|
346
|
|
336
|
|
—
|
|
3
|
|
|
1,033
|
|
983
|
|
5
|
|
|||||||
Issuer services
|
312
|
|
234
|
|
231
|
|
193
|
|
314
|
|
33
|
|
(1
|
)
|
|
777
|
|
773
|
|
1
|
|
|||||||
Treasury services
|
135
|
|
141
|
|
135
|
|
142
|
|
139
|
|
(4
|
)
|
(3
|
)
|
|
411
|
|
413
|
|
—
|
|
|||||||
Total investment services fees
|
1,823
|
|
1,756
|
|
1,721
|
|
1,673
|
|
1,787
|
|
4
|
|
2
|
|
|
5,300
|
|
5,145
|
|
3
|
|
|||||||
Foreign exchange and other trading revenue
|
177
|
|
179
|
|
209
|
|
165
|
|
159
|
|
(1
|
)
|
11
|
|
|
565
|
|
462
|
|
22
|
|
|||||||
Other
(a)
|
87
|
|
85
|
|
63
|
|
70
|
|
59
|
|
2
|
|
47
|
|
|
235
|
|
204
|
|
15
|
|
|||||||
Total fee and other revenue
|
2,087
|
|
2,020
|
|
1,993
|
|
1,908
|
|
2,005
|
|
3
|
|
4
|
|
|
6,100
|
|
5,811
|
|
5
|
|
|||||||
Net interest revenue
|
628
|
|
636
|
|
599
|
|
573
|
|
583
|
|
(1
|
)
|
8
|
|
|
1,863
|
|
1,766
|
|
5
|
|
|||||||
Total revenue
|
2,715
|
|
2,656
|
|
2,592
|
|
2,481
|
|
2,588
|
|
2
|
|
5
|
|
|
7,963
|
|
7,577
|
|
5
|
|
|||||||
Noninterest expense (ex. amortization of intangible assets)
|
1,822
|
|
1,840
|
|
1,794
|
|
2,509
|
|
1,831
|
|
(1
|
)
|
—
|
|
|
5,456
|
|
5,432
|
|
—
|
|
|||||||
Income (loss) before taxes (ex. amortization of intangible assets)
|
893
|
|
816
|
|
798
|
|
(28
|
)
|
757
|
|
9
|
|
18
|
|
|
2,507
|
|
2,145
|
|
17
|
|
|||||||
Amortization of intangible assets
|
41
|
|
40
|
|
41
|
|
43
|
|
44
|
|
3
|
|
(7
|
)
|
|
122
|
|
132
|
|
(8
|
)
|
|||||||
Income (loss) before taxes
|
$
|
852
|
|
$
|
776
|
|
$
|
757
|
|
$
|
(71
|
)
|
$
|
713
|
|
10
|
%
|
19
|
%
|
|
$
|
2,385
|
|
$
|
2,013
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Pre-tax operating margin
|
31
|
%
|
29
|
%
|
29
|
%
|
(3
|
)%
|
28
|
%
|
|
|
|
30
|
%
|
27
|
%
|
|
||||||||||
Pre-tax operating margin (ex. amortization of intangible assets)
|
33
|
%
|
31
|
%
|
31
|
%
|
(1
|
)%
|
29
|
%
|
|
|
|
31
|
%
|
28
|
%
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment services fees as a percentage of noninterest
expense
(b)
|
101
|
%
|
98
|
%
|
96
|
%
|
93
|
%
|
100
|
%
|
|
|
|
98
|
%
|
95
|
%
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Securities lending revenue
|
$
|
30
|
|
$
|
40
|
|
$
|
34
|
|
$
|
28
|
|
$
|
27
|
|
(25
|
)%
|
11
|
%
|
|
$
|
104
|
|
$
|
92
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average loans
|
$
|
38,025
|
|
$
|
38,264
|
|
$
|
37,699
|
|
$
|
35,448
|
|
$
|
33,785
|
|
(1
|
)%
|
13
|
%
|
|
$
|
37,997
|
|
$
|
32,798
|
|
16
|
%
|
Average deposits
|
$
|
230,153
|
|
$
|
237,193
|
|
$
|
234,183
|
|
$
|
228,282
|
|
$
|
221,734
|
|
(3
|
)%
|
4
|
%
|
|
$
|
233,828
|
|
$
|
219,152
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
AUC/A at period end
(in trillions) (c)
|
$
|
28.5
|
|
$
|
28.6
|
|
$
|
28.5
|
|
$
|
28.5
|
|
$
|
28.3
|
|
—
|
%
|
1
|
%
|
|
|
|
|
|||||
Market value of securities on loan at period end
(in billions) (d)
|
$
|
288
|
|
$
|
283
|
|
$
|
291
|
|
$
|
289
|
|
$
|
282
|
|
2
|
%
|
2
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Asset servicing:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Estimated new business wins (AUC/A)
(in billions) (e)
|
$
|
84
|
|
$
|
933
|
|
$
|
125
|
|
$
|
168
|
|
$
|
154
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Depositary Receipts:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Number of sponsored programs
|
1,176
|
|
1,206
|
|
1,258
|
|
1,279
|
|
1,302
|
|
(2
|
)%
|
(10
|
)%
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Clearing services:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Global DARTS volume
(in thousands)
|
246
|
|
242
|
|
261
|
|
242
|
|
209
|
|
2
|
%
|
18
|
%
|
|
|
|
|
||||||||||
Average active clearing accounts (U.S. platform) (
in thousands)
|
6,107
|
|
6,046
|
|
5,979
|
|
5,900
|
|
5,805
|
|
1
|
%
|
5
|
%
|
|
|
|
|
||||||||||
Average long-term mutual fund assets (U.S. platform)
|
$
|
447,287
|
|
$
|
466,195
|
|
$
|
456,954
|
|
$
|
450,305
|
|
$
|
442,827
|
|
(4
|
)%
|
1
|
%
|
|
|
|
|
|||||
Average investor margin loans (U.S. platform)
|
$
|
11,806
|
|
$
|
11,890
|
|
$
|
11,232
|
|
$
|
10,711
|
|
$
|
9,861
|
|
(1
|
)%
|
20
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Broker-Dealer:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average tri-party repo
balances (
in billions)
|
$
|
2,142
|
|
$
|
2,174
|
|
$
|
2,153
|
|
$
|
2,101
|
|
$
|
2,063
|
|
(1
|
)%
|
4
|
%
|
|
|
|
|
(a)
|
Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue and investment and other income.
|
(b)
|
Noninterest expense excludes amortization of intangible assets and litigation expense.
|
(c)
|
Includes the AUC/A of CIBC Mellon of
$1.0 trillion
at
Sept. 30, 2015
,
$1.1 trillion
at
June 30, 2015
,
March 31, 2015
and
Dec. 31, 2014
and
$1.2 trillion
at
Sept. 30, 2014
.
|
(d)
|
Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled
$61 billion
at
Sept. 30, 2015
,
$68 billion
at
June 30, 2015
,
$69 billion
at
March 31, 2015
and
$65 billion
at
Dec. 31, 2014
and
Sept. 30, 2014
.
|
(e)
|
Beginning with the third quarter of 2015, estimated new business wins are determined based on finalization of the contract as compared to the prior methodology of receipt of a mandate. Prior periods have been restated for comparative purposes.
|
•
|
Asset servicing fees (global custody, broker-dealer services and Global Collateral Services) were
$1.03 billion
compared with
$998 million
in the
third quarter of 2014
and
$1.04 billion
in the
second quarter of 2015
.
The year-over-year increase primarily reflects organic growth in the Global Collateral Services, Broker-Dealer Services and Asset Servicing businesses, and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar.
Sequentially, organic growth and net new business were offset by lower securities lending revenue and lower market values.
|
•
|
Clearing services fees were
$345 million
compared with
$336 million
in the
third quarter of 2014
and
$346 million
in the
second quarter of 2015
.
The year-over-year increase was primarily driven by higher mutual fund and asset-based fees.
|
•
|
Issuer services fees (Corporate Trust and Depositary Receipts) were
$312 million
compared with
$314 million
in the
third quarter of 2014
and
$234 million
in the
second quarter of 2015
.
The year-over-year decrease primarily reflects lower fees in Depositary Receipts and the unfavorable impact of a stronger U.S. dollar in Corporate Trust, partially offset by net new business in Corporate Trust.
The sequential increase primarily reflects seasonally higher fees in Depositary Receipts.
|
•
|
Treasury services fees were
$135 million
compared with
$139 million
in the
third quarter of 2014
and
$141 million
in the
second quarter of 2015
.
Both decreases primarily reflect lower payment volumes.
|
|
|
|
|
|
|
Year-to-date
|
|||||||||||||||
(dollars in millions)
|
3Q15
|
|
2Q15
|
|
1Q15
|
|
4Q14
|
|
3Q14
|
|
2015
|
|
2014
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||||||||
Fee and other revenue
|
$
|
103
|
|
$
|
137
|
|
$
|
117
|
|
$
|
133
|
|
$
|
942
|
|
$
|
357
|
|
$
|
1,204
|
|
Net interest revenue
|
48
|
|
65
|
|
55
|
|
70
|
|
69
|
|
168
|
|
197
|
|
|||||||
Total revenue
|
151
|
|
202
|
|
172
|
|
203
|
|
1,011
|
|
525
|
|
1,401
|
|
|||||||
Provision for credit losses
|
1
|
|
(6
|
)
|
2
|
|
1
|
|
(19
|
)
|
(3
|
)
|
(49
|
)
|
|||||||
Noninterest expense (ex. amortization of intangible assets, M&I and restructuring charges (recoveries))
|
125
|
|
110
|
|
134
|
|
226
|
|
290
|
|
369
|
|
604
|
|
|||||||
Income (loss) before taxes (ex. amortization of intangible assets, M&I and restructuring charges (recoveries))
|
25
|
|
98
|
|
36
|
|
(24
|
)
|
740
|
|
159
|
|
846
|
|
|||||||
Amortization of intangible assets
|
1
|
|
—
|
|
1
|
|
1
|
|
2
|
|
2
|
|
4
|
|
|||||||
M&I and restructuring charges (recoveries)
|
(2
|
)
|
8
|
|
(4
|
)
|
—
|
|
57
|
|
2
|
|
177
|
|
|||||||
Income (loss) before taxes
|
$
|
26
|
|
$
|
90
|
|
$
|
39
|
|
$
|
(25
|
)
|
$
|
681
|
|
$
|
155
|
|
$
|
665
|
|
Average loans and leases
|
$
|
10,853
|
|
$
|
10,514
|
|
$
|
8,602
|
|
$
|
10,272
|
|
$
|
10,278
|
|
$
|
9,999
|
|
$
|
10,116
|
|
On- and off-balance sheet exposure at Sept. 30, 2015
|
|
|
|
|
|
||||||||||
(in millions)
|
Ireland
|
|
Italy
|
|
Spain
|
|
Russia
|
|
Total
|
|
|||||
On-balance sheet exposure
|
|
|
|
|
|
||||||||||
Gross:
|
|
|
|
|
|
||||||||||
Deposits with banks (primarily interest-bearing)
(a)
|
$
|
85
|
|
$
|
189
|
|
$
|
347
|
|
$
|
4
|
|
$
|
625
|
|
Investment securities (primarily sovereign debt and European Floating Rate Notes)
(b)
|
920
|
|
1,432
|
|
1,955
|
|
—
|
|
4,307
|
|
|||||
Loans and leases
(c)
|
156
|
|
2
|
|
11
|
|
50
|
|
219
|
|
|||||
Trading assets
(d)
|
151
|
|
2
|
|
—
|
|
—
|
|
153
|
|
|||||
Total gross on-balance sheet exposure
|
1,312
|
|
1,625
|
|
2,313
|
|
54
|
|
5,304
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Collateral
|
112
|
|
2
|
|
—
|
|
—
|
|
114
|
|
|||||
Guarantees
|
—
|
|
2
|
|
1
|
|
—
|
|
3
|
|
|||||
Total collateral and guarantees
|
112
|
|
4
|
|
1
|
|
—
|
|
117
|
|
|||||
Total net on-balance sheet exposure
|
$
|
1,200
|
|
$
|
1,621
|
|
$
|
2,312
|
|
$
|
54
|
|
$
|
5,187
|
|
Off-balance sheet exposure
|
|
|
|
|
|
||||||||||
Gross:
|
|
|
|
|
|
||||||||||
Lending-related commitments
(e)
|
$
|
87
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
87
|
|
Letters of credit
(f)
|
53
|
|
3
|
|
13
|
|
—
|
|
69
|
|
|||||
Total gross off-balance sheet exposure
|
140
|
|
3
|
|
13
|
|
—
|
|
156
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Collateral
|
70
|
|
—
|
|
13
|
|
—
|
|
83
|
|
|||||
Total net off-balance sheet exposure
|
$
|
70
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
73
|
|
Total exposure:
|
|
|
|
|
|
||||||||||
Total gross on- and off-balance sheet exposure
|
$
|
1,452
|
|
$
|
1,628
|
|
$
|
2,326
|
|
$
|
54
|
|
$
|
5,460
|
|
Less: Total collateral and guarantees
|
182
|
|
4
|
|
14
|
|
—
|
|
200
|
|
|||||
Total net on- and off-balance sheet exposure
|
$
|
1,270
|
|
$
|
1,624
|
|
$
|
2,312
|
|
$
|
54
|
|
$
|
5,260
|
|
(a)
|
Interest-bearing deposits with banks represent a $43 million placement with an Irish financial institution, a $100 million placement with a financial institution in Italy, $346 million of placements with financial institutions in Spain and $136 million of nostro accounts related to our depositary receipts, custody and treasury services activities located in Ireland, Italy, Spain and Russia.
|
(b)
|
Investment securities represent $127 million, fair value, of residential mortgage-backed securities located in Ireland and Italy, $4.1 billion, fair value, of sovereign debt located in Ireland, Italy and Spain and $45 million, fair value, of investment grade corporate bonds located in Ireland, Italy and Spain. The investment securities were 97% investment grade.
|
(c)
|
Loans and leases primarily include $78 million of overdrafts in Ireland and $10 million of overdrafts in Spain resulting from our custody business, a $77 million commercial lease to a company located in Ireland, which was fully collateralized by U.S. Treasuries and $50 million of a syndicated loan to a large, state-owned financial institution in Russia. There is no impairment associated with these loans and leases. Overdrafts occur on a daily basis in our Investment Services businesses and are generally repaid within two business days.
|
(d)
|
Trading assets represent the receivable related to over-the-counter (“OTC”) foreign exchange and interest rate derivatives, net of master netting agreements. Trading assets include $151 million of receivables primarily due from Irish-domiciled investment funds and $2 million of receivables primarily due from financial institutions in Italy. Trading assets in Ireland were collateralized by $35 million of cash and U.S. Treasuries.
|
(e)
|
Lending-related commitments include $87 million to an insurance company in Ireland, collateralized by $21 million of marketable securities.
|
(f)
|
Letters of credit primarily represent $48 million extended to an insurance company in Ireland, collateralized by $46 million of marketable securities and $13 million extended to an insurance company in Spain, fully collateralized by marketable securities. Risk participations with counterparties in the above countries are excluded.
|
On- and off-balance sheet exposure at Dec. 31, 2014
|
|
|
|
|
|
||||||||||
(in millions)
|
Ireland
|
|
Italy
|
|
Spain
|
|
Russia
|
|
Total
|
|
|||||
On-balance sheet exposure
|
|
|
|
|
|
||||||||||
Gross:
|
|
|
|
|
|
||||||||||
Deposits with banks (primarily interest-bearing)
(a)
|
$
|
147
|
|
$
|
186
|
|
$
|
195
|
|
$
|
44
|
|
$
|
572
|
|
Investment securities (primarily sovereign debt and European Floating Rate Notes)
(b)
|
818
|
|
1,458
|
|
1,992
|
|
—
|
|
4,268
|
|
|||||
Loans and leases
(c)
|
198
|
|
3
|
|
1
|
|
199
|
|
401
|
|
|||||
Trading assets
(d)
|
239
|
|
7
|
|
12
|
|
—
|
|
258
|
|
|||||
Total gross on-balance sheet exposure
|
1,402
|
|
1,654
|
|
2,200
|
|
243
|
|
5,499
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Collateral
|
109
|
|
7
|
|
11
|
|
—
|
|
127
|
|
|||||
Guarantees
|
—
|
|
2
|
|
1
|
|
—
|
|
3
|
|
|||||
Total collateral and guarantees
|
109
|
|
9
|
|
12
|
|
—
|
|
130
|
|
|||||
Total net on-balance sheet exposure
|
$
|
1,293
|
|
$
|
1,645
|
|
$
|
2,188
|
|
$
|
243
|
|
$
|
5,369
|
|
Off-balance sheet exposure
|
|
|
|
|
|
||||||||||
Gross:
|
|
|
|
|
|
||||||||||
Lending-related commitments
(e)
|
$
|
91
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
91
|
|
Letters of credit
(f)
|
61
|
|
3
|
|
14
|
|
—
|
|
78
|
|
|||||
Total gross off-balance sheet exposure
|
152
|
|
3
|
|
14
|
|
—
|
|
169
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Collateral
|
82
|
|
—
|
|
14
|
|
—
|
|
96
|
|
|||||
Total net off-balance sheet exposure
|
$
|
70
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
73
|
|
Total exposure:
|
|
|
|
|
|
||||||||||
Total gross on- and off-balance sheet exposure
|
$
|
1,554
|
|
$
|
1,657
|
|
$
|
2,214
|
|
$
|
243
|
|
$
|
5,668
|
|
Less: Total collateral and guarantees
|
191
|
|
9
|
|
26
|
|
—
|
|
226
|
|
|||||
Total net on- and off-balance sheet exposure
|
$
|
1,363
|
|
$
|
1,648
|
|
$
|
2,188
|
|
$
|
243
|
|
$
|
5,442
|
|
(a)
|
Interest-bearing deposits with banks represent a $94 million placement with an Irish subsidiary of a UK holding company, a $37 million placement with an Irish financial institution, a $100 million placement with a financial institution in Italy, a $195 million placement with a financial institution in Spain, $146 million of nostro accounts related to our depositary receipts, custody and treasury services activities located in Ireland, Italy, Spain and Russia.
|
(b)
|
Investment securities represent $146 million, fair value, of residential mortgage-backed securities located in Ireland and Italy, $4.1 billion, fair value, of sovereign debt located in Ireland, Italy and Spain and $45 million, fair value, of investment grade corporate bonds located in Ireland, Italy and Spain. The investment securities were 97% investment grade.
|
(c)
|
Loans and leases primarily include $124 million of overdrafts primarily to Irish-domiciled investment funds resulting from our custody business, a $74 million commercial lease to a company located in Ireland, which was fully collateralized by U.S. Treasuries and $199 million of trade finance and syndicated loans primarily to large, state-owned financial institutions in Russia. There is no impairment associated with these loans and leases. Overdrafts occur on a daily basis in our Investment Services businesses and are generally repaid within two business days.
|
(d)
|
Trading assets represent the receivable related to OTC foreign exchange and interest rate derivatives, net of master netting agreements. Trading assets include $239 million of receivables primarily due from Irish-domiciled investment funds and $19 million of receivables primarily due from financial institutions in Italy and Spain. Trading assets in Ireland and Spain were collateralized by $46 million of cash and U.S. Treasuries. Additionally, cash collateral on trading assets represents $7 million in Italy.
|
(e)
|
Lending-related commitments include $79 million to an insurance company in Ireland, collateralized by $14 million of marketable securities, and $12 million to an investment company in Ireland, secured by a lien on the client’s collateral portfolio.
|
(f)
|
Letters of credit primarily represent $56 million extended to an insurance company in Ireland, collateralized by $54 million of marketable securities and $13 million extended to an insurance company in Spain, fully collateralized by marketable securities. Risk participations with counterparties in the above countries are excluded.
|
Investment securities
portfolio
(dollars in millions)
|
June 30, 2015
|
|
|
3Q15
change in
unrealized
gain (loss)
|
|
Sept. 30, 2015
|
Fair value
as a % of amortized
cost
(a)
|
|
Unrealized
gain (loss)
|
|
|
Ratings
|
||||||||||||||||||
|
|
|
|
BB+
and
lower
|
|
|||||||||||||||||||||||||
Fair
value
|
|
|
Amortized
cost
|
|
Fair
value
|
|
|
|
AAA/
AA-
|
A+/
A-
|
BBB+/
BBB-
|
Not
rated
|
||||||||||||||||||
Agency RMBS
|
$
|
50,018
|
|
|
$
|
252
|
|
$
|
49,563
|
|
$
|
49,850
|
|
|
101
|
%
|
$
|
287
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S. Treasury
|
24,222
|
|
|
11
|
|
23,548
|
|
23,642
|
|
|
100
|
|
94
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Sovereign debt/sovereign guaranteed
(b)
|
18,516
|
|
|
79
|
|
17,545
|
|
17,674
|
|
|
101
|
|
129
|
|
|
76
|
|
1
|
|
23
|
|
—
|
|
—
|
|
|||||
Non-agency RMBS
(c)
|
2,040
|
|
|
(24
|
)
|
1,548
|
|
1,938
|
|
|
81
|
|
390
|
|
|
—
|
|
1
|
|
2
|
|
90
|
|
7
|
|
|||||
Non-agency RMBS
|
1,024
|
|
|
1
|
|
955
|
|
973
|
|
|
94
|
|
18
|
|
|
2
|
|
8
|
|
20
|
|
69
|
|
1
|
|
|||||
European floating rate
notes
(d)
|
1,737
|
|
|
(15
|
)
|
1,660
|
|
1,634
|
|
|
98
|
|
(26
|
)
|
|
71
|
|
21
|
|
—
|
|
8
|
|
—
|
|
|||||
Commercial MBS
|
5,888
|
|
|
(7
|
)
|
5,715
|
|
5,730
|
|
|
100
|
|
15
|
|
|
95
|
|
4
|
|
1
|
|
—
|
|
—
|
|
|||||
State and political subdivisions
|
4,548
|
|
|
20
|
|
4,258
|
|
4,334
|
|
|
102
|
|
76
|
|
|
80
|
|
17
|
|
—
|
|
—
|
|
3
|
|
|||||
Foreign covered bonds
(e)
|
2,723
|
|
|
(7
|
)
|
2,329
|
|
2,379
|
|
|
102
|
|
50
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Corporate bonds
|
1,802
|
|
|
2
|
|
1,802
|
|
1,822
|
|
|
101
|
|
20
|
|
|
19
|
|
69
|
|
12
|
|
—
|
|
—
|
|
|||||
CLOs
|
2,245
|
|
|
(10
|
)
|
2,297
|
|
2,291
|
|
|
100
|
|
(6
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
U.S. Government agencies
|
1,856
|
|
|
5
|
|
1,569
|
|
1,572
|
|
|
100
|
|
3
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Consumer ABS
|
3,348
|
|
|
(10
|
)
|
3,138
|
|
3,129
|
|
|
100
|
|
(9
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other
(f)
|
3,008
|
|
|
—
|
|
3,047
|
|
3,055
|
|
|
100
|
|
8
|
|
|
48
|
|
—
|
|
49
|
|
—
|
|
3
|
|
|||||
Total investment securities
|
$
|
122,975
|
|
(g)
|
$
|
297
|
|
$
|
118,974
|
|
$
|
120,023
|
|
(g)
|
100
|
%
|
$
|
1,049
|
|
(g)(h)
|
91
|
%
|
2
|
%
|
5
|
%
|
2
|
%
|
—
|
%
|
(a)
|
Amortized cost before impairments.
|
(b)
|
Primarily consists of exposure to UK, France, Germany, Spain, and Italy.
|
(c)
|
These RMBS were included in the former Grantor Trust and were marked-to-market in 2009. We believe these RMBS would receive higher credit ratings if these ratings incorporated, as additional credit enhancements, the difference between the written-down amortized cost and the current face amount of each of these securities.
|
(d)
|
Includes RMBS and commercial MBS. Primarily consists of exposure to UK and Netherlands.
|
(e)
|
Primarily consists of exposure to Canada, UK and Netherlands.
|
(f)
|
Includes commercial paper with a fair value of
$1.7 billion
and
$1.5 billion
and money market funds with a fair value of
$779 million
and
$770 million
at
June 30, 2015
and
Sept. 30, 2015
, respectively.
|
(g)
|
Includes net unrealized losses on derivatives hedging securities available-for-sale of
$71 million
at
June 30, 2015
and
$417 million
at
Sept. 30, 2015
.
|
(h)
|
Unrealized gains of
$714 million
at
Sept. 30, 2015
related to available-for-sale securities.
|
Net premium amortization and discount accretion of investment securities
(a)
|
|
|
|
|
|
||||||||||
(dollars in millions)
|
3Q15
|
|
2Q15
|
|
1Q15
|
|
4Q14
|
|
3Q14
|
|
|||||
Amortizable purchase premium (net of discount) relating to investment securities:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
2,433
|
|
$
|
2,492
|
|
$
|
2,559
|
|
$
|
2,432
|
|
$
|
2,317
|
|
Estimated average life remaining at period end
(in years)
|
4.6
|
|
4.7
|
|
4.5
|
|
4.8
|
|
4.6
|
|
|||||
Amortization
|
$
|
176
|
|
$
|
183
|
|
$
|
173
|
|
$
|
166
|
|
$
|
159
|
|
Accretable discount related to the prior restructuring of the investment securities portfolio:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
401
|
|
$
|
420
|
|
$
|
386
|
|
$
|
413
|
|
$
|
465
|
|
Estimated average life remaining at period end
(in years)
|
6.0
|
|
6.0
|
|
6.0
|
|
5.9
|
|
6.6
|
|
|||||
Accretion
|
$
|
33
|
|
$
|
32
|
|
$
|
32
|
|
$
|
36
|
|
$
|
40
|
|
(a)
|
Amortization of purchase premium decreases net interest revenue while accretion of discount increases net interest revenue. Both were recorded on a level yield basis.
|
(a)
|
71%
of these securities are in the AAA to AA- ratings category.
|
Total exposure – consolidated
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||||||||
(in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||||
Financial institutions
|
$
|
16.0
|
|
$
|
43.5
|
|
$
|
59.5
|
|
|
$
|
13.3
|
|
$
|
15.5
|
|
$
|
28.8
|
|
Commercial
|
2.1
|
|
17.5
|
|
19.6
|
|
|
1.7
|
|
18.7
|
|
20.4
|
|
||||||
Subtotal institutional
|
18.1
|
|
61.0
|
|
79.1
|
|
|
15.0
|
|
34.2
|
|
49.2
|
|
||||||
Wealth management loans and mortgages
|
12.6
|
|
1.7
|
|
14.3
|
|
|
11.2
|
|
1.7
|
|
12.9
|
|
||||||
Commercial real estate
|
3.7
|
|
2.7
|
|
6.4
|
|
|
2.5
|
|
2.7
|
|
5.2
|
|
||||||
Lease financings
|
2.0
|
|
—
|
|
2.0
|
|
|
2.2
|
|
—
|
|
2.2
|
|
||||||
Other residential mortgages
|
1.1
|
|
—
|
|
1.1
|
|
|
1.2
|
|
—
|
|
1.2
|
|
||||||
Overdrafts
|
5.2
|
|
—
|
|
5.2
|
|
|
5.9
|
|
—
|
|
5.9
|
|
||||||
Other
|
1.2
|
|
—
|
|
1.2
|
|
|
1.1
|
|
—
|
|
1.1
|
|
||||||
Subtotal non-margin loans
|
43.9
|
|
65.4
|
|
109.3
|
|
|
39.1
|
|
38.6
|
|
77.7
|
|
||||||
Margin loans
|
19.4
|
|
0.7
|
|
20.1
|
|
|
20.0
|
|
0.7
|
|
20.7
|
|
||||||
Total
|
$
|
63.3
|
|
$
|
66.1
|
|
$
|
129.4
|
|
|
$
|
59.1
|
|
$
|
39.3
|
|
$
|
98.4
|
|
Financial institutions
portfolio exposure
(dollar amounts in billions)
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||||||||||||||||||
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
|
% Inv.
