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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, 2016
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Common Stock, $0.01 par value
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1,057,336,621
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Page
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Part I - Financial Information
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Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk:
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Key third quarter 2016 and subsequent events
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Highlights of
third quarter 2016 results
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Item 1. Financial Statements:
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Page
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Notes to Consolidated Financial Statements:
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Part II - Other Information
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Quarter ended
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Year-to-date
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|||||||||||||
(dollar amounts in millions, except per common share amounts and unless otherwise noted)
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Sept. 30, 2016
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June 30, 2016
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Sept. 30, 2015
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Sept. 30, 2016
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Sept. 30, 2015
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|||||
Results applicable to common shareholders of The Bank of New York Mellon Corporation:
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||||||||||
Net income
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$
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974
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$
|
825
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$
|
820
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$
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2,603
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$
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2,416
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Basic earnings per share
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0.90
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0.76
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0.74
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2.39
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2.15
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|||||
Diluted earnings per share
|
0.90
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0.75
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0.74
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2.38
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2.13
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|||||
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||||||||||
Fee and other revenue
|
3,150
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2,999
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3,053
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9,119
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9,132
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|||||
Income (loss) from consolidated investment management funds
|
17
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10
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(22
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)
|
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21
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|
70
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|||||
Net interest revenue
|
774
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|
767
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759
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2,307
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2,266
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|||||
Total revenue
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$
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3,941
|
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$
|
3,776
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$
|
3,790
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$
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11,447
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$
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11,468
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||||||||||
Return on common equity
(annualized) (a)
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10.8
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%
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9.3
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%
|
9.1
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%
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9.8
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%
|
9.1
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%
|
|||||
Adjusted return on common equity
(annualized) –
Non-GAAP
(a)(b)
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11.3
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%
|
9.7
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%
|
9.7
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%
|
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10.3
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%
|
9.7
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%
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|||||
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|
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||||||||||
Return on tangible common equity
(annualized) –
Non-GAAP
(a)
|
23.5
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%
|
20.4
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%
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20.8
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%
|
|
21.5
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%
|
20.9
|
%
|
|||||
Adjusted return on tangible common equity
(annualized) –
Non-GAAP
(a)(b)(c)
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23.6
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%
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20.5
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%
|
21.0
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%
|
|
21.7
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%
|
21.2
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%
|
|||||
|
|
|
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||||||||||
Return on average assets
(annualized)
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1.10
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%
|
0.89
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%
|
0.87
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%
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0.96
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%
|
0.86
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%
|
|||||
|
|
|
|
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|
||||||||||
Fee revenue as a percentage of total revenue
|
79
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%
|
79
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%
|
81
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%
|
|
79
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%
|
79
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%
|
|||||
|
|
|
|
|
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|
||||||||||
Percentage of non-U.S. total revenue
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36
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%
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34
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%
|
37
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%
|
|
34
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%
|
36
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%
|
|||||
|
|
|
|
|
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||||||||||
Pre-tax operating margin
(a)
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33
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%
|
31
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%
|
29
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%
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31
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%
|
29
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%
|
|||||
Adjusted pre-tax operating margin
–
Non-GAAP
(a)(b)
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35
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%
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33
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%
|
31
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%
|
|
33
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%
|
31
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%
|
|||||
|
|
|
|
|
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|
||||||||||
Net interest margin (FTE)
|
1.06
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%
|
0.98
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%
|
0.98
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%
|
|
1.02
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%
|
0.98
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%
|
|||||
|
|
|
|
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|
||||||||||
Assets under management (“AUM”) at period end
(in billions) (d)
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$
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1,715
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$
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1,664
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$
|
1,625
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$
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1,715
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$
|
1,625
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Assets under custody and/or administration (“AUC/A”) at period end
(in trillions) (e)
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$
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30.5
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$
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29.5
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$
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28.5
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$
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30.5
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$
|
28.5
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Market value of securities on loan at period end
(in billions) (f)
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$
|
288
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$
|
278
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$
|
288
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|
|
$
|
288
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|
$
|
288
|
|
|
|
|
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||||||||||
Average common shares and equivalents outstanding
(in thousands)
:
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||||||||||
Basic
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1,062,248
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1,072,583
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1,098,003
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1,071,457
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1,110,056
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|||||
Diluted
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1,067,682
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1,078,271
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1,105,645
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1,077,150
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1,117,975
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|||||
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||||||||||
Selected average balances:
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||||||||||
Interest-earning assets
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$
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296,703
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$
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318,433
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$
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315,672
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$
|
308,560
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$
|
314,152
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Assets of operations
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$
|
350,190
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$
|
372,974
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$
|
371,328
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|
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$
|
362,092
|
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$
|
371,156
|
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Total assets
|
$
|
351,230
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$
|
374,220
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$
|
373,453
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$
|
363,290
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$
|
373,400
|
|
Interest-bearing deposits
|
$
|
155,109
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$
|
165,122
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$
|
169,753
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|
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$
|
160,728
|
|
$
|
166,700
|
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Noninterest-bearing deposits
|
$
|
81,619
|
|
$
|
84,033
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|
$
|
85,046
|
|
|
$
|
82,861
|
|
$
|
86,493
|
|
Preferred stock
|
$
|
3,284
|
|
$
|
2,552
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|
$
|
2,552
|
|
|
$
|
2,798
|
|
$
|
2,146
|
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Total The Bank of New York Mellon Corporation common shareholders’ equity
|
$
|
35,767
|
|
$
|
35,827
|
|
$
|
35,588
|
|
|
$
|
35,616
|
|
$
|
35,530
|
|
|
|
|
|
|
|
|
||||||||||
Other information at period end:
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|
|
|
|
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|
||||||||||
Cash dividends per common share
|
$
|
0.19
|
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$
|
0.17
|
|
$
|
0.17
|
|
|
$
|
0.53
|
|
$
|
0.51
|
|
Common dividend payout ratio
|
21
|
%
|
23
|
%
|
23
|
%
|
|
22
|
%
|
24
|
%
|
|||||
Common dividend yield
(annualized)
|
1.9
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%
|
1.8
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%
|
1.7
|
%
|
|
1.8
|
%
|
1.7
|
%
|
|||||
Closing stock price per common share
|
$
|
39.88
|
|
$
|
38.85
|
|
$
|
39.15
|
|
|
$
|
39.88
|
|
$
|
39.15
|
|
Market capitalization
|
$
|
42,167
|
|
$
|
41,479
|
|
$
|
42,789
|
|
|
$
|
42,167
|
|
$
|
42,789
|
|
Book value per common share – GAAP
(a)
|
$
|
34.19
|
|
$
|
33.72
|
|
$
|
32.59
|
|
|
$
|
34.19
|
|
$
|
32.59
|
|
Tangible book value per common share – Non-GAAP
(a)(c)
|
$
|
16.67
|
|
$
|
16.25
|
|
$
|
15.16
|
|
|
$
|
16.67
|
|
$
|
15.16
|
|
Full-time employees
|
52,300
|
|
52,200
|
|
51,300
|
|
|
52,300
|
|
51,300
|
|
|||||
Common shares outstanding
(in thousands)
|
1,057,337
|
|
1,067,674
|
|
1,092,953
|
|
|
1,057,337
|
|
1,092,953
|
|
Capital ratios
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
Consolidated regulatory capital ratios:
(g)
|
|
|
|
|||
Standardized:
|
|
|
|
|||
Common equity Tier 1 (“CET1”) ratio
|
12.2
|
%
|
11.8
|
%
|
11.5
|
%
|
Tier 1 capital ratio
|
14.4
|
|
13.4
|
|
13.1
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
14.8
|
|
13.8
|
|
13.5
|
|
Advanced:
|
|
|
|
|||
CET1 ratio
|
10.5
|
|
10.2
|
|
10.8
|
|
Tier 1 capital ratio
|
12.5
|
|
11.5
|
|
12.3
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
12.6
|
|
11.7
|
|
12.5
|
|
|
|
|
|
|||
Leverage capital ratio
(g)
|
6.6
|
|
5.8
|
|
6.0
|
|
Supplementary leverage ratio (“SLR”)
(g)
|
6.0
|
|
5.3
|
|
5.4
|
|
|
|
|
|
|||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
(a)
|
10.6
|
|
10.4
|
|
9.7
|
|
BNY Mellon common shareholders’ equity to total assets ratio – GAAP
(a)
|
9.7
|
|
9.7
|
|
9.0
|
|
BNY Mellon tangible common shareholders’ equity to tangible assets of operations
ratio – Non-GAAP
(a)(c)
|
6.5
|
|
6.6
|
|
6.5
|
|
|
|
|
|
|||
Selected regulatory capital ratios – fully phased-in – Non-GAAP:
|
|
|
|
|||
Estimated CET1 ratio:
(h)
|
|
|
|
|||
Standardized Approach
|
11.4
|
|
11.0
|
|
10.2
|
|
Advanced Approach
|
9.8
|
|
9.5
|
|
9.5
|
|
|
|
|
|
|||
Estimated SLR
(i)
|
5.7
|
|
5.0
|
|
4.9
|
|
(a)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
48
for a reconciliation of Non-GAAP measures.
|
(b)
|
Non-GAAP information for all periods presented excludes the net income (loss) attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for the
third quarter of 2016
also excludes a recovery of the previously impaired Sentinel loan.
|
(c)
|
Tangible book value per common share - Non-GAAP and tangible common equity exclude goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
48
for the reconciliation of Non-GAAP measures.
|
(d)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business and 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
$1.2 trillion
at
Sept. 30, 2016
,
$1.1 trillion
at
June 30, 2016
and
$1.0 trillion
at
Sept. 30, 2015
.
|
(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
$64 billion
at
Sept. 30, 2016
, $56 billion at
June 30, 2016
and
$61 billion
at
Sept. 30, 2015
.
|
(g)
|
For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches. The leverage capital ratio is based on Tier I capital, as phased-in, and quarterly average total assets. The SLR is based on Tier 1 capital, as phased-in, and average quarterly assets and certain off-balance sheet exposures. For additional information on our capital ratios, see “Capital” beginning on page
37
.
|
(h)
|
The estimated fully phased-in CET1 ratios (Non-GAAP) are based on our interpretation of the 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
37
.
|
(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 in 2018 as a required minimum ratio, 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 BNY Mellon and other U.S. global systemically important banks (“G-SIBs”). For additional information on these Non-GAAP ratios, see “Capital” beginning on page
37
.
|
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
$30.5 trillion
at
Sept. 30, 2016
compared with
$28.5 trillion
at
Sept. 30, 2015
. The
7%
increase primarily reflects higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar. (See “Investment Services business” beginning on page
19
.)
|
•
|
AUM totaled
$1.72 trillion
at
Sept. 30, 2016
compared with
$1.63 trillion
at
Sept. 30, 2015
. The
6%
increase primarily reflects higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar (principally versus the British pound). AUM excludes securities lending cash management assets and assets managed in the Investment Services business and the Other segment. (See “Investment Management business” beginning on page
16
.)
|
•
|
Investment services fees totaled
$1.89 billion
, an increase of
2%
compared with
$1.85 billion
in the
third quarter of 2015
. The increase primarily reflects higher money market fees, higher fees in Depositary Receipts and higher securities lending revenue, partially offset by the unfavorable impact of a stronger U.S. dollar. (See “Investment Services business” beginning on page
19
.)
|
•
|
Investment management and performance fees totaled
$860 million
, an increase of
4%
compared with
$829 million
in the
third quarter of 2015
. The increase primarily reflects higher market values and money market fees, partially offset by the unfavorable impact of a stronger U.S. dollar
|
•
|
Foreign exchange and other trading revenue totaled
$183 million
compared with
$179 million
in the
third quarter of 2015
. Foreign exchange revenue totaled
$175 million
, a decrease of
3%
compared with
$180 million
in the
third quarter of 2015
. The decrease primarily reflects lower volumes and volatility, partially offset by the positive net impact of foreign currency hedging activity. (See “Fee and other revenue” beginning on page
7
.)
|
•
|
Financing-related fees totaled
$58 million
compared with
$71 million
in the
third quarter of 2015
. The decrease primarily reflects lower underwriting fees and lower fees related to secured intraday credit provided to dealers in connection with their tri-party repo activity. (See “Fee and other revenue” beginning on page
7
.)
|
•
|
Investment and other income totaled
$92 million
compared with
$59 million
in the
third quarter of 2015
. The increase primarily reflects higher asset-related and seed capital gains. (See “Fee and other revenue” beginning on page
7
.)
|
•
|
Net interest revenue totaled
$774 million
compared with
$759 million
in the
third quarter of 2015
. The increase primarily reflects
the actions we have taken to reduce the levels of our lower yielding interest-earning assets and higher yielding interest-bearing deposits, as well as the impact of higher market interest rates.
Net interest margin (FTE) was
1.06%
in the
third quarter of 2016
compared with
0.98%
in the
third quarter of 2015
. (See “Net interest revenue” beginning on page
10
.)
|
•
|
The provision for credit losses was a credit of
$19 million
, driven by net recoveries of $13 million. The provision for credit losses was
$1 million
in the
third quarter of 2015
. (See “Asset quality and allowance for credit losses” beginning on page
29
.)
|
•
|
Noninterest expense totaled
$2.64 billion
compared with
$2.68 billion
in the
third quarter of 2015
. The decrease primarily reflects lower expenses in most expense categories, primarily driven by the favorable impact of a stronger U.S. dollar, lower other, furniture and equipment, legal, net occupancy and business development expenses, partially offset by higher staff and distribution and servicing expenses. (See “Noninterest expense” beginning on page
13
.)
|
•
|
The provision for income taxes was
$324 million
and the effective rate was
24.6%
in the third quarter 2016 compared with an income tax provision of
$282 million
and an effective tax rate of
25.4%
in the
third quarter of 2015
. (See “Income taxes” on page
14
.)
|
•
|
The net unrealized pre-tax gain on the total investment securities portfolio was
$1.4 billion
at
Sept. 30, 2016
compared with
$1.6 billion
at
June 30, 2016
. The decrease primarily reflects an increase in market interest rates. (See “Investment securities” beginning on page
25
.)
|
•
|
Our CET1 ratio under the Advanced Approach was
10.5%
at
Sept. 30, 2016
and
10.2%
at
June 30, 2016
. The increase reflects an increase in capital and a decrease in risk-weighted assets. Our CET1 ratio under the Standardized Approach was
12.2%
at
Sept. 30, 2016
and
11.8%
at
June 30, 2016
. (See “Capital” beginning on page
37
.)
|
•
|
Our estimated CET1 ratio (Non-GAAP) calculated under the Advanced Approach on a fully phased-in basis was
9.8%
at
Sept. 30, 2016
and
9.5%
at
June 30, 2016
. The increase reflects an increase in capital and a decrease in risk-weighted assets. Our estimated CET1 ratio (Non-GAAP) calculated under the Standardized Approach on a fully phased-in basis was
11.4%
at
Sept. 30, 2016
and
11.0%
at
June 30, 2016
. (See “Capital” beginning on page
37
.)
|
Fee and other revenue
|
|
|
|
|
|
|
|
YTD16
|
||||||||||||||
|
|
|
|
3Q16 vs.
|
|
|
|
vs.
|
||||||||||||||
(dollars in millions, unless otherwise noted)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
2Q16
|
|
3Q15
|
|
|
YTD16
|
|
YTD15
|
|
YTD15
|
||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Asset servicing
(a)
|
$
|
1,067
|
|
$
|
1,069
|
|
$
|
1,057
|
|
—
|
%
|
1
|
%
|
|
$
|
3,176
|
|
$
|
3,155
|
|
1
|
%
|
Clearing services
|
349
|
|
350
|
|
345
|
|
—
|
|
1
|
|
|
1,049
|
|
1,036
|
|
1
|
|
|||||
Issuer services
|
337
|
|
234
|
|
313
|
|
44
|
|
8
|
|
|
815
|
|
779
|
|
5
|
|
|||||
Treasury services
|
137
|
|
139
|
|
137
|
|
(1
|
)
|
—
|
|
|
407
|
|
418
|
|
(3
|
)
|
|||||
Total investment services fees
|
1,890
|
|
1,792
|
|
1,852
|
|
5
|
|
2
|
|
|
5,447
|
|
5,388
|
|
1
|
|
|||||
Investment management and performance fees
|
860
|
|
830
|
|
829
|
|
4
|
|
4
|
|
|
2,502
|
|
2,574
|
|
(3
|
)
|
|||||
Foreign exchange and other trading revenue
|
183
|
|
182
|
|
179
|
|
1
|
|
2
|
|
|
540
|
|
595
|
|
(9
|
)
|
|||||
Financing-related fees
|
58
|
|
57
|
|
71
|
|
2
|
|
(18
|
)
|
|
169
|
|
169
|
|
—
|
|
|||||
Distribution and servicing
|
43
|
|
43
|
|
41
|
|
—
|
|
5
|
|
|
125
|
|
121
|
|
3
|
|
|||||
Investment and other income
|
92
|
|
74
|
|
59
|
|
24
|
|
56
|
|
|
271
|
|
223
|
|
22
|
|
|||||
Total fee revenue
|
3,126
|
|
2,978
|
|
3,031
|
|
5
|
|
3
|
|
|
9,054
|
|
9,070
|
|
—
|
|
|||||
Net securities gains
|
24
|
|
21
|
|
22
|
|
N/M
|
|
N/M
|
|
|
65
|
|
62
|
|
5
|
|
|||||
Total fee and other revenue
|
$
|
3,150
|
|
$
|
2,999
|
|
$
|
3,053
|
|
5
|
%
|
3
|
%
|
|
$
|
9,119
|
|
$
|
9,132
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fee revenue as a percentage of total revenue
|
79
|
%
|
79
|
%
|
81
|
%
|
|
|
|
79
|
%
|
79
|
%
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
AUM at period end
(in billions) (b)
|
$
|
1,715
|
|
$
|
1,664
|
|
$
|
1,625
|
|
3
|
%
|
6
|
%
|
|
$
|
1,715
|
|
$
|
1,625
|
|
6
|
%
|
AUC/A at period end
(in trillions) (c)
|
$
|
30.5
|
|
$
|
29.5
|
|
$
|
28.5
|
|
3
|
%
|
7
|
%
|
|
$
|
30.5
|
|
$
|
28.5
|
|
7
|
%
|
(a)
|
Asset servicing fees include securities lending revenue of
$51 million
in the
third quarter of 2016
,
$52 million
in the
second quarter of 2016
,
$38 million
in the
third quarter of 2015
,
$153 million
in the
first nine months of 2016
and
$130 million
in the
first nine months of 2015
.
|
(b)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business and the Other segment.
|
(c)
|
Includes the AUC/A of CIBC Mellon of
$1.2 trillion
at
Sept. 30, 2016
,
$1.1 trillion
at
June 30, 2016
and
$1.0 trillion
at
Sept. 30, 2015
.
|
•
|
Asset servicing fees increased
1%
compared with the
third quarter of 2015
and slightly decreased compared with the
second quarter of 2016
.
The year-over-year increase primarily reflects higher money market fees and securities lending revenue, partially offset by the unfavorable
|
•
|
Clearing services fees increased
1%
compared with the
third quarter of 2015
and decreased slightly compared with the
second quarter of 2016
.
The year-over-year increase was primarily driven by higher money market fees, partially offset by the impact of the previously disclosed lost business.
|
•
|
Issuer services fees increased
8%
compared with the
third quarter of 2015
and increased
44%
(unannualized) compared with the
second quarter of 2016
.
The year-over-year increase primarily reflects increased activity in Depositary Receipts and higher money market fees in Corporate Trust. The sequential increase primarily reflects seasonally higher fees in Depositary Receipts.
|
•
|
Treasury services fees were unchanged compared with the
third quarter of 2015
and decreased
1%
(unannualized) compared with the
second quarter of 2016
.
|
Foreign exchange and other trading revenue
|
|
||||||||||||||
|
Year-to-date
|
||||||||||||||
(in millions)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
2016
|
|
2015
|
|
|||||
Foreign exchange
|
$
|
175
|
|
$
|
166
|
|
$
|
180
|
|
$
|
512
|
|
$
|
578
|
|
Other trading revenue (loss)
|
8
|
|
16
|
|
(1
|
)
|
28
|
|
17
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
183
|
|
$
|
182
|
|
$
|
179
|
|
$
|
540
|
|
$
|
595
|
|
Investment and other income
|
|
|
|
||||||||||||
|
|
|
|
Year-to-date
|
|||||||||||
(in millions)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
2016
|
|
2015
|
|
|||||
Corporate/bank-owned life insurance
|
$
|
34
|
|
$
|
31
|
|
$
|
32
|
|
$
|
96
|
|
$
|
96
|
|
Expense reimbursements from joint venture
|
18
|
|
17
|
|
16
|
|
52
|
|
47
|
|
|||||
Lease-related gains
|
—
|
|
—
|
|
—
|
|
44
|
|
53
|
|
|||||
Seed capital gains
(a)
|
16
|
|
11
|
|
7
|
|
38
|
|
25
|
|
|||||
Asset-related gains (losses)
|
8
|
|
1
|
|
(9
|
)
|
9
|
|
(5
|
)
|
|||||
Equity investment (losses)
|
(1
|
)
|
(4
|
)
|
(6
|
)
|
(8
|
)
|
(17
|
)
|
|||||
Other income
|
17
|
|
18
|
|
19
|
|
40
|
|
24
|
|
|||||
Total investment and other income
|
$
|
92
|
|
$
|
74
|
|
$
|
59
|
|
$
|
271
|
|
$
|
223
|
|
(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. The gain (loss) on seed capital investments in consolidated investment management funds was
$8 million
in the
third quarter of 2016
,
$6 million
in the
second quarter of 2016
,
$(17) million
in the
third quarter of 2015
,
$15 million
in the
first nine months of 2016
and
$7 million
in the
first nine months of 2015
.
|
Net interest revenue
|
|
|
|
|
|
|
|
YTD16
|
||||||||||||||
|
|
|
|
3Q16 vs.
|
|
Year-to-date
|
vs.
|
|||||||||||||||
(dollars in millions)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
2Q16
|
|
3Q15
|
|
|
2016
|
|
2015
|
|
YTD15
|
||||||
Net interest revenue (non-FTE)
|
$
|
774
|
|
$
|
767
|
|
$
|
759
|
|
1%
|
|
2%
|
|
|
$
|
2,307
|
|
$
|
2,266
|
|
2%
|
|
Tax equivalent adjustment
|
12
|
|
13
|
|
14
|
|
(8
|
)
|
(14
|
)
|
|
39
|
|
44
|
|
(11
|
)
|
|||||
Net interest revenue (FTE)
|
$
|
786
|
|
$
|
780
|
|
$
|
773
|
|
1%
|
|
2%
|
|
|
$
|
2,346
|
|
$
|
2,310
|
|
2%
|
|
Average interest-earning assets
|
$
|
296,703
|
|
$
|
318,433
|
|
$
|
315,672
|
|
(7)%
|
|
(6)%
|
|
|
$
|
308,560
|
|
$
|
314,152
|
|
(2)%
|
|
Net interest margin (FTE)
|
1.06
|
%
|
0.98
|
%
|
0.98
|
%
|
8
|
bps
|
8
|
bps
|
|
1.02
|
%
|
0.98
|
%
|
4
|
bps
|
Average balances and interest rates
|
Quarter ended
|
||||||||||||||||||||||||||||
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
||||||||||||||||||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average
balance
|
|
Interest
|
|
|
Average
rates
|
|
|
Average
balance
|
|
Interest
|
|
|
Average
rates
|
|
|
Average balance
|
|
Interest
|
|
|
Average rates
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
14,066
|
|
$
|
26
|
|
|
0.74
|
%
|
|
$
|
14,394
|
|
$
|
24
|
|
|
0.68
|
%
|
|
$
|
20,549
|
|
$
|
24
|
|
|
0.45
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
74,102
|
|
37
|
|
|
0.20
|
|
|
97,788
|
|
72
|
|
|
0.30
|
|
|
84,175
|
|
43
|
|
|
0.20
|
|
||||||
Federal funds sold and securities purchased under resale agreements
|
26,376
|
|
62
|
|
|
0.93
|
|
|
25,813
|
|
56
|
|
|
0.87
|
|
|
25,366
|
|
39
|
|
|
0.61
|
|
||||||
Margin loans
|
18,132
|
|
67
|
|
|
1.48
|
|
|
18,226
|
|
64
|
|
|
1.40
|
|
|
19,839
|
|
53
|
|
|
1.05
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Domestic offices
|
30,534
|
|
171
|
|
|
2.22
|
|
|
29,413
|
|
165
|
|
|
2.25
|
|
|
27,411
|
|
147
|
|
|
2.15
|
|
||||||
Foreign offices
|
12,912
|
|
47
|
|
|
1.45
|
|
|
12,645
|
|
49
|
|
|
1.57
|
|
|
14,407
|
|
41
|
|
|
1.13
|
|
||||||
Total non-margin loans
|
43,446
|
|
218
|
|
|
1.99
|
|
|
42,058
|
|
214
|
|
|
2.04
|
|
|
41,818
|
|
188
|
|
|
1.80
|
|
||||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Government obligations
|
25,279
|
|
94
|
|
|
1.49
|
|
|
24,571
|
|
92
|
|
|
1.50
|
|
|
23,935
|
|
92
|
|
|
1.52
|
|
||||||
U.S. Government agency obligations
|
56,464
|
|
240
|
|
|
1.70
|
|
|
56,050
|
|
236
|
|
|
1.68
|
|
|
55,624
|
|
245
|
|
|
1.76
|
|
||||||
State and political subdivisions – tax-exempt
|
3,598
|
|
27
|
|
|
2.98
|
|
|
3,778
|
|
28
|
|
|
2.90
|
|
|
4,465
|
|
31
|
|
|
2.81
|
|
||||||
Other securities
|
33,064
|
|
102
|
|
|
1.23
|
|
|
33,603
|
|
104
|
|
|
1.24
|
|
|
37,164
|
|
119
|
|
|
1.28
|
|
||||||
Trading securities
|
2,176
|
|
13
|
|
|
2.62
|
|
|
2,152
|
|
13
|
|
|
2.45
|
|
|
2,737
|
|
18
|
|
|
2.74
|
|
||||||
Total securities
|
120,581
|
|
476
|
|
|
1.58
|
|
|
120,154
|
|
473
|
|
|
1.57
|
|
|
123,925
|
|
505
|
|
|
1.63
|
|
||||||
Total interest-earning assets
|
$
|
296,703
|
|
$
|
886
|
|
(a)
|
1.19
|
%
|
|
$
|
318,433
|
|
$
|
903
|
|
(a)
|
1.14
|
%
|
|
$
|
315,672
|
|
$
|
852
|
|
(a)
|
1.08
|
%
|
Allowance for loan losses
|
(165
|
)
|
|
|
|
|
(163
|
)
|
|
|
|
|
(184
|
)
|
|
|
|
||||||||||||
Cash and due from banks
|
4,189
|
|
|
|
|
|
4,141
|
|
|
|
|
|
6,140
|
|
|
|
|
||||||||||||
Other assets
|
49,463
|
|
|
|
|
|
50,563
|
|
|
|
|
|
49,700
|
|
|
|
|
||||||||||||
Assets of consolidated investment management funds
|
1,040
|
|
|
|
|
|
1,246
|
|
|
|
|
|
2,125
|
|
|
|
|
||||||||||||
Total assets
|
$
|
351,230
|
|
|
|
|
|
$
|
374,220
|
|
|
|
|
|
$
|
373,453
|
|
|
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Money market rate accounts
|
$
|
7,346
|
|
$
|
1
|
|
|
0.06
|
%
|
|
$
|
7,280
|
|
$
|
1
|
|
|
0.06
|
%
|
|
$
|
7,518
|
|
$
|
1
|
|
|
0.08
|
%
|
Savings
|
1,201
|
|
1
|
|
|
0.41
|
|
|
1,175
|
|
1
|
|
|
0.39
|
|
|
1,279
|
|
1
|
|
|
0.27
|
|
||||||
Demand deposits
|
2,681
|
|
3
|
|
|
0.36
|
|
|
1,790
|
|
2
|
|
|
0.40
|
|
|
3,105
|
|
2
|
|
|
0.25
|
|
||||||
Time deposits
|
45,186
|
|
7
|
|
|
0.07
|
|
|
46,629
|
|
6
|
|
|
0.06
|
|
|
43,529
|
|
4
|
|
|
0.04
|
|
||||||
Foreign offices
|
98,695
|
|
(18
|
)
|
|
(0.08
|
)
|
|
108,248
|
|
2
|
|
|
0.01
|
|
|
114,322
|
|
1
|
|
|
—
|
|
||||||
Total interest-bearing deposits
|
155,109
|
|
(6
|
)
|
|
(0.02
|
)
|
|
165,122
|
|
12
|
|
|
0.03
|
|
|
169,753
|
|
9
|
|
|
0.02
|
|
||||||
Federal funds purchased and securities sold under repurchase agreements
|
9,585
|
|
6
|
|
|
0.24
|
|
|
18,204
|
|
13
|
|
|
0.28
|
|
|
14,796
|
|
(1
|
)
|
|
(0.04
|
)
|
||||||
Trading liabilities
|
735
|
|
2
|
|
|
1.11
|
|
|
662
|
|
1
|
|
|
0.66
|
|
|
475
|
|
2
|
|
|
1.42
|
|
||||||
Other borrowed funds
|
874
|
|
1
|
|
|
0.76
|
|
|
847
|
|
2
|
|
|
0.97
|
|
|
628
|
|
2
|
|
|
1.18
|
|
||||||
Commercial paper
|
1,173
|
|
1
|
|
|
0.35
|
|
|
3,781
|
|
4
|
|
|
0.37
|
|
|
2,195
|
|
1
|
|
|
0.11
|
|
||||||
Payables to customers and broker-dealers
|
16,873
|
|
3
|
|
|
0.07
|
|
|
16,935
|
|
2
|
|
|
0.05
|
|
|
11,504
|
|
1
|
|
|
0.06
|
|
||||||
Long-term debt
|
23,930
|
|
93
|
|
|
1.54
|
|
|
22,838
|
|
89
|
|
|
1.54
|
|
|
21,070
|
|
65
|
|
|
1.21
|
|
||||||
Total interest-bearing liabilities
|
$
|
208,279
|
|
$
|
100
|
|
|
0.19
|
%
|
|
$
|
228,389
|
|
$
|
123
|
|
|
0.21
|
%
|
|
$
|
220,421
|
|
$
|
79
|
|
|
0.14
|
%
|
Total noninterest-bearing deposits
|
81,619
|
|
|
|
|
|
84,033
|
|
|
|
|
|
85,046
|
|
|
|
|
||||||||||||
Other liabilities
|
21,343
|
|
|
|
|
|
22,345
|
|
|
|
|
|
27,880
|
|
|
|
|
||||||||||||
Liabilities and obligations of consolidated investment management funds
|
238
|
|
|
|
|
|
253
|
|
|
|
|
|
841
|
|
|
|
|
||||||||||||
Total liabilities
|
311,479
|
|
|
|
|
|
335,020
|
|
|
|
|
|
334,188
|
|
|
|
|
||||||||||||
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Redeemable noncontrolling interests
|
179
|
|
|
|
|
|
181
|
|
|
|
|
|
252
|
|
|
|
|
||||||||||||
Permanent equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total BNY Mellon shareholders’ equity
|
39,051
|
|
|
|
|
|
38,379
|
|
|
|
|
|
38,140
|
|
|
|
|
||||||||||||
Noncontrolling interests
|
521
|
|
|
|
|
|
640
|
|
|
|
|
|
873
|
|
|
|
|
||||||||||||
Total permanent equity
|
39,572
|
|
|
|
|
|
39,019
|
|
|
|
|
|
39,013
|
|
|
|
|
||||||||||||
Total liabilities, temporary equity and permanent equity
|
$
|
351,230
|
|
|
|
|
|
$
|
374,220
|
|
|
|
|
|
$
|
373,453
|
|
|
|
|
|||||||||
Net interest margin (FTE)
|
|
|
|
1.06
|
%
|
|
|
|
|
0.98
|
%
|
|
|
|
|
0.98
|
%
|
Note:
|
Interest and average rates were calculated on a taxable equivalent basis using dollar amounts in thousands and actual number of days in the year.