grade
|
|
|
% due
<1 yr
|
|
|
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
|||||||
Securities industry
|
$
|
3.7
|
|
|
$
|
27.5
|
|
|
$
|
31.2
|
|
|
99
|
%
|
|
99
|
%
|
|
$
|
3.1
|
|
|
$
|
1.1
|
|
|
$
|
4.2
|
|
Banks
|
9.3
|
|
|
2.1
|
|
|
11.4
|
|
|
87
|
|
|
91
|
|
|
7.6
|
|
|
1.7
|
|
|
9.3
|
|
||||||
Asset managers
|
1.9
|
|
|
5.2
|
|
|
7.1
|
|
|
99
|
|
|
85
|
|
|
2.0
|
|
|
4.8
|
|
|
6.8
|
|
||||||
Insurance
|
0.2
|
|
|
4.6
|
|
|
4.8
|
|
|
99
|
|
|
19
|
|
|
0.1
|
|
|
4.0
|
|
|
4.1
|
|
||||||
Government
|
0.1
|
|
|
2.4
|
|
|
2.5
|
|
|
95
|
|
|
63
|
|
|
0.1
|
|
|
2.9
|
|
|
3.0
|
|
||||||
Other
|
0.8
|
|
|
1.7
|
|
|
2.5
|
|
|
98
|
|
|
27
|
|
|
0.4
|
|
|
1.0
|
|
|
1.4
|
|
||||||
Total
|
$
|
16.0
|
|
|
$
|
43.5
|
|
|
$
|
59.5
|
|
|
96
|
%
|
|
85
|
%
|
|
$
|
13.3
|
|
|
$
|
15.5
|
|
|
$
|
28.8
|
|
Commercial portfolio exposure
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||||||||||||||||||
(dollar amounts in billions)
|
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
|
% Inv.
grade
|
|
|
% due
<1 yr
|
|
|
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
||||||
Services and other
|
$
|
0.8
|
|
|
$
|
5.6
|
|
|
$
|
6.4
|
|
|
95
|
%
|
|
19
|
%
|
|
$
|
0.8
|
|
|
$
|
5.9
|
|
|
$
|
6.7
|
|
Manufacturing
|
0.5
|
|
|
5.3
|
|
|
5.8
|
|
|
90
|
|
|
7
|
|
|
0.3
|
|
|
5.7
|
|
|
6.0
|
|
||||||
Energy and utilities
|
0.5
|
|
|
5.1
|
|
|
5.6
|
|
|
97
|
|
|
11
|
|
|
0.5
|
|
|
5.6
|
|
|
6.1
|
|
||||||
Media and telecom
|
0.3
|
|
|
1.5
|
|
|
1.8
|
|
|
93
|
|
|
—
|
|
|
0.1
|
|
|
1.5
|
|
|
1.6
|
|
||||||
Total
|
$
|
2.1
|
|
|
$
|
17.5
|
|
|
$
|
19.6
|
|
|
94
|
%
|
|
11
|
%
|
|
$
|
1.7
|
|
|
$
|
18.7
|
|
|
$
|
20.4
|
|
Allowance for credit losses activity
(dollar amounts in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Dec. 31, 2014
|
|
Sept. 30, 2014
|
|
||||
Margin loans
|
$
|
19,414
|
|
$
|
20,449
|
|
$
|
20,034
|
|
$
|
17,548
|
|
Non-margin loans
|
43,557
|
|
42,425
|
|
39,077
|
|
39,979
|
|
||||
Total loans
|
$
|
62,971
|
|
$
|
62,874
|
|
$
|
59,111
|
|
$
|
57,527
|
|
Beginning balance of allowance for credit losses
|
$
|
278
|
|
$
|
283
|
|
$
|
288
|
|
$
|
311
|
|
Provision for credit losses
|
1
|
|
(6
|
)
|
1
|
|
(19
|
)
|
||||
Net (charge-offs) recoveries:
|
|
|
|
|
||||||||
Financial institutions
|
—
|
|
1
|
|
1
|
|
—
|
|
||||
Other residential mortgages
|
1
|
|
—
|
|
—
|
|
1
|
|
||||
Commercial
|
—
|
|
—
|
|
(8
|
)
|
(4
|
)
|
||||
Foreign
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
||||
Commercial real estate
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
||||
Net (charge-offs) recoveries
|
$
|
1
|
|
$
|
1
|
|
$
|
(9
|
)
|
$
|
(4
|
)
|
Ending balance of allowance for credit losses
|
$
|
280
|
|
$
|
278
|
|
$
|
280
|
|
$
|
288
|
|
Allowance for loan losses
|
$
|
181
|
|
$
|
183
|
|
$
|
191
|
|
$
|
191
|
|
Allowance for lending-related commitments
|
99
|
|
95
|
|
89
|
|
97
|
|
||||
Allowance for loan losses as a percentage of total loans
|
0.29
|
%
|
0.29
|
%
|
0.32
|
%
|
0.33
|
%
|
||||
Allowance for loan losses as a percentage of non-margin loans
|
0.42
|
|
0.43
|
|
0.49
|
|
0.48
|
|
||||
Total allowance for credit losses as a percentage of total loans
|
0.44
|
|
0.44
|
|
0.47
|
|
0.50
|
|
||||
Total allowance for credit losses as a percentage of non-margin loans
|
0.64
|
|
0.66
|
|
0.72
|
|
0.72
|
|
Allocation of allowance
|
Sept. 30, 2015
|
|
June 30,
2015 |
|
Dec. 31, 2014
|
|
Sept. 30, 2014
|
|
Commercial
|
27
|
%
|
27
|
%
|
21
|
%
|
25
|
%
|
Commercial real estate
|
22
|
|
21
|
|
18
|
|
16
|
|
Foreign
|
14
|
|
13
|
|
16
|
|
14
|
|
Other residential mortgages
|
13
|
|
13
|
|
14
|
|
17
|
|
Financial institutions
|
10
|
|
11
|
|
11
|
|
9
|
|
Wealth management
(a)
|
8
|
|
8
|
|
8
|
|
7
|
|
Lease financing
|
6
|
|
7
|
|
12
|
|
12
|
|
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Includes the allowance for wealth management mortgages.
|
Nonperforming assets
(dollars in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Dec. 31, 2014
|
|
|||
Loans:
|
|
|
|
||||||
Other residential mortgages
|
$
|
103
|
|
$
|
110
|
|
$
|
112
|
|
Wealth management loans and mortgages
|
12
|
|
11
|
|
12
|
|
|||
Commercial real estate
|
1
|
|
1
|
|
1
|
|
|||
Total nonperforming loans
|
116
|
|
122
|
|
125
|
|
|||
Other assets owned
|
7
|
|
5
|
|
3
|
|
|||
Total nonperforming assets
(a)
|
$
|
123
|
|
$
|
127
|
|
$
|
128
|
|
Nonperforming assets ratio
|
0.20
|
%
|
0.20
|
%
|
0.22
|
%
|
|||
Nonperforming assets ratio, excluding margin loans
|
0.3
|
|
0.3
|
|
0.3
|
|
|||
Allowance for loan losses/nonperforming loans
|
156.0
|
|
150.0
|
|
152.8
|
|
|||
Allowance for loan losses/nonperforming assets
|
147.2
|
|
144.1
|
|
149.2
|
|
|||
Total allowance for credit losses/nonperforming loans
|
241.4
|
|
227.9
|
|
224.0
|
|
|||
Total allowance for credit losses/nonperforming assets
|
227.6
|
|
218.9
|
|
218.8
|
|
(a)
|
Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in the loans of consolidated investment management funds are nonperforming loans of
$53 million
at
Dec. 31, 2014
. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above. In the second quarter of 2015, BNY Mellon adopted the new accounting guidance included in ASU 2015-02, Consolidations. As a result, we deconsolidated substantially all of the loans of consolidated investment management funds retrospectively to Jan. 1, 2015.
|
Nonperforming assets activity
(in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Dec. 31, 2014
|
|
|||
Balance at beginning of period
|
$
|
127
|
|
$
|
128
|
|
$
|
147
|
|
Additions
|
4
|
|
4
|
|
4
|
|
|||
Return to accrual status
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|||
Charge-offs
|
(1
|
)
|
—
|
|
(3
|
)
|
|||
Paydowns/sales
|
(6
|
)
|
(4
|
)
|
(19
|
)
|
|||
Balance at end of period
|
$
|
123
|
|
$
|
127
|
|
$
|
128
|
|
Payables to customers and broker-dealers
|
|||||||||
|
Quarter ended
|
||||||||
(dollars in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|||
Maximum daily balance during the quarter
|
$
|
24,135
|
|
$
|
26,988
|
|
$
|
20,244
|
|
Average daily balance
(a)
|
$
|
21,941
|
|
$
|
22,062
|
|
$
|
18,041
|
|
Weighted-average rate during the quarter
(a)
|
0.06
|
%
|
0.07
|
%
|
0.10
|
%
|
|||
Ending balance
|
$
|
22,236
|
|
$
|
22,050
|
|
$
|
20,155
|
|
Weighted-average rate at period end
|
0.06
|
%
|
0.07
|
%
|
0.13
|
%
|
(a)
|
The weighted-average rate is calculated based on, and is applied to, the average interest-bearing payables to customers and broker-dealers, which were
$11,504 million
in the
third quarter of 2015
,
$11,234 million
in the
second quarter of 2015
and
$9,705 million
in the
third quarter of 2014
.
|
Commercial paper
|
Quarter ended
|
||||||||
(dollars in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|||
Maximum daily balance during the quarter
|
$
|
4,801
|
|
$
|
4,849
|
|
$
|
5,003
|
|
Average daily balance
|
$
|
2,195
|
|
$
|
2,892
|
|
$
|
3,654
|
|
Weighted-average rate during the quarter
|
0.11
|
%
|
0.10
|
%
|
0.07
|
%
|
|||
Ending balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Weighted-average rate at period end
|
—
|
%
|
—
|
%
|
—
|
%
|
Other borrowed funds
|
Quarter ended
|
||||||||
(dollars in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|||
Maximum daily balance during the quarter
|
$
|
1,065
|
|
$
|
2,231
|
|
$
|
1,744
|
|
Average daily balance
|
$
|
628
|
|
$
|
903
|
|
$
|
933
|
|
Weighted-average rate during the quarter
|
1.18
|
%
|
1.26
|
%
|
0.47
|
%
|
|||
Ending balance
|
$
|
648
|
|
$
|
706
|
|
$
|
852
|
|
Weighted-average rate at period end
|
1.15
|
%
|
1.62
|
%
|
0.43
|
%
|
Consolidated HQLA and LCR
|
Sept. 30, 2015
|
|
|
(in billions)
|
|||
Securities
(a)
|
$
|
110
|
|
Cash
(b)
|
80
|
|
|
Total consolidated HQLA
(c)
|
$
|
190
|
|
|
|
||
Liquidity coverage ratio
(d)
|
108
|
%
|
(a)
|
Primarily includes U.S. Treasury, U.S. agency, sovereign securities, securities of U.S. Government-sponsored enterprises, investment-grade corporate debt and publicly traded common equity.
|
(b)
|
Primarily includes cash on deposit with central banks.
|
(c)
|
Consolidated HQLA presented before haircuts. After haircuts, consolidated HQLA totaled $170 billion.
|
(d)
|
Based on our interpretation of the final rule issued by the U.S. federal banking agencies to implement the LCR in the U.S. (“Final LCR Rule”).
|
Available and liquid funds
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
|
Average
|
||||||||||
(in millions)
|
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
|||||||||
Available funds:
|
|
|
|
|
|
|
||||||||||
Liquid funds:
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with banks
|
$
|
20,002
|
|
$
|
19,495
|
|
|
$
|
20,549
|
|
$
|
20,235
|
|
$
|
34,882
|
|
Federal funds sold and securities purchased under resale agreements
|
28,901
|
|
20,302
|
|
|
25,366
|
|
23,545
|
|
15,683
|
|
|||||
Total liquid funds
|
48,903
|
|
39,797
|
|
|
45,915
|
|
43,780
|
|
50,565
|
|
|||||
Cash and due from banks
|
8,234
|
|
6,970
|
|
|
6,140
|
|
6,785
|
|
6,225
|
|
|||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
82,426
|
|
96,682
|
|
|
84,175
|
|
81,846
|
|
88,713
|
|
|||||
Total available funds
|
$
|
139,563
|
|
$
|
143,449
|
|
|
$
|
136,230
|
|
$
|
132,411
|
|
$
|
145,503
|
|
Total available funds as a percentage of total assets
|
37
|
%
|
37
|
%
|
|
36
|
%
|
35
|
%
|
38
|
%
|
•
|
cash on hand;
|
•
|
dividends from its subsidiaries; and
|
•
|
access to the debt and equity markets.
|
Credit ratings
|
|||||||
|
Moody’s
|
|
S&P
|
|
Fitch
|
|
DBRS
|
Parent:
|
|
|
|
|
|
|
|
Long-term senior debt
|
A1
|
|
A+
|
|
AA-
|
|
AA (low)
|
Subordinated debt
|
A2
|
|
A
|
|
A+
|
|
A (high)
|
Preferred stock
|
Baa1
|
|
BBB
|
|
BBB
|
|
A (low)
|
Trust preferred securities
|
A3
|
|
BBB
|
|
BBB+
|
|
A (high)
|
Short-term debt
|
P1
|
|
A-1
|
|
F1+
|
|
R-1 (middle)
|
Outlook - Parent:
|
Stable
|
|
(a)
|
|
Stable
|
|
Stable
|
|
|||||||
The Bank of New York Mellon:
|
|||||||
Long-term senior debt
|
Aa2
|
|
AA-
|
|
AA
|
|
AA
|
Long-term deposits
|
Aa1
|
|
AA-
|
|
AA+
|
|
AA
|
Short-term deposits
|
P1
|
|
A-1+
|
|
F1+
|
|
R-1 (high)
|
|
|
|
|
|
|
|
|
BNY Mellon, N.A.:
|
|
|
|
|
|
|
|
Long-term senior debt
|
Aa2
|
|
AA-
|
|
AA
|
(b)
|
AA
|
Subordinated debt
|
Aa3
|
|
A+
|
(a)
|
A+
|
|
NR
|
Long-term deposits
|
Aa1
|
|
AA-
|
|
AA+
|
|
AA
|
Short-term deposits
|
P1
|
|
A-1+
|
|
F1+
|
|
R-1 (high)
|
|
|
|
|
|
|
|
|
Outlook - Banks:
|
Stable
|
|
Stable
|
|
Stable
|
|
Stable
|
(a)
|
Under review for downgrade.
|
(b)
|
Represents senior debt issuer default rating.
|
Debt issuances
|
Quarter ended
|
|
||
(in millions)
|
Sept. 30, 2015
|
|
||
Senior medium-term notes:
|
|
|
||
2.6% senior medium-term notes due 2020
|
|
$
|
1,100
|
|
3-month LIBOR + 87 bps senior medium-term notes due 2020
|
|
300
|
|
|
Total debt issuances
|
|
$
|
1,400
|
|
Capital data
(dollar amounts in millions except per share amounts; common shares in thousands)
|
Sept. 30, 2015
|
|
June 30,
2015 |
|
Dec. 31, 2014
|
|
|||
Average common equity to average assets
|
9.5
|
%
|
9.4
|
%
|
9.6
|
%
|
|||
|
|
|
|
||||||
At period end:
|
|
|
|
||||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
(a)
|
10.1
|
%
|
9.7
|
%
|
9.7
|
%
|
|||
BNY Mellon common shareholders’ equity to total assets ratio – GAAP
(a)
|
9.4
|
%
|
9.0
|
%
|
9.3
|
%
|
|||
BNY Mellon tangible common shareholders’ equity to tangible assets of
operations ratio – Non-GAAP
(a)
|
6.2
|
%
|
6.2
|
%
|
6.5
|
%
|
|||
Total BNY Mellon shareholders’ equity – GAAP
|
$
|
38,170
|
|
$
|
38,270
|
|
$
|
37,441
|
|
Total BNY Mellon common shareholders’ equity – GAAP
|
$
|
35,618
|
|
$
|
35,718
|
|
$
|
35,879
|
|
BNY Mellon tangible common shareholders’ equity – Non-GAAP
(a)
|
$
|
16,568
|
|
$
|
16,441
|
|
$
|
16,439
|
|
Book value per common share – GAAP
(a)
|
$
|
32.59
|
|
$
|
32.28
|
|
$
|
32.09
|
|
Tangible book value per common share – Non-GAAP
(a)
|
$
|
15.16
|
|
$
|
14.86
|
|
$
|
14.70
|
|
Closing stock price per common share
|
$
|
39.15
|
|
$
|
41.97
|
|
$
|
40.57
|
|
Market capitalization
|
$
|
42,789
|
|
$
|
46,441
|
|
$
|
45,366
|
|
Common shares outstanding
|
1,092,953
|
|
1,106,518
|
|
1,118,228
|
|
|||
|
|
|
|
||||||
Cash dividends per common share
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
Common dividend payout ratio
|
23
|
%
|
23
|
%
|
94
|
%
|
|||
Common dividend yield
(annualized)
|
1.7
|
%
|
1.6
|
%
|
1.7
|
%
|
(a)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
52
for a reconciliation of GAAP to Non-GAAP.
|
Consolidated and largest bank subsidiary regulatory capital ratios
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
|
Dec. 31, 2014
|
|
|||||||
Well capitalized
|
|
|
Minimum
required |
|
|
Capital
ratios
|
|
|
|
|||||
|
|
|
|
|||||||||||
Consolidated regulatory capital ratios:
|
|
|
|
|
|
|
|
|
|
|||||
CET1 ratio
|
N/A
|
|
(a)
|
4.5
|
%
|
|
10.5
|
%
|
|
10.9
|
%
|
|
11.2
|
%
|
Tier 1 capital ratio
|
6
|
%
|
|
6
|
%
|
|
11.9
|
%
|
|
12.5
|
%
|
|
12.2
|
%
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
%
|
|
8
|
%
|
|
12.2
|
%
|
|
12.8
|
%
|
|
12.5
|
%
|
Leverage capital ratio
|
N/A
|
|
(a)
|
4
|
%
|
|
5.9
|
%
|
|
5.8
|
%
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Selected regulatory capital ratios
–
fully phased-in
–
Non-GAAP:
|
|
|
|
|
|
|
|
|
|
|||||
Estimated CET1 ratio:
|
|
|
|
|
|
|
|
|
|
|||||
Standardized Approach
|
(b)
|
|
|
(b)
|
|
|
9.9
|
%
|
|
10.0
|
%
|
|
10.6
|
%
|
Advanced Approach
|
(b)
|
|
|
(b)
|
|
|
9.3
|
%
|
|
9.9
|
%
|
|
9.8
|
%
|
Estimated SLR
|
N/A
|
|
|
3
|
%
|
|
4.8
|
%
|
|
4.6
|
%
|
|
4.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
The Bank of New York Mellon regulatory
capital ratios
:
|
|
|
|
|
|
|
|
|
|
|||||
CET1 ratio
|
6.5
|
%
|
|
4.5
|
%
|
|
11.4
|
%
|
|
11.4
|
%
|
|
N/A
|
|
Tier 1 capital ratio
|
8
|
%
|
|
6
|
%
|
|
11.8
|
%
|
|
11.9
|
%
|
|
12.4
|
%
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
%
|
|
8
|
%
|
|
12.0
|
%
|
|
12.1
|
%
|
|
12.6
|
%
|
Leverage capital ratio
|
5
|
%
|
|
4
|
%
|
|
5.7
|
%
|
|
5.4
|
%
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Selected regulatory capital ratios – fully phased-in – Non-GAAP:
|
|
|
|
|
|
|
|
|
|
|||||
Estimated SLR
|
6
|
%
|
|
3
|
%
|
|
4.6
|
%
|
|
N/A
|
|
|
N/A
|
|
(a)
|
The federal banking agencies’ regulatory capital requirements do not establish well-capitalized thresholds for these measures for bank holding companies.
|
(b)
|
See page
45
for the capital ratios with the phase-in of the capital conservation buffer and the estimated U.S. G-SIB surcharge.
|
Consolidated capital ratio requirements
|
Minimum ratios
|
|
|
Minimum ratios with buffers, as phased-in
|
|||||||||
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
||
Capital conservation buffer (CET1)
|
|
|
N/A
|
|
0.625
|
%
|
1.25
|
%
|
1.875
|
%
|
2.5
|
%
|
|
U.S. G-SIB surcharge (CET1)
(a)
|
|
|
N/A
|
|
0.250
|
%
|
0.50
|
%
|
0.750
|
%
|
1.0
|
%
|
|
CET1 ratio
|
4.5
|
%
|
|
4.5
|
%
|
5.375
|
%
|
6.25
|
%
|
7.125
|
%
|
8.0
|
%
|
Tier 1 capital ratio
|
6.0
|
%
|
|
6.0
|
%
|
6.875
|
%
|
7.75
|
%
|
8.625
|
%
|
9.5
|
%
|
Total capital ratio
|
8.0
|
%
|
|
8.0
|
%
|
8.875
|
%
|
9.75
|
%
|
10.625
|
%
|
11.5
|
%
|
|
|
|
|
|
|
|
|
||||||
Enhanced SLR buffer (Tier 1 capital)
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
2.0
|
%
|
2.0
|
%
|
|
SLR
|
3.0
|
%
|
|
N/A
|
|
N/A
|
|
N/A
|
|
5.0
|
%
|
5.0
|
%
|
(a)
|
Federal Reserve published estimate.
|
Estimated Basel III CET1 generation presented on a fully phased-in basis
–
Non-GAAP
|
Quarter ended
|
|
||
(in millions)
|
|
Sept. 30, 2015
|
|
|
Estimated fully phased-in Basel III CET1 – Non-GAAP – Beginning of period
|
|
$
|
15,931
|
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
|
820
|
|
|
Goodwill and intangible assets, net of related deferred tax liabilities
|
|
227
|
|
|
Gross Basel III CET1 generated
|
|
1,047
|
|
|
Capital deployed:
|
|
|
||
Dividends
|
|
(190
|
)
|
|
Common stock repurchased
|
|
(690
|
)
|
|
Total capital deployed
|
|
(880
|
)
|
|
Other comprehensive income (loss):
|
|
|
||
Foreign currency translation
|
|
(147
|
)
|
|
Unrealized (loss) on assets available-for-sale
|
|
(6
|
)
|
|
Pension liabilities
|
|
23
|
|
|
Unrealized gain on cash flow hedges
|
|
—
|
|
|
Total other comprehensive (loss)
|
|
(130
|
)
|
|
Additional paid-in capital
(a)
|
|
90
|
|
|
Other additions (deductions):
|
|
|
||
Net pension fund assets
|
|
3
|
|
|
Deferred tax assets
|
|
(2
|
)
|
|
Cash flow hedges
|
|
3
|
|
|
Embedded goodwill
|
|
18
|
|
|
Other
|
|
(3
|
)
|
|
Total other (deductions)
|
|
19
|
|
|
Net Basel III CET1 generated
|
|
146
|
|
|
Estimated fully phased-in Basel III CET1 – Non-GAAP – End of period
|
|
$
|
16,077
|
|
(a)
|
Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.
|
Basel III capital components and ratios
(a)
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||
(dollars in millions)
|
Transitional
Approach
(a)
|
|
Fully phased-
in Basel III -
Non-GAAP
|
|
|
Transitional
Approach (a) |
|
Fully phased-
in Basel III - Non-GAAP |
|
||||
CET1:
|
|
|
|
|
|
||||||||
Common shareholders’ equity
|
$
|
36,143
|
|
$
|
35,618
|
|
|
$
|
36,326
|
|
$
|
35,879
|
|
Goodwill and intangible assets
|
(17,401
|
)
|
(19,050
|
)
|
|
(17,111
|
)
|
(19,440
|
)
|
||||
Net pension fund assets
|
(42
|
)
|
(106
|
)
|
|
(17
|
)
|
(87
|
)
|
||||
Equity method investments
|
(300
|
)
|
(356
|
)
|
|
(314
|
)
|
(401
|
)
|
||||
Deferred tax assets
|
(8
|
)
|
(20
|
)
|
|
(4
|
)
|
(18
|
)
|
||||
Other
|
(5
|
)
|
(9
|
)
|
|
4
|
|
(2
|
)
|
||||
Total CET1
|
18,387
|
|
16,077
|
|
|
18,884
|
|
15,931
|
|
||||
|
|
|
|
|
|
||||||||
Other Tier 1 capital:
|
|
|
|
|
|
||||||||
Preferred stock
|
2,552
|
|
2,552
|
|
|
1,562
|
|
1,562
|
|
||||
Trust preferred securities
|
76
|
|
—
|
|
|
156
|
|
—
|
|
||||
Disallowed deferred tax assets
|
(12
|
)
|
—
|
|
|
(14
|
)
|
—
|
|
||||
Net pension fund assets
|
(64
|
)
|
—
|
|
|
(69
|
)
|
—
|
|
||||
Other
|
(28
|
)
|
(24
|
)
|
|
(17
|
)
|
(12
|
)
|
||||
Total Tier 1 capital
|
20,911
|
|
18,605
|
|
|
20,502
|
|
17,481
|
|
||||
|
|
|
|
|
|
||||||||
Tier 2 capital:
|
|
|
|
|
|
||||||||
Trust preferred securities
|
227
|
|
—
|
|
|
156
|
|
—
|
|
||||
Subordinated debt
|
249
|
|
249
|
|
|
298
|
|
298
|
|
||||
Allowance for credit losses
|
280
|
|
280
|
|
|
280
|
|
280
|
|
||||
Other
|
(9
|
)
|
(9
|
)
|
|
(11
|
)
|
(11
|
)
|
||||
Total Tier 2 capital - Standardized Approach
|
747
|
|
520
|
|
|
723
|
|
567
|
|
||||
Excess of expected credit losses
|
24
|
|
24
|
|
|
13
|
|
24
|
|
||||
Less: Allowance for credit losses
|
280
|
|
280
|
|
|
280
|
|
280
|
|
||||
Total Tier 2 capital - Advanced Approach
|
$
|
491
|
|
$
|
264
|
|
|
$
|
456
|
|
$
|
311
|
|
|
|
|
|
|
|
||||||||
Total capital:
|
|
|
|
|
|
||||||||
Standardized Approach
|
$
|
21,658
|
|
$
|
19,125
|
|
|
$
|
21,225
|
|
$
|
18,048
|
|
Advanced Approach
|
$
|
21,402
|
|
$
|
18,869
|
|
|
$
|
20,958
|
|
$
|
17,792
|
|
|
|
|
|
|
|
||||||||
Risk-weighted assets:
|
|
|
|
|
|
||||||||
Standardized Approach
(b)
|
$
|
164,701
|
|
$
|
162,931
|
|
|
$
|
125,562
|
|
$
|
150,881
|
|
Advanced Approach:
|
|
|
|
|
|
||||||||
Credit Risk
|
$
|
114,104
|
|
$
|
112,228
|
|
|
$
|
120,122
|
|
$
|
114,105
|
|
Market Risk
|
2,617
|
|
2,617
|
|
|
3,046
|
|
3,046
|
|
||||
Operational Risk
|
58,938
|
|
58,938
|
|
|
45,112
|
|
45,112
|
|
||||
Total Advanced Approach
|
$
|
175,659
|
|
$
|
173,783
|
|
|
$
|
168,280
|
|
$
|
162,263
|
|
|
|
|
|
|
|
||||||||
Standardized Approach:
|
|
|
|
|
|
||||||||
Basel III CET1 ratio
|
11.2
|
%
|
9.9
|
%
|
|
15.0
|
%
|
10.6
|
%
|
||||
Tier 1 capital ratio
|
12.7
|
%
|
11.4
|
%
|
|
16.3
|
%
|
11.6
|
%
|
||||
Total (Tier 1 plus Tier 2) capital ratio
|
13.1
|
%
|
11.7
|
%
|
|
16.9
|
%
|
12.0
|
%
|
||||
|
|
|
|
|
|
||||||||
Advanced Approach:
|
|
|
|
|
|
||||||||
Basel III CET1 ratio
|
10.5
|
%
|
9.3
|
%
|
|
11.2
|
%
|
9.8
|
%
|
||||
Tier 1 capital ratio
|
11.9
|
%
|
10.7
|
%
|
|
12.2
|
%
|
10.8
|
%
|
||||
Total (Tier 1 plus Tier 2) capital ratio
|
12.2
|
%
|
10.9
|
%
|
|
12.5
|
%
|
11.0
|
%
|
||||
|
|
|
|
|
|
||||||||
Average assets for leverage capital purposes
|
$
|
356,152
|
|
|
|
$
|
368,140
|
|
|
||||
Total leverage exposure for estimated SLR purposes - Non-GAAP
|
|
$
|
390,123
|
|
|
|
$
|
398,813
|
|
(a)
|
Reflects transitional adjustments to CET1, Tier 1 capital and Tier 2 capital required in 2015 under the U.S. capital rules.
|
(b)
|
RWA under the Standardized Approach at Dec. 31, 2014 was determined using a Basel I-based calculation. Effective Jan. 1, 2015, we implemented the Basel III Standardized Approach which used a broader array of more risk sensitive risk-weighting categories.
|
Capital above thresholds at Sept. 30, 2015
|
|||||||
(in millions)
|
Consolidated
|
|
|
The Bank of New York Mellon
(b)
|
|
||
CET1
|
$
|
10,482
|
|
(a)
|
$
|
6,870
|
|
Tier 1 capital
|
10,371
|
|
(b)
|
5,339
|
|
||
Total capital
|
3,836
|
|
(b)
|
2,830
|
|
||
Leverage capital
|
6,665
|
|
(a)
|
1,918
|
|
(a)
|
Based on minimum required standards.
|
(b)
|
Based on well-capitalized standards.
|
Estimated fully phased-in SLR – Non-GAAP
(dollars in millions)
|
Sept. 30, 2015
|
|
|
June 30,
2015 |
|
|
Dec. 31, 2014
|
|
|||
Total estimated fully phased-in Basel III CET1 – Non-GAAP
|
$
|
16,077
|
|
|
$
|
15,931
|
|
|
$
|
15,931
|
|
Additional Tier 1 capital
|
2,528
|
|
|
2,545
|
|
|
1,550
|
|
|||
Total Tier 1 capital
|
$
|
18,605
|
|
|
$
|
18,476
|
|
|
$
|
17,481
|
|
|
|
|
|
|
|
||||||
Total leverage exposure:
|
|
|
|
|
|
||||||
Quarterly average total assets
|
$
|
373,453
|
|
|
$
|
378,279
|
|
|
$
|
385,232
|
|
Less: Amounts deducted from Tier 1 capital
|
19,532
|
|
|
19,779
|
|
|
19,947
|
|
|||
Total on-balance sheet assets, as adjusted
|
353,921
|
|
|
358,500
|
|
|
365,285
|
|
|||
Off-balance sheet exposures:
|
|
|
|
|
|
||||||
Potential future exposure for derivatives contracts (plus certain other items)
|
8,358
|
|
|
9,222
|
|
|
11,376
|
|
|||
Repo-style transaction exposures included in SLR
|
362
|
|
|
6,589
|
|
|
302
|
|
|||
Credit-equivalent amount of other off-balance sheet exposures (less SLR exclusions)
|
27,482
|
|
|
27,251
|
|
|
21,850
|
|
|||
Total off-balance sheet exposures
|
36,202
|
|
|
43,062
|
|
|
33,528
|
|
|||
Total leverage exposure
|
$
|
390,123
|
|
|
$
|
401,562
|
|
|
$
|
398,813
|
|
|
|
|
|
|
|
||||||
Estimated fully phased-in SLR – Non-GAAP
|
4.8
|
%
|
(a)
|
4.6
|
%
|
|
4.4
|
%
|
(a)
|
The estimated SLR on a fully phased-in basis (Non-GAAP) for our largest bank subsidiary, The Bank of New York Mellon, was 4.6% at Sept. 30, 2015.
At Sept. 30, 2015, total Tier 1 capital was $14,882 million and total leverage exposure was $322,531 million for The Bank of New York Mellon.
|
VaR
(a)
|
3Q15
|
Sept. 30, 2015
|
|
|||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
|||||||||
Interest rate
|
$
|
5.0
|
|
$
|
4.0
|
|
$
|
5.9
|
|
$
|
5.6
|
|
Foreign exchange
|
0.9
|
|
0.6
|
|
1.9
|
|
1.3
|
|
||||
Equity
|
0.9
|
|
0.6
|
|
1.5
|
|
0.8
|
|
||||
Diversification
|
(1.8
|
)
|
N/M
|
|
N/M
|
|
(2.4
|
)
|
||||
Overall portfolio
|
5.0
|
|
4.0
|
|
6.1
|
|
5.3
|
|
VaR
(a)
|
2Q15
|
June 30,
2015 |
|
|||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
|||||||||
Interest rate
|
$
|
5.3
|
|
$
|
4.1
|
|
$
|
7.8
|
|
$
|
4.1
|
|
Foreign exchange
|
0.8
|
|
0.5
|
|
1.4
|
|
0.7
|
|
||||
Equity
|
1.1
|
|
0.9
|
|
1.4
|
|
1.1
|
|
||||
Diversification
|
(1.8
|
)
|
N/M
|
|
N/M
|
|
(1.5
|
)
|
||||
Overall portfolio
|
5.4
|
|
4.1
|
|
8.1
|
|
4.4
|
|
VaR
(a)
|
3Q14
|
Sept. 30, 2014
|
|
|||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
|||||||||
Interest rate
|
$
|
5.7
|
|
$
|
4.1
|
|
$
|
6.8
|
|
$
|
5.4
|
|
Foreign exchange
|
0.9
|
|
0.4
|
|
1.5
|
|
0.7
|
|
||||
Equity
|
1.4
|
|
0.8
|
|
2.3
|
|
1.0
|
|
||||
Diversification
|
(2.0
|
)
|
N/M
|
|
N/M
|
|
(1.4
|
)
|
||||
Overall portfolio
|
6.0
|
|
4.5
|
|
7.3
|
|
5.7
|
|
VaR
(a)
|
YTD15
|
||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
||||||
Interest rate
|
$
|
5.2
|
|
$
|
3.6
|
|
$
|
8.0
|
|
Foreign exchange
|
0.9
|
|
0.5
|
|
1.9
|
|
|||
Equity
|
1.1
|
|
0.6
|
|
1.9
|
|
|||
Diversification
|
(1.9
|
)
|
N/M
|
|
N/M
|
|
|||
Overall portfolio
|
5.3
|
|
3.9
|
|
8.5
|
|
VaR
(a)
|
YTD14
|
||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
||||||
Interest rate
|
$
|
7.3
|
|
$
|
4.1
|
|
$
|
13.4
|
|
Foreign exchange
|
1.0
|
|
0.4
|
|
2.7
|
|
|||
Equity
|
1.8
|
|
0.8
|
|
4.0
|
|
|||
Diversification
|
(2.5
|
)
|
N/M
|
|
N/M
|
|
|||
Overall portfolio
|
7.6
|
|
4.5
|
|
13.0
|
|
(a)
|
VaR figures do not reflect the impact of the credit valuation adjustment (“CVA”) guidance in Accounting Standards Codification (“ASC”) 820. This is consistent with the regulatory treatment. VaR exposure does not include the impact of the Company’s consolidated investment management funds and seed capital investments.
|
(a)
|
Trading revenue (loss) includes realized and unrealized gains and losses primarily related to spot and forward foreign exchange transactions, derivatives, and securities trades for our customers and excludes any associated commissions, underwriting fees and net interest revenue.
|
(a)
|
Represents credit rating agency equivalent of internal credit ratings.
|
Estimated changes in net interest revenue
|
|
|
|
|
|
||||||||||
(dollars in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
March 31, 2015
|
|
Dec. 31, 2014
|
|
Sept. 30, 2014
|
|
|||||
up 200 bps parallel rate ramp vs. baseline
(a)
|
$
|
275
|
|
$
|
224
|
|
$
|
210
|
|
$
|
363
|
|
$
|
457
|
|
up 100 bps parallel rate ramp vs. baseline
(a)
|
290
|
|
245
|
|
262
|
|
326
|
|
365
|
|
|||||
Long-term up 50 bps, short-term unchanged
(b)
|
20
|
|
28
|
|
14
|
|
28
|
|
37
|
|
|||||
Long-term down 50 bps, short-term unchanged
(b)
|
(81
|
)
|
(73
|
)
|
(69
|
)
|
(54
|
)
|
(44
|
)
|
(a)
|
In the parallel rate ramp, both short-term and long-term rates move
in four equal quarterly increments.
|
(b)
|
Long-term is equal to or greater than one year.
|
•
|
Monetary policy;
|
•
|
Global economic uncertainty;
|
•
|
Our ratings relative to other financial institutions’ ratings; and
|
•
|
Money market mutual fund and other regulatory reform.
|
Reconciliation of net income and diluted
EPS – GAAP to Non-GAAP
|
3Q15
|
|
2Q15
|
|
3Q14
|
|||||||||||||||
Net
|
|
Diluted
|
|
|
Net
|
|
Diluted
|
|
|
Net
|
|
Diluted
|
|
|||||||
(in millions, except per common share amounts)
|
income
|
|
EPS
|
|
|
income
|
|
EPS
|
|
|
income
|
|
EPS
|
|
||||||
GAAP results
|
$
|
820
|
|
$
|
0.74
|
|
|
$
|
830
|
|
$
|
0.73
|
|
|
$
|
1,070
|
|
$
|
0.93
|
|
Less: Gain on the sale of our equity investment in Wing Hang
|
N/A
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
|
315
|
|
0.27
|
|
||||||
Gain on the sale of our One Wall Street building
|
N/A
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
|
204
|
|
0.18
|
|
||||||
Add: Litigation and restructuring charges
|
8
|
|
0.01
|
|
|
38
|
|
0.03
|
|
|
183
|
|
0.16
|
|
||||||
Non-GAAP results
|
$
|
828
|
|
$
|
0.74
|
|
(a)
|
$
|
868
|
|
$
|
0.77
|
|
(a)
|
$
|
734
|
|
$
|
0.64
|
|
Reconciliation of income before income taxes – pre-tax operating margin
(dollars in millions)
|
3Q15
|
|
|
2Q15
|
|
|
3Q14
|
|
|
YTD15
|
|
|
YTD14
|
|
|||||
Income before income taxes – GAAP
|
$
|
1,109
|
|
|
$
|
1,165
|
|
|
$
|
1,662
|
|
|
$
|
3,364
|
|
|
$
|
3,399
|
|
Less: Net (loss) income attributable to noncontrolling interests of consolidated investment management funds
|
(5
|
)
|
|
37
|
|
|
23
|
|
|
63
|
|
|
60
|
|
|||||
Gain on the sale of our equity investment in Wing Hang
|
—
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
490
|
|
|||||
Gain on the sale of our One Wall Street building
|
—
|
|
|
—
|
|
|
346
|
|
|
—
|
|
|
346
|
|
|||||
Add: Amortization of intangible assets
|
66
|
|
|
65
|
|
|
75
|
|
|
197
|
|
|
225
|
|
|||||
M&I, litigation and restructuring charges
|
11
|
|
|
59
|
|
|
220
|
|
|
67
|
|
|
330
|
|
|||||
Charge related to investment management funds, net of incentives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|||||
Income before income taxes, as adjusted – Non-GAAP
(a)
|
$
|
1,191
|
|
|
$
|
1,252
|
|
|
$
|
1,098
|
|
|
$
|
3,565
|
|
|
$
|
3,162
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fee and other revenue – GAAP
|
$
|
3,053
|
|
|
$
|
3,067
|
|
|
$
|
3,851
|
|
|
$
|
9,132
|
|
|
$
|
9,714
|
|
(Loss) income from consolidated investment management
funds – GAAP
|
(22
|
)
|
|
40
|
|
|
39
|
|
|
70
|
|
|
121
|
|
|||||
Net interest revenue – GAAP
|
759
|
|
|
779
|
|
|
721
|
|
|
2,266
|
|
|
2,168
|
|
|||||
Total revenue – GAAP
|
3,790
|
|
|
3,886
|
|
|
4,611
|
|
|
11,468
|
|
|
12,003
|
|
|||||
Less: Net (loss) income attributable to noncontrolling interests of consolidated investment management funds
|
(5
|
)
|
|
37
|
|
|
23
|
|
|
63
|
|
|
60
|
|
|||||
Gain on the sale of our equity investment in Wing Hang
|
—
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
490
|
|
|||||
Gain on the sale of our One Wall Street building
|
—
|
|
|
—
|
|
|
346
|
|
|
—
|
|
|
346
|
|
|||||
Total revenue, as adjusted – Non-GAAP
(a)
|
$
|
3,795
|
|
|
$
|
3,849
|
|
|
$
|
3,752
|
|
|
$
|
11,405
|
|
|
$
|
11,107
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax operating margin
(b)
|
29
|
%
|
(c)
|
30
|
%
|
(c)
|
36
|
%
|
|
29
|
%
|
(c)
|
28
|
%
|
|||||
Pre-tax operating margin – Non-GAAP
(a)(b)
|
31
|
%
|
(c)
|
33
|
%
|
(c)
|
29
|
%
|
|
31
|
%
|
(c)
|
28
|
%
|
(a)
|
Non-GAAP excludes net (loss) income attributable to noncontrolling interests of consolidated investment management funds, the gains on the sales of our equity investment in Wing Hang and our One Wall Street building, amortization of intangible assets, M&I, litigation and restructuring charges, and the charge related to investment management funds, net of incentives, if applicable.
|
(b)
|
Income before taxes divided by total revenue.
|
(c)
|
Our GAAP earnings include tax-advantaged investments such as low income housing, renewable energy, bank-owned life insurance and tax-exempt securities. The benefits of these investments are primarily reflected in tax expense. If reported on a tax-equivalent basis these investments would increase revenue and income before taxes by $53 million for the third quarter of 2015, $52 million for the second quarter of 2015 and $169 million for the first nine months of 2015 and would increase our pre-tax operating margin by approximately 1.0%, 0.9% and 1.0%, respectively.
|
Return on common equity and tangible common equity
(dollars in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
YTD15
|
|
YTD14
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
820
|
|
$
|
830
|
|
$
|
1,070
|
|
$
|
2,416
|
|
$
|
2,285
|
|
Add: Amortization of intangible assets, net of tax
|
43
|
|
44
|
|
49
|
|
130
|
|
147
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation excluding amortization of intangible assets – Non-GAAP
|
863
|
|
874
|
|
1,119
|
|
2,546
|
|
2,432
|
|
|||||
Less: Gain on the sale of our equity investment in Wing Hang
|
—
|
|
—
|
|
315
|
|
—
|
|
315
|
|
|||||
Gain on the sale of our One Wall Street building
|
—
|
|
—
|
|
204
|
|
—
|
|
204
|
|
|||||
Add: M&I, litigation and restructuring charges
|
8
|
|
38
|
|
183
|
|
44
|
|
252
|
|
|||||
Charge related to investment management funds, net of incentives
|
—
|
|
—
|
|
—
|
|
—
|
|
81
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation, as adjusted – Non-GAAP
(a)
|
$
|
871
|
|
$
|
912
|
|
$
|
783
|
|
$
|
2,590
|
|
$
|
2,246
|
|
|
|
|
|
|
|
||||||||||
Average common shareholders’ equity
|
$
|
35,588
|
|
$
|
35,516
|
|
$
|
36,751
|
|
$
|
35,530
|
|
$
|
36,537
|
|
Less: Average goodwill
|
17,742
|
|
17,752
|
|
18,109
|
|
17,750
|
|
18,110
|
|
|||||
Average intangible assets
|
3,962
|
|
4,031
|
|
4,274
|
|
4,027
|
|
4,350
|
|
|||||
Add: Deferred tax liability – tax deductible goodwill
(b)
|
1,379
|
|
1,351
|
|
1,317
|
|
1,379
|
|
1,317
|
|
|||||
Deferred tax liability – intangible assets
(b)
|
1,164
|
|
1,179
|
|
1,230
|
|
1,164
|
|
1,230
|
|
|||||
Average tangible common shareholders’ equity – Non-GAAP
|
$
|
16,427
|
|
$
|
16,263
|
|
$
|
16,915
|
|
$
|
16,296
|
|
$
|
16,624
|
|
|
|
|
|
|
|
||||||||||
Return on common equity – GAAP
(c)
|
9.1
|
%
|
9.4
|
%
|
11.6
|
%
|
9.1
|
%
|
8.4
|
%
|
|||||
Return on common equity – Non-GAAP
(a)(c)
|
9.7
|
%
|
10.3
|
%
|
8.5
|
%
|
9.7
|
%
|
8.2
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Return on tangible common equity – Non-GAAP
(a)(c)
|
20.8
|
%
|
21.5
|
%
|
26.2
|
%
|
20.9
|
%
|
19.6
|
%
|
|||||
Return on tangible common equity – Non-GAAP adjusted
(a)(c)
|
21.0
|
%
|
22.5
|
%
|
18.4
|
%
|
21.2
|
%
|
18.1
|
%
|
(a)
|
Non-GAAP excludes amortization of intangible assets, net of tax, the gains on the sales of our equity investment in Wing Hang and our One Wall Street building, M&I, litigation and restructuring charges and the charge related to investment management funds, net of incentives, if applicable.
|
(b)
|
Deferred tax liabilities are based on fully phased-in Basel III rules.
|
(c)
|
Annualized.
|
Equity to assets and book value per common share
|
Sept. 30, 2015
|
|
June 30,
2015 |
|
March 31,
2015 |
|
Dec. 31, 2014
|
|
Sept. 30, 2014
|
|
|||||
(dollars in millions, unless otherwise noted)
|
|||||||||||||||
BNY Mellon shareholders’ equity at period end – GAAP
|
$
|
38,170
|
|
$
|
38,270
|
|
$
|
37,328
|
|
$
|
37,441
|
|
$
|
38,451
|
|
Less: Preferred stock
|
2,552
|
|
2,552
|
|
1,562
|
|
1,562
|
|
1,562
|
|
|||||
BNY Mellon common shareholders’ equity at period end – GAAP
|
35,618
|
|
35,718
|
|
35,766
|
|
35,879
|
|
36,889
|
|
|||||
Less: Goodwill
|
17,679
|
|
17,807
|
|
17,663
|
|
17,869
|
|
17,992
|
|
|||||
Intangible assets
|
3,914
|
|
4,000
|
|
4,047
|
|
4,127
|
|
4,215
|
|
|||||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,379
|
|
1,351
|
|
1,362
|
|
1,340
|
|
1,317
|
|
|||||
Deferred tax liability – intangible assets
(a)
|
1,164
|
|
1,179
|
|
1,200
|
|
1,216
|
|
1,230
|
|
|||||
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP
|
$
|
16,568
|
|
$
|
16,441
|
|
$
|
16,618
|
|
$
|
16,439
|
|
$
|
17,229
|
|
|
|
|
|
|
|
||||||||||
Total assets at period end – GAAP
|
$
|
377,371
|
|
$
|
395,254
|
|
$
|
392,337
|
|
$
|
385,303
|
|
$
|
386,296
|
|
Less: Assets of consolidated investment management funds
|
2,297
|
|
2,231
|
|
1,681
|
|
9,282
|
|
9,562
|
|
|||||
Subtotal assets of operations – Non-GAAP
|
375,074
|
|
393,023
|
|
390,656
|
|
376,021
|
|
376,734
|
|
|||||
Less: Goodwill
|
17,679
|
|
17,807
|
|
17,663
|
|
17,869
|
|
17,992
|
|
|||||
Intangible assets
|
3,914
|
|
4,000
|
|
4,047
|
|
4,127
|
|
4,215
|
|
|||||
Cash on deposit with the Federal Reserve and other central banks
(b)
|
86,426
|
|
106,628
|
|
93,044
|
|
99,901
|
|
90,978
|
|
|||||
Tangible total assets of operations at period end – Non-GAAP
|
$
|
267,055
|
|
$
|
264,588
|
|
$
|
275,902
|
|
$
|
254,124
|
|
$
|
263,549
|
|
|
|
|
|
|
|
||||||||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
|
10.1
|
%
|
9.7
|
%
|
9.5
|
%
|
9.7
|
%
|
10.0
|
%
|
|||||
BNY Mellon common shareholders’ equity to total assets ratio – GAAP
|
9.4
|
%
|
9.0
|
%
|
9.1
|
%
|
9.3
|
%
|
9.5
|
%
|
|||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
|
6.2
|
%
|
6.2
|
%
|
6.0
|
%
|
6.5
|
%
|
6.5
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Period-end common shares outstanding
(in thousands)
|
1,092,953
|
|
1,106,518
|
|
1,121,512
|
|
1,118,228
|
|
1,125,710
|
|
|||||
|
|
|
|
|
|
||||||||||
Book value per common share – GAAP
|
$
|
32.59
|
|
$
|
32.28
|
|
$
|
31.89
|
|
$
|
32.09
|
|
$
|
32.77
|
|
Tangible book value per common share – Non-GAAP
|
$
|
15.16
|
|
$
|
14.86
|
|
$
|
14.82
|
|
$
|
14.70
|
|
$
|
15.30
|
|
(a)
|
Deferred tax liabilities are based on fully phased-in Basel III rules.
|
(b)
|
Assigned a zero percentage risk-weighting by the regulators.
|
Investment management and performance fees - Consolidated
|
|
|
3Q15 vs.
|
|||||
(dollars in millions)
|
3Q15
|
|
3Q14
|
|
3Q14
|
|||
Investment management and performance fees - GAAP
|
$
|
829
|
|
$
|
881
|
|
(6
|
)%
|
Impact of changes in foreign currency exchange rates
|
—
|
|
(39
|
)
|
|
|||
Investment management and performance fees, as adjusted - Non-GAAP
|
$
|
829
|
|
$
|
842
|
|
(2
|
)%
|
(Loss) income from consolidated investment management funds, net of noncontrolling interests - Investment Management business
|
|||||||||||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
YTD15
|
|
YTD14
|
|
|||||
Investment management fees
|
$
|
3
|
|
$
|
4
|
|
$
|
15
|
|
$
|
8
|
|
$
|
51
|
|
Other (Investment (loss) income)
|
(20
|
)
|
(1
|
)
|
1
|
|
(1
|
)
|
10
|
|
|||||
(Loss) income from consolidated investment management funds, net of noncontrolling interests
|
$
|
(17
|
)
|
$
|
3
|
|
$
|
16
|
|
$
|
7
|
|
$
|
61
|
|
Investment management fees - Investment Management business
|
|
|
3Q15 vs.
|
|
||||
(dollars in millions)
|
3Q15
|
|
3Q14
|
|
3Q14
|
|
||
Investment management fees - GAAP
|
$
|
804
|
|
$
|
843
|
|
(5
|
)%
|
Impact of changes in foreign currency exchange rates
|
—
|
|
(37
|
)
|
|
|||
Investment management fees, as adjusted - Non-GAAP
|
$
|
804
|
|
$
|
806
|
|
—
|
%
|
Pre-tax operating margin - Investment Management business
|
|
|
|
|
|
Year-to-date
|
|||||||||||||||
(dollars in millions)
|
3Q15
|
|
2Q15
|
|
1Q15
|
|
4Q14
|
|
3Q14
|
|
2015
|
|
2014
|
|
|||||||
Income before income taxes – GAAP
|
$
|
237
|
|
$
|
263
|
|
$
|
263
|
|
$
|
236
|
|
$
|
245
|
|
$
|
763
|
|
$
|
661
|
|
Add: Amortization of intangible assets
|
24
|
|
25
|
|
24
|
|
29
|
|
29
|
|
73
|
|
89
|
|
|||||||
Money market fee waivers
|
28
|
|
29
|
|
33
|
|
33
|
|
30
|
|
90
|
|
92
|
|
|||||||
Charge related to investment management funds, net of incentives
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
104
|
|
|||||||
Income before income taxes excluding amortization of intangible assets, money market fee waivers and the charge related to investment management funds, net of incentives – Non-GAAP
|
$
|
289
|
|
$
|
317
|
|
$
|
320
|
|
$
|
298
|
|
$
|
304
|
|
$
|
926
|
|
$
|
946
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total revenue – GAAP
|
$
|
929
|
|
$
|
991
|
|
$
|
997
|
|
$
|
981
|
|
$
|
989
|
|
$
|
2,917
|
|
$
|
2,965
|
|
Less:
Distribution and servicing expense
|
94
|
|
95
|
|
97
|
|
101
|
|
105
|
|
286
|
|
322
|
|
|||||||
Money market fee waivers benefiting distribution and servicing expense
|
35
|
|
37
|
|
38
|
|
37
|
|
37
|
|
110
|
|
113
|
|
|||||||
Add: Money market fee waivers impacting total revenue
|
63
|
|
66
|
|
71
|
|
70
|
|
67
|
|
200
|
|
205
|
|
|||||||
Total revenue net of distribution and servicing expense and excluding money market fee waivers – Non-GAAP
|
$
|
863
|
|
$
|
925
|
|
$
|
933
|
|
$
|
913
|
|
$
|
914
|
|
$
|
2,721
|
|
$
|
2,735
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pre-tax operating margin
(a)
|
26
|
%
|
27
|
%
|
26
|
%
|
24
|
%
|
25
|
%
|
26
|
%
|
22
|
%
|
|||||||
Pre-tax operating margin, excluding amortization of intangible assets, money market fee waivers, the charge related to investment management funds, net of incentives and net of distribution and servicing expense – Non-GAAP
(a)
|
34
|
%
|
34
|
%
|
34
|
%
|
33
|
%
|
33
|
%
|
34
|
%
|
35
|
%
|
(a)
|
Income before taxes divided by total revenue.
|
•
|
All of our SEC filings, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, SEC Forms 3, 4 and 5 and any proxy statement mailed by us in connection with the solicitation of proxies;
|
•
|
Financial statements and footnotes prepared using Extensible Business Reporting Language (“XBRL”);
|
•
|
Our earnings materials and selected management conference calls and presentations;
|
•
|
Other regulatory disclosures, including: Pillar 3 Disclosures (and Market Risk Disclosure contained therein); Federal Financial Institutions Examination Council - Consolidated Reports of Condition and Income for a Bank With Domestic and Foreign Offices; Consolidated Financial Statements for Bank Holding Companies; and the Dodd-Frank Act Stress Test Results for BNY Mellon and The Bank of New York Mellon; and
|
•
|
Our Corporate Governance Guidelines, Directors Code of Conduct and the Charters of the Audit, Finance, Corporate Governance and Nominating, Corporate Social Responsibility, Human Resources and Compensation, Risk and Technology Committees of our Board of Directors.