|
(a)
|
The tax equivalent adjustment was
$12 million
in the
third quarter of 2016
,
$13 million
in the
second quarter of 2016
and
$14 million
in the
third quarter of 2015
, and is based on the applicable tax rate (35%).
|
Average balances and interest rates
|
Year-to-date
|
||||||||||||||||||
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
||||||||||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average balance
|
|
Interest
|
|
|
Average rates
|
|
|
Average balance
|
|
Interest
|
|
|
Average rates
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
14,455
|
|
$
|
76
|
|
|
0.70
|
%
|
|
$
|
20,946
|
|
$
|
82
|
|
|
0.52
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
86,947
|
|
170
|
|
|
0.26
|
|
|
82,405
|
|
131
|
|
|
0.21
|
|
||||
Federal funds sold and securities purchased under resale agreements
|
25,275
|
|
167
|
|
|
0.88
|
|
|
23,127
|
|
105
|
|
|
0.61
|
|
||||
Margin loans
|
18,420
|
|
194
|
|
|
1.41
|
|
|
20,118
|
|
154
|
|
|
1.02
|
|
||||
Non-margin loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic offices
|
29,488
|
|
493
|
|
|
2.23
|
|
|
26,469
|
|
419
|
|
|
2.11
|
|
||||
Foreign offices
|
13,112
|
|
144
|
|
|
1.47
|
|
|
13,649
|
|
121
|
|
|
1.18
|
|
||||
Total non-margin loans
|
42,600
|
|
637
|
|
|
2.00
|
|
|
40,118
|
|
540
|
|
|
1.80
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government obligations
|
24,778
|
|
278
|
|
|
1.50
|
|
|
26,560
|
|
286
|
|
|
1.44
|
|
||||
U.S. Government agency obligations
|
56,161
|
|
727
|
|
|
1.73
|
|
|
54,911
|
|
716
|
|
|
1.74
|
|
||||
State and political subdivisions – tax-exempt
|
3,784
|
|
83
|
|
|
2.92
|
|
|
4,897
|
|
99
|
|
|
2.70
|
|
||||
Other securities
|
33,592
|
|
309
|
|
|
1.23
|
|
|
38,059
|
|
366
|
|
|
1.28
|
|
||||
Trading securities
|
2,548
|
|
45
|
|
|
2.37
|
|
|
3,011
|
|
57
|
|
|
2.61
|
|
||||
Total securities
|
120,863
|
|
1,442
|
|
|
1.59
|
|
|
127,438
|
|
1,524
|
|
|
1.60
|
|
||||
Total interest-earning assets
|
$
|
308,560
|
|
$
|
2,686
|
|
(a)
|
1.16
|
%
|
|
$
|
314,152
|
|
$
|
2,536
|
|
(a)
|
1.08
|
%
|
Allowance for loan losses
|
(162
|
)
|
|
|
|
|
(188
|
)
|
|
|
|
||||||||
Cash and due from banks
|
4,070
|
|
|
|
|
|
6,376
|
|
|
|
|
||||||||
Other assets
|
49,624
|
|
|
|
|
|
50,816
|
|
|
|
|
||||||||
Assets of consolidated investment management funds
|
1,198
|
|
|
|
|
|
2,244
|
|
|
|
|
||||||||
Total assets
|
$
|
363,290
|
|
|
|
|
|
$
|
373,400
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market rate accounts
|
$
|
7,337
|
|
$
|
3
|
|
|
0.06
|
%
|
|
$
|
7,186
|
|
$
|
5
|
|
|
0.09
|
%
|
Savings
|
1,203
|
|
3
|
|
|
0.36
|
|
|
1,344
|
|
3
|
|
|
0.28
|
|
||||
Demand deposits
|
1,782
|
|
5
|
|
|
0.40
|
|
|
3,138
|
|
5
|
|
|
0.22
|
|
||||
Time deposits
|
44,832
|
|
19
|
|
|
0.06
|
|
|
44,533
|
|
11
|
|
|
0.03
|
|
||||
Foreign offices
|
105,574
|
|
(9
|
)
|
|
(0.01
|
)
|
|
110,499
|
|
8
|
|
|
0.01
|
|
||||
Total interest-bearing deposits
|
160,728
|
|
21
|
|
|
0.02
|
|
|
166,700
|
|
32
|
|
|
0.03
|
|
||||
Federal funds purchased and securities sold under repurchase agreements
|
15,471
|
|
28
|
|
|
0.24
|
|
|
15,139
|
|
(5
|
)
|
|
(0.04
|
)
|
||||
Trading liabilities
|
650
|
|
5
|
|
|
1.05
|
|
|
633
|
|
7
|
|
|
1.41
|
|
||||
Other borrowed funds
|
827
|
|
5
|
|
|
0.90
|
|
|
841
|
|
7
|
|
|
1.12
|
|
||||
Commercial paper
|
1,657
|
|
5
|
|
|
0.37
|
|
|
2,071
|
|
2
|
|
|
0.10
|
|
||||
Payables to customers and broker-dealers
|
16,870
|
|
9
|
|
|
0.07
|
|
|
11,225
|
|
5
|
|
|
0.06
|
|
||||
Long-term debt
|
22,779
|
|
267
|
|
|
1.55
|
|
|
20,635
|
|
178
|
|
|
1.14
|
|
||||
Total interest-bearing liabilities
|
$
|
218,982
|
|
$
|
340
|
|
|
0.21
|
%
|
|
$
|
217,244
|
|
$
|
226
|
|
|
0.14
|
%
|
Total noninterest-bearing deposits
|
82,861
|
|
|
|
|
|
86,493
|
|
|
|
|
||||||||
Other liabilities
|
21,993
|
|
|
|
|
|
30,004
|
|
|
|
|
||||||||
Liabilities and obligations of consolidated investment management funds
|
250
|
|
|
|
|
|
900
|
|
|
|
|
||||||||
Total liabilities
|
324,086
|
|
|
|
|
|
334,641
|
|
|
|
|
||||||||
Temporary equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
183
|
|
|
|
|
|
240
|
|
|
|
|
||||||||
Permanent equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total BNY Mellon shareholders’ equity
|
38,414
|
|
|
|
|
|
37,676
|
|
|
|
|
||||||||
Noncontrolling interests
|
607
|
|
|
|
|
|
843
|
|
|
|
|
||||||||
Total permanent equity
|
39,021
|
|
|
|
|
|
38,519
|
|
|
|
|
||||||||
Total liabilities, temporary equity and permanent equity
|
$
|
363,290
|
|
|
|
|
|
$
|
373,400
|
|
|
|
|
||||||
Net interest margin (FTE)
|
|
|
|
1.02
|
%
|
|
|
|
|
0.98
|
%
|
Note:
|
Interest and average rates were calculated on a taxable equivalent basis using dollar amounts in thousands and actual number of days in the year.
|
(a)
|
The tax equivalent adjustment was
$39 million
in the
first nine months of 2016
and
$44 million
in the
first nine months of 2015
, and is based on the applicable tax rate (35%).
|
Noninterest expense
|
|
|
|
|
|
|
|
YTD16
|
||||||||||||||
|
|
|
|
3Q16 vs.
|
|
|
|
vs.
|
||||||||||||||
(dollars in millions)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
2Q16
|
|
3Q15
|
|
|
YTD16
|
|
YTD15
|
|
YTD15
|
||||||
Staff
|
$
|
1,467
|
|
$
|
1,412
|
|
$
|
1,437
|
|
4
|
%
|
2
|
%
|
|
$
|
4,338
|
|
$
|
4,356
|
|
—
|
%
|
Professional, legal and other purchased services
|
292
|
|
290
|
|
301
|
|
1
|
|
(3
|
)
|
|
860
|
|
902
|
|
(5
|
)
|
|||||
Software
|
156
|
|
160
|
|
154
|
|
(3
|
)
|
1
|
|
|
470
|
|
470
|
|
—
|
|
|||||
Net occupancy
|
143
|
|
152
|
|
152
|
|
(6
|
)
|
(6
|
)
|
|
437
|
|
452
|
|
(3
|
)
|
|||||
Distribution and servicing
|
105
|
|
102
|
|
95
|
|
3
|
|
11
|
|
|
307
|
|
289
|
|
6
|
|
|||||
Sub-custodian
|
59
|
|
70
|
|
65
|
|
(16
|
)
|
(9
|
)
|
|
188
|
|
210
|
|
(10
|
)
|
|||||
Furniture and equipment
|
59
|
|
63
|
|
72
|
|
(6
|
)
|
(18
|
)
|
|
187
|
|
212
|
|
(12
|
)
|
|||||
Business development
|
52
|
|
65
|
|
59
|
|
(20
|
)
|
(12
|
)
|
|
174
|
|
192
|
|
(9
|
)
|
|||||
Other
|
231
|
|
240
|
|
268
|
|
(4
|
)
|
(14
|
)
|
|
712
|
|
760
|
|
(6
|
)
|
|||||
Amortization of intangible assets
|
61
|
|
59
|
|
66
|
|
3
|
|
(8
|
)
|
|
177
|
|
197
|
|
(10
|
)
|
|||||
M&I, litigation and restructuring charges
|
18
|
|
7
|
|
11
|
|
N/M
|
N/M
|
|
42
|
|
67
|
|
N/M
|
||||||||
Total noninterest expense – GAAP
|
$
|
2,643
|
|
$
|
2,620
|
|
$
|
2,680
|
|
1
|
%
|
(1
|
)%
|
|
$
|
7,892
|
|
$
|
8,107
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Staff expense as a percentage of total revenue
|
37
|
%
|
37
|
%
|
38
|
%
|
|
|
|
38
|
%
|
38
|
%
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Full-time employees at period end
|
52,300
|
|
52,200
|
|
51,300
|
|
—
|
|
2%
|
|
|
52,300
|
|
51,300
|
|
2
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Memo:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total noninterest expense excluding amortization of intangible assets and M&I, litigation and restructuring charges – Non-GAAP
|
$
|
2,564
|
|
$
|
2,554
|
|
$
|
2,603
|
|
—
|
%
|
(1
|
)%
|
|
$
|
7,673
|
|
$
|
7,843
|
|
(2
|
)%
|
Key market metrics
|
|
|
|
|
|
|
|
|
|
YTD16
|
||||||||||||||||||
|
|
|
|
|
3Q16 vs.
|
|
|
|
vs.
|
|||||||||||||||||||
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q16
|
|
3Q15
|
|
|
YTD16
|
|
YTD15
|
|
YTD15
|
|||||||||
S&P 500 Index
(a)
|
2168
|
|
2099
|
|
2060
|
|
2044
|
|
1920
|
|
3
|
%
|
13 %
|
|
|
2168
|
|
1920
|
|
13 %
|
|
|||||||
S&P 500 Index – daily average
|
2162
|
|
2075
|
|
1951
|
|
2052
|
|
2027
|
|
4
|
|
7
|
|
|
2065
|
|
2064
|
|
—
|
|
|||||||
FTSE 100 Index
(a)
|
6899
|
|
6504
|
|
6175
|
|
6242
|
|
6062
|
|
6
|
|
14
|
|
|
6899
|
|
6062
|
|
14
|
|
|||||||
FTSE 100 Index – daily average
|
6765
|
|
6204
|
|
5988
|
|
6271
|
|
6399
|
|
9
|
|
6
|
|
|
6326
|
|
6698
|
|
(6
|
)
|
|||||||
MSCI EAFE
(a)
|
1702
|
|
1608
|
|
1652
|
|
1716
|
|
1644
|
|
6
|
|
4
|
|
|
1702
|
|
1644
|
|
4
|
|
|||||||
MSCI EAFE – daily average
|
1677
|
|
1648
|
|
1593
|
|
1732
|
|
1785
|
|
2
|
|
(6
|
)
|
|
1640
|
|
1836
|
|
(11
|
)
|
|||||||
Barclays Capital Global Aggregate Bond
SM
Index
(a)(b)
|
386
|
|
382
|
|
368
|
|
342
|
|
346
|
|
1
|
|
12
|
|
|
386
|
|
346
|
|
12
|
|
|||||||
NYSE and NASDAQ share volume
(in billions)
|
186
|
|
203
|
|
218
|
|
198
|
|
206
|
|
(8
|
)
|
(10
|
)
|
|
608
|
|
578
|
|
5
|
|
|||||||
JPMorgan G7 Volatility Index – daily average
(c)
|
10.19
|
|
11.12
|
|
10.60
|
|
9.49
|
|
9.93
|
|
(8
|
)
|
3
|
|
|
10.63
|
|
10.13
|
|
5
|
|
|||||||
Average Fed Funds effective rate
|
0.39
|
%
|
0.37
|
%
|
0.36
|
%
|
0.16
|
%
|
0.13
|
%
|
2 bps
|
|
26 bps
|
|
|
0.37
|
%
|
0.12
|
%
|
25 bps
|
|
|||||||
Foreign exchange rates vs. U.S. dollar:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
British pound
(a)
|
$
|
1.30
|
|
$
|
1.34
|
|
$
|
1.44
|
|
$
|
1.48
|
|
$
|
1.52
|
|
(3)%
|
|
(14)%
|
|
|
$
|
1.30
|
|
$
|
1.52
|
|
(14) %
|
|
British pound – average rate
|
1.31
|
|
1.43
|
|
1.43
|
|
1.52
|
|
1.55
|
|
(8
|
)
|
(15
|
)
|
|
1.39
|
|
1.53
|
|
(9
|
)
|
|||||||
Euro
(a)
|
1.12
|
|
1.11
|
|
1.14
|
|
1.09
|
|
1.12
|
|
1
|
|
—
|
|
|
1.12
|
|
1.12
|
|
—
|
|
|||||||
Euro – average rate
|
1.12
|
|
1.13
|
|
1.10
|
|
1.10
|
|
1.11
|
|
(1
|
)
|
1
|
|
|
1.12
|
|
1.11
|
|
1
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
YTD16
|
|||||||||||||||||
(dollar amounts in millions)
|
|
|
|
|
|
|
3Q16 vs.
|
|
|
|
vs.
|
|||||||||||||||||
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q16
|
|
3Q15
|
|
|
YTD16
|
|
YTD15
|
|
YTD15
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment management fees:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Mutual funds
|
$
|
309
|
|
$
|
304
|
|
$
|
300
|
|
$
|
294
|
|
$
|
301
|
|
2
|
%
|
3
|
%
|
|
$
|
913
|
|
$
|
914
|
|
—
|
%
|
Institutional clients
|
362
|
|
344
|
|
334
|
|
350
|
|
347
|
|
5
|
|
4
|
|
|
1,040
|
|
1,075
|
|
(3
|
)
|
|||||||
Wealth management
|
166
|
|
160
|
|
152
|
|
155
|
|
156
|
|
4
|
|
6
|
|
|
478
|
|
475
|
|
1
|
|
|||||||
Investment management fees
(a)
|
837
|
|
808
|
|
786
|
|
799
|
|
804
|
|
4
|
|
4
|
|
|
2,431
|
|
2,464
|
|
(1
|
)
|
|||||||
Performance fees
|
8
|
|
9
|
|
11
|
|
55
|
|
7
|
|
N/M
|
|
14
|
|
|
28
|
|
42
|
|
(33
|
)
|
|||||||
Investment management and performance fees
|
845
|
|
817
|
|
797
|
|
854
|
|
811
|
|
3
|
|
4
|
|
|
2,459
|
|
2,506
|
|
(2
|
)
|
|||||||
Distribution and servicing
|
49
|
|
49
|
|
46
|
|
39
|
|
37
|
|
—
|
|
32
|
|
|
144
|
|
113
|
|
27
|
|
|||||||
Other
(a)
|
(18
|
)
|
(10
|
)
|
(31
|
)
|
22
|
|
(5
|
)
|
N/M
|
|
N/M
|
|
|
(59
|
)
|
53
|
|
N/M
|
|
|||||||
Total fee and other revenue
(a)
|
876
|
|
856
|
|
812
|
|
915
|
|
843
|
|
2
|
|
4
|
|
|
2,544
|
|
2,672
|
|
(5
|
)
|
|||||||
Net interest revenue
|
82
|
|
82
|
|
83
|
|
84
|
|
83
|
|
—
|
|
(1
|
)
|
|
247
|
|
235
|
|
5
|
|
|||||||
Total revenue
|
958
|
|
938
|
|
895
|
|
999
|
|
926
|
|
2
|
|
3
|
|
|
2,791
|
|
2,907
|
|
(4
|
)
|
|||||||
Provision for credit losses
|
—
|
|
1
|
|
(1
|
)
|
(4
|
)
|
1
|
|
N/M
|
|
N/M
|
|
|
—
|
|
3
|
|
N/M
|
|
|||||||
Noninterest expense (ex. amortization of intangible assets)
|
680
|
|
684
|
|
660
|
|
689
|
|
665
|
|
(1
|
)
|
2
|
|
|
2,024
|
|
2,073
|
|
(2
|
)
|
|||||||
Amortization of intangible assets
|
22
|
|
19
|
|
19
|
|
24
|
|
24
|
|
16
|
|
(8
|
)
|
|
60
|
|
73
|
|
(18
|
)
|
|||||||
Total noninterest expense
|
702
|
|
703
|
|
679
|
|
713
|
|
689
|
|
—
|
|
2
|
|
|
2,084
|
|
2,146
|
|
(3
|
)
|
|||||||
Income before taxes
|
$
|
256
|
|
$
|
234
|
|
$
|
217
|
|
$
|
290
|
|
$
|
236
|
|
9
|
%
|
8
|
%
|
|
$
|
707
|
|
$
|
758
|
|
(7
|
)%
|
Income before taxes (ex. amortization of intangible
assets)
–
Non-GAAP
|
$
|
278
|
|
$
|
253
|
|
$
|
236
|
|
$
|
314
|
|
$
|
260
|
|
10
|
%
|
7
|
%
|
|
$
|
767
|
|
$
|
831
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Pre-tax operating margin
|
27
|
%
|
25
|
%
|
24
|
%
|
29
|
%
|
25
|
%
|
|
|
|
25
|
%
|
26
|
%
|
|
||||||||||
Adjusted pre-tax operating margin
–
Non-GAAP
(b)
|
33
|
%
|
31
|
%
|
30
|
%
|
36
|
%
|
34
|
%
|
|
|
|
32
|
%
|
34
|
%
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average balances:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average loans
|
$
|
15,308
|
|
$
|
14,795
|
|
$
|
14,275
|
|
$
|
13,447
|
|
$
|
12,779
|
|
3
|
%
|
20
|
%
|
|
$
|
14,795
|
|
$
|
12,241
|
|
21
|
%
|
Average deposits
|
$
|
15,600
|
|
$
|
15,518
|
|
$
|
15,971
|
|
$
|
15,497
|
|
$
|
15,282
|
|
1
|
%
|
2
|
%
|
|
$
|
15,696
|
|
$
|
15,046
|
|
4
|
%
|
(a)
|
Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests.
See page
51
for a breakdown of the revenue line items in the Investment Management business impacted by the consolidated investment management funds.
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 provision for credit losses and is net of distribution and servicing expense.
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
48
for the reconciliation of this Non-GAAP measure.
|
AUM trends
(a)
|
|
|
|
|
|
3Q16 vs.
|
|||||||||||||
(dollar amounts in billions)
|
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q16
|
|
3Q15
|
|
|||||
AUM at period end, by product type:
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
$
|
228
|
|
$
|
225
|
|
$
|
222
|
|
$
|
224
|
|
$
|
224
|
|
1
|
%
|
2
|
%
|
Fixed income
|
221
|
|
218
|
|
219
|
|
216
|
|
216
|
|
1
|
|
2
|
|
|||||
Index
|
315
|
|
305
|
|
319
|
|
329
|
|
325
|
|
3
|
|
(3
|
)
|
|||||
Liability-driven investments
(b)
|
609
|
|
573
|
|
542
|
|
514
|
|
520
|
|
6
|
|
17
|
|
|||||
Alternative investments
|
70
|
|
68
|
|
66
|
|
63
|
|
62
|
|
3
|
|
13
|
|
|||||
Cash
|
272
|
|
275
|
|
271
|
|
279
|
|
278
|
|
(1
|
)
|
(2
|
)
|
|||||
Total AUM
|
$
|
1,715
|
|
$
|
1,664
|
|
$
|
1,639
|
|
$
|
1,625
|
|
$
|
1,625
|
|
3
|
%
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||||
AUM at period end, by client type:
|
|
|
|
|
|
|
|
|
|
||||||||||
Institutional
|
$
|
1,234
|
|
$
|
1,182
|
|
$
|
1,155
|
|
$
|
1,127
|
|
$
|
1,129
|
|
4
|
%
|
9
|
%
|
Mutual funds
|
396
|
|
398
|
|
405
|
|
420
|
|
419
|
|
(1
|
)
|
(5
|
)
|
|||||
Private client
|
85
|
|
84
|
|
79
|
|
78
|
|
77
|
|
1
|
|
10
|
|
|||||
Total AUM
|
$
|
1,715
|
|
$
|
1,664
|
|
$
|
1,639
|
|
$
|
1,625
|
|
$
|
1,625
|
|
3
|
%
|
6
|
%
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in AUM:
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance of AUM
|
$
|
1,664
|
|
$
|
1,639
|
|
$
|
1,625
|
|
$
|
1,625
|
|
$
|
1,700
|
|
|
|
||
Net inflows (outflows):
|
|
|
|
|
|
|
|
||||||||||||
Long-term strategies:
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
(3
|
)
|
(2
|
)
|
(3
|
)
|
(9
|
)
|
(4
|
)
|
|
|
|||||||
Fixed income
|
—
|
|
(2
|
)
|
—
|
|
1
|
|
(3
|
)
|
|
|
|||||||
Liability-driven investments
(b)
|
4
|
|
15
|
|
14
|
|
11
|
|
11
|
|
|
|
|||||||
Alternative investments
|
2
|
|
1
|
|
1
|
|
2
|
|
1
|
|
|
|
|||||||
Total long-term active strategies inflows
|
3
|
|
12
|
|
12
|
|
5
|
|
5
|
|
|
|
|||||||
Index
|
(2
|
)
|
(17
|
)
|
(11
|
)
|
(16
|
)
|
(10
|
)
|
|
|
|||||||
Total long-term strategies inflows (outflows)
|
1
|
|
(5
|
)
|
1
|
|
(11
|
)
|
(5
|
)
|
|
|
|||||||
Short term strategies:
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
(1
|
)
|
4
|
|
(9
|
)
|
2
|
|
(10
|
)
|
|
|
|||||||
Total net (outflows)
|
—
|
|
(1
|
)
|
(8
|
)
|
(9
|
)
|
(15
|
)
|
|
|
|||||||
Net market impact/other
|
80
|
|
71
|
|
41
|
|
24
|
|
(35
|
)
|
|
|
|||||||
Net currency impact
|
(29
|
)
|
(47
|
)
|
(19
|
)
|
(15
|
)
|
(25
|
)
|
|
|
|||||||
Acquisition
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
|
|
|||||||
Ending balance of AUM
|
$
|
1,715
|
|
$
|
1,664
|
|
$
|
1,639
|
|
$
|
1,625
|
|
$
|
1,625
|
|
3
|
%
|
6
|
%
|
(a)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business and the Other segment.
|
(b)
|
Includes currency overlay AUM.
|
(dollars in millions, unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
YTD16
|
|||||||||||||||||
|
|
|
|
|
3Q16 vs.
|
|
|
|
vs.