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|||||
Fee and other revenue
|
|
|
|
|
|
|
||||||||||
Investment services fees:
|
|
|
|
|
|
|
||||||||||
Asset servicing
|
$
|
1,057
|
|
$
|
1,060
|
|
$
|
1,025
|
|
|
$
|
3,155
|
|
$
|
3,056
|
|
Clearing services
|
345
|
|
347
|
|
337
|
|
|
1,036
|
|
988
|
|
|||||
Issuer services
|
313
|
|
234
|
|
315
|
|
|
779
|
|
775
|
|
|||||
Treasury services
|
137
|
|
144
|
|
142
|
|
|
418
|
|
419
|
|
|||||
Total investment services fees
|
1,852
|
|
1,785
|
|
1,819
|
|
|
5,388
|
|
5,238
|
|
|||||
Investment management and performance fees
|
829
|
|
878
|
|
881
|
|
|
2,574
|
|
2,607
|
|
|||||
Foreign exchange and other trading revenue
|
179
|
|
187
|
|
153
|
|
|
595
|
|
419
|
|
|||||
Financing-related fees
|
71
|
|
58
|
|
44
|
|
|
169
|
|
126
|
|
|||||
Distribution and servicing
|
41
|
|
39
|
|
44
|
|
|
121
|
|
130
|
|
|||||
Investment and other income
|
59
|
|
104
|
|
890
|
|
|
223
|
|
1,134
|
|
|||||
Total fee revenue
|
3,031
|
|
3,051
|
|
3,831
|
|
|
9,070
|
|
9,654
|
|
|||||
Net securities gains — including other-than-temporary impairment
|
22
|
|
17
|
|
21
|
|
|
65
|
|
62
|
|
|||||
Noncredit-related portion of other-than-temporary impairment
(recognized in other comprehensive income)
|
—
|
|
1
|
|
1
|
|
|
3
|
|
2
|
|
|||||
Net securities gains
|
22
|
|
16
|
|
20
|
|
|
62
|
|
60
|
|
|||||
Total fee and other revenue
|
3,053
|
|
3,067
|
|
3,851
|
|
|
9,132
|
|
9,714
|
|
|||||
Operations of consolidated investment management funds
|
|
|
|
|
|
|
||||||||||
Investment (loss) income
|
(6
|
)
|
46
|
|
123
|
|
|
96
|
|
402
|
|
|||||
Interest of investment management fund note holders
|
16
|
|
6
|
|
84
|
|
|
26
|
|
281
|
|
|||||
(Loss) income from consolidated investment management funds
|
(22
|
)
|
40
|
|
39
|
|
|
70
|
|
121
|
|
|||||
Net interest revenue
|
|
|
|
|
|
|
||||||||||
Interest revenue
|
838
|
|
847
|
|
809
|
|
|
2,492
|
|
2,432
|
|
|||||
Interest expense
|
79
|
|
68
|
|
88
|
|
|
226
|
|
264
|
|
|||||
Net interest revenue
|
759
|
|
779
|
|
721
|
|
|
2,266
|
|
2,168
|
|
|||||
Provision for credit losses
|
1
|
|
(6
|
)
|
(19
|
)
|
|
(3
|
)
|
(49
|
)
|
|||||
Net interest revenue after provision for credit losses
|
758
|
|
785
|
|
740
|
|
|
2,269
|
|
2,217
|
|
|||||
Noninterest expense
|
|
|
|
|
|
|
||||||||||
Staff
|
1,437
|
|
1,434
|
|
1,477
|
|
|
4,356
|
|
4,427
|
|
|||||
Professional, legal and other purchased services
|
301
|
|
299
|
|
323
|
|
|
902
|
|
949
|
|
|||||
Software
|
154
|
|
158
|
|
154
|
|
|
470
|
|
460
|
|
|||||
Net occupancy
|
152
|
|
149
|
|
154
|
|
|
452
|
|
460
|
|
|||||
Distribution and servicing
|
95
|
|
96
|
|
107
|
|
|
289
|
|
326
|
|
|||||
Sub-custodian
|
65
|
|
75
|
|
67
|
|
|
210
|
|
216
|
|
|||||
Furniture and equipment
|
72
|
|
70
|
|
80
|
|
|
212
|
|
247
|
|
|||||
Business development
|
59
|
|
72
|
|
61
|
|
|
192
|
|
193
|
|
|||||
Other
|
268
|
|
250
|
|
250
|
|
|
760
|
|
820
|
|
|||||
Amortization of intangible assets
|
66
|
|
65
|
|
75
|
|
|
197
|
|
225
|
|
|||||
Merger and integration, litigation and restructuring charges
|
11
|
|
59
|
|
220
|
|
|
67
|
|
330
|
|
|||||
Total noninterest expense
|
2,680
|
|
2,727
|
|
2,968
|
|
|
8,107
|
|
8,653
|
|
|||||
Income
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
1,109
|
|
1,165
|
|
1,662
|
|
|
3,364
|
|
3,399
|
|
|||||
Provision for income taxes
|
282
|
|
276
|
|
556
|
|
|
838
|
|
1,005
|
|
|||||
Net income
|
827
|
|
889
|
|
1,106
|
|
|
2,526
|
|
2,394
|
|
|||||
Net loss (income) attributable to noncontrolling interests (includes $5, $(37), $(23), $(63) and $(60) related to consolidated investment management funds, respectively)
|
6
|
|
(36
|
)
|
(23
|
)
|
|
(61
|
)
|
(60
|
)
|
|||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
833
|
|
853
|
|
1,083
|
|
|
2,465
|
|
2,334
|
|
|||||
Preferred stock dividends
|
(13
|
)
|
(23
|
)
|
(13
|
)
|
|
(49
|
)
|
(49
|
)
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
820
|
|
$
|
830
|
|
$
|
1,070
|
|
|
$
|
2,416
|
|
$
|
2,285
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation
(in millions)
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
820
|
|
$
|
830
|
|
$
|
1,070
|
|
|
$
|
2,416
|
|
$
|
2,285
|
|
Less: Earnings allocated to participating securities
|
6
|
|
9
|
|
20
|
|
|
34
|
|
43
|
|
|||||
Net income applicable to the common shareholders of The Bank of New York Mellon Corporation after required adjustment for the calculation of basic and diluted earnings per common share
|
$
|
814
|
|
$
|
821
|
|
$
|
1,050
|
|
|
$
|
2,382
|
|
$
|
2,242
|
|
Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation
(in thousands)
|
Quarter ended
|
|
Year-to-date
|
||||||||
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|
Basic
|
1,098,003
|
|
1,113,790
|
|
1,126,946
|
|
|
1,110,056
|
|
1,133,006
|
|
Common stock equivalents
|
16,476
|
|
16,718
|
|
20,807
|
|
|
17,371
|
|
19,547
|
|
Less: Participating securities
|
(8,834
|
)
|
(8,373
|
)
|
(12,882
|
)
|
|
(9,452
|
)
|
(12,835
|
)
|
Diluted
|
1,105,645
|
|
1,122,135
|
|
1,134,871
|
|
|
1,117,975
|
|
1,139,718
|
|
|
|
|
|
|
|
|
|||||
Anti-dilutive securities
(a)
|
28,119
|
|
26,061
|
|
40,360
|
|
|
29,378
|
|
45,368
|
|
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
(b)
(in dollars)
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
||||||
Basic
|
$
|
0.74
|
|
$
|
0.74
|
|
$
|
0.93
|
|
|
$
|
2.15
|
|
$
|
1.98
|
|
Diluted
|
$
|
0.74
|
|
$
|
0.73
|
|
$
|
0.93
|
|
|
$
|
2.13
|
|
$
|
1.97
|
|
(a)
|
Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive.
|
(b)
|
Basic and diluted earnings per share under the two-class method are determined on the net income applicable to common shareholders of The Bank of New York Mellon Corporation reported on the income statement less earnings allocated to participating securities.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|||||
Net income
|
$
|
827
|
|
$
|
889
|
|
$
|
1,106
|
|
|
$
|
2,526
|
|
$
|
2,394
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(163
|
)
|
329
|
|
(589
|
)
|
|
(435
|
)
|
(475
|
)
|
|||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
||||||||||
Unrealized gain (loss) arising during the period
|
7
|
|
(358
|
)
|
4
|
|
|
(217
|
)
|
376
|
|
|||||
Reclassification adjustment
|
(14
|
)
|
(10
|
)
|
(13
|
)
|
|
(39
|
)
|
(40
|
)
|
|||||
Total unrealized gain (loss) on assets available-for-sale
|
(7
|
)
|
(368
|
)
|
(9
|
)
|
|
(256
|
)
|
336
|
|
|||||
Defined benefit plans:
|
|
|
|
|
|
|
||||||||||
Net gain (loss) arising during the period
|
2
|
|
—
|
|
—
|
|
|
(107
|
)
|
—
|
|
|||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
|
21
|
|
21
|
|
19
|
|
|
47
|
|
55
|
|
|||||
Total defined benefit plans
|
23
|
|
21
|
|
19
|
|
|
(60
|
)
|
55
|
|
|||||
Net unrealized gain (loss) on cash flow hedges
|
—
|
|
9
|
|
(12
|
)
|
|
8
|
|
(13
|
)
|
|||||
Total other comprehensive (loss), net of tax
(a)
|
(147
|
)
|
(9
|
)
|
(591
|
)
|
|
(743
|
)
|
(97
|
)
|
|||||
Net loss (income) attributable to noncontrolling interests
|
6
|
|
(36
|
)
|
(23
|
)
|
|
(61
|
)
|
(60
|
)
|
|||||
Other comprehensive loss (income) attributable to noncontrolling interests
|
17
|
|
(34
|
)
|
77
|
|
|
22
|
|
73
|
|
|||||
Net comprehensive income
|
$
|
703
|
|
$
|
810
|
|
$
|
569
|
|
|
$
|
1,744
|
|
$
|
2,310
|
|
(a)
|
Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was
$(130) million
for the
quarter ended
Sept. 30, 2015
,
$(43) million
for the
quarter ended
June 30, 2015
,
$(514) million
for the
quarter ended
Sept. 30, 2014
,
$(721) million
for the
nine months ended Sept. 30, 2015
and
$(24) million
for the
nine months ended Sept. 30, 2014
.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Sept. 30, 2015
|
|
|
Dec. 31, 2014
|
|
||
(dollars in millions, except per share amounts)
|
|
||||||
Assets
|
|
|
|
||||
Cash and due from:
|
|
|
|
||||
Banks
|
$
|
8,234
|
|
|
$
|
6,970
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
82,426
|
|
|
96,682
|
|
||
Interest-bearing deposits with banks
|
20,002
|
|
|
19,495
|
|
||
Federal funds sold and securities purchased under resale agreements
|
28,901
|
|
|
20,302
|
|
||
Securities:
|
|
|
|
||||
Held-to-maturity (fair value of $43,758 and $21,127)
|
43,423
|
|
|
20,933
|
|
||
Available-for-sale
|
76,682
|
|
|
98,330
|
|
||
Total securities
|
120,105
|
|
|
119,263
|
|
||
Trading assets
|
6,645
|
|
|
9,881
|
|
||
Loans (includes $338 and $21, at fair value)
|
63,309
|
|
|
59,132
|
|
||
Allowance for loan losses
|
(181
|
)
|
|
(191
|
)
|
||
Net loans
|
63,128
|
|
|
58,941
|
|
||
Premises and equipment
|
1,361
|
|
|
1,394
|
|
||
Accrued interest receivable
|
530
|
|
|
607
|
|
||
Goodwill
|
17,679
|
|
|
17,869
|
|
||
Intangible assets
|
3,914
|
|
|
4,127
|
|
||
Other assets (includes $1,200 and $1,916, at fair value)
|
22,149
|
|
|
20,490
|
|
||
Subtotal assets of operations
|
375,074
|
|
|
376,021
|
|
||
Assets of consolidated investment management funds, at fair value:
|
|
|
|
||||
Trading assets
|
2,087
|
|
|
8,678
|
|
||
Other assets
|
210
|
|
|
604
|
|
||
Subtotal assets of consolidated investment management funds, at fair value
|
2,297
|
|
|
9,282
|
|
||
Total assets
|
$
|
377,371
|
|
|
$
|
385,303
|
|
Liabilities
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Noninterest-bearing (principally U.S. offices)
|
$
|
101,111
|
|
|
$
|
104,240
|
|
Interest-bearing deposits in U.S. offices
|
54,073
|
|
|
53,236
|
|
||
Interest-bearing deposits in Non-U.S. offices
|
111,584
|
|
|
108,393
|
|
||
Total deposits
|
266,768
|
|
|
265,869
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
8,824
|
|
|
11,469
|
|
||
Trading liabilities
|
4,756
|
|
|
7,434
|
|
||
Payables to customers and broker-dealers
|
22,236
|
|
|
21,181
|
|
||
Commercial paper
|
—
|
|
|
—
|
|
||
Other borrowed funds
|
648
|
|
|
786
|
|
||
Accrued taxes and other expenses
|
6,457
|
|
|
6,903
|
|
||
Other liabilities (including allowance for lending-related commitments of $99 and $89, also includes $518 and $451, at fair value)
|
5,890
|
|
|
5,025
|
|
||
Long-term debt (includes $362 and $347, at fair value)
|
21,430
|
|
|
20,264
|
|
||
Subtotal liabilities of operations
|
337,009
|
|
|
338,931
|
|
||
Liabilities of consolidated investment management funds, at fair value:
|
|
|
|
||||
Trading liabilities
|
1,072
|
|
|
7,660
|
|
||
Other liabilities
|
91
|
|
|
9
|
|
||
Subtotal liabilities of consolidated investment management funds, at fair value
|
1,163
|
|
|
7,669
|
|
||
Total liabilities
|
338,172
|
|
|
346,600
|
|
||
Temporary equity
|
|
|
|
||||
Redeemable noncontrolling interests
|
247
|
|
|
229
|
|
||
Permanent equity
|
|
|
|
||||
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 25,826 and 15,826 shares
|
2,552
|
|
|
1,562
|
|
||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,310,436,554 and 1,290,222,821 shares
|
13
|
|
|
13
|
|
||
Additional paid-in capital
|
25,168
|
|
|
24,626
|
|
||
Retained earnings
|
19,525
|
|
|
17,683
|
|
||
Accumulated other comprehensive loss, net of tax
|
(2,355
|
)
|
|
(1,634
|
)
|
||
Less: Treasury stock of 217,483,962 and 171,995,262 common shares, at cost
|
(6,733
|
)
|
|
(4,809
|
)
|
||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
38,170
|
|
|
37,441
|
|
||
Nonredeemable noncontrolling interests of consolidated investment management funds
|
782
|
|
|
1,033
|
|
||
Total permanent equity
|
38,952
|
|
|
38,474
|
|
||
Total liabilities, temporary equity and permanent equity
|
$
|
377,371
|
|
|
$
|
385,303
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Nine months ended Sept. 30,
|
|||||
(in millions)
|
2015
|
|
2014
|
|
||
Operating activities
|
|
|
||||
Net income
|
$
|
2,526
|
|
$
|
2,394
|
|
Net (income) attributable to noncontrolling interests
|
(61
|
)
|
(60
|
)
|
||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
2,465
|
|
2,334
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||||
Provision for credit losses
|
(3
|
)
|
(49
|
)
|
||
Pension plan contributions
|
(41
|
)
|
(37
|
)
|
||
Depreciation and amortization
|
1,084
|
|
976
|
|
||
Deferred tax (benefit)
|
(179
|
)
|
(510
|
)
|
||
Net securities (gains) and venture capital (income)
|
(63
|
)
|
(65
|
)
|
||
Change in trading activities
|
511
|
|
1,154
|
|
||
Change in accruals and other, net
|
211
|
|
(505
|
)
|
||
Net cash provided by operating activities
|
3,985
|
|
3,298
|
|
||
Investing activities
|
|
|
||||
Change in interest-bearing deposits with banks
|
(522
|
)
|
4,950
|
|
||
Change in interest-bearing deposits with the Federal Reserve and other central banks
|
14,256
|
|
12,042
|
|
||
Purchases of securities held-to-maturity
|
(14,545
|
)
|
(2,132
|
)
|
||
Paydowns of securities held-to-maturity
|
2,648
|
|
1,399
|
|
||
Maturities of securities held-to-maturity
|
961
|
|
99
|
|
||
Purchases of securities available-for-sale
|
(26,795
|
)
|
(51,428
|
)
|
||
Sales of securities available-for-sale
|
16,085
|
|
25,253
|
|
||
Paydowns of securities available-for-sale
|
6,712
|
|
5,424
|
|
||
Maturities of securities available-for-sale
|
12,201
|
|
4,417
|
|
||
Net change in loans
|
(4,237
|
)
|
(6,060
|
)
|
||
Sales of loans and other real estate
|
316
|
|
259
|
|
||
Change in federal funds sold and securities purchased under resale agreements
|
(8,599
|
)
|
(8,214
|
)
|
||
Change in seed capital investments
|
367
|
|
(240
|
)
|
||
Purchases of premises and equipment/capitalized software
|
(427
|
)
|
(595
|
)
|
||
Proceeds from the sale of premises and equipment
|
16
|
|
585
|
|
||
Acquisitions, net of cash
|
(9
|
)
|
(25
|
)
|
||
Dispositions, net of cash
|
17
|
|
64
|
|
||
Other, net
|
1,307
|
|
3,543
|
|
||
Net cash (used for) investing activities
|
(248
|
)
|
(10,659
|
)
|
||
Financing activities
|
|
|
||||
Change in deposits
|
(505
|
)
|
2,442
|
|
||
Change in federal funds purchased and securities sold under repurchase agreements
|
(2,645
|
)
|
39
|
|
||
Change in payables to customers and broker-dealers
|
1,055
|
|
4,448
|
|
||
Change in other borrowed funds
|
(217
|
)
|
275
|
|
||
Change in commercial paper
|
—
|
|
(96
|
)
|
||
Net proceeds from the issuance of long-term debt
|
4,190
|
|
4,686
|
|
||
Repayments of long-term debt
|
(3,259
|
)
|
(2,921
|
)
|
||
Proceeds from the exercise of stock options
|
263
|
|
276
|
|
||
Issuance of common stock
|
20
|
|
20
|
|
||
Issuance of preferred stock
|
990
|
|
—
|
|
||
Treasury stock acquired
|
(1,924
|
)
|
(1,237
|
)
|
||
Common cash dividends paid
|
(574
|
)
|
(566
|
)
|
||
Preferred cash dividends paid
|
(49
|
)
|
(49
|
)
|
||
Other, net
|
140
|
|
94
|
|
||
Net cash (used for) provided by financing activities
|
(2,515
|
)
|
7,411
|
|
||
Effect of exchange rate changes on cash
|
42
|
|
(100
|
)
|
||
Change in cash and due from banks
|
|
|
||||
Change in cash and due from banks
|
1,264
|
|
(50
|
)
|
||
Cash and due from banks at beginning of period
|
6,970
|
|
6,460
|
|
||
Cash and due from banks at end of period
|
$
|
8,234
|
|
$
|
6,410
|
|
Supplemental disclosures
|
|
|
||||
Interest paid
|
$
|
285
|
|
$
|
291
|
|
Income taxes paid
|
746
|
|
514
|
|
||
Income taxes refunded
|
893
|
|
142
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
The Bank of New York Mellon Corporation shareholders
|
Non-
redeemable
noncontrolling
interests of
consolidated
investment
management
funds
|
|
Total
permanent
equity
|
|
|
Redeemable
non-
controlling
interests/
temporary
equity
|
|
||||||||||||||||||||
(in millions, except per
share amounts)
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive (loss),
net of tax
|
|
Treasury
stock
|
|
||||||||||||||||
Balance at Dec. 31, 2014
|
$
|
1,562
|
|
$
|
13
|
|
$
|
24,626
|
|
$
|
17,683
|
|
$
|
(1,634
|
)
|
$
|
(4,809
|
)
|
$
|
1,033
|
|
$
|
38,474
|
|
(a)
|
$
|
229
|
|
Adjustment for the cumulative effect of applying ASU 2015-02 for the consolidation of a legal entity
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
602
|
|
602
|
|
|
—
|
|
|||||||||
Adjustment for the cumulative effect of applying ASU 2015-02 for the deconsolidation of a legal entity
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(866
|
)
|
(866
|
)
|
|
—
|
|
|||||||||
Adjusted balance at Jan. 1, 2015
|
1,562
|
|
13
|
|
24,626
|
|
17,683
|
|
(1,634
|
)
|
(4,809
|
)
|
769
|
|
38,210
|
|
|
229
|
|
|||||||||
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
36
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(48
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(33
|
)
|
—
|
|
—
|
|
—
|
|
(33
|
)
|
(66
|
)
|
|
37
|
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
2,465
|
|
—
|
|
—
|
|
63
|
|
2,528
|
|
|
(2
|
)
|
|||||||||
Other comprehensive (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(721
|
)
|
—
|
|
(17
|
)
|
(738
|
)
|
|
(5
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.51 per share
|
—
|
|
—
|
|
—
|
|
(574
|
)
|
—
|
|
—
|
|
—
|
|
(574
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(49
|
)
|
—
|
|
—
|
|
—
|
|
(49
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,924
|
)
|
—
|
|
(1,924
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
18
|
|
—
|
|
—
|
|
—
|
|
—
|
|
18
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
16
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16
|
|
|
—
|
|
|||||||||
Preferred stock issued
|
990
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
990
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
541
|
|
—
|
|
—
|
|
—
|
|
—
|
|
541
|
|
|
—
|
|
|||||||||
Balance at Sept. 30, 2015
|
$
|
2,552
|
|
$
|
13
|
|
$
|
25,168
|
|
$
|
19,525
|
|
$
|
(2,355
|
)
|
$
|
(6,733
|
)
|
$
|
782
|
|
$
|
38,952
|
|
(a)
|
$
|
247
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$35,879 million
at
Dec. 31, 2014
and
$35,618 million
at
Sept. 30, 2015
.
|
Notes to Consolidated Financial Statements
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Securities at
Sept. 30, 2015
|
Amortized cost
|
|
Gross
unrealized
|
Fair value
|
|
|||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
12,222
|
|
$
|
301
|
|
$
|
10
|
|
$
|
12,513
|
|
U.S. Government agencies
|
427
|
|
4
|
|
—
|
|
431
|
|
||||
State and political subdivisions
|
4,238
|
|
95
|
|
18
|
|
4,315
|
|
||||
Agency RMBS
|
23,274
|
|
327
|
|
266
|
|
23,335
|
|
||||
Non-agency RMBS
|
827
|
|
34
|
|
20
|
|
841
|
|
||||
Other RMBS
|
1,323
|
|
16
|
|
28
|
|
1,311
|
|
||||
Commercial MBS
|
1,557
|
|
20
|
|
9
|
|
1,568
|
|
||||
Agency commercial MBS
|
3,723
|
|
50
|
|
11
|
|
3,762
|
|
||||
Asset-backed CLOs
|
2,297
|
|
1
|
|
7
|
|
2,291
|
|
||||
Other asset-backed securities
|
3,138
|
|
3
|
|
12
|
|
3,129
|
|
||||
Foreign covered bonds
|
2,251
|
|
57
|
|
—
|
|
2,308
|
|
||||
Corporate bonds
|
1,802
|
|
33
|
|
13
|
|
1,822
|
|
||||
Sovereign debt/sovereign guaranteed
|
13,910
|
|
222
|
|
36
|
|
14,096
|
|
||||
Other debt securities
|
2,241
|
|
9
|
|
2
|
|
2,248
|
|
||||
Equity securities
|
3
|
|
1
|
|
—
|
|
4
|
|
||||
Money market funds
|
770
|
|
—
|
|
—
|
|
770
|
|
||||
Non-agency RMBS
(a)
|
1,548
|
|
396
|
|
6
|
|
1,938
|
|
||||
Total securities available-for-sale
(b)
|
$
|
75,551
|
|
$
|
1,569
|
|
$
|
438
|
|
$
|
76,682
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
11,326
|
|
$
|
98
|
|
$
|
1
|
|
$
|
11,423
|
|
U.S. Government agencies
|
1,142
|
|
2
|
|
—
|
|
1,144
|
|
||||
State and political subdivisions
|
20
|
|
—
|
|
1
|
|
19
|
|
||||
Agency RMBS
|
26,289
|
|
268
|
|
42
|
|
26,515
|
|
||||
Non-agency RMBS
|
128
|
|
6
|
|
2
|
|
132
|
|
||||
Other RMBS
|
259
|
|
1
|
|
11
|
|
249
|
|
||||
Commercial MBS
|
10
|
|
—
|
|
—
|
|
10
|
|
||||
Agency commercial MBS
|
504
|
|
4
|
|
1
|
|
507
|
|
||||
Sovereign debt/sovereign guaranteed
|
3,635
|
|
24
|
|
10
|
|
3,649
|
|
||||
Foreign covered bonds
|
78
|
|
—
|
|
—
|
|
78
|
|
||||
Other debt securities
|
32
|
|
—
|
|
—
|
|
32
|
|
||||
Total securities held-to-maturity
|
$
|
43,423
|
|
$
|
403
|
|
$
|
68
|
|
$
|
43,758
|
|
Total securities
|
$
|
118,974
|
|
$
|
1,972
|
|
$
|
506
|
|
$
|
120,440
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized gains of
$92 million
and gross unrealized losses of
$263 million
recorded in accumulated other comprehensive income related to investment securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses primarily related to Agency RMBS and will be amortized into net interest revenue over the estimated lives of the securities.
|
Securities at
Dec. 31, 2014
|
Amortized cost
|
|
Gross
unrealized
|
Fair value
|
|
|||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
19,592
|
|
$
|
420
|
|
$
|
15
|
|
$
|
19,997
|
|
U.S. Government agencies
|
342
|
|
3
|
|
2
|
|
343
|
|
||||
State and political subdivisions
|
5,176
|
|
95
|
|
24
|
|
5,247
|
|
||||
Agency RMBS
|
32,568
|
|
357
|
|
325
|
|
32,600
|
|
||||
Non-agency RMBS
|
942
|
|
37
|
|
26
|
|
953
|
|
||||
Other RMBS
|
1,551
|
|
25
|
|
25
|
|
1,551
|
|
||||
Commercial MBS
|
1,927
|
|
39
|
|
7
|
|
1,959
|
|
||||
Agency commercial MBS
|
3,105
|
|
36
|
|
9
|
|
3,132
|
|
||||
Asset-backed CLOs
|
2,128
|
|
9
|
|
7
|
|
2,130
|
|
||||
Other asset-backed securities
|
3,241
|
|
5
|
|
6
|
|
3,240
|
|
||||
Foreign covered bonds
|
2,788
|
|
80
|
|
—
|
|
2,868
|
|
||||
Corporate bonds
|
1,747
|
|
45
|
|
7
|
|
1,785
|
|
||||
Sovereign debt/sovereign guaranteed
|
17,062
|
|
224
|
|
2
|
|
17,284
|
|
||||
Other debt securities
|
2,162
|
|
7
|
|
—
|
|
2,169
|
|
||||
Equity securities
|
94
|
|
1
|
|
—
|
|
95
|
|
||||
Money market funds
|
763
|
|
—
|
|
—
|
|
763
|
|
||||
Non-agency RMBS
(a)
|
1,747
|
|
471
|
|
4
|
|
2,214
|
|
||||
Total securities available-for-sale
(b)
|
$
|
96,935
|
|
$
|
1,854
|
|
$
|
459
|
|
$
|
98,330
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
5,047
|
|
$
|
32
|
|
$
|
16
|
|
$
|
5,063
|
|
U.S. Government agencies
|
344
|
|
—
|
|
3
|
|
341
|
|
||||
State and political subdivisions
|
24
|
|
1
|
|
1
|
|
24
|
|
||||
Agency RMBS
|
14,006
|
|
200
|
|
44
|
|
14,162
|
|
||||
Non-agency RMBS
|
153
|
|
9
|
|
2
|
|
160
|
|
||||
Other RMBS
|
315
|
|
2
|
|
8
|
|
309
|
|
||||
Commercial MBS
|
13
|
|
—
|
|
—
|
|
13
|
|
||||
Sovereign debt/sovereign guaranteed
|
1,031
|
|
24
|
|
—
|
|
1,055
|
|
||||
Total securities held-to-maturity
|
$
|
20,933
|
|
$
|
268
|
|
$
|
74
|
|
$
|
21,127
|
|
Total securities
|
$
|
117,868
|
|
$
|
2,122
|
|
$
|
533
|
|
$
|
119,457
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized gains of
$60 million
and gross unrealized losses of
$282 million
recorded in accumulated other comprehensive income related to investment securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses primarily related to Agency RMBS and will be amortized into net interest revenue over the estimated lives of the securities.
|
Net securities gains (losses)
|
|
|
|
|
|||||||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
YTD15
|
|
YTD14
|
|
|||||
Realized gross gains
|
$
|
23
|
|
$
|
18
|
|
$
|
23
|
|
$
|
66
|
|
$
|
73
|
|
Realized gross losses
|
—
|
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
(4
|
)
|
|||||
Recognized gross impairments
|
(1
|
)
|
(1
|
)
|
(2
|
)
|
(3
|
)
|
(9
|
)
|
|||||
Total net securities gains
|
$
|
22
|
|
$
|
16
|
|
$
|
20
|
|
$
|
62
|
|
$
|
60
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Temporarily impaired securities at Sept. 30, 2015
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||
(in millions)
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
625
|
|
$
|
10
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
625
|
|
$
|
10
|
|
State and political subdivisions
|
58
|
|
1
|
|
|
193
|
|
17
|
|
|
251
|
|
18
|
|
||||||
Agency RMBS
|
2,690
|
|
13
|
|
|
1,398
|
|
253
|
|
|
4,088
|
|
266
|
|
||||||
Non-agency RMBS
|
141
|
|
1
|
|
|
331
|
|
19
|
|
|
472
|
|
20
|
|
||||||
Other RMBS
|
81
|
|
3
|
|
|
361
|
|
25
|
|
|
442
|
|
28
|
|
||||||
Commercial MBS
|
300
|
|
3
|
|
|
213
|
|
6
|
|
|
513
|
|
9
|
|
||||||
Agency commercial MBS
|
1,715
|
|
9
|
|
|
161
|
|
2
|
|
|
1,876
|
|
11
|
|
||||||
Asset-backed CLOs
|
1,801
|
|
7
|
|
|
25
|
|
—
|
|
|
1,826
|
|
7
|
|
||||||
Other asset-backed securities
|
1,880
|
|
9
|
|
|
372
|
|
3
|
|
|
2,252
|
|
12
|
|
||||||
Corporate bonds
|
314
|
|
7
|
|
|
175
|
|
6
|
|
|
489
|
|
13
|
|
||||||
Sovereign debt/sovereign guaranteed
|
3,806
|
|
36
|
|
|
7
|
|
—
|
|
|
3,813
|
|
36
|
|
||||||
Other debt securities
|
1,662
|
|
2
|
|
|
—
|
|
—
|
|
|
1,662
|
|
2
|
|
||||||
Non-agency RMBS
(a)
|
54
|
|
2
|
|
|
32
|
|
4
|
|
|
86
|
|
6
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
15,127
|
|
$
|
103
|
|
|
$
|
3,268
|
|
$
|
335
|
|
|
$
|
18,395
|
|
$
|
438
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
503
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
503
|
|
$
|
1
|
|
State and political subdivisions
|
4
|
|
1
|
|
|
—
|
|
—
|
|
|
4
|
|
1
|
|
||||||
Agency RMBS
|
16,144
|
|
31
|
|
|
1,969
|
|
11
|
|
|
18,113
|
|
42
|
|
||||||
Non-agency RMBS
|
49
|
|
—
|
|
|
29
|
|
2
|
|
|
78
|
|
2
|
|
||||||
Other RMBS
|
49
|
|
—
|
|
|
177
|
|
11
|
|
|
226
|
|
11
|
|
||||||
Agency commercial MBS
|
285
|
|
1
|
|
|
—
|
|
—
|
|
|
285
|
|
1
|
|
||||||
Sovereign debt/sovereign guaranteed
|
1,032
|
|
10
|
|
|
—
|
|
—
|
|
|
1,032
|
|
10
|
|
||||||
Total securities held-to-maturity
|
$
|
18,066
|
|
$
|
44
|
|
|
$
|
2,175
|
|
$
|
24
|
|
|
$
|
20,241
|
|
$
|
68
|
|
Total temporarily impaired securities
|
$
|
33,193
|
|
$
|
147
|
|
|
$
|
5,443
|
|
$
|
359
|
|
|
$
|
38,636
|
|
$
|
506
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized losses for less than 12 months of
$9 million
and gross unrealized losses for 12 months or more of
$254 million
recorded in accumulated other comprehensive income related to investment securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses primarily related to Agency RMBS and will be amortized into net interest revenue over the estimated lives of the securities.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Temporarily impaired securities at Dec. 31, 2014
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||
(in millions)
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
6,049
|
|
$
|
15
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
6,049
|
|
$
|
15
|
|
U.S. Government agencies
|
32
|
|
—
|
|
|
100
|
|
2
|
|
|
132
|
|
2
|
|
||||||
State and political subdivisions
|
410
|
|
18
|
|
|
393
|
|
6
|
|
|
803
|
|
24
|
|
||||||
Agency RMBS
|
3,385
|
|
13
|
|
|
5,016
|
|
312
|
|
|
8,401
|
|
325
|
|
||||||
Non-agency RMBS
|
143
|
|
1
|
|
|
382
|
|
25
|
|
|
525
|
|
26
|
|
||||||
Other RMBS
|
—
|
|
—
|
|
|
449
|
|
25
|
|
|
449
|
|
25
|
|
||||||
Commercial MBS
|
175
|
|
1
|
|
|
394
|
|
6
|
|
|
569
|
|
7
|
|
||||||
Agency commercial MBS
|
719
|
|
1
|
|
|
550
|
|
8
|
|
|
1,269
|
|
9
|
|
||||||
Asset-backed CLOs
|
1,376
|
|
7
|
|
|
—
|
|
—
|
|
|
1,376
|
|
7
|
|
||||||
Other asset-backed securities
|
1,078
|
|
2
|
|
|
539
|
|
4
|
|
|
1,617
|
|
6
|
|
||||||
Corporate bonds
|
51
|
|
—
|
|
|
230
|
|
7
|
|
|
281
|
|
7
|
|
||||||
Sovereign debt/sovereign guaranteed
|
2,175
|
|
2
|
|
|
—
|
|
—
|
|
|
2,175
|
|
2
|
|
||||||
Non-agency RMBS
(a)
|
42
|
|
1
|
|
|
34
|
|
3
|
|
|
76
|
|
4
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
15,635
|
|
$
|
61
|
|
|
$
|
8,087
|
|
$
|
398
|
|
|
$
|
23,722
|
|
$
|
459
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
1,066
|
|
$
|
6
|
|
|
$
|
1,559
|
|
$
|
10
|
|
|
$
|
2,625
|
|
$
|
16
|
|
U.S. Government agencies
|
—
|
|
—
|
|
|
340
|
|
3
|
|
|
340
|
|
3
|
|
||||||
State and political subdivisions
|
5
|
|
1
|
|
|
—
|
|
—
|
|
|
5
|
|
1
|
|
||||||
Agency RMBS
|
551
|
|
3
|
|
|
3,808
|
|
41
|
|
|
4,359
|
|
44
|
|
||||||
Non-agency RMBS
|
40
|
|
—
|
|
|
33
|
|
2
|
|
|
73
|
|
2
|
|
||||||
Other RMBS
|
—
|
|
—
|
|
|
219
|
|
8
|
|
|
219
|
|
8
|
|
||||||
Total securities held-to-maturity
|
$
|
1,662
|
|
$
|
10
|
|
|
$
|
5,959
|
|
$
|
64
|
|
|
$
|
7,621
|
|
$
|
74
|
|
Total temporarily impaired securities
|
$
|
17,297
|
|
$
|
71
|
|
|
$
|
14,046
|
|
$
|
462
|
|
|
$
|
31,343
|
|
$
|
533
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized losses for 12 months or more of
$282 million
recorded in accumulated other comprehensive income related to investment securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses primarily related to Agency RMBS and will be amortized into net interest revenue over the estimated lives of the securities.
|
Maturity distribution and yield on investment securities at
Sept. 30, 2015 |
U.S.
Treasury
|
|
U.S.
Government
agencies
|
|
State and
political
subdivisions
|
|
Other bonds,
notes and
debentures
|
|
Mortgage/
asset-backed and
equity
securities
|
|
|
||||||||||||||||||||||
(dollars in millions)
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Total
|
|
||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
2,393
|
|
0.87
|
%
|
|
$
|
126
|
|
2.16
|
%
|
|
$
|
706
|
|
1.63
|
%
|
|
$
|
4,524
|
|
0.75
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
7,749
|
|
Over 1 through 5 years
|
5,490
|
|
1.38
|
|
|
134
|
|
1.56
|
|
|
2,150
|
|
2.63
|
|
|
13,615
|
|
1.10
|
|
|
—
|
|
—
|
|
|
21,389
|
|
||||||
Over 5 through 10 years
|
1,155
|
|
1.98
|
|
|
171
|
|
2.45
|
|
|
1,260
|
|
3.94
|
|
|
2,125
|
|
1.27
|
|
|
—
|
|
—
|
|
|
4,711
|
|
||||||
Over 10 years
|
3,475
|
|
3.11
|
|
|
—
|
|
—
|
|
|
199
|
|
1.10
|
|
|
210
|
|
1.81
|
|
|
—
|
|
—
|
|
|
3,884
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
32,755
|
|
2.63
|
|
|
32,755
|
|
||||||
Asset-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
5,420
|
|
1.19
|
|
|
5,420
|
|
||||||
Equity securities
(b)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
774
|
|
—
|
|
|
774
|
|
||||||
Total
|
$
|
12,513
|
|
1.82
|
%
|
|
$
|
431
|
|
2.09
|
%
|
|
$
|
4,315
|
|
2.78
|
%
|
|
$
|
20,474
|
|
1.05
|
%
|
|
$
|
38,949
|
|
2.38
|
%
|
|
$
|
76,682
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
510
|
|
1.49
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
1,484
|
|
0.24
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
1,994
|
|
Over 1 through 5 years
|
8,255
|
|
1.03
|
|
|
1,142
|
|
1.22
|
|
|
1
|
|
7.03
|
|
|
1,510
|
|
0.61
|
|
|
—
|
|
—
|
|
|
10,908
|
|
||||||
Over 5 through 10 years
|
2,561
|
|
2.06
|
|
|
—
|
|
—
|
|
|
4
|
|
6.79
|
|
|
751
|
|
0.71
|
|
|
—
|
|
—
|
|
|
3,316
|
|
||||||
Over 10 years
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
15
|
|
5.34
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
15
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
27,190
|
|
2.73
|
|
|
27,190
|
|
||||||
Total
|
$
|
11,326
|
|
1.29
|
%
|
|
$
|
1,142
|
|
1.22
|
%
|
|
$
|
20
|
|
5.77
|
%
|
|
$
|
3,745
|
|
0.48
|
%
|
|
$
|
27,190
|
|
2.73
|
%
|
|
$
|
43,423
|
|
(a)
|
Yields are based upon the amortized cost of securities.
|
(b)
|
Includes money market funds.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Default rate - the number of mortgage loans expected to go into default over the life of the transaction, which is driven by the roll rate of loans in each performance bucket that will ultimately migrate to default; and
|
•
|
Severity - the loss expected to be realized when a loan defaults.
|
Debt securities credit loss roll forward
|
|
|||||
(in millions)
|
3Q15
|
|
3Q14
|
|
||
Beginning balance as of June 30
|
$
|
91
|
|
$
|
107
|
|
Add: Initial OTTI credit losses
|
—
|
|
—
|
|
||
Subsequent OTTI credit losses
|
1
|
|
2
|
|
||
Less: Realized losses for securities sold
|
—
|
|
7
|
|
||
Ending balance as of Sept. 30
|
$
|
92
|
|
$
|
102
|
|
Debt securities credit loss roll forward
|
Year-to-date
|
|||||
(in millions)
|
2015
|
|
2014
|
|
||
Beginning balance as of Jan. 1
|
$
|
93
|
|
$
|
119
|
|
Add: Initial OTTI credit losses
|
—
|
|
2
|
|
||
Subsequent OTTI credit losses
|
2
|
|
7
|
|
||
Less: Realized losses for securities sold
|
3
|
|
26
|
|
||
Ending balance as of Sept. 30
|
$
|
92
|
|
$
|
102
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Loans
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
||
(in millions)
|
||||||
Domestic:
|
|
|
||||
Financial institutions
|
$
|
6,774
|
|
$
|
5,603
|
|
Commercial
|
1,869
|
|
1,390
|
|
||
Wealth management loans and mortgages
|
12,561
|
|
11,095
|
|
||
Commercial real estate
|
3,666
|
|
2,524
|
|
||
Lease financings
|
1,106
|
|
1,282
|
|
||
Other residential mortgages
|
1,080
|
|
1,222
|
|
||
Overdrafts
|
1,311
|
|
1,348
|
|
||
Other
|
1,150
|
|
1,113
|
|
||
Margin loans
|
19,200
|
|
20,034
|
|
||
Total domestic
|
48,717
|
|
45,611
|
|
||
Foreign:
|
|
|
||||
Financial institutions
|
9,193
|
|
7,716
|
|
||
Commercial
|
258
|
|
252
|
|
||
Wealth management loans and mortgages
|
102
|
|
89
|
|
||
Commercial real estate
|
56
|
|
6
|
|
||
Lease financings
|
848
|
|
889
|
|
||
Other (primarily overdrafts)
|
3,921
|
|
4,569
|
|
||
Margin loans
|
214
|
|
—
|
|
||
Total foreign
|
14,592
|
|
13,521
|
|
||
Total loans
(a)
|
$
|
63,309
|
|
$
|
59,132
|
|
(a)
|
Net of unearned income of
$715 million
at
Sept. 30, 2015
and
$866 million
at
Dec. 31, 2014
primarily on domestic and foreign lease financings.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the quarter ended Sept. 30, 2015
|
Wealth management loans and mortgages
|
|
Other residential mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
75
|
|
$
|
58
|
|
$
|
30
|
|
$
|
20
|
|
$
|
22
|
|
$
|
37
|
|
$
|
—
|
|
|
$
|
36
|
|
$
|
278
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
|
—
|
|
2
|
|
|||||||||
Net (charge-offs) recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Provision
|
1
|
|
4
|
|
(2
|
)
|
(2
|
)
|
1
|
|
(3
|
)
|
—
|
|
|
2
|
|
1
|
|
|||||||||
Ending balance
|
$
|
76
|
|
$
|
62
|
|
$
|
28
|
|
$
|
18
|
|
$
|
23
|
|
$
|
35
|
|
$
|
—
|
|
|
$
|
38
|
|
$
|
280
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
29
|
|
$
|
40
|
|
$
|
12
|
|
$
|
18
|
|
$
|
18
|
|
$
|
35
|
|
$
|
—
|
|
|
$
|
29
|
|
$
|
181
|
|
Lending-related commitments
|
47
|
|
22
|
|
16
|
|
—
|
|
5
|
|
—
|
|
—
|
|
|
9
|
|
99
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
9
|
|
Allowance for loan losses
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
2
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,869
|
|
$
|
3,328
|
|
$
|
6,774
|
|
$
|
1,106
|
|
$
|
12,552
|
|
$
|
1,080
|
|
$
|
21,661
|
|
(a)
|
$
|
14,592
|
|
$
|
62,962
|
|
Allowance for loan losses
|
29
|
|
39
|
|
12
|
|
18
|
|
17
|
|
35
|
|
—
|
|
|
29
|
|
179
|
|
(a)
|
Includes
$1,311 million
of domestic overdrafts,
$19,200 million
of margin loans and
$1,150 million
of other loans at
Sept. 30, 2015
.
|
Allowance for credit losses activity for the quarter ended June 30, 2015
|
Wealth management loans and mortgages
|
|
Other residential mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
65
|
|
$
|
53
|
|
$
|
33
|
|
$
|
31
|
|
$
|
21
|
|
$
|
40
|
|
$
|
—
|
|
|
$
|
40
|
|
$
|
283
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
2
|
|
|||||||||
Net (charge-offs) recoveries
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Provision
|
10
|
|
5
|
|
(4
|
)
|
(11
|
)
|
1
|
|
(3
|
)
|
—
|
|
|
(4
|
)
|
(6
|
)
|
|||||||||
Ending balance
|
$
|
75
|
|
$
|
58
|
|
$
|
30
|
|
$
|
20
|
|
$
|
22
|
|
$
|
37
|
|
$
|
—
|
|
|
$
|
36
|
|
$
|
278
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
31
|
|
$
|
36
|
|
$
|
13
|
|
$
|
20
|
|
$
|
17
|
|
$
|
37
|
|
$
|
—
|
|
|
$
|
29
|
|
$
|
183
|
|
Lending-related commitments
|
44
|
|
22
|
|
17
|
|
—
|
|
5
|
|
—
|
|
—
|
|
|
7
|
|
95
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
8
|
|
Allowance for loan losses
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,601
|
|
$
|
3,117
|
|
$
|
6,927
|
|
$
|
1,077
|
|
$
|
12,121
|
|
$
|
1,134
|
|
$
|
22,422
|
|
(a)
|
$
|
14,467
|
|
$
|
62,866
|
|
Allowance for loan losses
|
31
|
|
36
|
|
13
|
|
20
|
|
16
|
|
37
|
|
—
|
|
|
29
|
|
182
|
|
(a)
|
Includes
$1,013 million
of domestic overdrafts,
$20,247 million
of margin loans and
$1,162 million
of other loans at
June 30, 2015
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the quarter ended Sept. 30, 2014
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
74
|
|
$
|
45
|
|
$
|
43
|
|
$
|
33
|
|
$
|
22
|
|
$
|
47
|
|
$
|
—
|
|
|
$
|
47
|
|
$
|
311
|
|
Charge-offs
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(1
|
)
|
(5
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net (charge-offs)
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
(1
|
)
|
(4
|
)
|
|||||||||
Provision
|
1
|
|
2
|
|
(18
|
)
|
1
|
|
—
|
|
—
|
|
—
|
|
|
(5
|
)
|
(19
|
)
|
|||||||||
Ending balance
|
$
|
71
|
|
$
|
47
|
|
$
|
25
|
|
$
|
34
|
|
$
|
22
|
|
$
|
48
|
|
$
|
—
|
|
|
$
|
41
|
|
$
|
288
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
20
|
|
$
|
30
|
|
$
|
9
|
|
$
|
34
|
|
$
|
17
|
|
$
|
48
|
|
$
|
—
|
|
|
$
|
33
|
|
$
|
191
|
|
Lending-related commitments
|
51
|
|
17
|
|
16
|
|
—
|
|
5
|
|
—
|
|
—
|
|
|
8
|
|
97
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
13
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
25
|
|
Allowance for loan losses
|
4
|
|
1
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
6
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,304
|
|
$
|
2,387
|
|
$
|
5,465
|
|
$
|
1,293
|
|
$
|
10,724
|
|
$
|
1,262
|
|
$
|
19,638
|
|
(a)
|
$
|
15,429
|
|
$
|
57,502
|
|
Allowance for loan losses
|
16
|
|
29
|
|
9
|
|
34
|
|
16
|
|
48
|
|
—
|
|
|
33
|
|
185
|
|
(a)
|
Includes
$1,235 million
of domestic overdrafts,
$17,548 million
of margin loans and
$855 million
of other loans at
Sept. 30, 2014
.
|
Allowance for credit losses activity for the nine months ended Sept. 30, 2015
|
Wealth management loans and mortgages
|
|
Other
residential mortgages |
|
All
Other |
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate |
|
Financial
institutions |
|
Lease
financings |
|
|||||||||||||||||||
Beginning balance
|
$
|
60
|
|
$
|
50
|
|
$
|
31
|
|
$
|
32
|
|
$
|
22
|
|
$
|
41
|
|
$
|
—
|
|
$
|
44
|
|
$
|
280
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
(2
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
4
|
|
—
|
|
—
|
|
5
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
3
|
|
|||||||||
Provision
|
16
|
|
12
|
|
(4
|
)
|
(14
|
)
|
1
|
|
(8
|
)
|
—
|
|
(6
|
)
|
(3
|
)
|
|||||||||
Ending balance
|
$
|
76
|
|
$
|
62
|
|
$
|
28
|
|
$
|
18
|
|
$
|
23
|
|
$
|
35
|
|
$
|
—
|
|
$
|
38
|
|
$
|
280
|
|
Allowance for credit losses activity for the nine months ended Sept. 30, 2014
|
Wealth management loans and mortgages
|
|
Other
residential mortgages |
|
All
Other |
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate |
|
Financial
institutions |
|
Lease
financings |
|
|||||||||||||||||||
Beginning balance
|
$
|
83
|
|
$
|
41
|
|
$
|
49
|
|
$
|
37
|
|
$
|
24
|
|
$
|
54
|
|
$
|
—
|
|
$
|
56
|
|
$
|
344
|
|
Charge-offs
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(2
|
)
|
—
|
|
(3
|
)
|
(10
|
)
|
|||||||||
Recoveries
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
3
|
|
|||||||||
Net (charge-offs) recoveries
|
(3
|
)
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(3
|
)
|
(7
|
)
|
|||||||||
Provision
|
(9
|
)
|
6
|
|
(24
|
)
|
(3
|
)
|
(1
|
)
|
(6
|
)
|
—
|
|
(12
|
)
|
(49
|
)
|
|||||||||
Ending balance
|
$
|
71
|
|
$
|
47
|
|
$
|
25
|
|
$
|
34
|
|
$
|
22
|
|
$
|
48
|
|
$
|
—
|
|
$
|
41
|
|
$
|
288
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Nonperforming assets
(in millions)
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
|||
Nonperforming loans:
|
|
|
|||||
Other residential mortgages
|
$
|
103
|
|
$
|
112
|
|
|
Wealth management loans and mortgages
|
12
|
|
12
|
|
|||
Commercial real estate
|
1
|
|
1
|
|
|||
Total nonperforming loans
|
116
|
|
125
|
|
|||
Other assets owned
|
7
|
|
3
|
|
|||
Total nonperforming assets
(a)
|
$
|
123
|
|
$
|
128
|
|
(a)
|
Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in the loans of consolidated investment management funds are nonperforming loans of
$53 million
at
Dec. 31, 2014
. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above. In the second quarter of 2015, BNY Mellon adopted the new accounting guidance included in ASU 2015-02, Consolidations. As a result, we deconsolidated substantially all of the loans of consolidated investment management funds retrospectively to Jan. 1, 2015.
|
Lost interest
|
|
|
|
|
|
||||||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
YTD15
|
|
YTD14
|
|
|||||
Amount by which interest income recognized on nonperforming loans exceeded reversals
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1
|
|
Amount by which interest income would have increased if nonperforming loans at period end had been performing for the entire period
|
$
|
2
|
|
$
|
1
|
|
$
|
2
|
|
$
|
5
|
|
$
|
5
|
|
Impaired loans
|
Quarter ended
|
|||||||||||||||||||
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|||||||||||||||
(in millions)
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
||||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
|
||||||||||||
Wealth management loans and mortgages
|
$
|
6
|
|
$
|
—
|
|
|
$
|
6
|
|
$
|
—
|
|
|
$
|
7
|
|
$
|
—
|
|
Commercial
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
13
|
|
—
|
|
||||||
Commercial real estate
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
3
|
|
—
|
|
||||||
Foreign
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
2
|
|
—
|
|
||||||
Total impaired loans with an allowance
|
6
|
|
—
|
|
|
6
|
|
—
|
|
|
25
|
|
—
|
|
||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
|
||||||||||||
Wealth management loans and mortgages
|
2
|
|
—
|
|
|
2
|
|
—
|
|
|
2
|
|
—
|
|
||||||
Commercial real estate
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
||||||
Total impaired loans without an allowance
(a)
|
2
|
|
—
|
|
|
2
|
|
—
|
|
|
3
|
|
—
|
|
||||||
Total impaired loans
|
$
|
8
|
|
$
|
—
|
|
|
$
|
8
|
|
$
|
—
|
|
|
$
|
28
|
|
$
|
—
|
|
(a)
|
When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Impaired loans
|
Year-to-date
|
||||||||||||
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
||||||||||
(in millions)
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
||||
Impaired loans with an allowance:
|
|
|
|
|
|
||||||||
Wealth management loans and mortgages
|
$
|
6
|
|
$
|
—
|
|
|
$
|
8
|
|
$
|
—
|
|
Commercial
|
—
|
|
—
|
|
|
14
|
|
—
|
|
||||
Commercial real estate
|
—
|
|
—
|
|
|
2
|
|
—
|
|
||||
Foreign
|
—
|
|
—
|
|
|
4
|
|
—
|
|
||||
Total impaired loans with an allowance
|
6
|
|
—
|
|
|
28
|
|
—
|
|
||||
Impaired loans without an allowance
:
|
|
|
|
|
|
||||||||
Wealth management loans and mortgages
|
2
|
|
—
|
|
|
2
|
|
—
|
|
||||
Commercial real estate
|
—
|
|
—
|
|
|
1
|
|
—
|
|
||||
Total impaired loans without an allowance
(a)
|
2
|
|
—
|
|
|
3
|
|
—
|
|
||||
Total impaired loans
|
$
|
8
|
|
$
|
—
|
|
|
$
|
31
|
|
$
|
—
|
|
(a)
|
When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.
|
Impaired loans
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||||||||
(in millions)
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
(a)
|
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
(a)
|
|
||||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
||||||||||||
Wealth management loans and mortgages
|
$
|
7
|
|
$
|
7
|
|
$
|
1
|
|
|
$
|
6
|
|
$
|
6
|
|
$
|
1
|
|
Commercial real estate
|
—
|
|
3
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Total impaired loans with an allowance
|
7
|
|
10
|
|
2
|
|
|
6
|
|
6
|
|
1
|
|
||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
||||||||||||
Wealth management loans and mortgages
|
2
|
|
2
|
|
N/A
|
|
|
2
|
|
2
|
|
N/A
|
|
||||||
Commercial real estate
|
—
|
|
—
|
|
N/A
|
|
|
1
|
|
3
|
|
N/A
|
|
||||||
Total impaired loans without an allowance
(b)
|
2
|
|
2
|
|
N/A
|
|
|
3
|
|
5
|
|
N/A
|
|
||||||
Total impaired loans
(c)
|
$
|
9
|
|
$
|
12
|
|
$
|
2
|
|
|
$
|
9
|
|
$
|
11
|
|
$
|
1
|
|
(a)
|
The allowance for impaired loans is included in the allowance for loan losses.
|
(b)
|
When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.