|
|||||||||||||||||||
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q16
|
|
3Q15
|
|
|
YTD16
|
|
YTD15
|
|
YTD15
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Asset servicing
|
$
|
1,039
|
|
$
|
1,043
|
|
$
|
1,016
|
|
$
|
1,009
|
|
$
|
1,034
|
|
—
|
%
|
—
|
%
|
|
$
|
3,098
|
|
$
|
3,089
|
|
—
|
%
|
Clearing services
|
347
|
|
350
|
|
348
|
|
337
|
|
345
|
|
(1
|
)
|
1
|
|
|
1,045
|
|
1,033
|
|
1
|
|
|||||||
Issuer services
|
336
|
|
233
|
|
244
|
|
199
|
|
312
|
|
44
|
|
8
|
|
|
813
|
|
777
|
|
5
|
|
|||||||
Treasury services
|
136
|
|
137
|
|
129
|
|
135
|
|
135
|
|
(1
|
)
|
1
|
|
|
402
|
|
411
|
|
(2
|
)
|
|||||||
Total investment services fees
|
1,858
|
|
1,763
|
|
1,737
|
|
1,680
|
|
1,826
|
|
5
|
|
2
|
|
|
5,358
|
|
5,310
|
|
1
|
|
|||||||
Foreign exchange and other trading revenue
|
177
|
|
161
|
|
168
|
|
150
|
|
179
|
|
10
|
|
(1
|
)
|
|
506
|
|
572
|
|
(12
|
)
|
|||||||
Other
(a)
|
148
|
|
130
|
|
125
|
|
127
|
|
129
|
|
14
|
|
15
|
|
|
403
|
|
338
|
|
19
|
|
|||||||
Total fee and other revenue
|
2,183
|
|
2,054
|
|
2,030
|
|
1,957
|
|
2,134
|
|
6
|
|
2
|
|
|
6,267
|
|
6,220
|
|
1
|
|
|||||||
Net interest revenue
|
715
|
|
690
|
|
679
|
|
664
|
|
662
|
|
4
|
|
8
|
|
|
2,084
|
|
1,958
|
|
6
|
|
|||||||
Total revenue
|
2,898
|
|
2,744
|
|
2,709
|
|
2,621
|
|
2,796
|
|
6
|
|
4
|
|
|
8,351
|
|
8,178
|
|
2
|
|
|||||||
Provision for credit losses
|
1
|
|
(7
|
)
|
14
|
|
8
|
|
7
|
|
N/M
|
|
N/M
|
|
|
8
|
|
20
|
|
N/M
|
||||||||
Noninterest expense (ex. amortization of intangible assets)
|
1,812
|
|
1,819
|
|
1,770
|
|
1,791
|
|
1,853
|
|
—
|
|
(2
|
)
|
|
5,401
|
|
5,549
|
|
(3
|
)
|
|||||||
Amortization of intangible assets
|
39
|
|
40
|
|
38
|
|
40
|
|
41
|
|
(3
|
)
|
(5
|
)
|
|
117
|
|
122
|
|
(4
|
)
|
|||||||
Total noninterest expense
|
1,851
|
|
1,859
|
|
1,808
|
|
1,831
|
|
1,894
|
|
—
|
|
(2
|
)
|
|
5,518
|
|
5,671
|
|
(3
|
)
|
|||||||
Income before taxes
|
$
|
1,046
|
|
$
|
892
|
|
$
|
887
|
|
$
|
782
|
|
$
|
895
|
|
17
|
%
|
17
|
%
|
|
$
|
2,825
|
|
$
|
2,487
|
|
14
|
%
|
Income before taxes (ex. amortization of intangible assets)
–
Non-GAAP
|
$
|
1,085
|
|
$
|
932
|
|
$
|
925
|
|
$
|
822
|
|
$
|
936
|
|
16
|
%
|
16
|
%
|
|
$
|
2,942
|
|
$
|
2,609
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Pre-tax operating margin
|
36
|
%
|
33
|
%
|
33
|
%
|
30
|
%
|
32
|
%
|
|
|
|
34
|
%
|
30
|
%
|
|
||||||||||
Pre-tax operating margin (ex. provision for credit losses and amortization of intangible
assets) - Non-GAAP
|
37
|
%
|
34
|
%
|
35
|
%
|
32
|
%
|
34
|
%
|
|
|
|
35
|
%
|
32
|
%
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment services fees as a percentage of noninterest
expense (ex. amortization of intangible assets)
|
103
|
%
|
97
|
%
|
98
|
%
|
94
|
%
|
99
|
%
|
|
|
|
99
|
%
|
96
|
%
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Securities lending revenue
|
$
|
42
|
|
$
|
42
|
|
$
|
42
|
|
$
|
39
|
|
$
|
33
|
|
—
|
%
|
27
|
%
|
|
$
|
126
|
|
$
|
114
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Average loans
|
$
|
44,329
|
|
$
|
43,786
|
|
$
|
45,004
|
|
$
|
45,844
|
|
$
|
46,222
|
|
1
|
%
|
(4
|
)%
|
|
$
|
44,373
|
|
$
|
45,709
|
|
(3
|
)%
|
Average deposits
|
$
|
220,316
|
|
$
|
221,998
|
|
$
|
215,707
|
|
$
|
229,241
|
|
$
|
232,250
|
|
(1
|
)%
|
(5
|
)%
|
|
$
|
219,344
|
|
$
|
235,381
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AUC/A at period end
(in trillions) (b)
|
$
|
30.5
|
|
$
|
29.5
|
|
$
|
29.1
|
|
$
|
28.9
|
|
$
|
28.5
|
|
3
|
%
|
7
|
%
|
|
$
|
30.5
|
|
$
|
28.5
|
|
7
|
%
|
Market value of securities on loan at period end
(in billions) (c)
|
$
|
288
|
|
$
|
278
|
|
$
|
300
|
|
$
|
277
|
|
$
|
288
|
|
4
|
%
|
—
|
%
|
|
$
|
288
|
|
$
|
288
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Asset servicing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Estimated new business wins
(AUC/A)
(in billions)
|
$
|
150
|
|
$
|
167
|
|
$
|
40
|
|
$
|
49
|
|
$
|
84
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Depositary Receipts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Number of sponsored programs
|
1,094
|
|
1,112
|
|
1,131
|
|
1,145
|
|
1,176
|
|
(2
|
)%
|
(7
|
)%
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Clearing services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average active clearing accounts (U.S. platform) (
in thousands)
|
5,942
|
|
5,946
|
|
5,947
|
|
5,959
|
|
6,107
|
|
—
|
%
|
(3
|
)%
|
|
|
|
|
||||||||||
Average long-term mutual fund assets (U.S. platform)
|
$
|
443,112
|
|
$
|
431,150
|
|
$
|
415,025
|
|
$
|
437,260
|
|
$
|
447,287
|
|
3
|
%
|
(1
|
)%
|
|
|
|
|
|||||
Average investor margin loans (U.S. platform)
|
$
|
10,834
|
|
$
|
10,633
|
|
$
|
11,063
|
|
$
|
11,575
|
|
$
|
11,806
|
|
2
|
%
|
(8
|
)%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Broker-Dealer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average tri-party repo balances (
in billions)
|
$
|
2,212
|
|
$
|
2,108
|
|
$
|
2,104
|
|
$
|
2,153
|
|
$
|
2,142
|
|
5
|
%
|
3
|
%
|
|
|
|
|
(a)
|
Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue and investment and other income.
|
(b)
|
Includes the AUC/A of CIBC Mellon of
$1.2 trillion
at
Sept. 30, 2016
,
$1.1 trillion
at
June 30, 2016
and
March 31, 2016
and
$1.0 trillion
at
Dec. 31, 2015
and
Sept. 30, 2015
.
|
(c)
|
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
$64 billion
at
Sept. 30, 2016
,
$56 billion
at
June 30, 2016
and
March 31, 2016
,
$55 billion
at
Dec. 31, 2015
and
$61 billion
at
Sept. 30, 2015
.
|
•
|
Asset servicing fees (global custody, broker-dealer services and Global Collateral Services) were
$1.039 billion
compared with
$1.034 billion
in the
third quarter of 2015
and
$1.043 billion
in the
second quarter of 2016
. The increase compared with the third quarter of 2015 primarily reflects higher money market fees and securities lending revenue, partially offset by the unfavorable impact of a stronger U.S. dollar and downsizing of the UK transfer agency business.
|
•
|
Clearing services fees were
$347 million
compared with
$345 million
in the
third quarter of 2015
and
$350 million
in the
second quarter of 2016
. The increase compared with the third quarter of 2015 was primarily driven by higher money market fees, partially offset by the impact of previously disclosed lost business.
|
•
|
Issuer services fees (Corporate Trust and Depositary Receipts) were
$336 million
compared with
$312 million
in the
third quarter of 2015
and
$233 million
in the
second quarter of 2016
. The increase compared with the third quarter of 2015 primarily reflects increased activity in Depositary Receipts and higher money market fees in Corporate Trust. The increase compared with the second quarter of 2016 primarily reflects seasonally higher fees in Depositary Receipts.
|
•
|
Treasury services fees were
$136 million
compared with
$135 million
in the
third quarter of 2015
and
$137 million
in the
second quarter of 2016
.
|
|
|
|
|
|
|
|
|
||||||||||||||
(dollars in millions)
|
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
YTD16
|
|
YTD15
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||||||||
Fee and other revenue
|
$
|
100
|
|
$
|
95
|
|
$
|
129
|
|
$
|
89
|
|
$
|
59
|
|
$
|
324
|
|
$
|
247
|
|
Net interest (expense) revenue
|
(23
|
)
|
(5
|
)
|
4
|
|
12
|
|
14
|
|
(24
|
)
|
73
|
|
|||||||
Total revenue
|
77
|
|
90
|
|
133
|
|
101
|
|
73
|
|
300
|
|
320
|
|
|||||||
Provision for credit losses
|
(20
|
)
|
(3
|
)
|
(3
|
)
|
159
|
|
(7
|
)
|
(26
|
)
|
(26
|
)
|
|||||||
Noninterest expense (ex. amortization of intangible assets and M&I and restructuring charges (recoveries))
|
88
|
|
53
|
|
141
|
|
150
|
|
97
|
|
282
|
|
284
|
|
|||||||
Amortization of intangible assets
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
2
|
|
|||||||
M&I and restructuring charges (recoveries)
|
—
|
|
3
|
|
(1
|
)
|
(4
|
)
|
(2
|
)
|
2
|
|
2
|
|
|||||||
Total noninterest expense
|
88
|
|
56
|
|
140
|
|
146
|
|
96
|
|
284
|
|
288
|
|
|||||||
Income (loss) before taxes
|
$
|
9
|
|
$
|
37
|
|
$
|
(4
|
)
|
$
|
(204
|
)
|
$
|
(16
|
)
|
$
|
42
|
|
$
|
58
|
|
Income (loss) before taxes (ex. amortization of
intangible assets and M&I and restructuring charges (recoveries))
–
Non-GAAP
|
$
|
9
|
|
$
|
40
|
|
$
|
(5
|
)
|
$
|
(208
|
)
|
$
|
(17
|
)
|
$
|
44
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average loans and leases
|
$
|
1,941
|
|
$
|
1,703
|
|
$
|
1,917
|
|
$
|
2,673
|
|
$
|
2,656
|
|
$
|
1,853
|
|
$
|
2,287
|
|
Critical policy
|
Reference
|
Allowance for loan losses and allowance for lending-related commitments
|
2015 Annual Report, pages 33 - 35.
|
Fair value of financial instruments and derivatives
|
2015 Annual Report, pages 35 - 37.
|
OTTI
|
2015 Annual Report, page 37.
|
Goodwill and other intangibles
|
2015 Annual Report, pages 37 - 38 and Note 5 beginning on page 74.
|
Pension accounting
|
2015 Annual Report, pages 38 - 40.
|
Investment securities
portfolio
(dollars in millions)
|
June 30, 2016
|
|
|
3Q16
change in
unrealized
gain (loss)
|
|
Sept. 30, 2016
|
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
|
$
|
49,506
|
|
|
$
|
(70
|
)
|
$
|
48,498
|
|
$
|
48,987
|
|
|
101
|
%
|
$
|
489
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S. Treasury
|
23,893
|
|
|
(154
|
)
|
25,112
|
|
25,135
|
|
|
100
|
|
23
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Sovereign debt/sovereign guaranteed
(b)
|
15,605
|
|
|
12
|
|
15,690
|
|
15,998
|
|
|
102
|
|
308
|
|
|
74
|
|
5
|
|
21
|
|
—
|
|
—
|
|
|||||
Non-agency RMBS
(c)
|
1,529
|
|
|
5
|
|
1,166
|
|
1,463
|
|
|
80
|
|
297
|
|
|
—
|
|
1
|
|
1
|
|
90
|
|
8
|
|
|||||
Non-agency RMBS
|
797
|
|
|
8
|
|
741
|
|
757
|
|
|
94
|
|
16
|
|
|
8
|
|
4
|
|
16
|
|
71
|
|
1
|
|
|||||
European floating rate
notes
(d)
|
1,104
|
|
|
15
|
|
869
|
|
851
|
|
|
98
|
|
(18
|
)
|
|
71
|
|
22
|
|
7
|
|
—
|
|
—
|
|
|||||
Commercial MBS
|
6,316
|
|
|
8
|
|
7,236
|
|
7,310
|
|
|
101
|
|
74
|
|
|
98
|
|
2
|
|
—
|
|
—
|
|
—
|
|
|||||
State and political subdivisions
|
3,765
|
|
|
(24
|
)
|
3,494
|
|
3,578
|
|
|
102
|
|
84
|
|
|
80
|
|
17
|
|
—
|
|
—
|
|
3
|
|
|||||
Foreign covered bonds
(e)
|
2,376
|
|
|
(4
|
)
|
2,395
|
|
2,433
|
|
|
102
|
|
38
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Corporate bonds
|
1,610
|
|
|
(3
|
)
|
1,585
|
|
1,638
|
|
|
103
|
|
53
|
|
|
16
|
|
68
|
|
16
|
|
—
|
|
—
|
|
|||||
CLOs
|
2,482
|
|
|
16
|
|
2,530
|
|
2,534
|
|
|
100
|
|
4
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
U.S. Government agencies
|
1,889
|
|
|
3
|
|
1,820
|
|
1,808
|
|
|
99
|
|
(12
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Consumer ABS
|
2,454
|
|
|
7
|
|
2,202
|
|
2,203
|
|
|
100
|
|
1
|
|
|
98
|
|
—
|
|
2
|
|
—
|
|
—
|
|
|||||
Other
(f)
|
4,002
|
|
|
(23
|
)
|
3,931
|
|
3,961
|
|
|
101
|
|
30
|
|
|
60
|
|
—
|
|
38
|
|
—
|
|
2
|
|
|||||
Total investment securities
|
$
|
117,328
|
|
(g)
|
$
|
(204
|
)
|
$
|
117,269
|
|
$
|
118,656
|
|
(g)
|
101
|
%
|
$
|
1,387
|
|
(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, Norway 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
$865 million
and
$931 million
at
June 30, 2016
and
Sept. 30, 2016
, respectively.
|
(g)
|
Includes net unrealized losses on derivatives hedging securities available-for-sale of
$1,023 million
at
June 30, 2016
and
$1,001 million
at
Sept. 30, 2016
.
|
(h)
|
Unrealized gains of
$728 million
at
Sept. 30, 2016
related to available-for-sale securities.
|
Net premium amortization and discount accretion of investment securities
(a)
|
|
|
|
|
|
||||||||||
(dollars in millions)
|
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
|||||
Amortizable purchase premium (net of discount) relating to investment securities:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
2,267
|
|
$
|
2,251
|
|
$
|
2,233
|
|
$
|
2,319
|
|
$
|
2,433
|
|
Estimated average life remaining at period end
(in years)
|
4.5
|
|
4.4
|
|
4.5
|
|
4.7
|
|
4.6
|
|
|||||
Amortization
|
$
|
163
|
|
$
|
169
|
|
$
|
163
|
|
$
|
161
|
|
$
|
176
|
|
Accretable discount related to the prior restructuring of the investment securities portfolio:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
331
|
|
$
|
342
|
|
$
|
325
|
|
$
|
355
|
|
$
|
401
|
|
Estimated average life remaining at period end
(in years)
|
5.9
|
|
5.9
|
|
6.0
|
|
6.1
|
|
6.0
|
|
|||||
Accretion
|
$
|
24
|
|
$
|
26
|
|
$
|
27
|
|
$
|
29
|
|
$
|
33
|
|
(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, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||
(in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||||
Financial institutions
|
$
|
14.7
|
|
$
|
36.1
|
|
$
|
50.8
|
|
|
$
|
15.9
|
|
$
|
36.0
|
|
$
|
51.9
|
|
Commercial
|
2.7
|
|
16.7
|
|
19.4
|
|
|
2.3
|
|
18.2
|
|
20.5
|
|
||||||
Subtotal institutional
|
17.4
|
|
52.8
|
|
70.2
|
|
|
18.2
|
|
54.2
|
|
72.4
|
|
||||||
Wealth management loans and mortgages
|
15.1
|
|
1.3
|
|
16.4
|
|
|
13.3
|
|
1.6
|
|
14.9
|
|
||||||
Commercial real estate
|
4.7
|
|
3.3
|
|
8.0
|
|
|
3.9
|
|
3.3
|
|
7.2
|
|
||||||
Lease financings
|
1.8
|
|
—
|
|
1.8
|
|
|
1.9
|
|
—
|
|
1.9
|
|
||||||
Other residential mortgages
|
0.9
|
|
—
|
|
0.9
|
|
|
1.1
|
|
—
|
|
1.1
|
|
||||||
Overdrafts
|
7.3
|
|
—
|
|
7.3
|
|
|
4.5
|
|
—
|
|
4.5
|
|
||||||
Other
|
1.2
|
|
—
|
|
1.2
|
|
|
1.2
|
|
—
|
|
1.2
|
|
||||||
Subtotal non-margin loans
|
48.4
|
|
57.4
|
|
105.8
|
|
|
44.1
|
|
59.1
|
|
103.2
|
|
||||||
Margin loans
|
17.6
|
|
0.1
|
|
17.7
|
|
|
19.6
|
|
0.6
|
|
20.2
|
|
||||||
Total
|
$
|
66.0
|
|
$
|
57.5
|
|
$
|
123.5
|
|
|
$
|
63.7
|
|
$
|
59.7
|
|
$
|
123.4
|
|
Commercial portfolio exposure
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||||||||
(dollar amounts in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|
% Inv.
grade
|
|
|
% due
<1 yr.
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Manufacturing
|
$
|
1.1
|
|
$
|
6.0
|
|
$
|
7.1
|
|
|
93
|
%
|
|
12
|
%
|
|
$
|
0.6
|
|
$
|
6.3
|
|
$
|
6.9
|
|
Services and other
|
0.7
|
|
4.7
|
|
5.4
|
|
|
94
|
|
|
20
|
|
|
0.8
|
|
5.5
|
|
6.3
|
|
||||||
Energy and utilities
|
0.6
|
|
4.7
|
|
5.3
|
|
|
94
|
|
|
9
|
|
|
0.6
|
|
4.9
|
|
5.5
|
|
||||||
Media and telecom
|
0.3
|
|
1.3
|
|
1.6
|
|
|
94
|
|
|
1
|
|
|
0.3
|
|
1.5
|
|
1.8
|
|
||||||
Total
|
$
|
2.7
|
|
$
|
16.7
|
|
$
|
19.4
|
|
|
94
|
%
|
|
12
|
%
|
|
$
|
2.3
|
|
$
|
18.2
|
|
$
|
20.5
|
|
Allowance for credit losses activity
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
||||
(dollar amounts in millions)
|
||||||||||||
Margin loans
|
$
|
17,557
|
|
$
|
18,594
|
|
$
|
19,573
|
|
$
|
19,414
|
|
Non-margin loans
|
48,411
|
|
45,601
|
|
43,708
|
|
43,557
|
|
||||
Total loans
|
$
|
65,968
|
|
$
|
64,195
|
|
$
|
63,281
|
|
$
|
62,971
|
|
Beginning balance of allowance for credit losses
|
$
|
280
|
|
$
|
287
|
|
280
|
|
$
|
278
|
|
|
Provision for credit losses
|
(19
|
)
|
(9
|
)
|
163
|
|
1
|
|
||||
Net recoveries (charge-offs):
|
|
|
|
|
||||||||
Financial institutions
|
13
|
|
—
|
|
(170
|
)
|
—
|
|
||||
Other residential mortgages
|
—
|
|
1
|
|
2
|
|
1
|
|
||||
Foreign
|
—
|
|
1
|
|
—
|
|
—
|
|
||||
Net recoveries (charge-offs)
|
13
|
|
2
|
|
(168
|
)
|
1
|
|
||||
Ending balance of allowance for credit losses
|
$
|
274
|
|
$
|
280
|
|
$
|
275
|
|
$
|
280
|
|
Allowance for loan losses
|
$
|
148
|
|
$
|
158
|
|
$
|
157
|
|
$
|
181
|
|
Allowance for lending-related commitments
|
126
|
|
122
|
|
118
|
|
99
|
|
||||
Allowance for loan losses as a percentage of total loans
|
0.22
|
%
|
0.25
|
%
|
0.25
|
%
|
0.29
|
%
|
||||
Allowance for loan losses as a percentage of non-margin loans
|
0.31
|
|
0.35
|
|
0.36
|
|
0.42
|
|
||||
Total allowance for credit losses as a percentage of total loans
|
0.42
|
|
0.44
|
|
0.43
|
|
0.44
|
|
||||
Total allowance for credit losses as a percentage of non-margin loans
|
0.57
|
|
0.61
|
|
0.63
|
|
0.64
|
|
Allocation of allowance
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
|
Commercial
|
33
|
%
|
32
|
%
|
30
|
%
|
27
|
%
|
|
Commercial real estate
|
23
|
|
23
|
|
22
|
|
22
|
|
|
Foreign
|
11
|
|
13
|
|
13
|
|
14
|
|
|
Other residential mortgages
|
10
|
|
10
|
|
12
|
|
13
|
|
|
Financial institutions
|
11
|
|
10
|
|
11
|
|
10
|
|
|
Wealth management
(a)
|
7
|
|
7
|
|
7
|
|
8
|
|
|
Lease financing
|
5
|
|
5
|
|
5
|
|
6
|
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Includes the allowance for wealth management mortgages.
|
Nonperforming assets
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
|||
(dollars in millions)
|
|||||||||
Nonperforming loans:
|
|
|
|
||||||
Other residential mortgages
|
$
|
93
|
|
$
|
97
|
|
$
|
102
|
|
Wealth management loans and mortgages
|
7
|
|
10
|
|
11
|
|
|||
Lease financings
|
4
|
|
4
|
|
—
|
|
|||
Commercial real estate
|
1
|
|
2
|
|
2
|
|
|||
Financial institutions
|
—
|
|
171
|
|
171
|
|
|||
Total nonperforming loans
|
105
|
|
284
|
|
286
|
|
|||
Other assets owned
|
4
|
|
5
|
|
6
|
|
|||
Total nonperforming assets
|
$
|
109
|
|
$
|
289
|
|
$
|
292
|
|
Nonperforming assets ratio
|
0.17
|
%
|
0.45
|
%
|
0.46
|
%
|
|||
Nonperforming assets ratio, excluding margin loans
|
0.23
|
|
0.63
|
|
0.67
|
|
|||
Allowance for loan losses/nonperforming loans
|
141.0
|
|
55.6
|
|
54.9
|
|
|||
Allowance for loan losses/nonperforming assets
|
135.8
|
|
54.7
|
|
53.8
|
|
|||
Total allowance for credit losses/nonperforming loans
|
261.0
|
|
98.6
|
|
96.2
|
|
|||
Total allowance for credit losses/nonperforming assets
|
251.4
|
|
96.9
|
|
94.2
|
|
Nonperforming assets activity
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
|||
(in millions)
|
|||||||||
Balance at beginning of period
|
$
|
289
|
|
$
|
292
|
|
$
|
123
|
|
Additions
|
3
|
|
4
|
|
347
|
|
|||
Return to accrual status
|
—
|
|
(1
|
)
|
(1
|
)
|
|||
Charge-offs
|
(1
|
)
|
—
|
|
(171
|
)
|
|||
Paydowns/sales
|
(182
|
)
|
(6
|
)
|
(6
|
)
|
|||
Balance at end of period
|
$
|
109
|
|
$
|
289
|
|
$
|
292
|
|
(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
$16,873 million
in the
third quarter of 2016
,
$16,935 million
in the
second quarter of 2016
and
$11,504 million
in the
third quarter of 2015
.
|
Commercial paper
|
Quarter ended
|
||||||||
(dollars in millions)
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|
|||
Maximum month-end balance during the quarter
|
$
|
1,000
|
|
$
|
4,950
|
|
$
|
4,800
|
|
Average daily balance
|
$
|
1,173
|
|
$
|
3,781
|
|
$
|
2,195
|
|
Weighted-average rate during the quarter
|
0.35
|
%
|
0.37
|
%
|
0.11
|
%
|
|||
Ending balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Weighted-average rate at period end
|
—
|
%
|
—
|
%
|
—
|
%
|
Other borrowed funds
|
Quarter ended
|
||||||||
(dollars in millions)
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|
|||
Maximum month-end balance during the quarter
|
$
|
993
|
|
$
|
1,098
|
|
$
|
648
|
|
Average daily balance
|
$
|
874
|
|
$
|
847
|
|
$
|
628
|
|
Weighted-average rate during the quarter
|
0.76
|
%
|
0.97
|
%
|
1.18
|
%
|
|||
Ending balance
|
$
|
993
|
|
$
|
1,098
|
|
$
|
648
|
|
Weighted-average rate at period end
|
0.75
|
%
|
0.44
|
%
|
1.15
|
%
|
Available and liquid funds
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
|
Average
|
||||||||||
(in millions)
|
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
|||||||||
Available funds:
|
|
|
|
|
|
|
||||||||||
Liquid funds:
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with banks
|
$
|
14,416
|
|
$
|
15,146
|
|
|
$
|
14,066
|
|
$
|
14,394
|
|
$
|
20,549
|
|
Federal funds sold and securities purchased under resale agreements
|
34,851
|
|
24,373
|
|
|
26,376
|
|
25,813
|
|
25,366
|
|
|||||
Total liquid funds
|
49,267
|
|
39,519
|
|
|
40,442
|
|
40,207
|
|
45,915
|
|
|||||
Cash and due from banks
|
4,957
|
|
6,537
|
|
|
4,189
|
|
4,141
|
|
6,140
|
|
|||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
80,359
|
|
113,203
|
|
|
74,102
|
|
97,788
|
|
84,175
|
|
|||||
Total available funds
|
$
|
134,583
|
|
$
|
159,259
|
|
|
$
|
118,733
|
|
$
|
142,136
|
|
$
|
136,230
|
|
Total available funds as a percentage of total assets
|
36
|
%
|
40
|
%
|
|
34
|
%
|
38
|
%
|
36
|
%
|
(a)
|
Represents senior debt issuer default rating.
|
Consolidated HQLA and LCR
|
Sept. 30, 2016
|
|
|
(in billions)
|
|||
Securities
(a)
|
$
|
120
|
|
Cash
(b)
|
75
|
|
|
Total consolidated HQLA
(c)
|
$
|
195
|
|
|
|
||
Liquidity coverage ratio
(d)
|
109
|
%
|
(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
$166 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”).
|
Capital data
(dollar amounts in millions except per share amounts; common shares in thousands)
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
|||
Average common equity to average assets
|
10.2
|
%
|
9.6
|
%
|
9.7
|
%
|
|||
|
|
|
|
||||||
At period end:
|
|
|
|
||||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
(a)
|
10.6
|
%
|
10.4
|
%
|
9.7
|
%
|
|||
BNY Mellon common shareholders’ equity to total assets ratio – GAAP
(a)
|
9.7
|
%
|
9.7
|
%
|
9.0
|
%
|
|||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations
ratio – Non-GAAP
(a)
|
6.5
|
%
|
6.6
|
%
|
6.5
|
%
|
|||
Total BNY Mellon shareholders’ equity – GAAP
|
$
|
39,695
|
|
$
|
38,559
|
|
$
|
38,037
|
|
Total BNY Mellon common shareholders’ equity – GAAP
|
$
|
36,153
|
|
$
|
36,007
|
|
$
|
35,485
|
|
BNY Mellon tangible common shareholders’ equity – Non-GAAP
(a)
|
$
|
17,626
|
|
$
|
17,349
|
|
$
|
16,574
|
|
Book value per common share – GAAP
(a)
|
$
|
34.19
|
|
$
|
33.72
|
|
$
|
32.69
|
|
Tangible book value per common share – Non-GAAP
(a)
|
$
|
16.67
|
|
$
|
16.25
|
|
$
|
15.27
|
|
Closing stock price per common share
|
$
|
39.88
|
|
$
|
38.85
|
|
$
|
41.22
|
|
Market capitalization
|
$
|
42,167
|
|
$
|
41,479
|
|
$
|
44,738
|
|
Common shares outstanding
|
1,057,337
|
|
1,067,674
|
|
1,085,343
|
|
|||
|
|
|
|
||||||
Cash dividends per common share
|
$
|
0.19
|
|
$
|
0.17
|
|
$
|
0.17
|
|
Common dividend payout ratio
|
21
|
%
|
23
|
%
|
30
|
%
|
|||
Common dividend yield
(annualized)
|
1.9
|
%
|
1.8
|
%
|
1.6
|
%
|
(a)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
48
for a reconciliation of GAAP to Non-GAAP.
|
Consolidated and largest bank subsidiary regulatory capital ratios
|
Sept. 30, 2016
|
|
|
|
|||||||||
Well capitalized
|
|
|
Minimum
required |
|
|
Capital
ratios
|
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
|
|
(a)
|
|
|||||||||||
Consolidated regulatory capital ratios
:
(b)
|
|
|
|
|
|
|
|
|
|||||
Standardized:
|
|
|
|
|
|
|
|
|
|||||
CET1 ratio
|
N/A
|
|
(c)
|
5.5
|
%
|
|
12.2
|
%
|
|
11.8
|
%
|
11.5
|
%
|
Tier 1 capital ratio
|
6
|
%
|
|
7
|
%
|
|
14.4
|
%
|
|
13.4
|
%
|
13.1
|
%
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
%
|
|
9
|
%
|
|
14.8
|
%
|
|
13.8
|
%
|
13.5
|
%
|
Advanced:
|
|
|
|
|
|
|
|
|
|||||
CET1 ratio
|
N/A
|
|
(c)
|
5.5
|
%
|
|
10.5
|
%
|
|
10.2
|
%
|
10.8
|
%
|
Tier 1 capital ratio
|
6
|
%
|
|
7
|
%
|
|
12.5
|
%
|
|
11.5
|
%
|
12.3
|
%
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
%
|
|
9
|
%
|
|
12.6
|
%
|
|
11.7
|
%
|
12.5
|
%
|
Leverage capital ratio
(b)
|
N/A
|
|
(c)
|
4
|
%
|
|
6.6
|
%
|
|
5.8
|
%
|
6.0
|
%
|
SLR
(d)
|
5
|
%
|
(c)(e)
|
3
|
%
|
|
6.0
|
%
|
|
5.3
|
%
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|||||
Selected regulatory capital ratios
–
fully phased-in
–
Non-GAAP:
(c)(e)
|
|
|
|
|
|
|
|
|
|||||
Estimated CET1 ratio:
|
|
|
|
|
|
|
|
|
|||||
Standardized Approach
|
8.5
|
%
|
|
5.5
|
%
|
|
11.4
|
%
|
|
11.0
|
%
|
10.2
|
%
|
Advanced Approach
|
8.5
|
%
|
|
5.5
|
%
|
|
9.8
|
%
|
|
9.5
|
%
|
9.5
|
%
|
Estimated SLR
(d)
|
5
|
%
|
|
3
|
%
|
|
5.7
|
%
|
|
5.0
|
%
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|||||
The Bank of New York Mellon regulatory capital ratios
:
(b)
|
|
|
|
|
|
|
|
|
|||||
Advanced:
|
|
|
|
|
|
|
|
|
|||||
CET1 ratio
|
6.5
|
%
|
|
5.125
|
%
|
|
12.7
|
%
|
|
12.0
|
%
|
11.8
|
%
|
Tier 1 capital ratio
|
8
|
%
|
|
6.625
|
%
|
|
13.1
|
%
|
|
12.3
|
%
|
12.3
|
%
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
%
|
|
8.625
|
%
|
|
13.3
|
%
|
|
12.6
|
%
|
12.5
|
%
|
Leverage capital ratio
|
5
|
%
|
|
4
|
%
|
|
6.9
|
%
|
|
6.1
|
%
|
5.9
|
%
|
SLR
(d)
|
6
|
%
|
|
3
|
%
|
|
6.2
|
%
|
|
5.6
|
%
|
5.3
|
%
|
|
|
|
|
|
|
|
|
|
|||||
Selected regulatory capital ratios – fully phased-in – Non-GAAP:
|
|
|
|
|
|
|
|
|
|||||
Estimated SLR
(d)
|
6
|
%
|
|
3
|
%
|
|
5.9
|
%
|
|
5.3
|
%
|
4.8
|
%
|
(a)
|
Minimum requirements for Sept. 30, 2016 and June 30, 2016 include Basel III minimum thresholds plus currently applicable buffers.
|
(b)
|
For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches. The leverage capital ratio is based on Tier 1 capital, as phased-in and quarterly average total assets.
|
(c)
|
The Federal Reserve’s regulations do not establish well capitalized thresholds for these measures for bank holding companies.
|
(d)
|
The SLR does not become a binding measure until the first quarter of 2018. The SLR is based on Tier 1 capital, as phased-in, and average quarterly assets and certain off-balance sheet exposures.
|
(e)
|
Fully phased-in Basel III minimum with expected buffers. See page
41
for the capital ratios with the phase-in of the capital conservation buffer and the estimated U.S. G-SIB surcharge, as well as the introduction of the SLR buffer.
|
Consolidated capital ratio requirements
|
Well capitalized
|
|
|
Minimum ratios
|
|
|
Minimum ratios with buffers, as phased-in
(a)
|
|||||||||||
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
||||
Capital conservation buffer (CET1)
|
|
|
|
|
0.625
|
%
|
|
1.25
|
%
|
|
1.875
|
%
|
|
2.5
|
%
|
|
||
U.S. G-SIB surcharge (CET1)
(b)(c)
|
|
|
|
|
0.375
|
%
|
|
0.75
|
%
|
|
1.125
|
%
|
|
1.5
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CET1 ratio
|
N/A
|
|
|
4.5
|
%
|
|
5.5
|
%
|
|
6.5
|
%
|
|
7.5
|
%
|
|
8.5
|
%
|
|
Tier 1 capital ratio
|
6.0
|
%
|
|
6.0
|
%
|
|
7.0
|
%
|
|
8.0
|
%
|
|
9.0
|
%
|
|
10.0
|
%
|
|
Total capital ratio
|
10.0
|
%
|
|
8.0
|
%
|
|
9.0
|
%
|
|
10.0
|
%
|
|
11.0
|
%
|
|
12.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Enhanced SLR buffer (Tier 1 capital)
|
N/A
|
|
|
|
|
N/A
|
|
|
N/A
|
|
|
2.0
|
%
|
|
2.0
|
%
|
|
|
SLR
|
N/A
|
|
|
3.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
5.0
|
%
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank subsidiaries:
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CET1 ratio
|
6.5
|
%
|
|
4.5
|
%
|
|
5.125
|
%
|
|
5.75
|
%
|
|
6.375
|
%
|
|
7.0
|
%
|
|
Tier 1 capital ratio
|
8.0
|
%
|
|
6.0
|
%
|
|
6.625
|
%
|
|
7.25
|
%
|
|
7.875
|
%
|
|
8.5
|
%
|
|
Total capital ratio
|
10.0
|
%
|
|
8.0
|
%
|
|
8.625
|
%
|
|
9.25
|
%
|
|
9.875
|
%
|
|
10.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SLR
|
6.0
|
%
|
|
3.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
6.0
|
%
|
(d)
|
6.0
|
%
|
(d)
|
(a)
|
Countercyclical capital buffer currently set to 0%.
|
(b)
|
The U.S. G-SIB surcharge of 1.5% applicable to BNY Mellon is subject to change.
|
(c)
|
The U.S. G-SIB surcharge is not applicable to the regulatory capital ratios of the bank subsidiaries.
|
(d)
|
Well capitalized threshold.
|
Estimated CET1 generation presented on a transitional and fully phased-in basis
–
Non-GAAP
|
|
Quarter ended Sept. 30, 2016
|
|||||
(in millions)
|
|
Transitional basis
(b)
|
|
Fully phased-in Non-GAAP
(c)
|
|
||
CET1 – Beginning of period
|
|
$
|
18,275
|
|
$
|
16,873
|
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
|
974
|
|
974
|
|
||
Goodwill and intangible assets, net of related deferred tax liabilities
|
|
109
|
|
131
|
|
||
Gross CET1 generated
|
|
1,083
|
|
1,105
|
|
||
Capital deployed:
|
|
|
|
||||
Dividends
|
|
(205
|
)
|
(205
|
)
|
||
Common stock repurchased
|
|
(464
|
)
|
(464
|
)
|
||
Total capital deployed
|
|
(669
|
)
|
(669
|
)
|
||
Other comprehensive income:
|
|
|
|
||||
Foreign currency translation
|
|
(181
|
)
|
(181
|
)
|
||
Unrealized loss on assets available-for-sale
|
|
(41
|
)
|
(68
|
)
|
||
Pension liabilities
|
|
8
|
|
13
|
|
||
Unrealized gain on cash flow hedges
|
|
3
|
|
3
|
|
||
Total other comprehensive income
|
|
(211
|
)
|
(233
|
)
|
||
Additional paid-in capital
(a)
|
|
74
|
|
74
|
|
||
Other additions (deductions):
|
|
|
|
||||
Net pension fund assets
|
|
—
|
|
—
|
|
||
Embedded goodwill
|
|
8
|
|
9
|
|
||
Other
|
|
(1
|
)
|
—
|
|
||
Total other additions
|
|
7
|
|
9
|
|
||
Net CET1 generated
|
|
284
|
|
286
|
|
||
CET1 – End of period
|
|
$
|
18,559
|
|
$
|
17,159
|
|
(a)
|
Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.
|
(b)
|
Reflects transitional adjustments to CET1 required under the U.S. capital rules.
|
(c)
|
Estimated.
|
Capital components and ratios
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|||||||||||||||
(dollars in millions)
|
Transitional
Approach
(a)
|
|
Fully
phased-in - Non-GAAP
(b)
|
|
|
Transitional
Approach (a) |
|
Fully
phased-in - Non-GAAP (b) |
|
|
Transitional
Approach (a) |
|
Fully
phased-in - Non-GAAP
(b)
|
|
||||||
CET1:
|
|
|
|
|
|
|
|
|
||||||||||||
Common shareholders’ equity
|
$
|
36,450
|
|
$
|
36,153
|
|
|
$
|
36,282
|
|
$
|
36,007
|
|
|
$
|
36,067
|
|
$
|
35,485
|
|
Goodwill and intangible assets
|
(17,505
|
)
|
(18,527
|
)
|
|
(17,614
|
)
|
(18,658
|
)
|
|
(17,295
|
)
|
(18,911
|
)
|
||||||
Net pension fund assets
|
(56
|
)
|
(94
|
)
|
|
(56
|
)
|
(94
|
)
|
|
(46
|
)
|
(116
|
)
|
||||||
Equity method investments
|
(314
|
)
|
(347
|
)
|
|
(322
|
)
|
(356
|
)
|
|
(296
|
)
|
(347
|
)
|
||||||
Deferred tax assets
|
(15
|
)
|
(25
|
)
|
|
(14
|
)
|
(23
|
)
|
|
(8
|
)
|
(20
|
)
|
||||||
Other
|
(1
|
)
|
(1
|
)
|
|
(1
|
)
|
(3
|
)
|
|
(5
|
)
|
(9
|
)
|
||||||
Total CET1
|
18,559
|
|
17,159
|
|
|
18,275
|
|
16,873
|
|
|
18,417
|
|
16,082
|
|
||||||
Other Tier 1 capital:
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred stock
|
3,542
|
|
3,542
|
|
|
2,552
|
|
2,552
|
|
|
2,552
|
|
2,552
|
|
||||||
Trust preferred securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
74
|
|
—
|
|
||||||
Deferred tax assets
|
(10
|
)
|
—
|
|
|
(9
|
)
|
—
|
|
|
(12
|
)
|
—
|
|
||||||
Net pension fund assets
|
(38
|
)
|
—
|
|
|
(38
|
)
|
—
|
|
|
(70
|
)
|
—
|
|
||||||
Other
|
(110
|
)
|
(109
|
)
|
|
(112
|
)
|
(110
|
)
|
|
(25
|
)
|
(22
|
)
|
||||||
Total Tier 1 capital
|
21,943
|
|
20,592
|
|
|
20,668
|
|
19,315
|
|
|
20,936
|
|
18,612
|
|
||||||
Tier 2 capital:
|
|
|
|
|
|
|
|
|
||||||||||||
Trust preferred securities
|
156
|
|
—
|
|
|
161
|
|
—
|
|
|
222
|
|
—
|
|
||||||
Subordinated debt
|
149
|
|
149
|
|
|
149
|
|
149
|
|
|
149
|
|
149
|
|
||||||
Allowance for credit losses
|
274
|
|
274
|
|
|
280
|
|
280
|
|
|
275
|
|
275
|
|
||||||
Other
|
(6
|
)
|
(6
|
)
|
|
(6
|
)
|
(7
|
)
|
|
(12
|
)
|
(12
|
)
|
||||||
Total Tier 2 capital - Standardized Approach
|
573
|
|
417
|
|
|
584
|
|
422
|
|
|
634
|
|
412
|
|
||||||
Excess of expected credit losses
|
33
|
|
33
|
|
|
36
|
|
36
|
|
|
37
|
|
37
|
|
||||||
Less: Allowance for credit losses
|
274
|
|
274
|
|
|
280
|
|
280
|
|
|
275
|
|
275
|
|
||||||
Total Tier 2 capital - Advanced Approach
|
$
|
332
|
|
$
|
176
|
|
|
$
|
340
|
|
$
|
178
|
|
|
$
|
396
|
|
$
|
174
|
|
Total capital:
|
|
|
|
|
|
|
|
|
||||||||||||
Standardized Approach
|
$
|
22,516
|
|
$
|
21,009
|
|
|
$
|
21,252
|
|
$
|
19,737
|
|
|
$
|
21,570
|
|
$
|
19,024
|
|
Advanced Approach
|
$
|
22,275
|
|
$
|
20,768
|
|
|
$
|
21,008
|
|
$
|
19,493
|
|
|
$
|
21,332
|
|
$
|
18,786
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Risk-weighted assets:
|
|
|
|
|
|
|
|
|
||||||||||||
Standardized Approach
|
$
|
152,410
|
|
$
|
151,173
|
|
|
$
|
154,464
|
|
$
|
153,198
|
|
|
$
|
159,893
|
|
$
|
158,015
|
|
Advanced Approach:
|
|
|
|
|
|
|
|
|
||||||||||||
Credit Risk
|
$
|
100,398
|
|
$
|
99,078
|
|
|
$
|
104,367
|
|
$
|
103,024
|
|
|
$
|
106,974
|
|
$
|
105,099
|
|
Market Risk
|
3,009
|
|
3,009
|
|
|
2,080
|
|
2,080
|
|
|
2,148
|
|
2,148
|
|
||||||
Operational Risk
|
72,825
|
|
72,825
|
|
|
72,725
|
|
72,725
|
|
|
61,262
|
|
61,262
|
|
||||||
Total Advanced Approach
|
$
|
176,232
|
|
$
|
174,912
|
|
|
$
|
179,172
|
|
$
|
177,829
|
|
|
$
|
170,384
|
|
$
|
168,509
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Standardized Approach:
|
|
|
|
|
|
|
|
|
||||||||||||
CET1 ratio
|
12.2
|
%
|
11.4
|
%
|
|
11.8
|
%
|
11.0
|
%
|
|
11.5
|
%
|
10.2
|
%
|
||||||
Tier 1 capital ratio
|
14.4
|
%
|
13.6
|
%
|
|
13.4
|
%
|
12.6
|
%
|
|
13.1
|
%
|
11.8
|
%
|
||||||
Total (Tier 1 plus Tier 2) capital ratio
|
14.8
|
%
|
13.9
|
%
|
|
13.8
|
%
|
12.9
|
%
|
|
13.5
|
%
|
12.0
|
%
|
||||||
Advanced Approach:
|
|
|
|
|
|
|
|
|
||||||||||||
CET1 ratio
|
10.5
|
%
|
9.8
|
%
|
|
10.2
|
%
|
9.5
|
%
|
|
10.8
|
%
|
9.5
|
%
|
||||||
Tier 1 capital ratio
|
12.5
|
%
|
11.8
|
%
|
|
11.5
|
%
|
10.9
|
%
|
|
12.3
|
%
|
11.0
|
%
|
||||||
Total (Tier 1 plus Tier 2) capital ratio
|
12.6
|
%
|
11.9
|
%
|
|
11.7
|
%
|
11.0
|
%
|
|
12.5
|
%
|
11.1
|
%
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Average assets for leverage capital purposes
|
$
|
333,487
|
|
|
|
$
|
356,344
|
|
|
|
$
|
351,435
|
|
|
||||||
Total leverage exposure for SLR purposes
|
|
$
|
362,302
|
|
|
|
$
|
385,670
|
|
|
|
$
|
382,810
|
|
(a)
|
Reflects transitional adjustments to CET1, Tier 1 capital and Tier 2 capital required in 2016 and 2015 under the U.S. capital rules.
|
(b)
|
Estimated.
|
Capital above thresholds at Sept. 30, 2016
|
|||||||
(in millions)
|
Consolidated
|
|
|
The Bank of New York Mellon
(b)
|
|
||
CET1
|
$
|
8,866
|
|
(a)
|
$
|
8,904
|
|
Tier 1 capital
|
9,607
|
|
(a)
|
7,254
|
|
||
Total capital
|
4,652
|
|
(b)
|
4,765
|
|
||
Leverage capital
|
8,604
|
|
(a)
|
5,105
|
|
(a)
|
Based on minimum required standards, with applicable buffers.
|
(b)
|
Based on well capitalized standards.
|
SLR
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|||||||||||||||
(dollars in millions)
|
Transitional basis
|
|
Fully phased-in Non-GAAP
(a)
|
|
|
Transitional basis
|
|
Fully phased-in Non-GAAP
(a)
|
|
|
Transitional basis
|
|
Fully phased-in Non-GAAP
(a)
|
|
||||||
Consolidated:
|
|
|
|
|
|
|
|
|
||||||||||||
Total Tier 1 capital
|
$
|
21,943
|
|
$
|
20,592
|
|
|
$
|
20,668
|
|
$
|
19,315
|
|
|
$
|
20,936
|
|
$
|
18,612
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total leverage exposure:
|
|
|
|
|
|
|
|
|
||||||||||||
Quarterly average total assets
|
$
|
351,230
|
|
$
|
351,230
|
|
|
$
|
374,220
|
|
$
|
374,220
|
|
|
$
|
368,590
|
|
$
|
368,590
|
|
Less: Amounts deducted from Tier 1 capital
|
17,743
|
|
19,095
|
|
|
17,876
|
|
19,234
|
|
|
17,650
|
|
19,403
|
|
||||||
Total on-balance sheet assets, as adjusted
|
333,487
|
|
332,135
|
|
|
356,344
|
|
354,986
|
|
|
350,940
|
|
349,187
|
|
||||||
Off-balance sheet exposures:
|
|
|
|
|
|
|
|
|
||||||||||||
Potential future exposure for derivatives contracts (plus certain other items)
|
6,149
|
|
6,149
|
|
|
6,125
|
|
6,125
|
|
|
7,158
|
|
7,158
|
|
||||||
Repo-style transaction exposures
|
447
|
|
447
|
|
|
402
|
|
402
|
|
|
440
|
|
440
|
|
||||||
Credit-equivalent amount of other off-balance sheet exposures (less SLR exclusions)
|
23,571
|
|
23,571
|
|
|
24,157
|
|
24,157
|
|
|
26,025
|
|
26,025
|
|
||||||
Total off-balance sheet exposures
|
30,167
|
|
30,167
|
|
|
30,684
|
|
30,684
|
|
|
33,623
|
|
33,623
|
|
||||||
Total leverage exposure
|
$
|
363,654
|
|
$
|
362,302
|
|
|
$
|
387,028
|
|
$
|
385,670
|
|
|
$
|
384,563
|
|
$
|
382,810
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
SLR - Consolidated
|
6.0
|
%
|
5.7
|
%
|
|
5.3
|
%
|
5.0
|
%
|
|
5.4
|
%
|
4.9
|
%
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
The Bank of New York Mellon, our largest bank subsidiary:
|
|
|
|
|
|
|
|
|
||||||||||||
Tier 1 capital
|
$
|
18,701
|
|
$
|
17,592
|
|
|
$
|
18,049
|
|
$
|
16,948
|
|
|
$
|
16,814
|
|
$
|
15,142
|
|
Total leverage exposure
|
$
|
299,641
|
|
$
|
299,236
|
|
|
$
|
322,978
|
|
$
|
322,588
|
|
|
$
|
316,812
|
|
$
|
316,270
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
SLR - The Bank of New York Mellon
(b)
|
6.2
|
%
|
5.9
|
%
|
|
5.6
|
%
|
5.3
|
%
|
|
5.3
|
%
|
4.8
|
%
|
(a)
|
Estimated.
|
(b)
|
We expect our depository institutions to satisfy the 6% “well capitalized” threshold required for well-capitalized status when the SLR becomes effective as a binding ratio in 2018.
|
VaR
(a)
|
3Q16
|
Sept. 30, 2016
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
7.3
|
|
$
|
5.4
|
|
$
|
8.9
|
|
$
|
7.9
|
|
Foreign exchange
|
4.2
|
|
3.2
|
|
7.5
|
|
3.7
|
|
||||
Equity
|
0.6
|
|
0.5
|
|
0.8
|
|
0.6
|
|
||||
Credit
|
0.3
|
|
0.3
|
|
0.4
|
|
0.4
|
|
||||
Diversification
|
(5.8
|
)
|
N/M
|
|
N/M
|
|
(5.7
|
)
|
||||
Overall portfolio
|
$
|
6.6
|
|
$
|
5.0
|
|
$
|
7.7
|
|
$
|
6.9
|
|
VaR
(a)
|
2Q16
|
June 30, 2016
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
6.2
|
|
$
|
5.5
|
|
$
|
7.1
|
|
$
|
6.4
|
|
Foreign exchange
|
2.5
|
|
1.9
|
|
11.1
|
|
2.8
|
|
||||
Equity
|
0.6
|
|
0.4
|
|
0.7
|
|
0.6
|
|
||||
Credit
|
0.3
|
|
0.2
|
|
0.4
|
|
0.3
|
|
||||
Diversification
|
(3.7
|
)
|
N/M
|
|
N/M
|
|
(3.6
|
)
|
||||
Overall portfolio
|
$
|
5.9
|
|
$
|
5.0
|
|
$
|
6.9
|
|
$
|
6.5
|
|
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)
|
YTD16
|
||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
|||
Interest rate
|
$
|
6.3
|
|
$
|
4.3
|
|
$
|
8.9
|
|
Foreign exchange
|
2.8
|
|
1.2
|
|
11.1
|
|
|||
Equity
|
0.6
|
|
0.4
|
|
0.8
|
|
|||
Credit
|
0.3
|
|
0.2
|
|
0.4
|
|
|||
Diversification
|
(4.0
|
)
|
N/M
|
|
N/M
|
|
|||
Overall portfolio
|
$
|
6.0
|
|
$
|
4.3
|
|
$
|
7.7
|
|
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
|
|
(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, 2016
|
|
June 30,
2016 |
|
March 31,
2016 |
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
|||||
up 200 bps parallel rate ramp vs. baseline
(a)
|
$
|
62
|
|
$
|
91
|
|
$
|
103
|
|
$
|
179
|
|
$
|
275
|
|
up 100 bps parallel rate ramp vs. baseline
(a)
|
147
|
|
158
|
|
189
|
|
191
|
|
290
|
|
|||||
Long-term up 50 bps, short-term unchanged
(b)
|
116
|
|
130
|
|
104
|
|
33
|
|
20
|
|
|||||
Long-term down 50 bps, short-term unchanged
(b)
|
(128
|
)
|
(96
|
)
|
(93
|
)
|
(91
|
)
|
(81
|
)
|
(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
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
|||||||||||||||
Non-GAAP
(in millions, except per common share amounts)
|
Net income
|
|
Diluted EPS
|
|
|
Net income
|
|
Diluted EPS
|
|
|
Net income
|
|
Diluted EPS
|
|
|
||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
974
|
|
$
|
0.90
|
|
|
$
|
825
|
|
$
|
0.75
|
|
|
$
|
820
|
|
$
|
0.74
|
|
|
Add: M&I, litigation and restructuring charges
|
18
|
|
|
|
7
|
|
|
|
11
|
|
|
|
|||||||||
Tax impact of the recovery related to Sentinel
|
5
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|||||||||
Less: Recovery related to Sentinel
|
13
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|||||||||
Tax impact of M&I, litigation and restructuring charges
|
5
|
|
|
|
2
|
|
|
|
3
|
|
|
|
|||||||||
Non-GAAP adjustments – after-tax
|
5
|
|
—
|
|
|
5
|
|
—
|
|
|
8
|
|
0.01
|
|
|
||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP
|
$
|
979
|
|
$
|
0.90
|
|
|
$
|
830
|
|
$
|
0.76
|
|
(a)
|
$
|
828
|
|
$
|
0.74
|
|
(a)
|
(a)
|
Does not foot due to rounding.
|
Reconciliation of income before income taxes – pre-tax operating margin
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
YTD16
|
|
YTD15
|
|
|||||
(dollars in millions)
|
|||||||||||||||
Income before income taxes – GAAP
|
$
|
1,317
|
|
$
|
1,165
|
|
$
|
1,109
|
|
$
|
3,573
|
|
$
|
3,364
|
|
Less: Net income (loss) attributable to noncontrolling interests of consolidated investment management funds
|
9
|
|
4
|
|
(5
|
)
|
6
|
|
63
|
|
|||||
Add: Amortization of intangible assets
|
61
|
|
59
|
|
66
|
|
177
|
|
197
|
|
|||||
M&I, litigation and restructuring charges
|
18
|
|
7
|
|
11
|
|
42
|
|
67
|
|
|||||
Recovery related to Sentinel
|
(13
|
)
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
|||||
Income before income taxes, as adjusted – Non-GAAP
(a)
|
$
|
1,374
|
|
$
|
1,227
|
|
$
|
1,191
|
|
$
|
3,773
|
|
$
|
3,565
|
|
|
|
|
|
|
|
||||||||||
Fee and other revenue – GAAP
|
$
|
3,150
|
|
$
|
2,999
|
|
$
|
3,053
|
|
$
|
9,119
|
|
$
|
9,132
|
|
Income (loss) from consolidated investment management funds – GAAP
|
17
|
|
10
|
|
(22
|
)
|
21
|
|
70
|
|
|||||
Net interest revenue – GAAP
|
774
|
|
767
|
|
759
|
|
2,307
|
|
2,266
|
|
|||||
Total revenue – GAAP
|
3,941
|
|
3,776
|
|
3,790
|
|
11,447
|
|
11,468
|
|
|||||
Less: Net income (loss) attributable to noncontrolling interests of consolidated investment management funds
|
9
|
|
4
|
|
(5
|
)
|
6
|
|
63
|
|
|||||
Total revenue, as adjusted – Non-GAAP
(a)
|
$
|
3,932
|
|
$
|
3,772
|
|
$
|
3,795
|
|
$
|
11,441
|
|
$
|
11,405
|
|
|
|
|
|
|
|
||||||||||
Pre-tax operating margin – GAAP
(b)(c)
|
33
|
%
|
31
|
%
|
29
|
%
|
31
|
%
|
29
|
%
|
|||||
Adjusted pre-tax operating margin – Non-GAAP
(a)(b)(c)
|
35
|
%
|
33
|
%
|
31
|
%
|
33
|
%
|
31
|
%
|
(a)
|
Non-GAAP information for all periods presented excludes the net income (loss) attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for the
third quarter of 2016
also excludes a recovery of the previously impaired Sentinel loan.
|
(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 $74 million for the
third quarter of 2016
, $74 million for the
second quarter of 2016
, $53 million for the
third quarter of 2015
, $225 million for the
first nine months of 2016
and $169 million for the
first nine months of 2015
and would increase our pre-tax operating margin by approximately 1.2% for the
third quarter of 2016
, 1.3% for the
second quarter of 2016
, 1.0% for the
third quarter of 2015
, 1.3% for the
first nine months of 2016
and 1.0% for the
first nine months of 2015
.
|
Operating leverage
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
3Q16 vs.
|
||||||
(dollars in millions)
|
2Q16
|
|
3Q15
|
|
|||||||||
Total revenue – GAAP
|
$
|
3,941
|
|
$
|
3,776
|
|
$
|
3,790
|
|
4.37%
|
|
3.98%
|
|
Less: Net income (loss) attributable to noncontrolling interests of consolidated investment management funds
|
9
|
|
4
|
|
(5
|
)
|
|
|
|||||
Total revenue, as adjusted – Non-GAAP
|
$
|
3,932
|
|
$
|
3,772
|
|
$
|
3,795
|
|
4.24%
|
|
3.61%
|
|
|
|
|
|
|
|
||||||||
Total noninterest expense – GAAP
|
$
|
2,643
|
|
$
|
2,620
|
|
$
|
2,680
|
|
0.88%
|
|
(1.38)%
|
|
Less: Amortization of intangible assets
|
61
|
|
59
|
|
66
|
|
|
|
|||||
M&I, litigation and restructuring charges
|
18
|
|
7
|
|
11
|
|
|
|
|||||
Total noninterest expense, as adjusted – Non-GAAP
|
$
|
2,564
|
|
$
|
2,554
|
|
$
|
2,603
|
|
0.39%
|
|
(1.50)%
|
|
|
|
|
|
|
|
||||||||
Operating leverage – GAAP
(a)
|
|
|
|
349
|
bps
|
536
|
bps
|
||||||
Adjusted operating leverage – Non-GAAP
(a)(b)
|
|
|
|
385
|
bps
|
511
|
bps
|
(a)
|
Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
|
(b)
|
Non-GAAP operating leverage for all periods presented excludes the net income (loss) attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges.