|
(c)
|
Excludes an aggregate of less than
$1 million
of impaired loans in amounts individually less than
$1 million
at both
Sept. 30, 2015
and
Dec. 31, 2014
. The allowance for loan loss associated with these loans totaled less than
$1 million
at both
Sept. 30, 2015
and
Dec. 31, 2014
.
|
Past due loans and still accruing interest
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||||||||||||||
|
Days past due
|
Total
past due
|
|
|
Days past due
|
Total
past due
|
|
||||||||||||||||||
(in millions)
|
30-59
|
|
60-89
|
|
>90
|
|
30-59
|
|
60-89
|
|
>90
|
|
|||||||||||||
Commercial real estate
|
$
|
51
|
|
$
|
1
|
|
$
|
2
|
|
$
|
54
|
|
|
$
|
79
|
|
$
|
—
|
|
$
|
—
|
|
$
|
79
|
|
Wealth management loans and mortgages
|
5
|
|
3
|
|
1
|
|
9
|
|
|
45
|
|
—
|
|
1
|
|
46
|
|
||||||||
Other residential mortgages
|
17
|
|
3
|
|
7
|
|
27
|
|
|
23
|
|
3
|
|
5
|
|
31
|
|
||||||||
Total past due loans
|
$
|
73
|
|
$
|
7
|
|
$
|
10
|
|
$
|
90
|
|
|
$
|
147
|
|
$
|
3
|
|
$
|
6
|
|
$
|
156
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
TDRs
|
3Q15
|
|
2Q15
|
|
3Q14
|
|||||||||||||||||||||||||||
|
|
Outstanding
recorded investment
|
|
|
Outstanding
recorded investment
|
|
|
Outstanding
recorded investment
|
||||||||||||||||||||||||
(dollars in millions)
|
Number of
contracts
|
|
Pre-modification
|
|
Post-modification
|
|
|
Number of contracts
|
|
Pre-modification
|
|
Post-modification
|
|
|
Number of contracts
|
|
Pre-modification
|
|
Post-modification
|
|
||||||||||||
Other residential mortgages
|
14
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
20
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
27
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Total TDRs
|
14
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
20
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
27
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Wealth management loans and mortgages – Credit risk
profile by internally assigned grade
|
||||||
(in millions)
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
||
Wealth management loans:
|
|
|
||||
Investment grade
|
$
|
6,270
|
|
$
|
5,621
|
|
Non-investment grade
|
114
|
|
29
|
|
||
Wealth management mortgages
|
6,279
|
|
5,534
|
|
||
Total
|
$
|
12,663
|
|
$
|
11,184
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Goodwill by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2014
|
$
|
9,328
|
|
|
$
|
8,467
|
|
|
$
|
74
|
|
|
$
|
17,869
|
|
Acquisitions/dispositions
|
10
|
|
|
—
|
|
|
(22
|
)
|
|
(12
|
)
|
||||
Foreign currency translation
|
(93
|
)
|
|
(80
|
)
|
|
(2
|
)
|
|
(175
|
)
|
||||
Other
(b)
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Balance at Sept. 30, 2015
|
$
|
9,242
|
|
|
$
|
8,387
|
|
|
$
|
50
|
|
|
$
|
17,679
|
|
Goodwill by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2013
|
$
|
9,446
|
|
|
$
|
8,550
|
|
|
$
|
77
|
|
|
$
|
18,073
|
|
Acquisition/dispositions
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
||||
Foreign currency translation
|
(43
|
)
|
|
(75
|
)
|
|
(2
|
)
|
|
(120
|
)
|
||||
Balance at Sept. 30, 2014
|
$
|
9,403
|
|
|
$
|
8,514
|
|
|
$
|
75
|
|
|
$
|
17,992
|
|
(a)
|
Includes the reclassification of goodwill associated with Meriten Investment Management from Investment Management to Other segment.
|
(b)
|
Other changes in goodwill include purchase price adjustments and certain other reclassifications.
|
Intangible assets – net carrying amount by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2014
|
$
|
1,911
|
|
|
$
|
1,355
|
|
|
$
|
861
|
|
|
$
|
4,127
|
|
Acquisitions/dispositions
|
9
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
||||
Amortization
|
(73
|
)
|
|
(122
|
)
|
|
(2
|
)
|
|
(197
|
)
|
||||
Foreign currency translation
|
(10
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(16
|
)
|
||||
Balance at Sept. 30, 2015
|
$
|
1,837
|
|
|
$
|
1,228
|
|
|
$
|
849
|
|
|
$
|
3,914
|
|
Intangible assets – net carrying amount by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2013
|
$
|
2,047
|
|
|
$
|
1,538
|
|
|
$
|
867
|
|
|
$
|
4,452
|
|
Amortization
|
(89
|
)
|
|
(132
|
)
|
|
(4
|
)
|
|
(225
|
)
|
||||
Foreign currency translation
|
(6
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(12
|
)
|
||||
Balance at Sept. 30, 2014
|
$
|
1,952
|
|
|
$
|
1,401
|
|
|
$
|
862
|
|
|
$
|
4,215
|
|
(a)
|
Includes the reclassification of intangible assets associated with Meriten Investment Management from Investment Management to Other segment.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Intangible assets
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
||||||||||
(in millions)
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
carrying
amount
|
|
Remaining
weighted-
average
amortization
period
|
|
Net
carrying
amount
|
|
||||
Subject to amortization:
|
|
|
|
|
|
|
||||||||
Customer relationships—Investment Management
|
$
|
1,719
|
|
$
|
(1,335
|
)
|
$
|
384
|
|
11 years
|
|
$
|
464
|
|
Customer contracts—Investment Services
|
2,316
|
|
(1,465
|
)
|
851
|
|
10 years
|
|
974
|
|
||||
Other
|
76
|
|
(66
|
)
|
10
|
|
3 years
|
|
14
|
|
||||
Total subject to amortization
|
4,111
|
|
(2,866
|
)
|
1,245
|
|
11 years
|
|
1,452
|
|
||||
Not subject to amortization:
(a)
|
|
|
|
|
|
|
||||||||
Trade name
|
1,359
|
|
N/A
|
|
1,359
|
|
N/A
|
|
1,360
|
|
||||
Customer relationships
|
1,310
|
|
N/A
|
|
1,310
|
|
N/A
|
|
1,315
|
|
||||
Total not subject to amortization
|
2,669
|
|
N/A
|
|
2,669
|
|
N/A
|
|
2,675
|
|
||||
Total intangible assets
|
$
|
6,780
|
|
$
|
(2,866
|
)
|
$
|
3,914
|
|
N/A
|
|
$
|
4,127
|
|
(a)
|
Intangible assets not subject to amortization have an indefinite life.
|
For the year ended
Dec. 31, |
Estimated amortization expense
(in millions)
|
|
||
2015
|
|
$
|
263
|
|
2016
|
|
238
|
|
|
2017
|
|
214
|
|
|
2018
|
|
181
|
|
|
2019
|
|
108
|
|
Other assets
|
Sept. 30,
|
|
Dec. 31,
|
|
||
(in millions)
|
2015
|
|
2014
|
|
||
Accounts receivable
|
$
|
4,808
|
|
$
|
4,166
|
|
Corporate/bank owned life insurance
|
4,666
|
|
4,598
|
|
||
Equity in joint venture and other investments
(a)
|
3,037
|
|
3,287
|
|
||
Fails to deliver
|
2,089
|
|
1,351
|
|
||
Software
|
1,352
|
|
1,332
|
|
||
Income taxes receivable
|
1,304
|
|
2,142
|
|
||
Fair value of hedging derivatives
|
790
|
|
851
|
|
||
Prepaid pension assets
|
645
|
|
708
|
|
||
Prepaid expenses
|
478
|
|
451
|
|
||
Due from customers on acceptances
|
298
|
|
247
|
|
||
Other
|
2,682
|
|
1,357
|
|
||
Total other assets
|
$
|
22,149
|
|
$
|
20,490
|
|
(a)
|
Includes Federal Reserve Bank stock of
$452 million
and
$447 million
, respectively, at cost.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Seed capital and private equity investments valued using NAV
|
|||||||||||||||||||
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||||||||
(dollar amounts
in millions)
|
Fair
value
|
|
Unfunded
commitments
|
|
Redemption
frequency
|
Redemption
notice period
|
|
Fair
value
|
|
Unfunded
commitments
|
|
Redemption
frequency
|
Redemption
notice period
|
||||||
Seed capital and other funds
(a)
|
$
|
69
|
|
|
$
|
1
|
|
Daily-quarterly
|
0-180 days
|
|
$
|
307
|
|
|
$
|
—
|
|
Daily-quarterly
|
0-180 days
|
Private equity investments
(b)(c)
|
34
|
|
|
59
|
|
N/A
|
N/A
|
|
35
|
|
|
45
|
|
N/A
|
N/A
|
||||
Total
|
$
|
103
|
|
|
$
|
60
|
|
|
|
|
$
|
342
|
|
|
$
|
45
|
|
|
|
(a)
|
Other funds include various leveraged loans, structured credit funds and hedge funds. Redemption notice periods vary by fund.
|
(b)
|
Private equity funds primarily include numerous venture capital funds that invest in various sectors of the economy. Private equity funds do not have redemption rights. Distributions from such funds will be received as the underlying investments in the funds are liquidated.
|
(c)
|
Includes investments and unfunded commitments related to SBICs, which are compliant with the Volcker Rule, of
$34 million
and
$59 million
, respectively, at
Sept. 30, 2015
and
$18 million
and
$45 million
, respectively, at
Dec. 31, 2014
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net interest revenue
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(in millions)
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|||||
Interest revenue
|
|
|
|
|
|
|
||||||||||
Non-margin loans
|
$
|
188
|
|
$
|
179
|
|
$
|
174
|
|
|
$
|
540
|
|
$
|
519
|
|
Margin loans
|
53
|
|
51
|
|
48
|
|
|
154
|
|
134
|
|
|||||
Securities:
|
|
|
|
|
|
|
||||||||||
Taxable
|
453
|
|
468
|
|
398
|
|
|
1,360
|
|
1,186
|
|
|||||
Exempt from federal income taxes
|
20
|
|
21
|
|
24
|
|
|
63
|
|
78
|
|
|||||
Total securities
|
473
|
|
489
|
|
422
|
|
|
1,423
|
|
1,264
|
|
|||||
Deposits with banks
|
24
|
|
28
|
|
58
|
|
|
82
|
|
208
|
|
|||||
Deposits with the Federal Reserve and other central banks
|
43
|
|
43
|
|
51
|
|
|
131
|
|
152
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
39
|
|
36
|
|
24
|
|
|
105
|
|
60
|
|
|||||
Trading assets
|
18
|
|
21
|
|
32
|
|
|
57
|
|
95
|
|
|||||
Total interest revenue
|
838
|
|
847
|
|
809
|
|
|
2,492
|
|
2,432
|
|
|||||
Interest expense
|
|
|
|
|
|
|
||||||||||
Deposits
|
9
|
|
8
|
|
24
|
|
|
32
|
|
70
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
(1
|
)
|
(1
|
)
|
(4
|
)
|
|
(5
|
)
|
(11
|
)
|
|||||
Trading liabilities
|
2
|
|
3
|
|
6
|
|
|
7
|
|
21
|
|
|||||
Other borrowed funds
|
2
|
|
3
|
|
1
|
|
|
7
|
|
4
|
|
|||||
Commercial paper
|
1
|
|
1
|
|
1
|
|
|
2
|
|
1
|
|
|||||
Customer payables
|
1
|
|
2
|
|
2
|
|
|
5
|
|
6
|
|
|||||
Long-term debt
|
65
|
|
52
|
|
58
|
|
|
178
|
|
173
|
|
|||||
Total interest expense
|
79
|
|
68
|
|
88
|
|
|
226
|
|
264
|
|
|||||
Net interest revenue
|
$
|
759
|
|
$
|
779
|
|
$
|
721
|
|
|
$
|
2,266
|
|
$
|
2,168
|
|
Net periodic benefit cost (credit)
|
|
|
|
Quarter ended
|
|
|
|
|
|||||||||||||||||||||
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
||||||||||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|||||||||
Service cost
|
$
|
—
|
|
$
|
8
|
|
$
|
1
|
|
|
$
|
15
|
|
$
|
8
|
|
$
|
1
|
|
|
$
|
14
|
|
$
|
9
|
|
$
|
1
|
|
Interest cost
|
42
|
|
10
|
|
2
|
|
|
42
|
|
10
|
|
2
|
|
|
45
|
|
11
|
|
3
|
|
|||||||||
Expected return on assets
|
(83
|
)
|
(13
|
)
|
(2
|
)
|
|
(83
|
)
|
(13
|
)
|
(2
|
)
|
|
(79
|
)
|
(15
|
)
|
(2
|
)
|
|||||||||
Curtailment (gain)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Other
|
26
|
|
6
|
|
—
|
|
|
26
|
|
6
|
|
—
|
|
|
28
|
|
4
|
|
—
|
|
|||||||||
Net periodic benefit cost (credit)
|
$
|
(15
|
)
|
$
|
11
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
11
|
|
$
|
1
|
|
|
$
|
8
|
|
$
|
9
|
|
$
|
2
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net periodic benefit cost (credit)
|
|
Year-to-date
|
|
|
|||||||||||||||
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
||||||
Service cost
|
$
|
30
|
|
$
|
24
|
|
$
|
3
|
|
|
$
|
42
|
|
$
|
27
|
|
$
|
3
|
|
Interest cost
|
127
|
|
30
|
|
6
|
|
|
135
|
|
33
|
|
9
|
|
||||||
Expected return on assets
|
(249
|
)
|
(39
|
)
|
(6
|
)
|
|
(237
|
)
|
(45
|
)
|
(6
|
)
|
||||||
Curtailment (gain)
|
(30
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Other
|
83
|
|
18
|
|
—
|
|
|
86
|
|
12
|
|
—
|
|
||||||
Net periodic benefit cost (credit)
|
$
|
(39
|
)
|
$
|
33
|
|
$
|
3
|
|
|
$
|
26
|
|
$
|
27
|
|
$
|
6
|
|
Streamlining actions 2014 – restructuring charge by business
|
Total charges since inception
|
|
|||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
|||||
Investment Management
|
$
|
7
|
|
$
|
5
|
|
$
|
35
|
|
Investment Services
|
5
|
|
(1
|
)
|
89
|
|
|||
Other segment (including Business Partners)
|
3
|
|
4
|
|
81
|
|
|||
Total restructuring charge (recovery)
|
$
|
15
|
|
$
|
8
|
|
$
|
205
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Operational Excellence Initiatives 2011 – restructuring reserve activity
|
|||||||||
(in millions)
|
Severance
|
|
Other
|
|
Total
|
|
|||
Original restructuring charge
|
$
|
78
|
|
$
|
29
|
|
$
|
107
|
|
Net additional charges (net recovery/gain)
|
91
|
|
(57
|
)
|
34
|
|
|||
Utilization
|
(149
|
)
|
28
|
|
(121
|
)
|
|||
Balance at June 30, 2015
|
20
|
|
—
|
|
20
|
|
|||
Net additional charges (recovery)
|
(8
|
)
|
—
|
|
(8
|
)
|
|||
Utilization
|
(2
|
)
|
—
|
|
(2
|
)
|
|||
Balance at Sept. 30, 2015
|
$
|
10
|
|
$
|
—
|
|
$
|
10
|
|
Operational Excellence Initiatives 2011 – restructuring charge (recovery) by business
|
Total charges since inception
|
|
|||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
|||||
Investment Management
|
$
|
(3
|
)
|
$
|
—
|
|
$
|
48
|
|
Investment Services
|
(2
|
)
|
—
|
|
82
|
|
|||
Other segment (including Business Partners)
|
(3
|
)
|
—
|
|
3
|
|
|||
Total restructuring charge (recovery)
|
$
|
(8
|
)
|
$
|
—
|
|
$
|
133
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
(a)
|
Includes VMEs with assets of
$91 million
, liabilities of
$1 million
and nonredeemable noncontrolling interests of
$3 million
.
|
(a)
|
Includes VMEs with assets of
$855 million
, liabilities of
$148 million
and nonredeemable noncontrolling interests of
$544 million
.
|
Non-consolidated VIEs at Sept. 30, 2015
|
|||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|||
Other
|
$
|
175
|
|
$
|
—
|
|
$
|
175
|
|
Non-consolidated VIEs at Dec. 31, 2014
|
|||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|||
Other
|
$
|
148
|
|
$
|
—
|
|
$
|
148
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Preferred stock summary
|
Liquidation
preference
per share
(in dollars)
|
|
Total shares issued and outstanding
|
|
|
|
||||||||||||
|
|
|
|
Carrying value
(a)
|
||||||||||||||
(dollars in millions, unless
otherwise noted)
|
Per annum dividend rate
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
||||||||
Series A
|
Noncumulative Perpetual Preferred Stock
|
Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%
|
|
$
|
100,000
|
|
|
5,001
|
|
5,001
|
|
|
$
|
500
|
|
$
|
500
|
|
Series C
|
Noncumulative Perpetual Preferred Stock
|
5.2
|
%
|
$
|
100,000
|
|
|
5,825
|
|
5,825
|
|
|
568
|
|
568
|
|
||
Series D
|
Noncumulative Perpetual Preferred Stock
|
4.50% commencing Dec. 20, 2013 to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%
|
|
$
|
100,000
|
|
|
5,000
|
|
5,000
|
|
|
494
|
|
494
|
|
||
Series E
|
Noncumulative Perpetual Preferred Stock
|
4.95% commencing Dec. 20, 2015 to and including June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42%
|
|
$
|
100,000
|
|
|
10,000
|
|
—
|
|
|
990
|
|
—
|
|
||
Total
|
|
|
|
25,826
|
|
15,826
|
|
|
$
|
2,552
|
|
$
|
1,562
|
|
•
|
$1,011.11
per share on the Series A Preferred Stock (equivalent to
$10.1111
per Normal Preferred Capital Security of Mellon Capital IV, each representing 1/100th interest in a share of Series A Preferred Stock); and
|
•
|
$1,300.00
per share on the Series C Preferred Stock (equivalent to
$0.3250
per depositary share, each representing a 1/4,000th interest in a share of the Series C Preferred Stock).
|
Notes to Consolidated Financial Statements
(continued)
|
|
Components of other comprehensive income (loss)
|
|||||||||||||||||||||||||||||
|
Quarter ended
|
||||||||||||||||||||||||||||
|
Sept. 30, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2014
|
||||||||||||||||||||||||
(in millions)
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|||||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign currency translation adjustments arising during the period
|
$
|
(132
|
)
|
$
|
(31
|
)
|
$
|
(163
|
)
|
|
$
|
239
|
|
$
|
90
|
|
$
|
329
|
|
|
$
|
(505
|
)
|
$
|
(84
|
)
|
$
|
(589
|
)
|
Total foreign currency translation
|
(132
|
)
|
(31
|
)
|
(163
|
)
|
|
239
|
|
90
|
|
329
|
|
|
(505
|
)
|
(84
|
)
|
(589
|
)
|
|||||||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized gain (loss) arising during period
|
(3
|
)
|
10
|
|
7
|
|
|
(499
|
)
|
141
|
|
(358
|
)
|
|
(18
|
)
|
22
|
|
4
|
|
|||||||||
Reclassification adjustment
(a)
|
(22
|
)
|
8
|
|
(14
|
)
|
|
(16
|
)
|
6
|
|
(10
|
)
|
|
(20
|
)
|
7
|
|
(13
|
)
|
|||||||||
Net unrealized gain (loss) on assets available-for-sale
|
(25
|
)
|
18
|
|
(7
|
)
|
|
(515
|
)
|
147
|
|
(368
|
)
|
|
(38
|
)
|
29
|
|
(9
|
)
|
|||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net gain (loss) arising during the period
|
3
|
|
(1
|
)
|
2
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
(a)
|
32
|
|
(11
|
)
|
21
|
|
|
32
|
|
(11
|
)
|
21
|
|
|
31
|
|
(12
|
)
|
19
|
|
|||||||||
Total defined benefit plans
|
35
|
|
(12
|
)
|
23
|
|
|
32
|
|
(11
|
)
|
21
|
|
|
31
|
|
(12
|
)
|
19
|
|
|||||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized hedge gain (loss) arising during period
|
(3
|
)
|
(6
|
)
|
(9
|
)
|
|
1
|
|
1
|
|
2
|
|
|
15
|
|
(6
|
)
|
9
|
|
|||||||||
Reclassification adjustment
(a)
|
3
|
|
6
|
|
9
|
|
|
11
|
|
(4
|
)
|
7
|
|
|
(31
|
)
|
10
|
|
(21
|
)
|
|||||||||
Net unrealized gain (loss) on cash flow hedges
|
—
|
|
—
|
|
—
|
|
|
12
|
|
(3
|
)
|
9
|
|
|
(16
|
)
|
4
|
|
(12
|
)
|
|||||||||
Total other comprehensive income (loss)
|
$
|
(122
|
)
|
$
|
(25
|
)
|
$
|
(147
|
)
|
|
$
|
(232
|
)
|
$
|
223
|
|
$
|
(9
|
)
|
|
$
|
(528
|
)
|
$
|
(63
|
)
|
$
|
(591
|
)
|
(a)
|
The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the Consolidated Income Statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the Consolidated Income Statement. See Note 17 of the Notes to Consolidated Financial Statements for the location of the reclassification adjustment related to cash flow hedges on the Consolidated Income Statement.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Components of other comprehensive income (loss)
|
|||||||||||||||||||
|
Year-to-date
|
||||||||||||||||||
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
||||||||||||||||
(in millions)
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments arising during the period
|
$
|
(396
|
)
|
$
|
(39
|
)
|
$
|
(435
|
)
|
|
$
|
(432
|
)
|
$
|
(43
|
)
|
$
|
(475
|
)
|
Total foreign currency translation
|
(396
|
)
|
(39
|
)
|
(435
|
)
|
|
(432
|
)
|
(43
|
)
|
(475
|
)
|
||||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gain (loss) arising during period
|
(300
|
)
|
83
|
|
(217
|
)
|
|
519
|
|
(143
|
)
|
376
|
|
||||||
Reclassification adjustment
(a)
|
(62
|
)
|
23
|
|
(39
|
)
|
|
(60
|
)
|
20
|
|
(40
|
)
|
||||||
Net unrealized gain (loss) on assets available-for-sale
|
(362
|
)
|
106
|
|
(256
|
)
|
|
459
|
|
(123
|
)
|
336
|
|
||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
||||||||||||
Net gain (loss) arising during the period
|
(182
|
)
|
75
|
|
(107
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
(a)
|
71
|
|
(24
|
)
|
47
|
|
|
92
|
|
(37
|
)
|
55
|
|
||||||
Total defined benefit plans
|
(111
|
)
|
51
|
|
(60
|
)
|
|
92
|
|
(37
|
)
|
55
|
|
||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized hedge gain (loss) arising during period
|
—
|
|
—
|
|
—
|
|
|
18
|
|
(9
|
)
|
9
|
|
||||||
Reclassification adjustment
(a)
|
11
|
|
(3
|
)
|
8
|
|
|
(34
|
)
|
12
|
|
(22
|
)
|
||||||
Net unrealized gain (loss) on cash flow hedges
|
11
|
|
(3
|
)
|
8
|
|
|
(16
|
)
|
3
|
|
(13
|
)
|
||||||
Total other comprehensive income (loss)
|
$
|
(858
|
)
|
$
|
115
|
|
$
|
(743
|
)
|
|
$
|
103
|
|
$
|
(200
|
)
|
$
|
(97
|
)
|
(a)
|
The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the Consolidated Income Statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the Consolidated Income Statement. See Note 17 of the Notes to Consolidated Financial Statements for the location of the reclassification adjustment related to cash flow hedges on the Consolidated Income Statement.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a recurring basis at Sept. 30, 2015
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value |
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
12,513
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
12,513
|
|
U.S. Government agencies
|
—
|
|
431
|
|
—
|
|
—
|
|
431
|
|
|||||
Sovereign debt/sovereign guaranteed
|
35
|
|
14,061
|
|
—
|
|
—
|
|
14,096
|
|
|||||
State and political subdivisions
(b)
|
—
|
|
4,304
|
|
11
|
|
—
|
|
4,315
|
|
|||||
Agency RMBS
|
—
|
|
23,335
|
|
—
|
|
—
|
|
23,335
|
|
|||||
Non-agency RMBS
|
—
|
|
841
|
|
—
|
|
—
|
|
841
|
|
|||||
Other RMBS
|
—
|
|
1,311
|
|
—
|
|
—
|
|
1,311
|
|
|||||
Commercial MBS
|
—
|
|
1,568
|
|
—
|
|
—
|
|
1,568
|
|
|||||
Agency commercial MBS
|
—
|
|
3,762
|
|
—
|
|
—
|
|
3,762
|
|
|||||
Asset-backed CLOs
|
—
|
|
2,291
|
|
—
|
|
—
|
|
2,291
|
|
|||||
Other asset-backed securities
|
—
|
|
3,129
|
|
—
|
|
—
|
|
3,129
|
|
|||||
Equity securities
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||
Money market funds
(b)
|
770
|
|
—
|
|
—
|
|
—
|
|
770
|
|
|||||
Corporate bonds
|
—
|
|
1,822
|
|
—
|
|
—
|
|
1,822
|
|
|||||
Other debt securities
|
—
|
|
2,248
|
|
—
|
|
—
|
|
2,248
|
|
|||||
Foreign covered bonds
|
2,038
|
|
270
|
|
—
|
|
—
|
|
2,308
|
|
|||||
Non-agency RMBS
(c)
|
—
|
|
1,938
|
|
—
|
|
—
|
|
1,938
|
|
|||||
Total available-for-sale securities
|
15,360
|
|
61,311
|
|
11
|
|
—
|
|
76,682
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(b)
|
561
|
|
1,971
|
|
—
|
|
—
|
|
2,532
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
28
|
|
11,454
|
|
—
|
|
(8,893
|
)
|
2,589
|
|
|||||
Foreign exchange
|
—
|
|
4,222
|
|
—
|
|
(2,782
|
)
|
1,440
|
|
|||||
Equity
|
41
|
|
115
|
|
—
|
|
(72
|
)
|
84
|
|
|||||
Total derivative assets not designated as hedging
|
69
|
|
15,791
|
|
—
|
|
(11,747
|
)
|
4,113
|
|
|||||
Total trading assets
|
630
|
|
17,762
|
|
—
|
|
(11,747
|
)
|
6,645
|
|
|||||
Loans
|
—
|
|
338
|
|
—
|
|
—
|
|
338
|
|
|||||
Other assets:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
648
|
|
—
|
|
—
|
|
648
|
|
|||||
Foreign exchange
|
—
|
|
142
|
|
—
|
|
—
|
|
142
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
790
|
|
—
|
|
—
|
|
790
|
|
|||||
Other assets
(d)
|
198
|
|
109
|
|
—
|
|
—
|
|
307
|
|
|||||
Other assets measured at net asset value
|
|
|
|
|
103
|
|
|||||||||
Total other assets
|
198
|
|
899
|
|
—
|
|
—
|
|
1,200
|
|
|||||
Subtotal assets of operations at fair value
|
16,188
|
|
80,310
|
|
11
|
|
(11,747
|
)
|
84,865
|
|
|||||
Percentage of assets prior to netting
|
17
|
%
|
83
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading assets
|
370
|
|
1,717
|
|
—
|
|
—
|
|
2,087
|
|
|||||
Other assets
|
197
|
|
13
|
|
—
|
|
—
|
|
210
|
|
|||||
Total assets of consolidated investment management funds
|
567
|
|
1,730
|
|
—
|
|
—
|
|
2,297
|
|
|||||
Total assets
|
$
|
16,755
|
|
$
|
82,040
|
|
$
|
11
|
|
$
|
(11,747
|
)
|
$
|
87,162
|
|
Percentage of assets prior to netting
|
17
|
%
|
83
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Sept. 30, 2015
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value |
|
|||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
246
|
|
$
|
154
|
|
$
|
—
|
|
$
|
—
|
|
$
|
400
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
17
|
|
11,406
|
|
—
|
|
(8,991
|
)
|
2,432
|
|
|||||
Foreign exchange
|
—
|
|
4,179
|
|
—
|
|
(2,352
|
)
|
1,827
|
|
|||||
Equity and other contracts
|
18
|
|
133
|
|
—
|
|
(54
|
)
|
97
|
|
|||||
Total derivative liabilities not designated as hedging
|
35
|
|
15,718
|
|
—
|
|
(11,397
|
)
|
4,356
|
|
|||||
Total trading liabilities
|
281
|
|
15,872
|
|
—
|
|
(11,397
|
)
|
4,756
|
|
|||||
Long-term debt
(b)
|
—
|
|
362
|
|
—
|
|
—
|
|
362
|
|
|||||
Other liabilities - derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
470
|
|
—
|
|
—
|
|
470
|
|
|||||
Foreign exchange
|
—
|
|
48
|
|
—
|
|
—
|
|
48
|
|
|||||
Total other liabilities - derivative liabilities designated as hedging
|
—
|
|
518
|
|
—
|
|
—
|
|
518
|
|
|||||
Subtotal liabilities of operations at fair value
|
281
|
|
16,752
|
|
—
|
|
(11,397
|
)
|
5,636
|
|
|||||
Percentage of liabilities prior to netting
|
2
|
%
|
98
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading liabilities
|
—
|
|
1,072
|
|
—
|
|
—
|
|
1,072
|
|
|||||
Other liabilities
|
1
|
|
90
|
|
—
|
|
—
|
|
91
|
|
|||||
Total liabilities of consolidated investment management funds
|
1
|
|
1,162
|
|
—
|
|
—
|
|
1,163
|
|
|||||
Total liabilities
|
$
|
282
|
|
$
|
17,914
|
|
$
|
—
|
|
$
|
(11,397
|
)
|
$
|
6,799
|
|
Percentage of liabilities prior to netting
|
2
|
%
|
98
|
%
|
—
|
%
|
|
|
(a)
|
ASC 815 permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities, and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.
|
(b)
|
Includes certain interests in securitizations.
|
(c)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(d)
|
Includes private equity investments and seed capital.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a recurring basis at Dec. 31, 2014
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value
|
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
19,997
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
19,997
|
|
U.S. Government agencies
|
—
|
|
343
|
|
—
|
|
—
|
|
343
|
|
|||||
Sovereign debt/sovereign guaranteed
|
40
|
|
17,244
|
|
—
|
|
—
|
|
17,284
|
|
|||||
State and political subdivisions
(b)
|
—
|
|
5,236
|
|
11
|
|
—
|
|
5,247
|
|
|||||
Agency RMBS
|
—
|
|
32,600
|
|
—
|
|
—
|
|
32,600
|
|
|||||
Non-agency RMBS
|
—
|
|
953
|
|
—
|
|
—
|
|
953
|
|
|||||
Other RMBS
|
—
|
|
1,551
|
|
—
|
|
—
|
|
1,551
|
|
|||||
Commercial MBS
|
—
|
|
1,959
|
|
—
|
|
—
|
|
1,959
|
|
|||||
Agency commercial MBS
|
—
|
|
3,132
|
|
—
|
|
—
|
|
3,132
|
|
|||||
Asset-backed CLOs
|
—
|
|
2,130
|
|
—
|
|
—
|
|
2,130
|
|
|||||
Other asset-backed securities
|
—
|
|
3,240
|
|
—
|
|
—
|
|
3,240
|
|
|||||
Equity securities
|
95
|
|
—
|
|
—
|
|
—
|
|
95
|
|
|||||
Money market funds
(b)
|
763
|
|
—
|
|
—
|
|
—
|
|
763
|
|
|||||
Corporate bonds
|
—
|
|
1,785
|
|
—
|
|
—
|
|
1,785
|
|
|||||
Other debt securities
|
—
|
|
2,169
|
|
—
|
|
—
|
|
2,169
|
|
|||||
Foreign covered bonds
|
2,250
|
|
618
|
|
—
|
|
—
|
|
2,868
|
|
|||||
Non-agency RMBS
(c)
|
—
|
|
2,214
|
|
—
|
|
—
|
|
2,214
|
|
|||||
Total available-for-sale securities
|
23,145
|
|
75,174
|
|
11
|
|
—
|
|
98,330
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(b)
|
2,204
|
|
2,217
|
|
—
|
|
—
|
|
4,421
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
7
|
|
17,137
|
|
6
|
|
(13,942
|
)
|
3,208
|
|
|||||
Foreign exchange
|
—
|
|
6,280
|
|
—
|
|
(4,246
|
)
|
2,034
|
|
|||||
Equity
|
96
|
|
278
|
|
3
|
|
(159
|
)
|
218
|
|
|||||
Total derivative assets not designated as hedging
|
103
|
|
23,695
|
|
9
|
|
(18,347
|
)
|
5,460
|
|
|||||
Total trading assets
|
2,307
|
|
25,912
|
|
9
|
|
(18,347
|
)
|
9,881
|
|
|||||
Loans
|
—
|
|
21
|
|
—
|
|
—
|
|
21
|
|
|||||
Other assets
:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
477
|
|
—
|
|
—
|
|
477
|
|
|||||
Foreign exchange
|
—
|
|
374
|
|
—
|
|
—
|
|
374
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
851
|
|
—
|
|
—
|
|
851
|
|
|||||
Other assets
(d)(e)
|
174
|
|
514
|
|
35
|
|
—
|
|
723
|
|
|||||
Other assets measured at net asset value
(e)
|
|
|
|
|
342
|
|
|||||||||
Total other assets
|
174
|
|
1,365
|
|
35
|
|
—
|
|
1,916
|
|
|||||
Subtotal assets of operations at fair value
|
25,626
|
|
102,472
|
|
55
|
|
(18,347
|
)
|
110,148
|
|
|||||
Percentage of assets prior to netting
|
20
|
%
|
80
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading assets
|
100
|
|
8,578
|
|
—
|
|
—
|
|
8,678
|
|
|||||
Other assets
|
457
|
|
147
|
|
—
|
|
—
|
|
604
|
|
|||||
Total assets of consolidated investment management funds
|
557
|
|
8,725
|
|
—
|
|
—
|
|
9,282
|
|
|||||
Total assets
|
$
|
26,183
|
|
$
|
111,197
|
|
$
|
55
|
|
$
|
(18,347
|
)
|
$
|
119,430
|
|
Percentage of assets prior to netting
|
19
|
%
|
81
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Dec. 31, 2014
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value
|
|
|||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
367
|
|
$
|
294
|
|
$
|
—
|
|
$
|
—
|
|
$
|
661
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
3
|
|
17,645
|
|
6
|
|
(14,467
|
)
|
3,187
|
|
|||||
Foreign exchange
|
—
|
|
6,367
|
|
—
|
|
(3,149
|
)
|
3,218
|
|
|||||
Equity and other contracts
|
47
|
|
499
|
|
3
|
|
(181
|
)
|
368
|
|
|||||
Total derivative liabilities not designated as hedging
|
50
|
|
24,511
|
|
9
|
|
(17,797
|
)
|
6,773
|
|
|||||
Total trading liabilities
|
417
|
|
24,805
|
|
9
|
|
(17,797
|
)
|
7,434
|
|
|||||
Long-term debt (
b
)
|
—
|
|
347
|
|
—
|
|
—
|
|
347
|
|
|||||
Other liabilities:
|
|
|
|
|
|
||||||||||
Derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
385
|
|
—
|
|
—
|
|
385
|
|
|||||
Foreign exchange
|
—
|
|
62
|
|
—
|
|
—
|
|
62
|
|
|||||
Total derivative liabilities designated as hedging
|
—
|
|
447
|
|
—
|
|
—
|
|
447
|
|
|||||
Other liabilities
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||
Total other liabilities
|
4
|
|
447
|
|
—
|
|
—
|
|
451
|
|
|||||
Subtotal liabilities of operations at fair value
|
421
|
|
25,599
|
|
9
|
|
(17,797
|
)
|
8,232
|
|
|||||
Percentage of liabilities prior to netting
|
2
|
%
|
98
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading liabilities
|
—
|
|
7,660
|
|
—
|
|
—
|
|
7,660
|
|
|||||
Other liabilities
|
1
|
|
8
|
|
—
|
|
—
|
|
9
|
|
|||||
Total liabilities of consolidated investment management funds
|
1
|
|
7,668
|
|
—
|
|
—
|
|
7,669
|
|
|||||
Total liabilities
|
$
|
422
|
|
$
|
33,267
|
|
$
|
9
|
|
$
|
(17,797
|
)
|
$
|
15,901
|
|
Percentage of liabilities prior to netting
|
1
|
%
|
99
|
%
|
—
|
%
|
|
|
(a)
|
ASC 815 permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities, and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.
|
(b)
|
Includes certain interests in securitizations.
|
(c)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(d)
|
Includes private equity investments and seed capital.
|
(e)
|
Other assets measured at fair value at Dec. 31, 2014 were restated to reflect the retrospective application of adopting new disclosure guidance contained in ASU 2015-07 related to investments in certain entities that use NAV as a practical expedient when measuring fair value. See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Details of certain items measured at fair value
on a recurring basis
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
||||||||||||||||||||||
Total
carrying
value
(a)
|
|
|
Ratings
|
|
Total
carrying value
(a)
|
|
|
Ratings
|
|||||||||||||||||
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
|
|
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
||||||||
(dollar amounts in millions)
|
|
||||||||||||||||||||||||
Non-agency RMBS, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007
|
$
|
70
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
78
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
2006
|
129
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
138
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
||
2005
|
247
|
|
|
2
|
|
23
|
|
16
|
|
59
|
|
|
284
|
|
|
—
|
|
21
|
|
19
|
|
60
|
|
||
2004 and earlier
|
395
|
|
|
4
|
|
4
|
|
26
|
|
66
|
|
|
453
|
|
|
3
|
|
5
|
|
27
|
|
65
|
|
||
Total non-agency RMBS
|
$
|
841
|
|
|
2
|
%
|
9
|
%
|
17
|
%
|
72
|
%
|
|
$
|
953
|
|
|
1
|
%
|
9
|
%
|
19
|
%
|
71
|
%
|
Commercial MBS - Domestic, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2009-2015
|
$
|
653
|
|
|
84
|
%
|
16
|
%
|
—
|
%
|
—
|
%
|
|
$
|
639
|
|
|
83
|
%
|
17
|
%
|
—
|
%
|
—
|
%
|
2008
|
17
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
19
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
2007
|
320
|
|
|
63
|
|
21
|
|
16
|
|
—
|
|
|
353
|
|
|
65
|
|
21
|
|
14
|
|
—
|
|
||
2006
|
476
|
|
|
79
|
|
21
|
|
—
|
|
—
|
|
|
599
|
|
|
83
|
|
17
|
|
—
|
|
—
|
|
||
2005
|
38
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
271
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
2004 and earlier
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
6
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total commercial MBS - Domestic
|
$
|
1,504
|
|
|
79
|
%
|
18
|
%
|
3
|
%
|
—
|
%
|
|
$
|
1,887
|
|
|
82
|
%
|
15
|
%
|
3
|
%
|
—
|
%
|
Foreign covered bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada
|
$
|
1,074
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,266
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
United Kingdom
|
420
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
690
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Netherlands
|
221
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
244
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
|
593
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
668
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total foreign covered bonds
|
$
|
2,308
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,868
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
European floating rate notes - available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
994
|
|
|
85
|
%
|
15
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,172
|
|
|
83
|
%
|
17
|
%
|
—
|
%
|
—
|
%
|
Netherlands
|
236
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
296
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
125
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
144
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
||
Other
|
19
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
25
|
|
|
99
|
|
1
|
|
—
|
|
—
|
|
||
Total European floating rate notes - available-for-sale
|
$
|
1,374
|
|
|
80
|
%
|
11
|
%
|
—
|
%
|
9
|
%
|
|
$
|
1,637
|
|
|
79
|
%
|
12
|
%
|
—
|
%
|
9
|
%
|
Sovereign debt/sovereign guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
3,040
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
5,076
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
France
|
2,530
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
3,550
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Spain
|
1,939
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,978
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Germany
|
1,776
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,522
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Italy
|
1,403
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,427
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Belgium
|
1,387
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
829
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Netherlands
|
920
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,800
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
793
|
|
|
—
|
|
18
|
|
82
|
|
—
|
|
|
672
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Other
|
308
|
|
|
72
|
|
—
|
|
28
|
|
—
|
|
|
430
|
|
|
81
|
|
—
|
|
19
|
|
—
|
|
||
Total sovereign debt/sovereign guaranteed
|
$
|
14,096
|
|
|
70
|
%
|
1
|
%
|
29
|
%
|
—
|
%
|
|
$
|
17,284
|
|
|
76
|
%
|
—
|
%
|
24
|
%
|
—
|
%
|
Non-agency RMBS
(b)
, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007
|
$
|
546
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
620
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
2006
|
572
|
|
|
—
|
|
—
|
|
1
|
|
99
|
|
|
653
|
|
|
—
|
|
—
|
|
1
|
|
99
|
|
||
2005
|
633
|
|
|
—
|
|
2
|
|
1
|
|
97
|
|
|
727
|
|
|
—
|
|
3
|
|
1
|
|
96
|
|
||
2004 and earlier
|
187
|
|
|
—
|
|
3
|
|
9
|
|
88
|
|
|
214
|
|
|
—
|
|
4
|
|
7
|
|
89
|
|
||
Total non-agency RMBS
(b)
|
$
|
1,938
|
|
|
—
|
%
|
1
|
%
|
1
|
%
|
98
|
%
|
|
$
|
2,214
|
|
|
—
|
%
|
1
|
%
|
1
|
%
|
98
|
%
|
(a)
|
At Sept. 30, 2015 and Dec. 31, 2014, foreign covered bonds and sovereign debt were included in Level 1 and Level 2 in the valuation hierarchy. All other assets in the table are Level 2 assets in the valuation hierarchy.
|
(b)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
Notes to Consolidated Financial Statements
(continued)
|
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(c)
|
Reported in foreign exchange and other trading revenue.
|
(d)
|
Reported in investment and other income.
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Fair value measurements for assets using significant unobservable inputs for the three months ended Sept. 30, 2014
|
|||||||||||||||||||
|
Available-for-sale securities
|
|
Trading assets
|
|
|
|
|
||||||||||||
(in millions)
|
State and political
subdivisions |
|
|
Debt and equity
instruments |
|
|
Derivative
assets |
|
(a)
|
Other assets
|
|
|
Total
assets
(b)
|
|
|||||
Fair value at June 30, 2014
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
34
|
|
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Transfers into of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
38
|
|
|||||
Total gains or (losses) for the period:
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in earnings (or changes in net assets)
|
—
|
|
(c)
|
—
|
|
(d)
|
13
|
|
(d)
|
—
|
|
(e)
|
13
|
|
|||||
Settlements
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Fair value at Sept. 30, 2014
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
38
|
|
|
$
|
73
|
|
Change in unrealized gains or (losses) for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
16
|
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Total assets measured at fair value at Dec. 31, 2014 were restated to reflect the retrospective application of adopting new disclosure guidance contained in ASU 2015-07 related to investments in certain entities that use NAV as a practical expedient when measuring fair value. See Note 2 for additional information.
|
(c)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(d)
|
Reported in foreign exchange and other trading revenue.
|
(e)
|
Reported in investment and other income.
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(c)
|
Reported in foreign exchange and other trading revenue.
|
(d)
|
Reported in investment and other income.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Fair value measurements for liabilities using significant unobservable inputs for the nine months ended Sept. 30, 2015
|
|||||||
|
Trading liabilities
|
|
|
Total liabilities
|
|
||
(in millions)
|
Derivative liabilities
|
|
(a)
|
||||
Fair value at Dec. 31, 2014
|
$
|
9
|
|
|
$
|
9
|
|
Transfers out of Level 3
|
(3
|
)
|
|
(3
|
)
|
||
Total (gains) or losses for the period:
|
|
|
|
||||
Included in earnings (or changes in net liabilities)
|
(1
|
)
|
(b)
|
(1
|
)
|
||
Settlements
|
(5
|
)
|
|
(5
|
)
|
||
Fair value at Sept. 30, 2015
|
$
|
—
|
|
|
$
|
—
|
|
Change in unrealized (gains) or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Total assets measured at fair value at Dec. 31, 2014 were restated to reflect the retrospective application of adopting new disclosure guidance contained in ASU 2015-07 related to investments in certain entities that use NAV as a practical expedient when measuring fair value. See Note 2 for additional information.
|
(c)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(d)
|
Reported in foreign exchange and other trading revenue.
|
(e)
|
Reported in investment and other income.
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a nonrecurring basis at Sept. 30, 2015
|
|
Total carrying
value
|
|
||||||||||||
(in millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
||||||
Loans
(a)
|
$
|
—
|
|
|
$
|
101
|
|
|
$
|
2
|
|
|
$
|
103
|
|
Other assets
(b)
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
2
|
|
|
$
|
112
|
|
Assets measured at fair value on a nonrecurring basis at Dec. 31, 2014
|
|
Total carrying
value
|
|
||||||||||||
(in millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
||||||
Loans
(a)
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
2
|
|
|
$
|
114
|
|
Other assets
(b)
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
|
$
|
118
|
|
|
$
|
2
|
|
|
$
|
120
|
|
(a)
|
During the quarters ended
Sept. 30, 2015
and
Dec. 31, 2014
, the fair value of these loans decreased
$1 million
and
$3 million
, respectively, based on the fair value of the underlying collateral as allowed by ASC 310, Accounting by Creditors for Impairment of a loan, with an offset to the allowance for credit losses.
|
(b)
|
Includes other assets received in satisfaction of debt and loans held for sale. Loans held for sale are carried on the balance sheet at the lower of cost or fair value.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Summary of financial instruments
|
Sept. 30, 2015
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Total
estimated
fair value
|
|
|
Carrying
amount
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
$
|
—
|
|
$
|
82,426
|
|
$
|
—
|
|
|
$
|
82,426
|
|
|
$
|
82,426
|
|
Interest-bearing deposits with banks
|
—
|
|
20,007
|
|
—
|
|
|
20,007
|
|
|
20,002
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
28,901
|
|
—
|
|
|
28,901
|
|
|
28,901
|
|
|||||
Securities held-to-maturity
|
11,501
|
|
32,257
|
|
—
|
|
|
43,758
|
|
|
43,423
|
|
|||||
Loans
|
—
|
|
61,022
|
|
—
|
|
|
61,022
|
|
|
60,836
|
|
|||||
Other financial assets
|
8,234
|
|
1,066
|
|
—
|
|
|
9,300
|
|
|
9,300
|
|
|||||
Total
|
$
|
19,735
|
|
$
|
225,679
|
|
$
|
—
|
|
|
$
|
245,414
|
|
|
$
|
244,888
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
101,111
|
|
$
|
—
|
|
|
$
|
101,111
|
|
|
$
|
101,111
|
|
Interest-bearing deposits
|
—
|
|
164,893
|
|
—
|
|
|
164,893
|
|
|
165,657
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
8,824
|
|
—
|
|
|
8,824
|
|
|
8,824
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
22,236
|
|
—
|
|
|
22,236
|
|
|
22,236
|
|
|||||
Borrowings
|
—
|
|
758
|
|
—
|
|
|
758
|
|
|
758
|
|
|||||
Long-term debt
|
—
|
|
21,481
|
|
—
|
|
|
21,481
|
|
|
21,068
|
|
|||||
Total
|
$
|
—
|
|
$
|
319,303
|
|
$
|
—
|
|
|
$
|
319,303
|
|
|
$
|
319,654
|
|
Summary of financial instruments
|
Dec. 31, 2014
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Total estimated
fair value |
|
|
Carrying
amount |
|
|||||
Assets:
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
$
|
—
|
|
$
|
96,682
|
|
$
|
—
|
|
|
$
|
96,682
|
|
|
$
|
96,682
|
|
Interest-bearing deposits with banks
|
—
|
|
19,505
|
|
—
|
|
|
19,505
|
|
|
19,495
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
20,302
|
|
—
|
|
|
20,302
|
|
|
20,302
|
|
|||||
Securities held-to-maturity
|
5,063
|
|
16,064
|
|
—
|
|
|
21,127
|
|
|
20,933
|
|
|||||
Loans
|
—
|
|
56,840
|
|
—
|
|
|
56,840
|
|
|
56,749
|
|
|||||
Other financial assets
|
6,970
|
|
1,121
|
|
—
|
|
|
8,091
|
|
|
8,091
|
|
|||||
Total
|
$
|
12,033
|
|
$
|
210,514
|
|
$
|
—
|
|
|
$
|
222,547
|
|
|
$
|
222,252
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
104,240
|
|
$
|
—
|
|
|
$
|
104,240
|
|
|
$
|
104,240
|
|
Interest-bearing deposits
|
—
|
|
160,688
|
|
—
|
|
|
160,688
|
|
|
161,629
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
11,469
|
|
—
|
|
|
11,469
|
|
|
11,469
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
21,181
|
|
—
|
|
|
21,181
|
|
|
21,181
|
|
|||||
Borrowings
|
—
|
|
956
|
|
—
|
|
|
956
|
|
|
956
|
|
|||||
Long-term debt
|
—
|
|
20,401
|
|
—
|
|
|
20,401
|
|
|
19,917
|
|
|||||
Total
|
$
|
—
|
|
$
|
318,935
|
|
$
|
—
|
|
|
$
|
318,935
|
|
|
$
|
319,392
|
|
Hedged financial instruments
|
Carrying amount
|
|
Notional amount of hedge
|
|
Unrealized
|
|||||||
(in millions)
|
Gain
|
|
(Loss)
|
|
||||||||
Sept. 30, 2015
|
|
|
|
|
||||||||
Securities available-for-sale
|
$
|
8,011
|
|
$
|
7,820
|
|
$
|
10
|
|
$
|
(462
|
)
|
Long-term debt
|
17,648
|
|
17,051
|
|
636
|
|
(8
|
)
|
||||
Dec. 31, 2014
|
|
|||||||||||
Securities available-for-sale
|
$
|
7,294
|
|
$
|
7,045
|
|
$
|
4
|
|
$
|
(370
|
)
|
Long-term debt
|
16,469
|
|
16,100
|
|
470
|
|
(14
|
)
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets and liabilities of consolidated investment management funds, at fair value
|
||||||
(in millions)
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
||
Assets of consolidated investment management funds:
|
|
|
||||
Trading assets
|
$
|
2,087
|
|
$
|
8,678
|
|
Other assets
|
210
|
|
604
|
|
||
Total assets of consolidated investment management funds
|
$
|
2,297
|
|
$
|
9,282
|
|
Liabilities of consolidated investment management funds:
|
|
|
||||
Trading liabilities
|
$
|
1,072
|
|
$
|
7,660
|
|
Other liabilities
|
91
|
|
9
|
|
||
Total liabilities of consolidated investment management funds
|
$
|
1,163
|
|
$
|
7,669
|
|
(a)
|
The changes in fair value of the loans and long-term debt are approximately offset by economic hedges included in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Ineffectiveness
|
Nine months ended
|
|||||
(in millions)
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
||
Fair value hedges of securities
|
$
|
2.8
|
|
$
|
(7.7
|
)
|
Fair value hedges of deposits and long-term debt
|
(4.8
|
)
|
(12.0
|
)
|
||
Cash flow hedges
|
—
|
|
0.1
|
|
||
Other
(a)
|
—
|
|
(0.1
|
)
|
||
Total
|
$
|
(2.0
|
)
|
$
|
(19.7
|
)
|
(a)
|
Includes ineffectiveness recorded on foreign exchange hedges.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Impact of derivative instruments on the balance sheet
|
Notional value
|
|
Asset derivatives
fair value
|
|
Liability derivatives
fair value
|
|||||||||||||||
(in millions)
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
||||||
Derivatives designated as hedging instruments
(a)
:
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
24,871
|
|
$
|
23,145
|
|
|
$
|
648
|
|
$
|
477
|
|
|
$
|
470
|
|
$
|
385
|
|
Foreign exchange contracts
|
7,158
|
|
7,344
|
|
|
142
|
|
374
|
|
|
48
|
|
62
|
|
||||||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
790
|
|
$
|
851
|
|
|
$
|
518
|
|
$
|
447
|
|
||||
Derivatives not designated as hedging instruments
(b)
:
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
573,832
|
|
$
|
731,628
|
|
|
$
|
11,482
|
|
$
|
17,150
|
|
|
$
|
11,423
|
|
$
|
17,654
|
|
Foreign exchange contracts
|
603,954
|
|
528,401
|
|
|
4,222
|
|
6,280
|
|
|
4,179
|
|
6,367
|
|
||||||
Equity contracts
|
2,841
|
|
10,842
|
|
|
156
|
|
377
|
|
|
151
|
|
549
|
|
||||||
Credit contracts
|
155
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
15,860
|
|
$
|
23,807
|
|
|
$
|
15,753
|
|
$
|
24,570
|
|
||||
Total derivatives fair value
(c)
|
|
|
|
$
|
16,650
|
|
$
|
24,658
|
|
|
$
|
16,271
|
|
$
|
25,017
|
|
||||
Effect of master netting agreements
(d)
|
|
|
|
(11,747
|
)
|
(18,347
|
)
|
|
(11,397
|
)
|
(17,797
|
)
|
||||||||
Fair value after effect of master netting agreements
|
|
|
|
$
|
4,903
|
|
$
|
6,311
|
|
|
$
|
4,874
|
|
$
|
7,220
|
|
(a)
|
The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the balance sheet.
|
(b)
|
The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the balance sheet.
|
(c)
|
Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815.
|
(d)
|
Effect of master netting agreements includes cash collateral received and paid of
$893 million
and
$543 million
, respectively, at
Sept. 30, 2015
, and
$1,589 million
and
$1,039 million
, respectively, at
Dec. 31, 2014
.