|
Return on common equity and tangible common equity
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
YTD16
|
|
YTD15
|
|
|||||
(dollars in millions)
|
|||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
974
|
|
$
|
825
|
|
$
|
820
|
|
$
|
2,603
|
|
$
|
2,416
|
|
Add: Amortization of intangible assets
|
61
|
|
59
|
|
66
|
|
177
|
|
197
|
|
|||||
Less: Tax impact of amortization of intangible assets
|
21
|
|
21
|
|
23
|
|
62
|
|
67
|
|
|||||
Net income applicable to common shareholders of The Bank of New
York Mellon Corporation excluding amortization of intangible assets – Non-GAAP |
1,014
|
|
863
|
|
863
|
|
2,718
|
|
2,546
|
|
|||||
Add: M&I, litigation and restructuring charges
|
18
|
|
7
|
|
11
|
|
42
|
|
67
|
|
|||||
Recovery related to Sentinel
|
(13
|
)
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
|||||
Less: Tax impact of M&I, litigation and restructuring charges
|
5
|
|
2
|
|
3
|
|
13
|
|
23
|
|
|||||
Tax impact of recovery related to Sentinel
|
(5
|
)
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation, as adjusted – Non-GAAP
(a)
|
$
|
1,019
|
|
$
|
868
|
|
$
|
871
|
|
$
|
2,739
|
|
$
|
2,590
|
|
|
|
|
|
|
|
||||||||||
Average common shareholders’ equity
|
$
|
35,767
|
|
$
|
35,827
|
|
$
|
35,588
|
|
$
|
35,616
|
|
$
|
35,530
|
|
Less: Average goodwill
|
17,463
|
|
17,622
|
|
17,742
|
|
17,549
|
|
17,750
|
|
|||||
Average intangible assets
|
3,711
|
|
3,789
|
|
3,962
|
|
3,770
|
|
4,027
|
|
|||||
Add: Deferred tax liability – tax deductible goodwill
(b)
|
1,477
|
|
1,452
|
|
1,379
|
|
1,477
|
|
1,379
|
|
|||||
Deferred tax liability – intangible assets
(b)
|
1,116
|
|
1,129
|
|
1,164
|
|
1,116
|
|
1,164
|
|
|||||
Average tangible common shareholders’ equity – Non-GAAP
|
$
|
17,186
|
|
$
|
16,997
|
|
$
|
16,427
|
|
$
|
16,890
|
|
$
|
16,296
|
|
|
|
|
|
|
|
||||||||||
Return on common equity – GAAP
(c)
|
10.8
|
%
|
9.3
|
%
|
9.1
|
%
|
9.8
|
%
|
9.1
|
%
|
|||||
Adjusted return on common equity – Non-GAAP
(a)(c)
|
11.3
|
%
|
9.7
|
%
|
9.7
|
%
|
10.3
|
%
|
9.7
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Return on tangible common equity – Non-GAAP
(c)
|
23.5
|
%
|
20.4
|
%
|
20.8
|
%
|
21.5
|
%
|
20.9
|
%
|
|||||
Adjusted return on tangible common equity – Non-GAAP
(a)(c)
|
23.6
|
%
|
20.5
|
%
|
21.0
|
%
|
21.7
|
%
|
21.2
|
%
|
(a)
|
Non-GAAP information for all periods presented excludes the amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for the
third quarter of 2016
also excludes a recovery of the previously impaired Sentinel loan.
|
(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, 2016
|
|
June 30, 2016
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
||||
(dollars in millions, unless otherwise noted)
|
||||||||||||
BNY Mellon shareholders’ equity at period end – GAAP
|
$
|
39,695
|
|
$
|
38,559
|
|
$
|
38,037
|
|
$
|
38,170
|
|
Less: Preferred stock
|
3,542
|
|
2,552
|
|
2,552
|
|
2,552
|
|
||||
BNY Mellon common shareholders’ equity at period end – GAAP
|
36,153
|
|
36,007
|
|
35,485
|
|
35,618
|
|
||||
Less: Goodwill
|
17,449
|
|
17,501
|
|
17,618
|
|
17,679
|
|
||||
Intangible assets
|
3,671
|
|
3,738
|
|
3,842
|
|
3,914
|
|
||||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,477
|
|
1,452
|
|
1,401
|
|
1,379
|
|
||||
Deferred tax liability – intangible assets
(a)
|
1,116
|
|
1,129
|
|
1,148
|
|
1,164
|
|
||||
BNY Mellon tangible common shareholders’ equity at
period end – Non-GAAP
|
$
|
17,626
|
|
$
|
17,349
|
|
$
|
16,574
|
|
$
|
16,568
|
|
|
|
|
|
|
||||||||
Total assets at period end – GAAP
|
$
|
374,114
|
|
$
|
372,351
|
|
$
|
393,780
|
|
$
|
377,371
|
|
Less: Assets of consolidated investment management funds
|
1,009
|
|
1,083
|
|
1,401
|
|
2,297
|
|
||||
Subtotal assets of operations – Non-GAAP
|
373,105
|
|
371,268
|
|
392,379
|
|
375,074
|
|
||||
Less: Goodwill
|
17,449
|
|
17,501
|
|
17,618
|
|
17,679
|
|
||||
Intangible assets
|
3,671
|
|
3,738
|
|
3,842
|
|
3,914
|
|
||||
Cash on deposit with the Federal Reserve and other central banks
(b)
|
80,362
|
|
88,080
|
|
116,211
|
|
86,426
|
|
||||
Tangible total assets of operations at period end – Non-GAAP
|
$
|
271,623
|
|
$
|
261,949
|
|
$
|
254,708
|
|
$
|
267,055
|
|
|
|
|
|
|
||||||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
|
10.6
|
%
|
10.4
|
%
|
9.7
|
%
|
10.1
|
%
|
||||
BNY Mellon common shareholders’ equity to total
assets ratio – GAAP
|
9.7
|
%
|
9.7
|
%
|
9.0
|
%
|
9.4
|
%
|
||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
|
6.5
|
%
|
6.6
|
%
|
6.5
|
%
|
6.2
|
%
|
||||
|
|
|
|
|
||||||||
Period-end common shares outstanding
(in thousands)
|
1,057,337
|
|
1,067,674
|
|
1,085,343
|
|
1,092,953
|
|
||||
|
|
|
|
|
||||||||
Book value per common share – GAAP
|
$
|
34.19
|
|
$
|
33.72
|
|
$
|
32.69
|
|
$
|
32.59
|
|
Tangible book value per common share – Non-GAAP
|
$
|
16.67
|
|
$
|
16.25
|
|
$
|
15.27
|
|
$
|
15.16
|
|
(a)
|
Deferred tax liabilities are based on fully phased-in Basel III rules.
|
(b)
|
Assigned a zero percentage risk-weighting by the regulators.
|
Income (loss) from consolidated investment management funds, net of noncontrolling interests - Investment Management business
|
|||||||||||||||||||||
(in millions)
|
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
YTD16
|
|
YTD15
|
|
|||||||
Investment management fees
|
$
|
2
|
|
$
|
3
|
|
$
|
2
|
|
$
|
7
|
|
$
|
3
|
|
$
|
7
|
|
$
|
8
|
|
Other (Investment income (loss))
|
6
|
|
3
|
|
(1
|
)
|
4
|
|
(20
|
)
|
8
|
|
(1
|
)
|
|||||||
Income (loss) from consolidated investment management funds, net of noncontrolling interests
|
$
|
8
|
|
$
|
6
|
|
$
|
1
|
|
$
|
11
|
|
$
|
(17
|
)
|
$
|
15
|
|
$
|
7
|
|
Pre-tax operating margin - Investment Management business
|
|
|
|
|
|
|
|||||||||||||||
(dollars in millions)
|
3Q16
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
YTD16
|
|
YTD15
|
|
|||||||
Income before income taxes – GAAP
|
$
|
256
|
|
$
|
234
|
|
$
|
217
|
|
$
|
290
|
|
$
|
236
|
|
$
|
707
|
|
$
|
758
|
|
Add: Amortization of intangible assets
|
22
|
|
19
|
|
19
|
|
24
|
|
24
|
|
60
|
|
73
|
|
|||||||
Provision for credit losses
|
—
|
|
1
|
|
(1
|
)
|
(4
|
)
|
1
|
|
—
|
|
3
|
|
|||||||
Money market fee waivers
|
11
|
|
11
|
|
9
|
|
23
|
|
28
|
|
31
|
|
90
|
|
|||||||
Income before income taxes excluding amortization of intangible assets, provision for credit losses and money market fee waivers – Non-GAAP
|
$
|
289
|
|
$
|
265
|
|
$
|
244
|
|
$
|
333
|
|
$
|
289
|
|
$
|
798
|
|
$
|
924
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total revenue – GAAP
|
$
|
958
|
|
$
|
938
|
|
$
|
895
|
|
$
|
999
|
|
$
|
926
|
|
$
|
2,791
|
|
$
|
2,907
|
|
Less:
Distribution and servicing expense
|
104
|
|
102
|
|
100
|
|
92
|
|
94
|
|
306
|
|
286
|
|
|||||||
Money market fee waivers benefiting distribution and servicing expense
|
15
|
|
15
|
|
23
|
|
27
|
|
35
|
|
53
|
|
110
|
|
|||||||
Add: Money market fee waivers impacting total revenue
|
26
|
|
26
|
|
32
|
|
50
|
|
63
|
|
84
|
|
200
|
|
|||||||
Total revenue net of distribution and servicing expense and excluding money market fee waivers – Non-GAAP
|
$
|
865
|
|
$
|
847
|
|
$
|
804
|
|
$
|
930
|
|
$
|
860
|
|
$
|
2,516
|
|
$
|
2,711
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pre-tax operating margin – GAAP
(a)
|
27
|
%
|
25
|
%
|
24
|
%
|
29
|
%
|
25
|
%
|
25
|
%
|
26
|
%
|
|||||||
Adjusted pre-tax operating margin, excluding amortization of intangible assets, provision for credit losses, money market fee waivers and net of distribution and servicing expense – Non-GAAP
(a)
|
33
|
%
|
31
|
%
|
30
|
%
|
36
|
%
|
34
|
%
|
32
|
%
|
34
|
%
|
(a)
|
Income before taxes divided by total revenue.
|
•
|
cyber risk governance;
|
•
|
cyber risk management;
|
•
|
internal dependency management;
|
•
|
external dependency management;
|
•
|
incident response, cyber resilience, and situational awareness.
|
•
|
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, Amended and Restated By-laws, 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
|
|||||||||||||
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
|
|||||
(in millions)
|
|
|||||||||||||||
Fee and other revenue
|
|
|
|
|
|
|
||||||||||
Investment services fees:
|
|
|
|
|
|
|
||||||||||
Asset servicing
|
$
|
1,067
|
|
$
|
1,069
|
|
$
|
1,057
|
|
|
$
|
3,176
|
|
$
|
3,155
|
|
Clearing services
|
349
|
|
350
|
|
345
|
|
|
1,049
|
|
1,036
|
|
|||||
Issuer services
|
337
|
|
234
|
|
313
|
|
|
815
|
|
779
|
|
|||||
Treasury services
|
137
|
|
139
|
|
137
|
|
|
407
|
|
418
|
|
|||||
Total investment services fees
|
1,890
|
|
1,792
|
|
1,852
|
|
|
5,447
|
|
5,388
|
|
|||||
Investment management and performance fees
|
860
|
|
830
|
|
829
|
|
|
2,502
|
|
2,574
|
|
|||||
Foreign exchange and other trading revenue
|
183
|
|
182
|
|
179
|
|
|
540
|
|
595
|
|
|||||
Financing-related fees
|
58
|
|
57
|
|
71
|
|
|
169
|
|
169
|
|
|||||
Distribution and servicing
|
43
|
|
43
|
|
41
|
|
|
125
|
|
121
|
|
|||||
Investment and other income
|
92
|
|
74
|
|
59
|
|
|
271
|
|
223
|
|
|||||
Total fee revenue
|
3,126
|
|
2,978
|
|
3,031
|
|
|
9,054
|
|
9,070
|
|
|||||
Net securities gains — including other-than-temporary impairment
|
27
|
|
21
|
|
22
|
|
|
67
|
|
65
|
|
|||||
Noncredit-related portion of other-than-temporary impairment
(recognized in other comprehensive income)
|
3
|
|
—
|
|
—
|
|
|
2
|
|
3
|
|
|||||
Net securities gains
|
24
|
|
21
|
|
22
|
|
|
65
|
|
62
|
|
|||||
Total fee and other revenue
|
3,150
|
|
2,999
|
|
3,053
|
|
|
9,119
|
|
9,132
|
|
|||||
Operations of consolidated investment management funds
|
|
|
|
|
|
|
||||||||||
Investment income (loss)
|
20
|
|
10
|
|
(6
|
)
|
|
27
|
|
96
|
|
|||||
Interest of investment management fund note holders
|
3
|
|
—
|
|
16
|
|
|
6
|
|
26
|
|
|||||
Income (loss) from consolidated investment management funds
|
17
|
|
10
|
|
(22
|
)
|
|
21
|
|
70
|
|
|||||
Net interest revenue
|
|
|
|
|
|
|
||||||||||
Interest revenue
|
874
|
|
890
|
|
838
|
|
|
2,647
|
|
2,492
|
|
|||||
Interest expense
|
100
|
|
123
|
|
79
|
|
|
340
|
|
226
|
|
|||||
Net interest revenue
|
774
|
|
767
|
|
759
|
|
|
2,307
|
|
2,266
|
|
|||||
Total revenue
|
3,941
|
|
3,776
|
|
3,790
|
|
|
11,447
|
|
11,468
|
|
|||||
Provision for credit losses
|
(19
|
)
|
(9
|
)
|
1
|
|
|
(18
|
)
|
(3
|
)
|
|||||
Noninterest expense
|
|
|
|
|
|
|
||||||||||
Staff
|
1,467
|
|
1,412
|
|
1,437
|
|
|
4,338
|
|
4,356
|
|
|||||
Professional, legal and other purchased services
|
292
|
|
290
|
|
301
|
|
|
860
|
|
902
|
|
|||||
Software
|
156
|
|
160
|
|
154
|
|
|
470
|
|
470
|
|
|||||
Net occupancy
|
143
|
|
152
|
|
152
|
|
|
437
|
|
452
|
|
|||||
Distribution and servicing
|
105
|
|
102
|
|
95
|
|
|
307
|
|
289
|
|
|||||
Sub-custodian
|
59
|
|
70
|
|
65
|
|
|
188
|
|
210
|
|
|||||
Furniture and equipment
|
59
|
|
63
|
|
72
|
|
|
187
|
|
212
|
|
|||||
Business development
|
52
|
|
65
|
|
59
|
|
|
174
|
|
192
|
|
|||||
Other
|
231
|
|
240
|
|
268
|
|
|
712
|
|
760
|
|
|||||
Amortization of intangible assets
|
61
|
|
59
|
|
66
|
|
|
177
|
|
197
|
|
|||||
Merger and integration, litigation and restructuring charges
|
18
|
|
7
|
|
11
|
|
|
42
|
|
67
|
|
|||||
Total noninterest expense
|
2,643
|
|
2,620
|
|
2,680
|
|
|
7,892
|
|
8,107
|
|
|||||
Income
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
1,317
|
|
1,165
|
|
1,109
|
|
|
3,573
|
|
3,364
|
|
|||||
Provision for income taxes
|
324
|
|
290
|
|
282
|
|
|
897
|
|
838
|
|
|||||
Net income
|
993
|
|
875
|
|
827
|
|
|
2,676
|
|
2,526
|
|
|||||
Net (income) loss attributable to noncontrolling interests (includes $(9), $(4), $5, $(6) and $(63) related to consolidated investment management funds, respectively)
|
(6
|
)
|
(2
|
)
|
6
|
|
|
1
|
|
(61
|
)
|
|||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
987
|
|
873
|
|
833
|
|
|
2,677
|
|
2,465
|
|
|||||
Preferred stock dividends
|
(13
|
)
|
(48
|
)
|
(13
|
)
|
|
(74
|
)
|
(49
|
)
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
974
|
|
$
|
825
|
|
$
|
820
|
|
|
$
|
2,603
|
|
$
|
2,416
|
|
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
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
|
||||||
(in millions)
|
|
|||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
974
|
|
$
|
825
|
|
$
|
820
|
|
|
$
|
2,603
|
|
$
|
2,416
|
|
Less: Earnings allocated to participating securities
|
15
|
|
13
|
|
6
|
|
|
39
|
|
34
|
|
|||||
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
|
$
|
959
|
|
$
|
812
|
|
$
|
814
|
|
|
$
|
2,564
|
|
$
|
2,382
|
|
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
(b)
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
|
||||||
(in dollars)
|
|
|||||||||||||||
Basic
|
$
|
0.90
|
|
$
|
0.76
|
|
$
|
0.74
|
|
|
$
|
2.39
|
|
$
|
2.15
|
|
Diluted
|
$
|
0.90
|
|
$
|
0.75
|
|
$
|
0.74
|
|
|
$
|
2.38
|
|
$
|
2.13
|
|
(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, and the change in the excess of redeemable value over the fair value of noncontrolling interests, if applicable.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
|
|||||
(in millions)
|
|
|||||||||||||||
Net income
|
$
|
993
|
|
$
|
875
|
|
$
|
827
|
|
|
$
|
2,676
|
|
$
|
2,526
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(186
|
)
|
(284
|
)
|
(163
|
)
|
|
(433
|
)
|
(435
|
)
|
|||||
Unrealized (loss) gain on assets available-for-sale:
|
|
|
|
|
|
|
||||||||||
Unrealized (loss) gain arising during the period
|
(53
|
)
|
117
|
|
7
|
|
|
227
|
|
(217
|
)
|
|||||
Reclassification adjustment
|
(15
|
)
|
(13
|
)
|
(14
|
)
|
|
(43
|
)
|
(39
|
)
|
|||||
Total unrealized (loss) gain on assets available-for-sale
|
(68
|
)
|
104
|
|
(7
|
)
|
|
184
|
|
(256
|
)
|
|||||
Defined benefit plans:
|
|
|
|
|
|
|
||||||||||
Net gain (loss) arising during the period
|
—
|
|
—
|
|
2
|
|
|
2
|
|
(107
|
)
|
|||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
|
14
|
|
14
|
|
21
|
|
|
43
|
|
47
|
|
|||||
Total defined benefit plans
|
14
|
|
14
|
|
23
|
|
|
45
|
|
(60
|
)
|
|||||
Net unrealized gain (loss) on cash flow hedges
|
2
|
|
(9
|
)
|
—
|
|
|
(4
|
)
|
8
|
|
|||||
Total other comprehensive (loss), net of tax
(a)
|
(238
|
)
|
(175
|
)
|
(147
|
)
|
|
(208
|
)
|
(743
|
)
|
|||||
Total comprehensive income
|
755
|
|
700
|
|
680
|
|
|
2,468
|
|
1,783
|
|
|||||
Net (income) loss attributable to noncontrolling interests
|
(6
|
)
|
(2
|
)
|
6
|
|
|
1
|
|
(61
|
)
|
|||||
Other comprehensive loss attributable to noncontrolling interests
|
5
|
|
13
|
|
17
|
|
|
23
|
|
22
|
|
|||||
Comprehensive income applicable to The Bank of New York Mellon Corporation
|
$
|
754
|
|
$
|
711
|
|
$
|
703
|
|
|
$
|
2,492
|
|
$
|
1,744
|
|
(a)
|
Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was
$(233) million
for the
quarter ended Sept. 30, 2016
,
$(162) million
for the
quarter ended June 30, 2016
,
$(130) million
for the
quarter ended Sept. 30, 2015
,
$(185) million
for the
nine months ended Sept. 30, 2016
and
$(721) million
for the
nine months ended Sept. 30, 2015
.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
||
(dollars in millions, except per share amounts)
|
||||||
Assets
|
|
|
||||
Cash and due from:
|
|
|
||||
Banks
|
$
|
4,957
|
|
$
|
6,537
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
80,359
|
|
113,203
|
|
||
Interest-bearing deposits with banks
|
14,416
|
|
15,146
|
|
||
Federal funds sold and securities purchased under resale agreements
|
34,851
|
|
24,373
|
|
||
Securities:
|
|
|
||||
Held-to-maturity (fair value of $41,387 and $43,204)
|
40,728
|
|
43,312
|
|
||
Available-for-sale
|
78,270
|
|
75,867
|
|
||
Total securities
|
118,998
|
|
119,179
|
|
||
Trading assets
|
5,340
|
|
7,368
|
|
||
Loans (includes $29 and $422, at fair value)
|
65,997
|
|
63,703
|
|
||
Allowance for loan losses
|
(148
|
)
|
(157
|
)
|
||
Net loans
|
65,849
|
|
63,546
|
|
||
Premises and equipment
|
1,338
|
|
1,379
|
|
||
Accrued interest receivable
|
522
|
|
562
|
|
||
Goodwill
|
17,449
|
|
17,618
|
|
||
Intangible assets
|
3,671
|
|
3,842
|
|
||
Other assets (includes $1,702 and $1,087, at fair value)
|
25,355
|
|
19,626
|
|
||
Subtotal assets of operations
|
373,105
|
|
392,379
|
|
||
Assets of consolidated investment management funds, at fair value:
|
|
|
||||
Trading assets
|
873
|
|
1,228
|
|
||
Other assets
|
136
|
|
173
|
|
||
Subtotal assets of consolidated investment management funds, at fair value
|
1,009
|
|
1,401
|
|
||
Total assets
|
$
|
374,114
|
|
$
|
393,780
|
|
Liabilities
|
|
|
||||
Deposits:
|
|
|
||||
Noninterest-bearing (principally U.S. offices)
|
$
|
105,632
|
|
$
|
96,277
|
|
Interest-bearing deposits in U.S. offices
|
56,713
|
|
51,704
|
|
||
Interest-bearing deposits in Non-U.S. offices
|
99,033
|
|
131,629
|
|
||
Total deposits
|
261,378
|
|
279,610
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
8,052
|
|
15,002
|
|
||
Trading liabilities
|
4,154
|
|
4,501
|
|
||
Payables to customers and broker-dealers
|
21,162
|
|
21,900
|
|
||
Other borrowed funds
|
993
|
|
523
|
|
||
Accrued taxes and other expenses
|
5,687
|
|
5,986
|
|
||
Other liabilities (including allowance for lending-related commitments of $126 and $118, also includes $1,120 and $392, at fair value)
|
7,709
|
|
5,490
|
|
||
Long-term debt (includes $376 and $359, at fair value)
|
24,374
|
|
21,547
|
|
||
Subtotal liabilities of operations
|
333,509
|
|
354,559
|
|
||
Liabilities of consolidated investment management funds, at fair value:
|
|
|
||||
Trading liabilities
|
219
|
|
229
|
|
||
Other liabilities
|
13
|
|
17
|
|
||
Subtotal liabilities of consolidated investment management funds, at fair value
|
232
|
|
246
|
|
||
Total liabilities
|
333,741
|
|
354,805
|
|
||
Temporary equity
|
|
|
||||
Redeemable noncontrolling interests
|
178
|
|
200
|
|
||
Permanent equity
|
|
|
||||
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 35,826 and 25,826 shares
|
3,542
|
|
2,552
|
|
||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,325,167,583 and 1,312,941,113 shares
|
13
|
|
13
|
|
||
Additional paid-in capital
|
25,637
|
|
25,262
|
|
||
Retained earnings
|
22,002
|
|
19,974
|
|
||
Accumulated other comprehensive loss, net of tax
|
(2,785
|
)
|
(2,600
|
)
|
||
Less: Treasury stock of 267,830,962 and 227,598,128 common shares, at cost
|
(8,714
|
)
|
(7,164
|
)
|
||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
39,695
|
|
38,037
|
|
||
Nonredeemable noncontrolling interests of consolidated investment management funds
|
500
|
|
738
|
|
||
Total permanent equity
|
40,195
|
|
38,775
|
|
||
Total liabilities, temporary equity and permanent equity
|
$
|
374,114
|
|
$
|
393,780
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Nine months ended Sept. 30,
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Operating activities
|
|
|
||||
Net income
|
$
|
2,676
|
|
$
|
2,526
|
|
Net loss (income) attributable to noncontrolling interests
|
1
|
|
(61
|
)
|
||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
2,677
|
|
2,465
|
|
||
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
||||
Provision for credit losses
|
(18
|
)
|
(3
|
)
|
||
Pension plan contributions
|
(17
|
)
|
(41
|
)
|
||
Depreciation and amortization
|
1,118
|
|
1,084
|
|
||
Deferred tax (benefit)
|
(282
|
)
|
(179
|
)
|
||
Net securities (gains) and venture capital (income)
|
(68
|
)
|
(63
|
)
|
||
Change in trading activities
|
1,680
|
|
511
|
|
||
Originations of loans held-for-sale
|
(350
|
)
|
—
|
|
||
Proceeds from the sales of loans originated for sale
|
802
|
|
—
|
|
||
Change in accruals and other, net
|
(3,985
|
)
|
211
|
|
||
Net cash provided by operating activities
|
1,557
|
|
3,985
|
|
||
Investing activities
|
|
|
||||
Change in interest-bearing deposits with banks
|
880
|
|
(522
|
)
|
||
Change in interest-bearing deposits with the Federal Reserve and other central banks
|
33,473
|
|
14,256
|
|
||
Purchases of securities held-to-maturity
|
(4,169
|
)
|
(14,545
|
)
|
||
Paydowns of securities held-to-maturity
|
3,577
|
|
2,648
|
|
||
Maturities of securities held-to-maturity
|
2,933
|
|
961
|
|
||
Purchases of securities available-for-sale
|
(21,491
|
)
|
(26,795
|
)
|
||
Sales of securities available-for-sale
|
5,624
|
|
16,085
|
|
||
Paydowns of securities available-for-sale
|
6,552
|
|
6,712
|
|
||
Maturities of securities available-for-sale
|
7,610
|
|
12,201
|
|
||
Net change in loans
|
(2,884
|
)
|
(4,237
|
)
|
||
Sales of loans and other real estate
|
172
|
|
316
|
|
||
Change in federal funds sold and securities purchased under resale agreements
|
(10,456
|
)
|
(8,599
|
)
|
||
Net change in seed capital investments
|
(57
|
)
|
367
|
|
||
Purchases of premises and equipment/capitalized software
|
(495
|
)
|
(427
|
)
|
||
Proceeds from the sale of premises and equipment
|
65
|
|
16
|
|
||
Acquisitions, net of cash
|
(38
|
)
|
(9
|
)
|
||
Dispositions, net of cash
|
1
|
|
17
|
|
||
Other, net
|
(239
|
)
|
1,307
|
|
||
Net cash provided by (used for) investing activities
|
21,058
|
|
(248
|
)
|
||
Financing activities
|
|
|
||||
Change in deposits
|
(18,378
|
)
|
(505
|
)
|
||
Change in federal funds purchased and securities sold under repurchase agreements
|
(6,950
|
)
|
(2,645
|
)
|
||
Change in payables to customers and broker-dealers
|
(743
|
)
|
1,055
|
|
||
Change in other borrowed funds
|
427
|
|
(217
|
)
|
||
Net proceeds from the issuance of long-term debt
|
4,982
|
|
4,190
|
|
||
Repayments of long-term debt
|
(2,453
|
)
|
(3,259
|
)
|
||
Proceeds from the exercise of stock options
|
129
|
|
263
|
|
||
Issuance of common stock
|
20
|
|
20
|
|
||
Issuance of preferred stock
|
990
|
|
990
|
|
||
Treasury stock acquired
|
(1,550
|
)
|
(1,924
|
)
|
||
Common cash dividends paid
|
(576
|
)
|
(574
|
)
|
||
Preferred cash dividends paid
|
(74
|
)
|
(49
|
)
|
||
Other, net
|
(2
|
)
|
140
|
|
||
Net cash (used for) financing activities
|
(24,178
|
)
|
(2,515
|
)
|
||
Effect of exchange rate changes on cash
|
(17
|
)
|
42
|
|
||
Change in cash and due from banks
|
|
|
||||
Change in cash and due from banks
|
(1,580
|
)
|
1,264
|
|
||
Cash and due from banks at beginning of period
|
6,537
|
|
6,970
|
|
||
Cash and due from banks at end of period
|
$
|
4,957
|
|
$
|
8,234
|
|
Supplemental disclosures
|
|
|
||||
Interest paid
|
$
|
371
|
|
$
|
285
|
|
Income taxes paid
|
597
|
|
746
|
|
||
Income taxes refunded
|
293
|
|
893
|
|
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) income, net of tax |
|
Treasury
stock
|
|
||||||||||||||||
Balance at Dec. 31, 2015
|
$
|
2,552
|
|
$
|
13
|
|
$
|
25,262
|
|
$
|
19,974
|
|
$
|
(2,600
|
)
|
$
|
(7,164
|
)
|
$
|
738
|
|
$
|
38,775
|
|
(a)
|
$
|
200
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
42
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(45
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(8
|
)
|
—
|
|
—
|
|
—
|
|
(244
|
)
|
(252
|
)
|
|
11
|
|
|||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
2,677
|
|
—
|
|
—
|
|
6
|
|
2,683
|
|
|
(7
|
)
|
|||||||||
Other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(185
|
)
|
—
|
|
—
|
|
(185
|
)
|
|
(23
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.53 per share
|
—
|
|
—
|
|
—
|
|
(575
|
)
|
—
|
|
—
|
|
—
|
|
(575
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(74
|
)
|
—
|
|
—
|
|
—
|
|
(74
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,550
|
)
|
—
|
|
(1,550
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
22
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
15
|
|
—
|
|
—
|
|
—
|
|
—
|
|
15
|
|
|
—
|
|
|||||||||
Preferred stock issued
|
990
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
990
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
346
|
|
—
|
|
—
|
|
—
|
|
—
|
|
346
|
|
|
—
|
|
|||||||||
Balance at Sept. 30, 2016
|
$
|
3,542
|
|
$
|
13
|
|
$
|
25,637
|
|
$
|
22,002
|
|
$
|
(2,785
|
)
|
$
|
(8,714
|
)
|
$
|
500
|
|
$
|
40,195
|
|
(a)
|
$
|
178
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$35,485 million
at
Dec. 31, 2015
and
$36,153 million
at
Sept. 30, 2016
.