|
Derivatives in cash flow hedging
relationships
|
Gain or (loss) recognized
in accumulated
OCI on derivatives(effective portion)
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Location of gain or
(loss) recognized in
income on derivatives
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss) recognized in income on derivatives
(ineffectiveness portion and amount excluded from effectiveness testing)
|
||||||||||||||||||||||||
3Q15
|
|
2Q15
|
|
3Q14
|
|
|
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
|
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
||||||||||||
FX contracts
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
FX contracts
|
—
|
|
—
|
|
(5
|
)
|
|
Other revenue
|
|
—
|
|
—
|
|
1
|
|
|
Other revenue
|
|
—
|
|
—
|
|
0.2
|
|
|||||||||
FX contracts
|
—
|
|
(3
|
)
|
29
|
|
|
Trading revenue
|
|
—
|
|
(3
|
)
|
29
|
|
|
Trading revenue
|
|
—
|
|
—
|
|
—
|
|
|||||||||
FX contracts
|
(3
|
)
|
4
|
|
(8
|
)
|
|
Salary expense
|
|
(3
|
)
|
(8
|
)
|
2
|
|
|
Salary expense
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Total
|
$
|
(3
|
)
|
$
|
1
|
|
$
|
16
|
|
|
|
|
$
|
(3
|
)
|
$
|
(11
|
)
|
$
|
31
|
|
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.2
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Derivatives in net
investment hedging
relationships
|
Gain or (loss) recognized in accumulated OCI
on derivatives
(effective portion)
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Location of gain or
(loss) recognized in
income on derivative
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss)
recognized in income on
derivatives
(ineffectiveness portion and amount excluded from
effectiveness testing)
|
||||||||||||||||||||||||
3Q15
|
|
2Q15
|
|
3Q14
|
|
|
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
|
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
||||||||||||
FX contracts
|
$
|
213
|
|
$
|
(255
|
)
|
$
|
308
|
|
|
Net interest revenue
|
|
$
|
1
|
|
$
|
—
|
|
$
|
—
|
|
|
Other revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.2
|
)
|
Derivatives in cash flow hedging
relationships
|
Gain or (loss) recognized
in accumulated
OCI on derivatives(effective portion)
Nine months ended
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
Nine months ended
|
|
Location of gain or
(loss) recognized in
income on derivatives
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss) recognized in income on derivatives
(ineffectiveness portion and amount excluded from effectiveness testing)
Nine months ended
|
|||||||||||||||
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|||||||||
FX contracts
|
$
|
(1
|
)
|
$
|
(2
|
)
|
|
Net interest revenue
|
|
$
|
(1
|
)
|
$
|
(2
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
FX contracts
|
—
|
|
(2
|
)
|
|
Other revenue
|
|
—
|
|
2
|
|
|
Other revenue
|
|
—
|
|
0.1
|
|
||||||
FX contracts
|
9
|
|
26
|
|
|
Trading revenue
|
|
9
|
|
26
|
|
|
Trading revenue
|
|
—
|
|
—
|
|
||||||
FX contracts
|
(8
|
)
|
(4
|
)
|
|
Salary expense
|
|
(19
|
)
|
8
|
|
|
Salary expense
|
|
—
|
|
—
|
|
||||||
Total
|
$
|
—
|
|
$
|
18
|
|
|
|
|
$
|
(11
|
)
|
$
|
34
|
|
|
|
|
$
|
—
|
|
$
|
0.1
|
|
Derivatives in net
investment hedging
relationships
|
Gain or (loss) recognized in accumulated OCI
on derivatives
(effective portion)
Nine months ended
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
Nine months ended
|
|
Location of gain or
(loss) recognized in
income on derivative
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss)
recognized in income on
derivatives
(ineffectiveness portion and amount excluded from
effectiveness testing)
Nine months ended
|
|||||||||||||||
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|||||||||
FX contracts
|
$
|
326
|
|
$
|
163
|
|
|
Net interest revenue
|
|
$
|
1
|
|
$
|
(1
|
)
|
|
Other revenue
|
|
$
|
—
|
|
$
|
(0.1
|
)
|
Notes to Consolidated Financial Statements
(continued)
|
|
Foreign exchange and other trading revenue
|
Year-to-date
|
||||||||||||||
(in millions)
|
3Q15
|
|
2Q15
|
|
3Q14
|
|
2015
|
|
2014
|
|
|||||
Foreign exchange
|
$
|
180
|
|
$
|
181
|
|
$
|
154
|
|
$
|
578
|
|
$
|
413
|
|
Other trading revenue (loss)
|
(1
|
)
|
6
|
|
(1
|
)
|
17
|
|
6
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
179
|
|
$
|
187
|
|
$
|
153
|
|
$
|
595
|
|
$
|
419
|
|
If The Bank of New York Mellon’s rating was changed to (Moody’s/S&P)
|
Potential close-out exposures (fair value)
(a)
|
|
||
A3/A-
|
|
$
|
72
|
million
|
Baa2/BBB
|
|
$
|
1,031
|
million
|
Ba1/BB+
|
|
$
|
2,089
|
million
|
(a)
|
The amounts represent potential total close-out values if The Bank of New York Mellon’s rating were to immediately drop to the indicated levels.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Offsetting of derivative assets and financial assets at Sept. 30, 2015
|
|
|
|
|
|||||||||||||||
|
Gross assets recognized
|
|
Gross amounts offset in the balance sheet
|
|
|
Net assets recognized on the balance sheet
|
|
Gross amounts not offset in the balance sheet
|
|
||||||||||
(in millions)
|
(a)
|
Financial instruments
|
|
Cash collateral received
|
|
Net amount
|
|
||||||||||||
Derivatives subject to netting arrangements:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
10,435
|
|
$
|
8,893
|
|
|
$
|
1,542
|
|
$
|
470
|
|
$
|
—
|
|
$
|
1,072
|
|
Foreign exchange contracts
|
3,525
|
|
2,782
|
|
|
743
|
|
27
|
|
—
|
|
716
|
|
||||||
Equity contracts
|
148
|
|
72
|
|
|
76
|
|
—
|
|
—
|
|
76
|
|
||||||
Total derivatives subject to netting arrangements
|
14,108
|
|
11,747
|
|
|
2,361
|
|
497
|
|
—
|
|
1,864
|
|
||||||
Total derivatives not subject to netting arrangements
|
2,542
|
|
—
|
|
|
2,542
|
|
—
|
|
—
|
|
2,542
|
|
||||||
Total derivatives
|
16,650
|
|
11,747
|
|
|
4,903
|
|
497
|
|
—
|
|
4,406
|
|
||||||
Reverse repurchase agreements
|
21,806
|
|
589
|
|
(b)
|
21,217
|
|
21,213
|
|
—
|
|
4
|
|
||||||
Securities borrowing
|
7,678
|
|
—
|
|
|
7,678
|
|
7,496
|
|
—
|
|
182
|
|
||||||
Total
|
$
|
46,134
|
|
$
|
12,336
|
|
|
$
|
33,798
|
|
$
|
29,206
|
|
$
|
—
|
|
$
|
4,592
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral received. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
(a)
|
Includes the effect of netting agreements and net cash collateral received. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Offsetting of derivative liabilities and financial liabilities at Sept. 30, 2015
|
|
|
|
||||||||||||||||
|
Gross liabilities recognized
|
|
Gross amounts offset in the balance sheet
|
|
|
Net liabilities recognized on the balance sheet
|
|
Gross amounts not offset in the balance sheet
|
|
||||||||||
(in millions)
|
(a)
|
Financial instruments
|
|
Cash collateral pledged
|
|
Net amount
|
|
||||||||||||
Derivatives subject to netting arrangements:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
11,210
|
|
$
|
8,991
|
|
|
$
|
2,219
|
|
$
|
2,005
|
|
$
|
—
|
|
$
|
214
|
|
Foreign exchange contracts
|
3,093
|
|
2,352
|
|
|
741
|
|
365
|
|
—
|
|
376
|
|
||||||
Equity contracts
|
142
|
|
54
|
|
|
88
|
|
64
|
|
—
|
|
24
|
|
||||||
Total derivatives subject to netting arrangements
|
14,445
|
|
11,397
|
|
|
3,048
|
|
2,434
|
|
—
|
|
614
|
|
||||||
Total derivatives not subject to netting arrangements
|
1,826
|
|
—
|
|
|
1,826
|
|
—
|
|
—
|
|
1,826
|
|
||||||
Total derivatives
|
16,271
|
|
11,397
|
|
|
4,874
|
|
2,434
|
|
—
|
|
2,440
|
|
||||||
Repurchase agreements
|
6,860
|
|
589
|
|
(b)
|
6,271
|
|
6,255
|
|
—
|
|
16
|
|
||||||
Securities lending
|
2,263
|
|
—
|
|
|
2,263
|
|
2,221
|
|
—
|
|
42
|
|
||||||
Total
|
$
|
25,394
|
|
$
|
11,986
|
|
|
$
|
13,408
|
|
$
|
10,910
|
|
$
|
—
|
|
$
|
2,498
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral paid. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
(a)
|
Includes the effect of netting agreements and net cash collateral paid. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Financial institutions
portfolio exposure
(in billions)
|
Sept. 30, 2015
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Securities industry
|
$
|
3.7
|
|
$
|
27.5
|
|
$
|
31.2
|
|
Banks
|
9.3
|
|
2.1
|
|
11.4
|
|
|||
Asset managers
|
1.9
|
|
5.2
|
|
7.1
|
|
|||
Insurance
|
0.2
|
|
4.6
|
|
4.8
|
|
|||
Government
|
0.1
|
|
2.4
|
|
2.5
|
|
|||
Other
|
0.8
|
|
1.7
|
|
2.5
|
|
|||
Total
|
$
|
16.0
|
|
$
|
43.5
|
|
$
|
59.5
|
|
Commercial portfolio
exposure
(in billions)
|
Sept. 30, 2015
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Services and other
|
$
|
0.8
|
|
$
|
5.6
|
|
$
|
6.4
|
|
Manufacturing
|
0.5
|
|
5.3
|
|
5.8
|
|
|||
Energy and utilities
|
0.5
|
|
5.1
|
|
5.6
|
|
|||
Media and telecom
|
0.3
|
|
1.5
|
|
1.8
|
|
|||
Total
|
$
|
2.1
|
|
$
|
17.5
|
|
$
|
19.6
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Off-balance sheet credit risks
|
Sept. 30,
|
|
Dec. 31,
|
|
||
(in millions)
|
2015
|
|
2014
|
|
||
Lending commitments
|
$
|
60,731
|
|
$
|
33,273
|
|
Standby letters of credit
(a)
|
5,020
|
|
5,767
|
|
||
Commercial letters of credit
|
304
|
|
255
|
|
||
Securities lending indemnifications
(b)
|
305,538
|
|
304,386
|
|
(a)
|
Net of participations totaling
$855 million
at
Sept. 30, 2015
and
$894 million
at
Dec. 31, 2014
.
|
(b)
|
Excludes the
indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients
, which totaled
$60 billion
at
Sept. 30, 2015
and
$64 billion
at
Dec. 31, 2014
.
|
Standby letters of credit
|
Sept. 30,
|
|
|
Dec. 31,
|
|
|
2015
|
|
|
2014
|
|
Investment grade
|
86
|
%
|
|
88
|
%
|
Non-investment grade
|
14
|
%
|
|
12
|
%
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Revenue amounts reflect fee and other revenue generated by each business. Fee and other revenue transferred between businesses under revenue transfer agreements is included within other revenue in each business.
|
•
|
Revenues and expenses associated with specific client bases are included in those businesses. For example, foreign exchange activity associated with clients using custody products is allocated to Investment Services.
|
•
|
Net interest revenue is allocated to businesses based on the yields on the assets and liabilities
|
•
|
Incentive expense related to restricted stock and certain corporate overhead charges are allocated to the businesses.
|
•
|
Support and other indirect expenses are allocated to businesses based on internally-developed methodologies.
|
•
|
Recurring FDIC expense is allocated to the businesses based on average deposits generated within each business.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Litigation expense is generally recorded in the business in which the charge occurs.
|
•
|
Management of the investment securities portfolio is a shared service contained in the Other segment. As a result, gains and losses associated with the valuation of the securities portfolio are included in the Other segment.
|
•
|
Client deposits serve as the primary funding source for our investment securities portfolio. We typically allocate all interest revenue to the businesses generating the deposits. Accordingly, accretion related to the portion of the investment securities portfolio restructured in 2009 has been included in the results of the businesses.
|
•
|
M&I expense is a corporate level item and is recorded in the Other segment.
|
•
|
Restructuring charges recorded in 2014 relate to corporate-level initiatives and were therefore recorded in the Other segment. In the fourth quarter of 2013, restructuring charges were recorded in the businesses. Prior to the fourth quarter of 2013, restructuring charges were reported in the Other segment.
|
•
|
Balance sheet assets and liabilities and their related income or expense are specifically assigned to each business. Businesses with a net liability position have been allocated assets.
|
•
|
Goodwill and intangible assets are reflected within individual businesses.
|
For the quarter ended Sept. 30, 2015
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
Other
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
846
|
|
(a)
|
$
|
2,087
|
|
$
|
103
|
|
$
|
3,036
|
|
(a)
|
Net interest revenue
|
83
|
|
|
628
|
|
48
|
|
759
|
|
|
||||
Total revenue
|
929
|
|
(a)
|
2,715
|
|
151
|
|
3,795
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
1
|
|
1
|
|
|
||||
Noninterest expense
|
692
|
|
|
1,863
|
|
124
|
|
2,679
|
|
(b)
|
||||
Income before taxes
|
$
|
237
|
|
(a)
|
$
|
852
|
|
$
|
26
|
|
$
|
1,115
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
26
|
%
|
|
31
|
%
|
N/M
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,960
|
|
|
$
|
282,159
|
|
$
|
60,334
|
|
$
|
373,453
|
|
|
(a)
|
Both total fee and other revenue and total revenue include the net loss from consolidated investment management funds of
$17 million
,
representing
$22 million
of losses and a loss attributable to noncontrolling interests of
$5 million
. Income before taxes is net of a loss attributable to noncontrolling interests of
$5 million
.
|
(b)
|
Includes a loss attributable to noncontrolling interest of
$1 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the quarter ended June 30, 2015
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
Other
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
913
|
|
(a)
|
$
|
2,020
|
|
$
|
137
|
|
$
|
3,070
|
|
(a)
|
Net interest revenue
|
78
|
|
|
636
|
|
65
|
|
779
|
|
|
||||
Total revenue
|
991
|
|
(a)
|
2,656
|
|
202
|
|
3,849
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
(6
|
)
|
(6
|
)
|
|
||||
Noninterest expense
|
728
|
|
|
1,880
|
|
118
|
|
2,726
|
|
(b)
|
||||
Income before taxes
|
$
|
263
|
|
(a)
|
$
|
776
|
|
$
|
90
|
|
$
|
1,129
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
27
|
%
|
|
29
|
%
|
N/M
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,414
|
|
|
$
|
290,102
|
|
$
|
57,763
|
|
$
|
378,279
|
|
|
(a)
|
Both total fee and other revenue and total revenue include the net income from consolidated investment management funds of
$3 million
, representing
$40 million
of income and noncontrolling interests of
$37 million
. Income before taxes is net of noncontrolling interests of
$37 million
.
|
(b)
|
Includes a loss attributable to noncontrolling interest of
$1 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
For the quarter ended Sept. 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
Other
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
920
|
|
(a)
|
$
|
2,005
|
|
$
|
942
|
|
$
|
3,867
|
|
(a)
|
Net interest revenue
|
69
|
|
|
583
|
|
69
|
|
721
|
|
|
||||
Total revenue
|
989
|
|
(a)
|
2,588
|
|
1,011
|
|
4,588
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
(19
|
)
|
(19
|
)
|
|
||||
Noninterest expense
|
744
|
|
|
1,875
|
|
349
|
|
2,968
|
|
|
||||
Income before taxes
|
$
|
245
|
|
(a)
|
$
|
713
|
|
$
|
681
|
|
$
|
1,639
|
|
(a)
|
Pre-tax operating margin
(b)
|
25
|
%
|
|
28
|
%
|
N/M
|
|
36
|
%
|
|
||||
Average assets
|
$
|
36,542
|
|
|
$
|
266,466
|
|
$
|
77,401
|
|
$
|
380,409
|
|
|
(a)
|
Both total fee and other revenue and total revenue include the net income from consolidated investment management funds of
$16 million
, representing
$39 million
of income and noncontrolling interests of
$23 million
. Income before taxes is net of noncontrolling interests of
$23 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
For the nine months ended Sept. 30, 2015
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
Other
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
2,682
|
|
(a)
|
$
|
6,100
|
|
$
|
357
|
|
$
|
9,139
|
|
(a)
|
Net interest revenue
|
235
|
|
|
1,863
|
|
168
|
|
2,266
|
|
|
||||
Total revenue
|
2,917
|
|
(a)
|
7,963
|
|
525
|
|
11,405
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
(3
|
)
|
(3
|
)
|
|
||||
Noninterest expense
|
2,154
|
|
|
5,578
|
|
373
|
|
8,105
|
|
(b)
|
||||
Income before taxes
|
$
|
763
|
|
(a)
|
$
|
2,385
|
|
$
|
155
|
|
$
|
3,303
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
26
|
%
|
|
30
|
%
|
N/M
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,910
|
|
|
$
|
285,747
|
|
$
|
56,743
|
|
$
|
373,400
|
|
|
(a)
|
Both total fee and other revenue and total revenue include the net income from consolidated investment management funds of
$7 million
, representing
$70 million
of income and noncontrolling interests of
$63 million
. Income before taxes is net of noncontrolling interests of
$63 million
.
|
(b)
|
Includes a loss attributable to noncontrolling interest of
$2 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the nine months ended Sept. 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
Other
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
2,760
|
|
(a)
|
$
|
5,811
|
|
$
|
1,204
|
|
$
|
9,775
|
|
(a)
|
Net interest revenue
|
205
|
|
|
1,766
|
|
197
|
|
2,168
|
|
|
||||
Total revenue
|
2,965
|
|
(a)
|
7,577
|
|
1,401
|
|
11,943
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
(49
|
)
|
(49
|
)
|
|
||||
Noninterest expense
|
2,304
|
|
|
5,564
|
|
785
|
|
8,653
|
|
|
||||
Income before taxes
|
$
|
661
|
|
(a)
|
$
|
2,013
|
|
$
|
665
|
|
$
|
3,339
|
|
(a)
|
Pre-tax operating margin
(b)
|
22
|
%
|
|
27
|
%
|
N/M
|
|
28
|
%
|
|
||||
Average assets
|
$
|
37,821
|
|
|
$
|
263,084
|
|
$
|
67,392
|
|
$
|
368,297
|
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$61 million
, representing
$121 million
of income and noncontrolling interests of
$60 million
. Income before taxes is net of noncontrolling interests of
$60 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Noncash investing and financing transactions
|
Nine months ended Sept. 30,
|
|||||||
(in millions)
|
|
2015
|
|
|
2014
|
|
||
Transfers from loans to other assets for other real estate owned (“OREO”)
|
|
$
|
6
|
|
|
$
|
3
|
|
Change in assets of consolidated VIEs
|
|
6,985
|
|
|
1,710
|
|
||
Change in liabilities of consolidated VIEs
|
|
6,506
|
|
|
1,991
|
|
||
Change in noncontrolling interests of consolidated VIEs
|
|
251
|
|
|
118
|
|
||
Securities purchased not settled
|
|
222
|
|
|
578
|
|
||
Securities sales not settled
|
|
676
|
|
|
63
|
|
||
Available-for-sale securities transferred to held-to-maturity
|
|
11,602
|
|
|
—
|
|
Item 4. Controls and Procedures
|
|
Forward-looking Statements
|
|
Part II - Other Information
|
|
(c)
|
The following table discloses repurchases of our common stock made in the
third quarter of 2015
. All of the Company’s preferred stock outstanding has preference over the Company’s common stock with respect to the payment of dividends.
|
(a)
|
Includes
88 thousand
shares repurchased at a purchase price of
$4 million
from employees, primarily in connection with the employees’ payment of taxes upon the vesting of restricted stock. The average price per share of open market purchases was
$43.58
.
|
(b)
|
Represents the maximum value of the shares authorized to be repurchased through the second quarter of 2016, including employee benefit plan repurchases, in connection with the Federal Reserve’s non-objection to our 2015 capital plan.
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
(Registrant)
|
|
|
|
|
Date: November 6, 2015
|
By:
|
|
/s/ Kurtis R. Kurimsky
|
|
|
|
Kurtis R. Kurimsky
|
|
|
|
Corporate Controller
|
|
|
|
(Duly Authorized Officer and
|
|
|
|
Principal Accounting Officer of
|
|
|
|
the Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
Index to Exhibits
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
2.1
|
|
Amended and Restated Agreement and Plan of Merger, dated as of Dec. 3, 2006, as amended and restated as of Feb. 23, 2007, and as further amended and restated as of March 30, 2007, between The Bank of New York Company, Inc., Mellon Financial Corporation and The Bank of New York Mellon Corporation (the “Company”).
|
|
Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File Nos. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference.
|
3.1
|
|
Restated Certificate of Incorporation of The Bank of New York Mellon Corporation.
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File Nos. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference.
|
3.2
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series A Noncumulative Preferred Stock, dated June 15, 2007.
|
|
Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 5, 2007, and incorporated herein by reference.
|
3.3
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series C Noncumulative Perpetual Preferred Stock, dated Sept. 13, 2012.
|
|
Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 8A12B (File No. 001-35651) as filed with the Commission on Sept. 14, 2012, and incorporated herein by reference.
|
3.4
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series D Noncumulative Perpetual Preferred Stock, dated May 16, 2013.
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on May 16, 2013, and incorporated herein by reference.
|
3.5
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series E Noncumulative Perpetual Preferred Stock, dated April 27, 2015.
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 28, 2015, and incorporated herein by reference.
|
3.6
|
|
Amended and Restated By-Laws of The Bank of New York Mellon Corporation, as amended and restated on Oct. 13, 2015.
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Oct. 19, 2015, and incorporated herein by reference.
|
4.1
|
|
None of the instruments defining the rights of holders of long-term debt of the Parent or any of its subsidiaries represented long-term debt in excess of 10% of the total assets of the Company as of Sept. 30, 2015. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument.
|
|
N/A
|
Index to Exhibits
(continued)
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
10.1
|
*
|
2015 Form of Performance Share Unit Agreement.
|
|
Filed herewith.
|
10.2
|
*
|
2015 Form of Restricted Share Unit Agreement.
|
|
Filed herewith.
|
12.1
|
|
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
Filed herewith.
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
101.INS
|
|
XBRL Instance Document.
|
|
Filed herewith.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
Filed herewith.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
Filed herewith.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
Filed herewith.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
Filed herewith.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Filed herewith.
|
* Management contract or compensatory plan arrangement.
|
By:
|
|
|
[Name/Title]
|
|
|
|
|
|
By:
|
|
|
[Name]
|
|
|
|
|
|
•
|
[Definition of applicable metrics]
|
•
|
No PSUs may be earned if the Performance Threshold is not achieved.
|
•
|
The Human Resources and Compensation Committee (“HRCC”) certifies Performance Threshold following the end of calendar year
.
|
•
|
Did the Grantee’s score/rating reflect poor risk behavior by the Grantee in a prior year?
|
•
|
Did the Grantee receive an award in that year?
|
•
|
Financial Impact: How much did/will the issue cost the Company?
|
•
|
Reputational Impact: How much of a regulatory impact did/will it have on the Company?
|
Criteria
|
Metric
|
None
|
Low
|
Medium
|
High
|
Financial Impact
|
|
|
|
|
|
Reputational Impact
|
|
|
|
|
|
Criteria
|
None
|
Indirect
|
Direct
|
The Grantee’s role
& responsibility |
|
|
|
By:
|
|
|
[Name/Title]
|
|
|
|
|
|
By:
|
|
|
[Name]
|
|
|
|
|
|
•
|
Did the Grantee’s score/rating reflect poor risk behavior by the Grantee in a prior year?
|
•
|
Did the Grantee receive an award in that year?
|
•
|
Financial Impact: How much did/will the issue cost the Company?
|
•
|
Reputational Impact: How much of a regulatory impact did/will it have on the Company?
|
Criteria
|
Metric
|
None
|
Low
|
Medium
|
High
|
Financial Impact
|
|
|
|
|
|
Reputational Impact
|
|
|
|
|
|
Criteria
|
None
|
Indirect
|
Direct
|
The Grantee’s role
& responsibility |
|
|
|
|
Quarter ended
|
Year-to-date
|
|||||||||||||
(dollar amounts in millions)
|
Sept. 30, 2015
|
|
June 30,
2015 |
|
Sept. 30, 2014
|
|
Sept. 30, 2015
|
|
Sept. 30, 2014
|
|
|||||
Earnings
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
1,109
|
|
$
|
1,165
|
|
$
|
1,662
|
|
$
|
3,364
|
|
$
|
3,399
|
|
Net loss (income) attributable to noncontrolling interests
|
6
|
|
(36
|
)
|
(23
|
)
|
(61
|
)
|
(60
|
)
|
|||||
Income before income taxes attributable to shareholders of The Bank of New York Mellon Corporation
|
1,115
|
|
1,129
|
|
1,639
|
|
3,303
|
|
3,339
|
|
|||||
Fixed charges, excluding interest on deposits
|
97
|
|
87
|
|
92
|
|
276
|
|
277
|
|
|||||
Income before income taxes and fixed charges, excluding interest on deposits applicable to the shareholders of The Bank of New York Mellon Corporation
|
1,212
|
|
1,216
|
|
1,731
|
|
3,579
|
|
3,616
|
|
|||||
Interest on deposits
|
9
|
|
8
|
|
24
|
|
32
|
|
70
|
|
|||||
Income before income taxes and fixed charges, including interest on deposits applicable to shareholders of The Bank of New York Mellon Corporation
|
$
|
1,221
|
|
$
|
1,224
|
|
$
|
1,755
|
|
$
|
3,611
|
|
$
|
3,686
|
|
Fixed charges
|
|
|
|
|
|
||||||||||
Interest expense, excluding interest on deposits
|
$
|
70
|
|
$
|
60
|
|
$
|
64
|
|
$
|
194
|
|
$
|
194
|
|
One-third net rental expense
(a)
|
27
|
|
27
|
|
28
|
|
82
|
|
83
|
|
|||||
Total fixed charges, excluding interest on deposits
|
97
|
|
87
|
|
92
|
|
276
|
|
277
|
|
|||||
Interest on deposits
|
9
|
|
8
|
|
24
|
|
32
|
|
70
|
|
|||||
Total fixed charges, including interests on deposits
|
$
|
106
|
|
$
|
95
|
|
$
|
116
|
|
$
|
308
|
|
$
|
347
|
|
Preferred stock dividends
|
$
|
13
|
|
$
|
23
|
|
$
|
13
|
|
$
|
49
|
|
$
|
49
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges and preferred stock dividends, excluding interest on deposits
|
$
|
110
|
|
$
|
110
|
|
$
|
105
|
|
$
|
325
|
|
$
|
326
|
|
Total fixed charges and preferred stock dividends, including interest on deposits
|
$
|
119
|
|
$
|
118
|
|
$
|
129
|
|
$
|
357
|
|
$
|
396
|
|
|
|
|
|
|
|
||||||||||
Earnings to fixed charges ratios
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
12.49
|
|
13.98
|
|
18.82
|
|
12.97
|
|
13.05
|
|
|||||
Including interest on deposits
|
11.52
|
|
12.88
|
|
15.13
|
|
11.72
|
|
10.62
|
|
|||||
|
|
|
|
|
|
||||||||||
Earnings to fixed charges and preferred stock dividends ratios
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
11.02
|
|
11.05
|
|
16.49
|
|
11.01
|
|
11.09
|
|
|||||
Including interest on deposits
|
10.26
|
|
10.37
|
|
13.60
|
|
10.11
|
|
9.31
|
|
(a)
|
The proportion deemed representative of the interest factor.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Gerald L. Hassell
|
|
Name: Gerald L. Hassell
|
|
Title: Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Thomas P. Gibbons
|
|
Name: Thomas P. Gibbons
|
|
Title: Chief Financial Officer
|
|
Dated: November 6, 2015
|
|
/s/ Gerald L. Hassell
|
|
|
|
|
Name:
|
Gerald L. Hassell
|
|
|
|
Title:
|
Chief Executive Officer
|
|
Dated: November 6, 2015
|
|
/s/ Thomas P. Gibbons
|
|
|
|
|
Name:
|
Thomas P. Gibbons
|
|
|
|
Title:
|
Chief Financial Officer
|
|