|
Notes to Consolidated Financial Statements
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Securities at Sept. 30, 2016
|
Gross
unrealized
|
|
||||||||||
|
Amortized cost
|
|
Fair
value
|
|
||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
13,947
|
|
$
|
670
|
|
$
|
8
|
|
$
|
14,609
|
|
U.S. Government agencies
|
291
|
|
10
|
|
—
|
|
301
|
|
||||
State and political subdivisions
|
3,475
|
|
99
|
|
15
|
|
3,559
|
|
||||
Agency RMBS
|
23,447
|
|
290
|
|
229
|
|
23,508
|
|
||||
Non-agency RMBS
|
659
|
|
28
|
|
14
|
|
673
|
|
||||
Other RMBS
|
649
|
|
5
|
|
10
|
|
644
|
|
||||
Commercial MBS
|
939
|
|
27
|
|
5
|
|
961
|
|
||||
Agency commercial MBS
|
5,775
|
|
114
|
|
8
|
|
5,881
|
|
||||
CLOs
|
2,530
|
|
5
|
|
1
|
|
2,534
|
|
||||
Other asset-backed securities
|
2,202
|
|
9
|
|
8
|
|
2,203
|
|
||||
Foreign covered bonds
|
2,316
|
|
40
|
|
1
|
|
2,355
|
|
||||
Corporate bonds
|
1,585
|
|
54
|
|
1
|
|
1,638
|
|
||||
Sovereign debt/sovereign guaranteed
|
13,657
|
|
348
|
|
—
|
|
14,005
|
|
||||
Other debt securities
|
2,970
|
|
32
|
|
—
|
|
3,002
|
|
||||
Equity securities
|
2
|
|
1
|
|
—
|
|
3
|
|
||||
Money market funds
|
931
|
|
—
|
|
—
|
|
931
|
|
||||
Non-agency RMBS
(a)
|
1,166
|
|
304
|
|
7
|
|
1,463
|
|
||||
Total securities available-for-sale
(b)
|
$
|
76,541
|
|
$
|
2,036
|
|
$
|
307
|
|
$
|
78,270
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
11,165
|
|
$
|
154
|
|
$
|
—
|
|
$
|
11,319
|
|
U.S. Government agencies
|
1,529
|
|
1
|
|
—
|
|
1,530
|
|
||||
State and political subdivisions
|
19
|
|
1
|
|
1
|
|
19
|
|
||||
Agency RMBS
|
25,051
|
|
433
|
|
5
|
|
25,479
|
|
||||
Non-agency RMBS
|
82
|
|
4
|
|
2
|
|
84
|
|
||||
Other RMBS
|
158
|
|
—
|
|
11
|
|
147
|
|
||||
Commercial MBS
|
29
|
|
—
|
|
—
|
|
29
|
|
||||
Agency commercial MBS
|
555
|
|
19
|
|
—
|
|
574
|
|
||||
Foreign covered bonds
|
79
|
|
2
|
|
—
|
|
81
|
|
||||
Sovereign debt/sovereign guaranteed
|
2,033
|
|
64
|
|
—
|
|
2,097
|
|
||||
Other debt securities
|
28
|
|
—
|
|
—
|
|
28
|
|
||||
Total securities held-to-maturity
|
$
|
40,728
|
|
$
|
678
|
|
$
|
19
|
|
$
|
41,387
|
|
Total securities
|
$
|
117,269
|
|
$
|
2,714
|
|
$
|
326
|
|
$
|
119,657
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized gains of
$68 million
and gross unrealized losses of
$204 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 are related to Agency RMBS and will be amortized into net interest revenue over the estimated lives of the securities.
|
Securities at Dec. 31, 2015
|
Gross
unrealized |
|
|
|||||||||
|
Amortized cost
|
|
Fair
value
|
|
||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
12,693
|
|
$
|
175
|
|
$
|
36
|
|
$
|
12,832
|
|
U.S. Government agencies
|
386
|
|
2
|
|
1
|
|
387
|
|
||||
State and political subdivisions
|
3,968
|
|
91
|
|
13
|
|
4,046
|
|
||||
Agency RMBS
|
23,549
|
|
239
|
|
287
|
|
23,501
|
|
||||
Non-agency RMBS
|
782
|
|
31
|
|
20
|
|
793
|
|
||||
Other RMBS
|
1,072
|
|
10
|
|
21
|
|
1,061
|
|
||||
Commercial MBS
|
1,400
|
|
8
|
|
16
|
|
1,392
|
|
||||
Agency commercial MBS
|
4,031
|
|
24
|
|
35
|
|
4,020
|
|
||||
CLOs
|
2,363
|
|
1
|
|
13
|
|
2,351
|
|
||||
Other asset-backed securities
|
2,909
|
|
1
|
|
17
|
|
2,893
|
|
||||
Foreign covered bonds
|
2,125
|
|
46
|
|
3
|
|
2,168
|
|
||||
Corporate bonds
|
1,740
|
|
26
|
|
14
|
|
1,752
|
|
||||
Sovereign debt/sovereign guaranteed
|
13,036
|
|
211
|
|
30
|
|
13,217
|
|
||||
Other debt securities
|
2,732
|
|
46
|
|
3
|
|
2,775
|
|
||||
Equity securities
|
3
|
|
1
|
|
—
|
|
4
|
|
||||
Money market funds
|
886
|
|
—
|
|
—
|
|
886
|
|
||||
Non-agency RMBS
(a)
|
1,435
|
|
362
|
|
8
|
|
1,789
|
|
||||
Total securities available-for-sale
(b)
|
$
|
75,110
|
|
$
|
1,274
|
|
$
|
517
|
|
$
|
75,867
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
11,326
|
|
$
|
25
|
|
$
|
51
|
|
$
|
11,300
|
|
U.S. Government agencies
|
1,431
|
|
—
|
|
6
|
|
1,425
|
|
||||
State and political subdivisions
|
20
|
|
—
|
|
1
|
|
19
|
|
||||
Agency RMBS
|
26,036
|
|
134
|
|
205
|
|
25,965
|
|
||||
Non-agency RMBS
|
118
|
|
5
|
|
2
|
|
121
|
|
||||
Other RMBS
|
224
|
|
1
|
|
10
|
|
215
|
|
||||
Commercial MBS
|
9
|
|
—
|
|
—
|
|
9
|
|
||||
Agency commercial MBS
|
503
|
|
—
|
|
9
|
|
494
|
|
||||
Foreign covered bonds
|
76
|
|
—
|
|
—
|
|
76
|
|
||||
Sovereign debt/sovereign guaranteed
|
3,538
|
|
22
|
|
11
|
|
3,549
|
|
||||
Other debt securities
|
31
|
|
—
|
|
—
|
|
31
|
|
||||
Total securities held-to-maturity
|
$
|
43,312
|
|
$
|
187
|
|
$
|
295
|
|
$
|
43,204
|
|
Total securities
|
$
|
118,422
|
|
$
|
1,461
|
|
$
|
812
|
|
$
|
119,071
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized gains of
$84 million
and gross unrealized losses of
$248 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 are 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)
|
|
Net securities gains (losses)
|
|
|
|
|
|||||||||||
(in millions)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
YTD16
|
|
YTD15
|
|
|||||
Realized gross gains
|
$
|
26
|
|
$
|
23
|
|
$
|
23
|
|
$
|
71
|
|
$
|
66
|
|
Realized gross losses
|
(1
|
)
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
|||||
Recognized gross impairments
|
(1
|
)
|
(2
|
)
|
(1
|
)
|
(5
|
)
|
(3
|
)
|
|||||
Total net securities gains
|
$
|
24
|
|
$
|
21
|
|
$
|
22
|
|
$
|
65
|
|
$
|
62
|
|
Temporarily impaired securities at Sept. 30, 2016
|
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
|
$
|
1,945
|
|
$
|
8
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
1,945
|
|
$
|
8
|
|
State and political subdivisions
|
281
|
|
1
|
|
|
130
|
|
14
|
|
|
411
|
|
15
|
|
||||||
Agency RMBS
|
6,580
|
|
21
|
|
|
1,490
|
|
208
|
|
|
8,070
|
|
229
|
|
||||||
Non-agency RMBS
|
29
|
|
—
|
|
|
351
|
|
14
|
|
|
380
|
|
14
|
|
||||||
Other RMBS
|
38
|
|
1
|
|
|
151
|
|
9
|
|
|
189
|
|
10
|
|
||||||
Commercial MBS
|
99
|
|
—
|
|
|
172
|
|
5
|
|
|
271
|
|
5
|
|
||||||
Agency commercial MBS
|
1,106
|
|
3
|
|
|
608
|
|
5
|
|
|
1,714
|
|
8
|
|
||||||
CLOs
|
97
|
|
—
|
|
|
854
|
|
1
|
|
|
951
|
|
1
|
|
||||||
Other asset-backed securities
|
12
|
|
—
|
|
|
434
|
|
8
|
|
|
446
|
|
8
|
|
||||||
Corporate bonds
|
155
|
|
1
|
|
|
—
|
|
—
|
|
|
155
|
|
1
|
|
||||||
Non-agency RMBS
(a)
|
44
|
|
—
|
|
|
44
|
|
7
|
|
|
88
|
|
7
|
|
||||||
Foreign covered bonds
|
179
|
|
1
|
|
|
64
|
|
—
|
|
|
243
|
|
1
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
10,565
|
|
$
|
36
|
|
|
$
|
4,298
|
|
$
|
271
|
|
|
$
|
14,863
|
|
$
|
307
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
State and political subdivisions
|
$
|
—
|
|
$
|
—
|
|
|
$
|
4
|
|
$
|
1
|
|
|
$
|
4
|
|
$
|
1
|
|
Agency RMBS
|
1,601
|
|
4
|
|
|
75
|
|
1
|
|
|
1,676
|
|
5
|
|
||||||
Non-agency RMBS
|
5
|
|
—
|
|
|
49
|
|
2
|
|
|
54
|
|
2
|
|
||||||
Other RMBS
|
15
|
|
1
|
|
|
132
|
|
10
|
|
|
147
|
|
11
|
|
||||||
Total securities held-to-maturity
|
$
|
1,621
|
|
$
|
5
|
|
|
$
|
260
|
|
$
|
14
|
|
|
$
|
1,881
|
|
$
|
19
|
|
Total temporarily impaired securities
|
$
|
12,186
|
|
$
|
41
|
|
|
$
|
4,558
|
|
$
|
285
|
|
|
$
|
16,744
|
|
$
|
326
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Gross unrealized losses for 12 months or more of
$204 million
were recorded in accumulated other comprehensive income and 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. There were
no
gross unrealized losses for less than 12 months.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Temporarily impaired securities at Dec. 31, 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
|
$
|
6,343
|
|
$
|
36
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
6,343
|
|
$
|
36
|
|
U.S. Government agencies
|
148
|
|
1
|
|
|
10
|
|
—
|
|
|
158
|
|
1
|
|
||||||
State and political subdivisions
|
143
|
|
2
|
|
|
117
|
|
11
|
|
|
260
|
|
13
|
|
||||||
Agency RMBS
|
8,500
|
|
44
|
|
|
1,316
|
|
243
|
|
|
9,816
|
|
287
|
|
||||||
Non-agency RMBS
|
72
|
|
—
|
|
|
417
|
|
20
|
|
|
489
|
|
20
|
|
||||||
Other RMBS
|
2
|
|
—
|
|
|
298
|
|
21
|
|
|
300
|
|
21
|
|
||||||
Commercial MBS
|
567
|
|
9
|
|
|
224
|
|
7
|
|
|
791
|
|
16
|
|
||||||
Agency commercial MBS
|
2,551
|
|
31
|
|
|
172
|
|
4
|
|
|
2,723
|
|
35
|
|
||||||
CLOs
|
1,599
|
|
10
|
|
|
455
|
|
3
|
|
|
2,054
|
|
13
|
|
||||||
Other asset-backed securities
|
2,001
|
|
10
|
|
|
546
|
|
7
|
|
|
2,547
|
|
17
|
|
||||||
Corporate bonds
|
338
|
|
10
|
|
|
128
|
|
4
|
|
|
466
|
|
14
|
|
||||||
Sovereign debt/sovereign guaranteed
|
2,063
|
|
30
|
|
|
43
|
|
—
|
|
|
2,106
|
|
30
|
|
||||||
Non-agency RMBS
(a)
|
45
|
|
1
|
|
|
52
|
|
7
|
|
|
97
|
|
8
|
|
||||||
Other debt securities
|
505
|
|
3
|
|
|
—
|
|
—
|
|
|
505
|
|
3
|
|
||||||
Foreign covered bonds
|
515
|
|
3
|
|
|
—
|
|
—
|
|
|
515
|
|
3
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
25,392
|
|
$
|
190
|
|
|
$
|
3,778
|
|
$
|
327
|
|
|
$
|
29,170
|
|
$
|
517
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
9,121
|
|
$
|
51
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
9,121
|
|
$
|
51
|
|
U.S. Government agencies
|
1,122
|
|
6
|
|
|
—
|
|
—
|
|
|
1,122
|
|
6
|
|
||||||
State and political subdivisions
|
4
|
|
1
|
|
|
—
|
|
—
|
|
|
4
|
|
1
|
|
||||||
Agency RMBS
|
16,491
|
|
171
|
|
|
1,917
|
|
34
|
|
|
18,408
|
|
205
|
|
||||||
Non-agency RMBS
|
40
|
|
—
|
|
|
29
|
|
2
|
|
|
69
|
|
2
|
|
||||||
Other RMBS
|
9
|
|
—
|
|
|
166
|
|
10
|
|
|
175
|
|
10
|
|
||||||
Agency commercial MBS
|
494
|
|
9
|
|
|
—
|
|
—
|
|
|
494
|
|
9
|
|
||||||
Sovereign debt/sovereign guaranteed
|
2,161
|
|
11
|
|
|
—
|
|
—
|
|
|
2,161
|
|
11
|
|
||||||
Total securities held-to-maturity
|
$
|
29,442
|
|
$
|
249
|
|
|
$
|
2,112
|
|
$
|
46
|
|
|
$
|
31,554
|
|
$
|
295
|
|
Total temporarily impaired securities
|
$
|
54,834
|
|
$
|
439
|
|
|
$
|
5,890
|
|
$
|
373
|
|
|
$
|
60,724
|
|
$
|
812
|
|
(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
$8 million
and gross unrealized losses for 12 months or more of
$240 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, 2016
|
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
|
$
|
2,515
|
|
0.68
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
176
|
|
2.80
|
%
|
|
$
|
5,842
|
|
0.93
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
8,533
|
|
Over 1 through 5 years
|
5,810
|
|
1.44
|
|
|
40
|
|
1.25
|
|
|
1,822
|
|
2.85
|
|
|
12,256
|
|
1.05
|
|
|
—
|
|
—
|
|
|
19,928
|
|
||||||
Over 5 through 10 years
|
2,445
|
|
1.72
|
|
|
261
|
|
2.34
|
|
|
1,363
|
|
3.52
|
|
|
2,679
|
|
1.18
|
|
|
—
|
|
—
|
|
|
6,748
|
|
||||||
Over 10 years
|
3,839
|
|
3.11
|
|
|
—
|
|
—
|
|
|
198
|
|
1.48
|
|
|
223
|
|
1.69
|
|
|
—
|
|
—
|
|
|
4,260
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
33,130
|
|
2.66
|
|
|
33,130
|
|
||||||
Asset-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
4,737
|
|
1.73
|
|
|
4,737
|
|
||||||
Equity securities
(b)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
934
|
|
—
|
|
|
934
|
|
||||||
Total
|
$
|
14,609
|
|
1.79
|
%
|
|
$
|
301
|
|
2.19
|
%
|
|
$
|
3,559
|
|
3.03
|
%
|
|
$
|
21,000
|
|
1.04
|
%
|
|
$
|
38,801
|
|
2.48
|
%
|
|
$
|
78,270
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
1,745
|
|
0.79
|
%
|
|
$
|
75
|
|
0.68
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
541
|
|
0.57
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
2,361
|
|
Over 1 through 5 years
|
6,922
|
|
1.19
|
|
|
1,454
|
|
1.11
|
|
|
1
|
|
7.12
|
|
|
862
|
|
0.62
|
|
|
—
|
|
—
|
|
|
9,239
|
|
||||||
Over 5 through 10 years
|
2,498
|
|
1.90
|
|
|
—
|
|
—
|
|
|
4
|
|
6.76
|
|
|
737
|
|
0.69
|
|
|
—
|
|
—
|
|
|
3,239
|
|
||||||
Over 10 years
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
14
|
|
5.31
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
14
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
25,875
|
|
2.73
|
|
|
25,875
|
|
||||||
Total
|
$
|
11,165
|
|
1.29
|
%
|
|
$
|
1,529
|
|
1.09
|
%
|
|
$
|
19
|
|
5.67
|
%
|
|
$
|
2,140
|
|
0.63
|
%
|
|
$
|
25,875
|
|
2.73
|
%
|
|
$
|
40,728
|
|
(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)
|
3Q16
|
|
3Q15
|
|
||
Beginning balance as of June 30
|
$
|
91
|
|
$
|
91
|
|
Add: Initial OTTI credit losses
|
—
|
|
—
|
|
||
Subsequent OTTI credit losses
|
1
|
|
1
|
|
||
Less: Realized losses for securities sold
|
5
|
|
—
|
|
||
Ending balance as of Sept. 30
|
$
|
87
|
|
$
|
92
|
|
Debt securities credit loss roll forward
|
Year-to-date
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Beginning balance as of Jan. 1
|
$
|
91
|
|
$
|
93
|
|
Add: Initial OTTI credit losses
|
—
|
|
—
|
|
||
Subsequent OTTI credit losses
|
5
|
|
2
|
|
||
Less: Realized losses for securities sold
|
9
|
|
3
|
|
||
Ending balance as of Sept. 30
|
$
|
87
|
|
$
|
92
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Loans
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
||
(in millions)
|
||||||
Domestic:
|
|
|
||||
Financial institutions
|
$
|
6,783
|
|
$
|
6,640
|
|
Commercial
|
2,292
|
|
2,115
|
|
||
Wealth management loans and mortgages
|
15,031
|
|
13,247
|
|
||
Commercial real estate
|
4,723
|
|
3,899
|
|
||
Lease financings
|
1,017
|
|
1,007
|
|
||
Other residential mortgages
|
901
|
|
1,055
|
|
||
Overdrafts
|
1,580
|
|
911
|
|
||
Other
|
1,122
|
|
1,137
|
|
||
Margin loans
|
17,487
|
|
19,340
|
|
||
Total domestic
|
50,936
|
|
49,351
|
|
||
Foreign:
|
|
|
||||
Financial institutions
|
7,963
|
|
9,259
|
|
||
Commercial
|
373
|
|
227
|
|
||
Wealth management loans and mortgages
|
97
|
|
100
|
|
||
Commercial real estate
|
17
|
|
46
|
|
||
Lease financings
|
731
|
|
850
|
|
||
Other (primarily overdrafts)
|
5,810
|
|
3,637
|
|
||
Margin loans
|
70
|
|
233
|
|
||
Total foreign
|
15,061
|
|
14,352
|
|
||
Total loans
(a)
|
$
|
65,997
|
|
$
|
63,703
|
|
(a)
|
Net of unearned income of
$563 million
at
Sept. 30, 2016
and
$674 million
at
Dec. 31, 2015
primarily on domestic and foreign lease financings.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for cre
dit losses activity for the quarter ended Sept. 30, 2016
|
Wealth management loans and mortgages
|
|
Other residential mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
90
|
|
$
|
63
|
|
$
|
29
|
|
$
|
14
|
|
$
|
18
|
|
$
|
29
|
|
$
|
—
|
|
|
$
|
37
|
|
$
|
280
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
13
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
14
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
13
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
13
|
|
|||||||||
Provision
|
1
|
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
(6
|
)
|
(19
|
)
|
|||||||||
Ending balance
|
$
|
91
|
|
$
|
63
|
|
$
|
29
|
|
$
|
14
|
|
$
|
18
|
|
$
|
28
|
|
$
|
—
|
|
|
$
|
31
|
|
$
|
274
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
22
|
|
$
|
45
|
|
$
|
9
|
|
$
|
14
|
|
$
|
14
|
|
$
|
28
|
|
$
|
—
|
|
|
$
|
16
|
|
$
|
148
|
|
Lending-related commitments
|
69
|
|
18
|
|
20
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
15
|
|
126
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
1
|
|
$
|
—
|
|
$
|
4
|
|
$
|
4
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
9
|
|
Allowance for loan losses
|
—
|
|
1
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
3
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
2,292
|
|
$
|
4,693
|
|
$
|
6,783
|
|
$
|
1,013
|
|
$
|
15,027
|
|
$
|
901
|
|
$
|
20,189
|
|
(a)
|
$
|
15,061
|
|
$
|
65,959
|
|
Allowance for loan losses
|
22
|
|
44
|
|
9
|
|
12
|
|
14
|
|
28
|
|
—
|
|
|
16
|
|
145
|
|
(a)
|
Includes
$1,580 million
of domestic overdrafts,
$17,487 million
of margin loans and
$1,122 million
of other loans at
Sept. 30, 2016
.
|
Allowance for credit losses activity for the quarter ended June 30, 2016
|
Wealth management loans and mortgages
|
|
Other residential mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
88
|
|
$
|
62
|
|
$
|
32
|
|
$
|
16
|
|
$
|
18
|
|
$
|
32
|
|
$
|
—
|
|
|
$
|
39
|
|
$
|
287
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
1
|
|
2
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
1
|
|
2
|
|
|||||||||
Provision
|
2
|
|
1
|
|
(3
|
)
|
(2
|
)
|
—
|
|
(4
|
)
|
—
|
|
|
(3
|
)
|
(9
|
)
|
|||||||||
Ending balance
|
$
|
90
|
|
$
|
63
|
|
$
|
29
|
|
$
|
14
|
|
$
|
18
|
|
$
|
29
|
|
$
|
—
|
|
|
$
|
37
|
|
$
|
280
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
25
|
|
$
|
43
|
|
$
|
9
|
|
$
|
14
|
|
$
|
15
|
|
$
|
29
|
|
$
|
—
|
|
|
$
|
23
|
|
$
|
158
|
|
Lending-related commitments
|
65
|
|
20
|
|
20
|
|
—
|
|
3
|
|
—
|
|
—
|
|
|
14
|
|
122
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
2
|
|
$
|
171
|
|
$
|
4
|
|
$
|
8
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
185
|
|
Allowance for loan losses
|
—
|
|
1
|
|
—
|
|
2
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
4
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
2,377
|
|
$
|
4,222
|
|
$
|
6,690
|
|
$
|
1,023
|
|
$
|
14,437
|
|
$
|
945
|
|
$
|
20,842
|
|
(a)
|
$
|
13,474
|
|
$
|
64,010
|
|
Allowance for loan losses
|
25
|
|
42
|
|
9
|
|
12
|
|
14
|
|
29
|
|
—
|
|
|
23
|
|
154
|
|
(a)
|
Includes
$1,331 million
of domestic overdrafts,
$18,388 million
of margin loans and
$1,123 million
of other loans at
June 30, 2016
.
|
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
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
75
|
|
$
|
58
|
|
$
|
30
|
|
$
|
20
|
|
$
|
22
|
|
$
|
37
|
|
$
|
—
|
|
|
$
|
36
|
|
$
|
278
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
|
—
|
|
2
|
|
|||||||||
Net 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 nine months ended Sept. 30, 2016
|
Wealth management loans and mortgages
|
|
Other
residential mortgages |
|
All
Other |
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate |
|
Financial
institutions |
|
Lease
financings |
|
|||||||||||||||||||
Beginning balance
|
$
|
82
|
|
$
|
59
|
|
$
|
31
|
|
$
|
15
|
|
$
|
19
|
|
$
|
34
|
|
$
|
—
|
|
$
|
35
|
|
$
|
275
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
13
|
|
—
|
|
—
|
|
4
|
|
—
|
|
1
|
|
18
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
13
|
|
—
|
|
—
|
|
3
|
|
—
|
|
1
|
|
17
|
|
|||||||||
Provision
|
9
|
|
4
|
|
(15
|
)
|
(1
|
)
|
(1
|
)
|
(9
|
)
|
—
|
|
(5
|
)
|
(18
|
)
|
|||||||||
Ending balance
|
$
|
91
|
|
$
|
63
|
|
$
|
29
|
|
$
|
14
|
|
$
|
18
|
|
$
|
28
|
|
$
|
—
|
|
$
|
31
|
|
$
|
274
|
|
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
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Nonperforming assets
(in millions)
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
|||
Nonperforming loans:
|
|
|
|||||
Other residential mortgages
|
$
|
93
|
|
$
|
102
|
|
|
Wealth management loans and mortgages
|
7
|
|
11
|
|
|||
Lease financings
|
4
|
|
—
|
|
|||
Commercial real estate
|
1
|
|
2
|
|
|||
Financial institutions
|
—
|
|
171
|
|
|||
Total nonperforming loans
|
105
|
|
286
|
|
|||
Other assets owned
|
4
|
|
6
|
|
|||
Total nonperforming assets
|
$
|
109
|
|
$
|
292
|
|
Lost interest
|
|
|
|
|
|
||||||||||
(in millions)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
YTD16
|
|
YTD15
|
|
|||||
Amount by which interest income recognized on nonperforming loans exceeded reversals
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Amount by which interest income would have increased if nonperforming loans at period-end had been performing for the entire period
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
$
|
4
|
|
$
|
5
|
|
Impaired loans
|
Quarter ended
|
|
Year-to-date
|
||||||||||||||||||||||||||||
|
Sept. 30, 2016
|
June 30, 2016
|
Sept. 30, 2015
|
|
Sept. 30, 2016
|
Sept. 30, 2015
|
|||||||||||||||||||||||||
(in millions)
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
|
Average
recorded investment |
|
Interest
income recognized |
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
||||||||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Commercial real estate
|
$
|
1
|
|
$
|
—
|
|
$
|
1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Wealth management loans and mortgages
|
3
|
|
—
|
|
6
|
|
—
|
|
6
|
|
—
|
|
|
5
|
|
—
|
|
6
|
|
—
|
|
||||||||||
Lease financings
|
4
|
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
|
3
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Total impaired loans with an allowance
|
8
|
|
—
|
|
11
|
|
—
|
|
6
|
|
—
|
|
|
9
|
|
—
|
|
6
|
|
—
|
|
||||||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Commercial real estate
|
1
|
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Financial institutions
|
85
|
|
—
|
|
171
|
|
—
|
|
—
|
|
—
|
|
|
128
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Wealth management loans and mortgages
|
3
|
|
—
|
|
2
|
|
—
|
|
2
|
|
—
|
|
|
2
|
|
—
|
|
2
|
|
—
|
|
||||||||||
Total impaired
loans without an
allowance
(a)
|
89
|
|
—
|
|
174
|
|
—
|
|
2
|
|
—
|
|
|
131
|
|
—
|
|
2
|
|
—
|
|
||||||||||
Total impaired loans
|
$
|
97
|
|
$
|
—
|
|
$
|
185
|
|
$
|
—
|
|
$
|
8
|
|
$
|
—
|
|
|
$
|
140
|
|
$
|
—
|
|
$
|
8
|
|
$
|
—
|
|
(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
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||
(in millions)
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
(a)
|
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
(a)
|
|
||||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate
|
$
|
1
|
|
$
|
4
|
|
$
|
1
|
|
|
$
|
1
|
|
$
|
3
|
|
$
|
1
|
|
Wealth management loans and mortgages
|
1
|
|
1
|
|
—
|
|
|
6
|
|
7
|
|
1
|
|
||||||
Lease financings
|
4
|
|
4
|
|
2
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Total impaired loans with an allowance
|
6
|
|
9
|
|
3
|
|
|
7
|
|
10
|
|
2
|
|
||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate
|
—
|
|
—
|
|
N/A
|
|
|
—
|
|
—
|
|
N/A
|
|
||||||
Financial institutions
|
—
|
|
—
|
|
N/A
|
|
|
171
|
|
312
|
|
N/A
|
|
||||||
Wealth management loans and mortgages
|
3
|
|
3
|
|
N/A
|
|
|
2
|
|
2
|
|
N/A
|
|
||||||
Total impaired loans without an allowance
(b)
|
3
|
|
3
|
|
N/A
|
|
|
173
|
|
314
|
|
N/A
|
|
||||||
Total impaired loans
(c)
|
$
|
9
|
|
$
|
12
|
|
$
|
3
|
|
|
$
|
180
|
|
$
|
324
|
|
$
|
2
|
|
(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 less than
$1 million
and an aggregate of
$2 million
of impaired loans in amounts individually less than
$1 million
at
Sept. 30, 2016
and
Dec. 31, 2015
, respectively. The allowance for loan loss associated with these loans totaled less than
$1 million
at both
Sept. 30, 2016
and
Dec. 31, 2015
, respectively.
|
Past due loans and still accruing interest
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||||||||
|
Days past due
|
Total
past due
|
|
|
Days past due
|
Total
past due
|
|
||||||||||||||||||
(in millions)
|
30-59
|
|
60-89
|
|
>90
|
|
30-59
|
|
60-89
|
|
>90
|
|
|||||||||||||
Financial institutions
(a)
|
$
|
143
|
|
$
|
—
|
|
$
|
—
|
|
$
|
143
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Wealth management loans and mortgages
|
25
|
|
3
|
|
—
|
|
28
|
|
|
69
|
|
2
|
|
1
|
|
72
|
|
||||||||
Other residential mortgages
|
17
|
|
5
|
|
6
|
|
28
|
|
|
22
|
|
5
|
|
4
|
|
31
|
|
||||||||
Commercial real estate
|
23
|
|
—
|
|
—
|
|
23
|
|
|
57
|
|
11
|
|
—
|
|
68
|
|
||||||||
Commercial
|
10
|
|
—
|
|
—
|
|
10
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total past due loans
|
$
|
218
|
|
$
|
8
|
|
$
|
6
|
|
$
|
232
|
|
|
$
|
148
|
|
$
|
18
|
|
$
|
5
|
|
$
|
171
|
|
(a)
|
Substantially all of these past due loans have been repaid subsequent to Sept 30, 2016.
|
TDRs
|
3Q16
|
|
2Q16
|
|
3Q15
|
|||||||||||||||||||||||||||
|
|
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
|
17
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
23
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
14
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Total TDRs
|
17
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
23
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
14
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Goodwill by business
(in millions)
|
Investment
Management |
|
|
Investment
Services |
|
(a)
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2015
|
$
|
9,207
|
|
|
$
|
8,366
|
|
|
$
|
45
|
|
|
$
|
17,618
|
|
Acquisition/dispositions
|
29
|
|
|
(1
|
)
|
|
—
|
|
|
28
|
|
||||
Foreign currency translation
|
(167
|
)
|
|
(30
|
)
|
|
—
|
|
|
(197
|
)
|
||||
Other
(c)
|
2
|
|
|
(4
|
)
|
|
2
|
|
|
—
|
|
||||
Balance at Sept. 30, 2016
|
$
|
9,071
|
|
|
$
|
8,331
|
|
|
$
|
47
|
|
|
$
|
17,449
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Goodwill by business
(in millions)
|
Investment
Management |
|
(b)
|
Investment
Services |
|
(a)
|
Other
|
|
(a)(b)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2014
|
$
|
9,328
|
|
|
$
|
8,471
|
|
|
$
|
70
|
|
|
$
|
17,869
|
|
Acquisitions/dispositions
|
10
|
|
|
—
|
|
|
(22
|
)
|
|
(12
|
)
|
||||
Foreign currency translation
|
(93
|
)
|
|
(80
|
)
|
|
(2
|
)
|
|
(175
|
)
|
||||
Other
(c)
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Balance at Sept. 30, 2015
|
$
|
9,242
|
|
|
$
|
8,391
|
|
|
$
|
46
|
|
|
$
|
17,679
|
|
(a)
|
Includes the reclassification of goodwill associated with credit-related activities from the Other segment to Investment Services.
|
(b)
|
Includes the reclassification of goodwill associated with Meriten from Investment Management to the Other segment.
|
(c)
|
Other changes in goodwill include purchase price adjustments and certain other reclassifications.
|
Intangible assets – net carrying amount by business
(in millions)
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
||||
Balance at Dec. 31, 2015
|
$
|
1,807
|
|
|
$
|
1,186
|
|
|
$
|
849
|
|
|
$
|
3,842
|
|
Acquisition
|
30
|
|
|
2
|
|
|
—
|
|
|
32
|
|
||||
Amortization
(a)
|
(60
|
)
|
|
(117
|
)
|
|
—
|
|
|
(177
|
)
|
||||
Foreign currency translation
|
(27
|
)
|
|
1
|
|
|
—
|
|
|
(26
|
)
|
||||
Balance at Sept. 30, 2016
|
$
|
1,750
|
|
|
$
|
1,072
|
|
|
$
|
849
|
|
|
$
|
3,671
|
|
Intangible assets – net carrying amount by business
(in millions)
|
Investment
Management |
|
(b)
|
Investment
Services |
|
|
Other
|
|
(b)
|
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
|
|
(a)
|
Includes a
$3 million
impairment charge related to the write-down of the value of a customer contract intangible in the Investment Management business to its fair value.
|
(b)
|
Includes the reclassification of intangible assets associated with Meriten from Investment Management to the Other segment.
|
Intangible assets
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|||||||||||||||||
(in millions)
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
carrying
amount
|
|
Remaining
weighted-
average
amortization
period
|
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net
carrying
amount
|
|
||||||
Subject to amortization
:
(a)
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships—Investment Management
|
$
|
1,547
|
|
$
|
(1,224
|
)
|
$
|
323
|
|
11 years
|
|
$
|
1,593
|
|
$
|
(1,235
|
)
|
$
|
358
|
|
Customer contracts—Investment Services
|
2,258
|
|
(1,559
|
)
|
699
|
|
10 years
|
|
2,260
|
|
(1,450
|
)
|
810
|
|
||||||
Other
|
38
|
|
(32
|
)
|
6
|
|
2 years
|
|
40
|
|
(31
|
)
|
9
|
|
||||||
Total subject to amortization
|
3,843
|
|
(2,815
|
)
|
1,028
|
|
10 years
|
|
3,893
|
|
(2,716
|
)
|
1,177
|
|
||||||
Not subject to amortization:
(b)
|
|
|
|
|
|
|
|
|
||||||||||||
Trade name
|
1,353
|
|
N/A
|
|
1,353
|
|
N/A
|
|
1,358
|
|
N/A
|
|
1,358
|
|
||||||
Customer relationships
|
1,290
|
|
N/A
|
|
1,290
|
|
N/A
|
|
1,307
|
|
N/A
|
|
1,307
|
|
||||||
Total not subject to amortization
|
2,643
|
|
N/A
|
|
2,643
|
|
N/A
|
|
2,665
|
|
N/A
|
|
2,665
|
|
||||||
Total intangible assets
|
$
|
6,486
|
|
$
|
(2,815
|
)
|
$
|
3,671
|
|
N/A
|
|
$
|
6,558
|
|
$
|
(2,716
|
)
|
$
|
3,842
|
|
(a)
|
Excludes fully amortized intangible assets.
|
(b)
|
Intangible assets not subject to amortization have an indefinite life.
|
Notes to Consolidated Financial Statements
(continued)
|
|
For the year ended
Dec. 31, |
Estimated amortization expense
(in millions)
|
|
||
2016
|
|
$
|
234
|
|
2017
|
|
209
|
|
|
2018
|
|
179
|
|
|
2019
|
|
108
|
|
|
2020
|
|
98
|
|
Other assets
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
||
(in millions)
|
||||||
Fails to deliver
|
$
|
6,932
|
|
$
|
1,494
|
|
Corporate/bank-owned life insurance
|
4,770
|
|
4,704
|
|
||
Accounts receivable
|
4,332
|
|
3,535
|
|
||
Equity in joint venture and other investments
(a)
|
3,516
|
|
3,329
|
|
||
Software
|
1,411
|
|
1,355
|
|
||
Fair value of hedging derivatives
|
1,139
|
|
716
|
|
||
Income taxes receivable
|
875
|
|
1,554
|
|
||
Prepaid pension assets
|
847
|
|
727
|
|
||
Prepaid expenses
|
401
|
|
464
|
|
||
Due from customers on acceptances
|
249
|
|
258
|
|
||
Other
|
883
|
|
1,490
|
|
||
Total other assets
|
$
|
25,355
|
|
$
|
19,626
|
|
(a)
|
Includes Federal Reserve Bank stock of
$465 million
and
$453 million
, respectively, at cost.
|
(a)
|
Other funds include various leveraged loans, structured credit funds and hedge funds. Redemption notice periods vary by fund.
|
(b)
|
Private equity investments primarily include Volcker Rule-compliant investments in SBICs that invest in various sectors of the economy. Private equity investments do not have redemption rights. Distributions from such investments will be received as the underlying investments in the private equity investments are liquidated.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net interest revenue
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(in millions)
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
|
|||||
Interest revenue
|
|
|
|
|
|
|
||||||||||
Non-margin loans
|
$
|
218
|
|
$
|
214
|
|
$
|
188
|
|
|
$
|
637
|
|
$
|
540
|
|
Margin loans
|
67
|
|
64
|
|
53
|
|
|
194
|
|
154
|
|
|||||
Securities:
|
|
|
|
|
|
|
||||||||||
Taxable
|
434
|
|
429
|
|
453
|
|
|
1,307
|
|
1,360
|
|
|||||
Exempt from federal income taxes
|
17
|
|
18
|
|
20
|
|
|
53
|
|
63
|
|
|||||
Total securities
|
451
|
|
447
|
|
473
|
|
|
1,360
|
|
1,423
|
|
|||||
Deposits with banks
|
26
|
|
24
|
|
24
|
|
|
76
|
|
82
|
|
|||||
Deposits with the Federal Reserve and other central banks
|
37
|
|
72
|
|
43
|
|
|
170
|
|
131
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
62
|
|
56
|
|
39
|
|
|
167
|
|
105
|
|
|||||
Trading assets
|
13
|
|
13
|
|
18
|
|
|
43
|
|
57
|
|
|||||
Total interest revenue
|
874
|
|
890
|
|
838
|
|
|
2,647
|
|
2,492
|
|
|||||
Interest expense
|
|
|
|
|
|
|
||||||||||
Deposits
|
(6
|
)
|
12
|
|
9
|
|
|
21
|
|
32
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
6
|
|
13
|
|
(1
|
)
|
|
28
|
|
(5
|
)
|
|||||
Trading liabilities
|
2
|
|
1
|
|
2
|
|
|
5
|
|
7
|
|
|||||
Other borrowed funds
|
1
|
|
2
|
|
2
|
|
|
5
|
|
7
|
|
|||||
Customer payables
|
3
|
|
2
|
|
1
|
|
|
9
|
|
5
|
|
|||||
Commercial paper
|
1
|
|
4
|
|
1
|
|
|
5
|
|
2
|
|
|||||
Long-term debt
|
93
|
|
89
|
|
65
|
|
|
267
|
|
178
|
|
|||||
Total interest expense
|
100
|
|
123
|
|
79
|
|
|
340
|
|
226
|
|
|||||
Net interest revenue
|
774
|
|
767
|
|
759
|
|
|
2,307
|
|
2,266
|
|
|||||
Provision for credit losses
|
(19
|
)
|
(9
|
)
|
1
|
|
|
(18
|
)
|
(3
|
)
|
|||||
Net interest revenue after provision for credit losses
|
$
|
793
|
|
$
|
776
|
|
$
|
758
|
|
|
$
|
2,325
|
|
$
|
2,269
|
|
Net periodic benefit (credit) cost
|
Quarter ended
|
||||||||||||||||||||||||||||
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
||||||||||||||||||||||||
(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
|
|
|
$
|
—
|
|
$
|
8
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
8
|
|
$
|
1
|
|
Interest cost
|
45
|
|
9
|
|
2
|
|
|
45
|
|
9
|
|
2
|
|
|
42
|
|
10
|
|
2
|
|
|||||||||
Expected return on assets
|
(82
|
)
|
(13
|
)
|
(2
|
)
|
|
(82
|
)
|
(13
|
)
|
(2
|
)
|
|
(83
|
)
|
(13
|
)
|
(2
|
)
|
|||||||||
Other
|
17
|
|
4
|
|
(1
|
)
|
|
17
|
|
5
|
|
(1
|
)
|
|
26
|
|
6
|
|
—
|
|
|||||||||
Net periodic benefit (credit) cost
|
$
|
(20
|
)
|
$
|
8
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
$
|
9
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
$
|
11
|
|
$
|
1
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net periodic benefit (credit) cost
|
|
Year-to-date
|
|
|
|||||||||||||||
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
||||||
Service cost
|
$
|
—
|
|
$
|
24
|
|
$
|
3
|
|
|
$
|
30
|
|
$
|
24
|
|
$
|
3
|
|
Interest cost
|
135
|
|
27
|
|
6
|
|
|
127
|
|
30
|
|
6
|
|
||||||
Expected return on assets
|
(246
|
)
|
(39
|
)
|
(6
|
)
|
|
(249
|
)
|
(39
|
)
|
(6
|
)
|
||||||
Curtailment (gain)
|
—
|
|
—
|
|
—
|
|
|
(30
|
)
|
—
|
|
—
|
|
||||||
Other
|
52
|
|
13
|
|
(3
|
)
|
|
83
|
|
18
|
|
—
|
|
||||||
Net periodic benefit (credit) cost
|
$
|
(59
|
)
|
$
|
25
|
|
$
|
—
|
|
|
$
|
(39
|
)
|
$
|
33
|
|
$
|
3
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
(a)
|
Includes VMEs with assets of
$134 million
, liabilities of
$2 million
and nonredeemable noncontrolling interests of
$16 million
.
|
(a)
|
Includes VMEs with assets of
$190 million
, liabilities of
$1 million
and nonredeemable noncontrolling interests of
$5 million
.
|
Non-consolidated VIEs at Sept. 30, 2016
|
|||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|||
Other
|
$
|
208
|
|
$
|
—
|
|
$
|
208
|
|
Non-consolidated VIEs at Dec. 31, 2015
|
|||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|||
Other
|
$
|
189
|
|
$
|
—
|
|
$
|
189
|
|
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, 2016
|
|
Dec. 31, 2015
|
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
||||||||
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
|
|
10,000
|
|
|
990
|
|
990
|
|
||
Series F
|
Noncumulative Perpetual Preferred Stock
|
4.625% commencing Mar. 20, 2017 to and including Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131%
|
|
$
|
100,000
|
|
|
10,000
|
|
—
|
|
|
990
|
|
—
|
|
||
Total
|
|
|
|
35,826
|
|
25,826
|
|
|
$
|
3,542
|
|
$
|
2,552
|
|
(a)
|
The carrying value of the Series C, Series D, Series E and Series F preferred stock is recorded net of issuance costs.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
$1,022.22
per share on the Series A Preferred Stock (equivalent to
$10.2222
per Normal Preferred Capital Security of Mellon Capital IV, each representing a 1/100th interest in a share of the 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).
|
Components of other comprehensive income (loss)
|
Quarter ended
|
||||||||||||||||||||||||||||
Sept. 30, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2015
|
|||||||||||||||||||||||||
(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
(a)
|
$
|
(104
|
)
|
$
|
(82
|
)
|
$
|
(186
|
)
|
|
$
|
(164
|
)
|
$
|
(120
|
)
|
$
|
(284
|
)
|
|
$
|
(132
|
)
|
$
|
(31
|
)
|
$
|
(163
|
)
|
Total foreign currency translation
|
(104
|
)
|
(82
|
)
|
(186
|
)
|
|
(164
|
)
|
(120
|
)
|
(284
|
)
|
|
(132
|
)
|
(31
|
)
|
(163
|
)
|
|||||||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized gain (loss) arising during period
|
(87
|
)
|
34
|
|
(53
|
)
|
|
182
|
|
(65
|
)
|
117
|
|
|
(3
|
)
|
10
|
|
7
|
|
|||||||||
Reclassification adjustment
(b)
|
(24
|
)
|
9
|
|
(15
|
)
|
|
(21
|
)
|
8
|
|
(13
|
)
|
|
(22
|
)
|
8
|
|
(14
|
)
|
|||||||||
Net unrealized gain (loss) on assets available-for-sale
|
(111
|
)
|
43
|
|
(68
|
)
|
|
161
|
|
(57
|
)
|
104
|
|
|
(25
|
)
|
18
|
|
(7
|
)
|
|||||||||
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
(b)
|
22
|
|
(8
|
)
|
14
|
|
|
21
|
|
(7
|
)
|
14
|
|
|
32
|
|
(11
|
)
|
21
|
|
|||||||||
Total defined benefit plans
|
22
|
|
(8
|
)
|
14
|
|
|
21
|
|
(7
|
)
|
14
|
|
|
35
|
|
(12
|
)
|
23
|
|
|||||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized hedge gain (loss) arising during period
|
(24
|
)
|
7
|
|
(17
|
)
|
|
(10
|
)
|
4
|
|
(6
|
)
|
|
(3
|
)
|
(6
|
)
|
(9
|
)
|
|||||||||
Reclassification adjustment
(b)
|
28
|
|
(9
|
)
|
19
|
|
|
(4
|
)
|
1
|
|
(3
|
)
|
|
3
|
|
6
|
|
9
|
|
|||||||||
Net unrealized gain (loss) on cash flow hedges
|
4
|
|
(2
|
)
|
2
|
|
|
(14
|
)
|
5
|
|
(9
|
)
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Total other comprehensive income (loss)
|
$
|
(189
|
)
|
$
|
(49
|
)
|
$
|
(238
|
)
|
|
$
|
4
|
|
$
|
(179
|
)
|
$
|
(175
|
)
|
|
$
|
(122
|
)
|
$
|
(25
|
)
|
$
|
(147
|
)
|
(a)
|
Includes the impact of hedges of net investments in foreign subsidiaries. See Note 16 for additional information.
|
(b)
|
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 16 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, 2016
|
|
Sept. 30, 2015
|
||||||||||||||||
(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
(a)
|
$
|
(223
|
)
|
$
|
(210
|
)
|
$
|
(433
|
)
|
|
$
|
(396
|
)
|
$
|
(39
|
)
|
$
|
(435
|
)
|
Total foreign currency translation
|
(223
|
)
|
(210
|
)
|
(433
|
)
|
|
(396
|
)
|
(39
|
)
|
(435
|
)
|
||||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gain (loss) arising during period
|
338
|
|
(111
|
)
|
227
|
|
|
(300
|
)
|
83
|
|
(217
|
)
|
||||||
Reclassification adjustment
(b)
|
(65
|
)
|
22
|
|
(43
|
)
|
|
(62
|
)
|
23
|
|
(39
|
)
|
||||||
Net unrealized gain (loss) on assets available-for-sale
|
273
|
|
(89
|
)
|
184
|
|
|
(362
|
)
|
106
|
|
(256
|
)
|
||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
||||||||||||
Net gain (loss) arising during the period
|
3
|
|
(1
|
)
|
2
|
|
|
(182
|
)
|
75
|
|
(107
|
)
|
||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
(b)
|
65
|
|
(22
|
)
|
43
|
|
|
71
|
|
(24
|
)
|
47
|
|
||||||
Total defined benefit plans
|
68
|
|
(23
|
)
|
45
|
|
|
(111
|
)
|
51
|
|
(60
|
)
|
||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized hedge gain (loss) arising during period
|
(115
|
)
|
38
|
|
(77
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Reclassification adjustment
(b)
|
110
|
|
(37
|
)
|
73
|
|
|
11
|
|
(3
|
)
|
8
|
|
||||||
Net unrealized gain (loss) on cash flow hedges
|
(5
|
)
|
1
|
|
(4
|
)
|
|
11
|
|
(3
|
)
|
8
|
|
||||||
Total other comprehensive income (loss)
|
$
|
113
|
|
$
|
(321
|
)
|
$
|
(208
|
)
|
|
$
|
(858
|
)
|
$
|
115
|
|
$
|
(743
|
)
|
(a)
|
Includes the impact of hedges of net investments in foreign subsidiaries. See Note 16 for additional information.
|
(b)
|
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 16 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, 2016
|
Total carrying
value |
|
|||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
14,609
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
14,609
|
|
U.S. Government agencies
|
—
|
|
301
|
|
—
|
|
—
|
|
301
|
|
|||||
Sovereign debt/sovereign guaranteed
|
70
|
|
13,935
|
|
—
|
|
—
|
|
14,005
|
|
|||||
State and political subdivisions
|
—
|
|
3,559
|
|
—
|
|
—
|
|
3,559
|
|
|||||
Agency RMBS
|
—
|
|
23,508
|
|
—
|
|
—
|
|
23,508
|
|
|||||
Non-agency RMBS
|
—
|
|
673
|
|
—
|
|
—
|
|
673
|
|
|||||
Other RMBS
|
—
|
|
644
|
|
—
|
|
—
|
|
644
|
|
|||||
Commercial MBS
|
—
|
|
961
|
|
—
|
|
—
|
|
961
|
|
|||||
Agency commercial MBS
|
—
|
|
5,881
|
|
—
|
|
—
|
|
5,881
|
|
|||||
CLOs
|
—
|
|
2,534
|
|
—
|
|
—
|
|
2,534
|
|
|||||
Other asset-backed securities
|
—
|
|
2,203
|
|
—
|
|
—
|
|
2,203
|
|
|||||
Equity securities
|
3
|
|
—
|
|
—
|
|
—
|
|
3
|
|
|||||
Money market funds
(b)
|
931
|
|
—
|
|
—
|
|
—
|
|
931
|
|
|||||
Corporate bonds
|
—
|
|
1,638
|
|
—
|
|
—
|
|
1,638
|
|
|||||
Other debt securities
|
—
|
|
3,002
|
|
—
|
|
—
|
|
3,002
|
|
|||||
Foreign covered bonds
|
2,110
|
|
245
|
|
—
|
|
—
|
|
2,355
|
|
|||||
Non-agency RMBS
(c)
|
—
|
|
1,463
|
|
—
|
|
—
|
|
1,463
|
|
|||||
Total available-for-sale securities
|
17,723
|
|
60,547
|
|
—
|
|
—
|
|
78,270
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(b)
|
353
|
|
1,940
|
|
—
|
|
—
|
|
2,293
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
7
|
|
12,353
|
|
—
|
|
(10,408
|
)
|
1,952
|
|
|||||
Foreign exchange
|
—
|
|
3,289
|
|
—
|
|
(2,212
|
)
|
1,077
|
|
|||||
Equity and other contracts
|
3
|
|
60
|
|
—
|
|
(45
|
)
|
18
|
|
|||||
Total derivative assets not designated as hedging
|
10
|
|
15,702
|
|
—
|
|
(12,665
|
)
|
3,047
|
|
|||||
Total trading assets
|
363
|
|
17,642
|
|
—
|
|
(12,665
|
)
|
5,340
|
|
|||||
Loans
|
—
|
|
29
|
|
—
|
|
—
|
|
29
|
|
|||||
Other assets:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
764
|
|
—
|
|
—
|
|
764
|
|
|||||
Foreign exchange
|
—
|
|
375
|
|
—
|
|
—
|
|
375
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
1,139
|
|
—
|
|
—
|
|
1,139
|
|
|||||
Other assets
(d)
|
302
|
|
49
|
|
—
|
|
—
|
|
351
|
|
|||||
Other assets measured at net asset value
(d)
|
|
|
|
|
212
|
|
|||||||||
Total other assets
|
302
|
|
1,188
|
|
—
|
|
—
|
|
1,702
|
|
|||||
Subtotal assets of operations at fair value
|
18,388
|
|
79,406
|
|
—
|
|
(12,665
|
)
|
85,341
|
|
|||||
Percentage of assets prior to netting
|
19
|
%
|
81
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading assets
|
252
|
|
621
|
|
—
|
|
—
|
|
873
|
|
|||||
Other assets
|
97
|
|
39
|
|
—
|
|
—
|
|
136
|
|
|||||
Total assets of consolidated investment management funds
|
349
|
|
660
|
|
—
|
|
—
|
|
1,009
|
|
|||||
Total assets
|
$
|
18,737
|
|
$
|
80,066
|
|
$
|
—
|
|
$
|
(12,665
|
)
|
$
|
86,350
|
|
Percentage of assets prior to netting
|
19
|
%
|
81
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Sept. 30, 2016
|
Total carrying
value |
|
|||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
800
|
|
$
|
189
|
|
$
|
—
|
|
$
|
—
|
|
$
|
989
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
24
|
|
12,308
|
|
—
|
|
(10,541
|
)
|
1,791
|
|
|||||
Foreign exchange
|
—
|
|
3,235
|
|
—
|
|
(1,936
|
)
|
1,299
|
|
|||||
Equity and other contracts
|
—
|
|
122
|
|
—
|
|
(47
|
)
|
75
|
|
|||||
Total derivative liabilities not designated as hedging
|
24
|
|
15,665
|
|
—
|
|
(12,524
|
)
|
3,165
|
|
|||||
Total trading liabilities
|
824
|
|
15,854
|
|
—
|
|
(12,524
|
)
|
4,154
|
|
|||||
Long-term debt
(b)
|
—
|
|
376
|
|
—
|
|
—
|
|
376
|
|
|||||
Other liabilities - derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
1,077
|
|
—
|
|
—
|
|
1,077
|
|
|||||
Foreign exchange
|
—
|
|
43
|
|
—
|
|
—
|
|
43
|
|
|||||
Total other liabilities - derivative liabilities designated as hedging
|
—
|
|
1,120
|
|
—
|
|
—
|
|
1,120
|
|
|||||
Subtotal liabilities of operations at fair value
|
824
|
|
17,350
|
|
—
|
|
(12,524
|
)
|
5,650
|
|
|||||
Percentage of liabilities prior to netting
|
5
|
%
|
95
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading liabilities
|
—
|
|
219
|
|
—
|
|
—
|
|
219
|
|
|||||
Other liabilities
|
2
|
|
11
|
|
—
|
|
—
|
|
13
|
|
|||||
Total liabilities of consolidated investment management funds
|
2
|
|
230
|
|
—
|
|
—
|
|
232
|
|
|||||
Total liabilities
|
$
|
826
|
|
$
|
17,580
|
|
$
|
—
|
|
$
|
(12,524
|
)
|
$
|
5,882
|
|
Percentage of liabilities prior to netting
|
4
|
%
|
96
|
%
|
—
|
%
|
|
|
(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, 2015
|
Total carrying
value
|
|
|||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
12,832
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
12,832
|
|
U.S. Government agencies
|
—
|
|
387
|
|
—
|
|
—
|
|
387
|
|
|||||
Sovereign debt/sovereign guaranteed
|
35
|
|
13,182
|
|
—
|
|
—
|
|
13,217
|
|
|||||
State and political subdivisions
|
—
|
|
4,046
|
|
—
|
|
—
|
|
4,046
|
|
|||||
Agency RMBS
|
—
|
|
23,501
|
|
—
|
|
—
|
|
23,501
|
|
|||||
Non-agency RMBS
|
—
|
|
793
|
|
—
|
|
—
|
|
793
|
|
|||||
Other RMBS
|
—
|
|
1,061
|
|
—
|
|
—
|
|
1,061
|
|
|||||
Commercial MBS
|
—
|
|
1,392
|
|
—
|
|
—
|
|
1,392
|
|
|||||
Agency commercial MBS
|
—
|
|
4,020
|
|
—
|
|
—
|
|
4,020
|
|
|||||
CLOs
|
—
|
|
2,351
|
|
—
|
|
—
|
|
2,351
|
|
|||||
Other asset-backed securities
|
—
|
|
2,893
|
|
—
|
|
—
|
|
2,893
|
|
|||||
Equity securities
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||
Money market funds
(b)
|
886
|
|
—
|
|
—
|
|
—
|
|
886
|
|
|||||
Corporate bonds
|
—
|
|
1,752
|
|
—
|
|
—
|
|
1,752
|
|
|||||
Other debt securities
|
—
|
|
2,775
|
|
—
|
|
—
|
|
2,775
|
|
|||||
Foreign covered bonds
|
1,966
|
|
202
|
|
—
|
|
—
|
|
2,168
|
|
|||||
Non-agency RMBS
(c)
|
—
|
|
1,789
|
|
—
|
|
—
|
|
1,789
|
|
|||||
Total available-for-sale securities
|
15,723
|
|
60,144
|
|
—
|
|
—
|
|
75,867
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(b)
|
1,232
|
|
2,167
|
|
—
|
|
—
|
|
3,399
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
10
|
|
10,034
|
|
—
|
|
(8,071
|
)
|
1,973
|
|
|||||
Foreign exchange
|
—
|
|
4,905
|
|
—
|
|
(2,981
|
)
|
1,924
|
|
|||||
Equity and other contracts
|
15
|
|
120
|
|
—
|
|
(63
|
)
|
72
|
|
|||||
Total derivative assets not designated as hedging
|
25
|
|
15,059
|
|
—
|
|
(11,115
|
)
|
3,969
|
|
|||||
Total trading assets
|
1,257
|
|
17,226
|
|
—
|
|
(11,115
|
)
|
7,368
|
|
|||||
Loans
|
—
|
|
422
|
|
—
|
|
—
|
|
422
|
|
|||||
Other assets
:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
497
|
|
—
|
|
—
|
|
497
|
|
|||||
Foreign exchange
|
—
|
|
219
|
|
—
|
|
—
|
|
219
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
716
|
|
—
|
|
—
|
|
716
|
|
|||||
Other assets
(d)
|
192
|
|
62
|
|
—
|
|
—
|
|
254
|
|
|||||
Other assets measured at net asset value
(d)
|
|
|
|
|
117
|
|
|||||||||
Total other assets
|
192
|
|
778
|
|
—
|
|
—
|
|
1,087
|
|
|||||
Subtotal assets of operations at fair value
|
17,172
|
|
78,570
|
|
—
|
|
(11,115
|
)
|
84,744
|
|
|||||
Percentage of assets prior to netting
|
18
|
%
|
82
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading assets
|
455
|
|
773
|
|
—
|
|
—
|
|
1,228
|
|
|||||
Other assets
|
157
|
|
16
|
|
—
|
|
—
|
|
173
|
|
|||||
Total assets of consolidated investment management funds
|
612
|
|
789
|
|
—
|
|
—
|
|
1,401
|
|
|||||
Total assets
|
$
|
17,784
|
|
$
|
79,359
|
|
$
|
—
|
|
$
|
(11,115
|
)
|
$
|
86,145
|
|
Percentage of assets prior to netting
|
18
|
%
|
82
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Dec. 31, 2015
|
Total carrying
value
|
|
|||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
422
|
|
$
|
152
|
|
$
|
—
|
|
$
|
—
|
|
$
|
574
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
5
|
|
9,957
|
|
—
|
|
(8,235
|
)
|
1,727
|
|
|||||
Foreign exchange
|
—
|
|
4,682
|
|
—
|
|
(2,567
|
)
|
2,115
|
|
|||||
Equity and other contracts
|
5
|
|
147
|
|
—
|
|
(67
|
)
|
85
|
|
|||||
Total derivative liabilities not designated as hedging
|
10
|
|
14,786
|
|
—
|
|
(10,869
|
)
|
3,927
|
|
|||||
Total trading liabilities
|
432
|
|
14,938
|
|
—
|
|
(10,869
|
)
|
4,501
|
|
|||||
Long-term debt (
b
)
|
—
|
|
359
|
|
—
|
|
—
|
|
359
|
|
|||||
Other liabilities - derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
372
|
|
—
|
|
—
|
|
372
|
|
|||||
Foreign exchange
|
—
|
|
20
|
|
—
|
|
—
|
|
20
|
|
|||||
Total other liabilities - derivative liabilities designated as hedging
|
—
|
|
392
|
|
—
|
|
—
|
|
392
|
|
|||||
Subtotal liabilities of operations at fair value
|
432
|
|
15,689
|
|
—
|
|
(10,869
|
)
|
5,252
|
|
|||||
Percentage of liabilities prior to netting
|
3
|
%
|
97
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading liabilities
|
—
|
|
229
|
|
—
|
|
—
|
|
229
|
|
|||||
Other liabilities
|
1
|
|
16
|
|
—
|
|
—
|
|
17
|
|
|||||
Total liabilities of consolidated investment management funds
|
1
|
|
245
|
|
—
|
|
—
|
|
246
|
|
|||||
Total liabilities
|
$
|
433
|
|
$
|
15,934
|
|
$
|
—
|
|
$
|
(10,869
|
)
|
$
|
5,498
|
|
Percentage of liabilities prior to netting
|
3
|
%
|
97
|
%
|
—
|
%
|
|
|
(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)
|
|
Details of certain items measured at fair value
on a recurring basis
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||||||||
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
|
$
|
59
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
66
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
2006
|
101
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
115
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
||
2005
|
194
|
|
|
24
|
|
4
|
|
9
|
|
63
|
|
|
234
|
|
|
19
|
|
9
|
|
13
|
|
59
|
|
||
2004 and earlier
|
319
|
|
|
5
|
|
3
|
|
25
|
|
67
|
|
|
378
|
|
|
4
|
|
4
|
|
26
|
|
66
|
|
||
Total non-agency RMBS
|
$
|
673
|
|
|
9
|
%
|
3
|
%
|
14
|
%
|
74
|
%
|
|
$
|
793
|
|
|
8
|
%
|
4
|
%
|
16
|
%
|
72
|
%
|
Commercial MBS - Domestic, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2009-2016
|
$
|
632
|
|
|
83
|
%
|
17
|
%
|
—
|
%
|
—
|
%
|
|
$
|
626
|
|
|
83
|
%
|
17
|
%
|
—
|
%
|
—
|
%
|
2008
|
14
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
16
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
2007
|
258
|
|
|
75
|
|
25
|
|
—
|
|
—
|
|
|
304
|
|
|
62
|
|
22
|
|
16
|
|
—
|
|
||
2006
|
6
|
|
|
96
|
|
4
|
|
—
|
|
—
|
|
|
384
|
|
|
76
|
|
24
|
|
—
|
|
—
|
|
||
Total commercial MBS - Domestic
|
$
|
910
|
|
|
81
|
%
|
19
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,330
|
|
|
76
|
%
|
20
|
%
|
4
|
%
|
—
|
%
|
Foreign covered bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada
|
$
|
1,460
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,014
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
United Kingdom
|
323
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
363
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Norway
|
181
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
191
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
|
391
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
600
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total foreign covered bonds
|
$
|
2,355
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,168
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
European floating rate notes - available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
494
|
|
|
91
|
%
|
9
|
%
|
—
|
%
|
—
|
%
|
|
$
|
780
|
|
|
85
|
%
|
15
|
%
|
—
|
%
|
—
|
%
|
Netherlands
|
139
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
222
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
62
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
121
|
|
|
—
|
|
45
|
|
55
|
|
—
|
|
||
Total European floating rate notes - available-for-sale
|
$
|
695
|
|
|
85
|
%
|
6
|
%
|
9
|
%
|
—
|
%
|
|
$
|
1,123
|
|
|
79
|
%
|
15
|
%
|
6
|
%
|
—
|
%
|
Sovereign debt/sovereign guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
3,413
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,941
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
France
|
2,151
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
2,008
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Spain
|
2,030
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,955
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Germany
|
1,889
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,683
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Italy
|
1,335
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,398
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Netherlands
|
1,087
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,055
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Belgium
|
975
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,108
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
791
|
|
|
—
|
|
100
|
|
—
|
|
—
|
|
|
772
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Other
(b)
|
334
|
|
|
79
|
|
—
|
|
—
|
|
21
|
|
|
297
|
|
|
68
|
|
—
|
|
32
|
|
—
|
|
||
Total sovereign debt/sovereign guaranteed
|
$
|
14,005
|
|
|
70
|
%
|
5
|
%
|
24
|
%
|
1
|
%
|
|
$
|
13,217
|
|
|
68
|
%
|
—
|
%
|
32
|
%
|
—
|
%
|
Non-agency RMBS
(c)
, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007
|
$
|
411
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
502
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
2006
|
418
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
530
|
|
|
—
|
|
1
|
|
—
|
|
99
|
|
||
2005
|
483
|
|
|
—
|
|
2
|
|
1
|
|
97
|
|
|
580
|
|
|
—
|
|
2
|
|
1
|
|
97
|
|
||
2004 and earlier
|
151
|
|
|
2
|
|
2
|
|
9
|
|
87
|
|
|
177
|
|
|
—
|
|
3
|
|
9
|
|
88
|
|
||
Total non-agency RMBS
(c)
|
$
|
1,463
|
|
|
—
|
%
|
1
|
%
|
1
|
%
|
98
|
%
|
|
$
|
1,789
|
|
|
—
|
%
|
1
|
%
|
1
|
%
|
98
|
%
|
(a)
|
At
Sept. 30, 2016
and
Dec. 31, 2015
, 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)
|
Includes
$71 million
of noninvestment grade sovereign debt at
Sept. 30, 2016
and
$95 million
of investment grade sovereign debt at
Dec. 31, 2015
related to Brazil.
|
(c)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
Notes to Consolidated Financial Statements
(continued)
|
|
(a)
|
Reported in investment and other income.
|
(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 nine months ended Sept. 30, 2016
|
||||
(in millions)
|
Loans
|
|
|
|
Fair value at Dec. 31, 2015
|
$
|
—
|
|
|
Transfers into Level 3
|
19
|
|
|
|
Total gains or (losses) for the period included in earnings
|
2
|
|
(a)
|
|
Purchases, issuances and sales:
|
|
|
||
Purchases
|
113
|
|
|
|
Issuances
|
1
|
|
|
|
Sales
|
(135
|
)
|
|
|
Fair value at Sept. 30, 2016
|
$
|
—
|
|
|
Change in unrealized gains or (losses) for the period included in earnings for assets held at the end of the reporting period
|
$
|
—
|
|
|
(a)
|
Reported in investment and other income.
|
(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)
|
|
Assets measured at fair value on a nonrecurring basis at Sept. 30, 2016
|
Total
carrying
value
|
|
||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||
Loans
(a)
|
$
|
—
|
|
$
|
87
|
|
$
|
7
|
|
$
|
94
|
|
Other assets
(b)
|
—
|
|
5
|
|
—
|
|
5
|
|
||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
$
|
92
|
|
$
|
7
|
|
$
|
99
|
|
Assets measured at fair value on a nonrecurring basis at Dec. 31, 2015
|
Total
carrying
value
|
|
||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||
Loans
(a)
|
$
|
—
|
|
$
|
97
|
|
$
|
174
|
|
$
|
271
|
|
Other assets
(b)
|
—
|
|
6
|
|
—
|
|
6
|
|
||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
$
|
103
|
|
$
|
174
|
|
$
|
277
|
|
(a)
|
During the quarters ended
Sept. 30, 2016
and
Dec. 31, 2015
, the fair value of these loans decreased
$1 million
and
$1 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.
|
Summary of financial instruments
|
Sept. 30, 2016
|
||||||||||||||
(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
|
$
|
—
|
|
$
|
80,359
|
|
$
|
—
|
|
$
|
80,359
|
|
$
|
80,359
|
|
Interest-bearing deposits with banks
|
—
|
|
14,420
|
|
—
|
|
14,420
|
|
14,416
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
34,851
|
|
—
|
|
34,851
|
|
34,851
|
|
|||||
Securities held-to-maturity
|
11,400
|
|
29,987
|
|
—
|
|
41,387
|
|
40,728
|
|
|||||
Loans
|
—
|
|
64,360
|
|
—
|
|
64,360
|
|
64,072
|
|
|||||
Other financial assets
|
4,957
|
|
1,060
|
|
—
|
|
6,017
|
|
6,017
|
|
|||||
Total
|
$
|
16,357
|
|
$
|
225,037
|
|
$
|
—
|
|
$
|
241,394
|
|
$
|
240,443
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
105,632
|
|
$
|
—
|
|
$
|
105,632
|
|
$
|
105,632
|
|
Interest-bearing deposits
|
—
|
|
154,591
|
|
—
|
|
154,591
|
|
155,746
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
8,052
|
|
—
|
|
8,052
|
|
8,052
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
21,162
|
|
—
|
|
21,162
|
|
21,162
|
|
|||||
Borrowings
|
—
|
|
1,137
|
|
—
|
|
1,137
|
|
1,137
|
|
|||||
Long-term debt
|
—
|
|
24,690
|
|
—
|
|
24,690
|
|
23,998
|
|
|||||
Total
|
$
|
—
|
|
$
|
315,264
|
|
$
|
—
|
|
$
|
315,264
|
|
$
|
315,727
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Summary of financial instruments
|
Dec. 31, 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
|
$
|
—
|
|
$
|
113,203
|
|
$
|
—
|
|
$
|
113,203
|
|
$
|
113,203
|
|
Interest-bearing deposits with banks
|
—
|
|
15,150
|
|
—
|
|
15,150
|
|
15,146
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
24,373
|
|
—
|
|
24,373
|
|
24,373
|
|
|||||
Securities held-to-maturity
|
11,376
|
|
31,828
|
|
—
|
|
43,204
|
|
43,312
|
|
|||||
Loans
|
—
|
|
61,421
|
|
—
|
|
61,421
|
|
61,267
|
|
|||||
Other financial assets
|
6,537
|
|
1,096
|
|
—
|
|
7,633
|
|
7,633
|
|
|||||
Total
|
$
|
17,913
|
|
$
|
247,071
|
|
$
|
—
|
|
$
|
264,984
|
|
$
|
264,934
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
96,277
|
|
$
|
—
|
|
$
|
96,277
|
|
$
|
96,277
|
|
Interest-bearing deposits
|
—
|
|
182,410
|
|
—
|
|
182,410
|
|
183,333
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
15,002
|
|
—
|
|
15,002
|
|
15,002
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
21,900
|
|
—
|
|
21,900
|
|
21,900
|
|
|||||
Borrowings
|
—
|
|
698
|
|
—
|
|
698
|
|
698
|
|
|||||
Long-term debt
|
—
|
|
21,494
|
|
—
|
|
21,494
|
|
21,188
|
|
|||||
Total
|
$
|
—
|
|
$
|
337,781
|
|
$
|
—
|
|
$
|
337,781
|
|
$
|
338,398
|
|
Hedged financial instruments
|
Carrying
amount
|
|
Notional amount of hedge
|
|
|
|
||||||
|
Unrealized
|
|||||||||||
(in millions)
|
Gain
|
|
(Loss)
|
|
||||||||
Sept. 30, 2016
|
|
|
|
|
||||||||
Securities available-for-sale
|
$
|
8,717
|
|
$
|
8,016
|
|
$
|
—
|
|
$
|
(1,034
|
)
|
Long-term debt
|
20,645
|
|
19,950
|
|
761
|
|
(43
|
)
|
||||
Dec. 31, 2015
|
|
|||||||||||
Securities available-for-sale
|
$
|
7,978
|
|
$
|
7,918
|
|
$
|
16
|
|
$
|
(359
|
)
|
Long-term debt
|
18,231
|
|
17,850
|
|
479
|
|
(14
|
)
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets and liabilities of consolidated investment management funds, at fair value
|
||||||
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
||
(in millions)
|
||||||
Assets of consolidated investment management funds:
|
|
|
||||
Trading assets
|
$
|
873
|
|
$
|
1,228
|
|
Other assets
|
136
|
|
173
|
|
||
Total assets of consolidated investment management funds
|
$
|
1,009
|
|
$
|
1,401
|
|
Liabilities of consolidated investment management funds:
|
|
|
||||
Trading liabilities
|
$
|
219
|
|
$
|
229
|
|
Other liabilities
|
13
|
|
17
|
|
||
Total liabilities of consolidated investment management funds
|
$
|
232
|
|
$
|
246
|
|
(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, 2016
|
|
Sept. 30, 2015
|
|
||
Fair value hedges of securities
|
$
|
(19.4
|
)
|
$
|
2.8
|
|
Fair value hedges of long-term debt
|
(9.0
|
)
|
(4.8
|
)
|
||
Cash flow hedges
|
—
|
|
—
|
|
||
Other
(a)
|
—
|
|
—
|
|
||
Total
|
$
|
(28.4
|
)
|
$
|
(2.0
|
)
|
(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, 2016
|
|
Dec. 31, 2015
|
|
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
||||||
Derivatives designated as hedging instruments:
(a)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
27,966
|
|
$
|
25,768
|
|
|
$
|
764
|
|
$
|
497
|
|
|
$
|
1,077
|
|
$
|
372
|
|
Foreign exchange contracts
|
7,493
|
|
6,839
|
|
|
375
|
|
219
|
|
|
43
|
|
20
|
|
||||||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
1,139
|
|
$
|
716
|
|
|
$
|
1,120
|
|
$
|
392
|
|
||||
Derivatives not designated as hedging instruments:
(b)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
401,827
|
|
$
|
519,428
|
|
|
$
|
12,360
|
|
$
|
10,044
|
|
|
$
|
12,332
|
|
$
|
9,962
|
|
Foreign exchange contracts
|
589,769
|
|
576,253
|
|
|
3,289
|
|
4,905
|
|
|
3,235
|
|
4,682
|
|
||||||
Equity contracts
|
1,247
|
|
1,923
|
|
|
62
|
|
127
|
|
|
120
|
|
151
|
|
||||||
Credit contracts
|
178
|
|
319
|
|
|
1
|
|
8
|
|
|
2
|
|
1
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
15,712
|
|
$
|
15,084
|
|
|
$
|
15,689
|
|
$
|
14,796
|
|
||||
Total derivatives fair value
(c)
|
|
|
|
$
|
16,851
|
|
$
|
15,800
|
|
|
$
|
16,809
|
|
$
|
15,188
|
|
||||
Effect of master netting agreements
(d)
|
|
|
|
(12,665
|
)
|
(11,115
|
)
|
|
(12,524
|
)
|
(10,869
|
)
|
||||||||
Fair value after effect of master netting agreements
|
|
|
|
$
|
4,186
|
|
$
|
4,685
|
|
|
$
|
4,285
|
|
$
|
4,319
|
|
(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
$920 million
and
$779 million
, respectively, at
Sept. 30, 2016
, and
$792 million
and
$546 million
, respectively, at
Dec. 31, 2015
.
|
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)
|
||||||||||||||||||||||||
3Q16
|
|
2Q16
|
|
3Q15
|
|
|
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
|
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
||||||||||||
FX contracts
|
$
|
(7
|
)
|
$
|
(15
|
)
|
$
|
—
|
|
|
Net interest revenue
|
|
$
|
(6
|
)
|
$
|
(15
|
)
|
$
|
—
|
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
FX contracts
|
—
|
|
—
|
|
—
|
|
|
Other revenue
|
|
—
|
|
—
|
|
—
|
|
|
Other revenue
|
|
—
|
|
—
|
|
—
|
|
|||||||||
FX contracts
|
(19
|
)
|
19
|
|
—
|
|
|
Trading revenue
|
|
(19
|
)
|
19
|
|
—
|
|
|
Trading revenue
|
|
—
|
|
—
|
|
—
|
|
|||||||||
FX contracts
|
2
|
|
(14
|
)
|
(3
|
)
|
|
Salary expense
|
|
(3
|
)
|
—
|
|
(3
|
)
|
|
Salary expense
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Total
|
$
|
(24
|
)
|
$
|
(10
|
)
|
$
|
(3
|
)
|
|
|
|
$
|
(28
|
)
|
$
|
4
|
|
$
|
(3
|
)
|
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
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)
|
||||||||||||||||||||||||
3Q16
|
|
2Q16
|
|
3Q15
|
|
|
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
|
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
||||||||||||
FX contracts
|
$
|
47
|
|
$
|
331
|
|
$
|
213
|
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1
|
|
|
Other revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Impact of derivative instruments on the income statement
(in millions)
|
|
||||||||||||||||||
Derivatives in fair value hedging relationships
|
Location of gain or
(loss) recognized in income on derivatives
|
|
Gain or (loss) recognized in income on derivatives
|
|
Location of gain or(loss) recognized in income on hedged item
|
|
Gain or (loss) recognized
in hedged item
|
||||||||||||
YTD16
|
|
|
YTD15
|
|
YTD16
|
|
|
YTD15
|
|
||||||||||
Interest rate contracts
|
Net interest revenue
|
|
$
|
(445
|
)
|
|
$
|
10
|
|
|
Net interest revenue
|
|
$
|
417
|
|
|
$
|
(12
|
)
|
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)
|
|||||||||||||||
YTD16
|
|
YTD15
|
|
|
|
YTD16
|
|
YTD15
|
|
|
|
YTD16
|
|
YTD15
|
|
|||||||||
FX contracts
|
$
|
(16
|
)
|
$
|
(1
|
)
|
|
Net interest revenue
|
|
$
|
(16
|
)
|
$
|
(1
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
FX contracts
|
—
|
|
—
|
|
|
Other revenue
|
|
—
|
|
—
|
|
|
Other revenue
|
|
—
|
|
—
|
|
||||||
FX contracts
|
(89
|
)
|
9
|
|
|
Trading revenue
|
|
(89
|
)
|
9
|
|
|
Trading revenue
|
|
—
|
|
—
|
|
||||||
FX contracts
|
(10
|
)
|
(8
|
)
|
|
Salary expense
|
|
(5
|
)
|
(19
|
)
|
|
Salary expense
|
|
—
|
|
—
|
|
||||||
Total
|
$
|
(115
|
)
|
$
|
—
|
|
|
|
|
$
|
(110
|
)
|
$
|
(11
|
)
|
|
|
|
$
|
—
|
|
$
|
—
|
|
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)
|
|||||||||||||||
YTD16
|
|
YTD15
|
|
|
|
YTD16
|
|
YTD15
|
|
|
|
YTD16
|
|
YTD15
|
|
|||||||||
FX contracts
|
$
|
320
|
|
$
|
326
|
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
1
|
|
|
Other revenue
|
|
$
|
—
|
|
$
|
—
|
|
Foreign exchange and other trading revenue
|
|
||||||||||||||
|
|
|
|
Year-to-date
|
|||||||||||
(in millions)
|
3Q16
|
|
2Q16
|
|
3Q15
|
|
2016
|
|
2015
|
|
|||||
Foreign exchange
|
$
|
175
|
|
$
|
166
|
|
$
|
180
|
|
$
|
512
|
|
$
|
578
|
|
Other trading revenue (loss)
|
8
|
|
16
|
|
(1
|
)
|
28
|
|
17
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
183
|
|
$
|
182
|
|
$
|
179
|
|
$
|
540
|
|
$
|
595
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
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-
|
|
$
|
48
|
million
|
Baa2/BBB
|
|
$
|
782
|
million
|
Ba1/BB+
|
|
$
|
2,813
|
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, 2016
|
|
|
|
|
|||||||||||||||
|
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
|
$
|
11,962
|
|
$
|
10,408
|
|
|
$
|
1,554
|
|
$
|
493
|
|
$
|
—
|
|
$
|
1,061
|
|
Foreign exchange contracts
|
2,753
|
|
2,212
|
|
|
541
|
|
102
|
|
—
|
|
439
|
|
||||||
Equity and other contracts
|
60
|
|
45
|
|
|
15
|
|
—
|
|
—
|
|
15
|
|
||||||
Total derivatives subject to netting arrangements
|
14,775
|
|
12,665
|
|
|
2,110
|
|
595
|
|
—
|
|
1,515
|
|
||||||
Total derivatives not subject to netting arrangements
|
2,076
|
|
—
|
|
|
2,076
|
|
—
|
|
—
|
|
2,076
|
|
||||||
Total derivatives
|
16,851
|
|
12,665
|
|
|
4,186
|
|
595
|
|
—
|
|
3,591
|
|
||||||
Reverse repurchase agreements
|
27,955
|
|
1,640
|
|
(b)
|
26,315
|
|
26,240
|
|
—
|
|
75
|
|
||||||
Securities borrowing
|
8,536
|
|
—
|
|
|
8,536
|
|
8,307
|
|
—
|
|
229
|
|
||||||
Total
|
$
|
53,342
|
|
$
|
14,305
|
|
|
$
|
39,037
|
|
$
|
35,142
|
|
$
|
—
|
|
$
|
3,895
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC 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 OTC 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, 2016
|
|
|
|
||||||||||||||||
|
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
|
$
|
13,217
|
|
$
|
10,541
|
|
|
$
|
2,676
|
|
$
|
2,524
|
|
$
|
—
|
|
$
|
152
|
|
Foreign exchange contracts
|
2,706
|
|
1,936
|
|
|
770
|
|
242
|
|
—
|
|
528
|
|
||||||
Equity and other contracts
|
111
|
|
47
|
|
|
64
|
|
63
|
|
—
|
|
1
|
|
||||||
Total derivatives subject to netting arrangements
|
16,034
|
|
12,524
|
|
|
3,510
|
|
2,829
|
|
—
|
|
681
|
|
||||||
Total derivatives not subject to netting arrangements
|
775
|
|
—
|
|
|
775
|
|
—
|
|
—
|
|
775
|
|
||||||
Total derivatives
|
16,809
|
|
12,524
|
|
|
4,285
|
|
2,829
|
|
—
|
|
1,456
|
|
||||||
Repurchase agreements
|
7,868
|
|
1,640
|
|
(b)
|
6,228
|
|
6,226
|
|
—
|
|
2
|
|
||||||
Securities lending
|
1,507
|
|
—
|
|
|
1,507
|
|
1,443
|
|
—
|
|
64
|
|
||||||
Total
|
$
|
26,184
|
|
$
|
14,164
|
|
|
$
|
12,020
|
|
$
|
10,498
|
|
$
|
—
|
|
$
|
1,522
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC 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 OTC 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)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Financial institutions
portfolio exposure
(in billions)
|
Sept. 30, 2016
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Securities industry
|
$
|
3.8
|
|
$
|
20.9
|
|
$
|
24.7
|
|
Banks
|
7.8
|
|
2.0
|
|
9.8
|
|
|||
Asset managers
|
1.5
|
|
6.2
|
|
7.7
|
|
|||
Insurance
|
0.1
|
|
4.3
|
|
4.4
|
|
|||
Government
|
0.1
|
|
1.1
|
|
1.2
|
|
|||
Other
|
1.4
|
|
1.6
|
|
3.0
|
|
|||
Total
|
$
|
14.7
|
|
$
|
36.1
|
|
$
|
50.8
|
|
Commercial portfolio
exposure
(in billions)
|
Sept. 30, 2016
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Manufacturing
|
$
|
1.1
|
|
$
|
6.0
|
|
$
|
7.1
|
|
Services and other
|
0.7
|
|
4.7
|
|
5.4
|
|
|||
Energy and utilities
|
0.6
|
|
4.7
|
|
5.3
|
|
|||
Media and telecom
|
0.3
|
|
1.3
|
|
1.6
|
|
|||
Total
|
$
|
2.7
|
|
$
|
16.7
|
|
$
|
19.4
|
|
Off-balance sheet credit risks
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
||
(in millions)
|
||||||
Lending commitments
|
$
|
52,807
|
|
$
|
54,505
|
|
Standby letters of credit
(a)
|
4,388
|
|
4,915
|
|
||
Commercial letters of credit
|
266
|
|
303
|
|
||
Securities lending indemnifications
(b)
|
309,420
|
|
294,108
|
|
(a)
|
Net of participations totaling
$776 million
at
Sept. 30, 2016
and
$809 million
at
Dec. 31, 2015
.
|
(b)
|
Excludes the
indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients
, which totaled
$62 billion
at
Sept. 30, 2016
and
$54 billion
at
Dec. 31, 2015
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Standby letters of credit
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
|
||||
Investment grade
|
87
|
%
|
86
|
%
|
Non-investment grade
|
13
|
%
|
14
|
%
|
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 included in Investment Services.
|
•
|
Net interest revenue is allocated to businesses based on the yields on the assets and liabilities generated by each business. We employ a funds transfer pricing system that matches funds with the specific assets and liabilities of each business based on their interest sensitivity and maturity characteristics.
|
•
|
The provision for credit losses associated with the respective credit portfolios is reflected in each business segment.
|
•
|
Incentive expense related to restricted stock is 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.
|
•
|
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.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Restructuring charges relate to corporate-level initiatives and were therefore recorded in the Other segment.
|
•
|
Balance sheet assets and liabilities and their related income or expense are specifically
|
•
|
Goodwill and intangible assets are reflected within individual businesses.
|
For the quarter ended Sept. 30, 2016
|
Investment
Management |
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
876
|
|
(a)
|
$
|
2,183
|
|
|
$
|
100
|
|
|
$
|
3,159
|
|
(a)
|
Net interest revenue
|
82
|
|
|
715
|
|
|
(23
|
)
|
|
774
|
|
|
||||
Total revenue
|
958
|
|
(a)
|
2,898
|
|
|
77
|
|
|
3,933
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
1
|
|
|
(20
|
)
|
|
(19
|
)
|
|
||||
Noninterest expense
|
702
|
|
|
1,851
|
|
|
88
|
|
|
2,641
|
|
(b)
|
||||
Income before taxes
|
$
|
256
|
|
(a)
|
$
|
1,046
|
|
|
$
|
9
|
|
|
$
|
1,311
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
27
|
%
|
|
36
|
%
|
|
N/M
|
|
|
33
|
%
|
|
||||
Average assets
|
$
|
30,392
|
|
|
$
|
275,714
|
|
|
$
|
45,124
|
|
|
$
|
351,230
|
|
|
(a)
|
Both fee and other revenue and total revenue include the net income from consolidated investment management funds of
$8 million
, representing
$17 million
of income and noncontrolling interests of
$9 million
.
Income before taxes is net of noncontrolling interests of
$9 million
.
|
(b)
|
Noninterest expense 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 quarter ended June 30, 2016
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
856
|
|
(a)
|
$
|
2,054
|
|
|
$
|
95
|
|
|
$
|
3,005
|
|
(a)
|
Net interest revenue
|
82
|
|
|
690
|
|
|
(5
|
)
|
|
767
|
|
|
||||
Total revenue
|
938
|
|
(a)
|
2,744
|
|
|
90
|
|
|
3,772
|
|
(a)
|
||||
Provision for credit losses
|
1
|
|
|
(7
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
||||
Noninterest expense
|
703
|
|
|
1,859
|
|
|
56
|
|
|
2,618
|
|
(b)
|
||||
Income before taxes
|
$
|
234
|
|
(a)
|
$
|
892
|
|
|
$
|
37
|
|
|
$
|
1,163
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
25
|
%
|
|
33
|
%
|
|
N/M
|
|
|
31
|
%
|
|
||||
Average assets
|
$
|
30,229
|
|
|
$
|
277,225
|
|
|
$
|
66,766
|
|
|
$
|
374,220
|
|
|
(a)
|
Both fee and other revenue and total revenue include the net income from consolidated investment management funds of
$6 million
, representing
$10 million
of income and noncontrolling interests of
$4 million
. Income before taxes is net of noncontrolling interests of
$4 million
.
|
(b)
|
Noninterest expense 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 quarter ended Sept. 30, 2015
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
843
|
|
(a)
|
$
|
2,134
|
|
|
$
|
59
|
|
|
$
|
3,036
|
|
(a)
|
Net interest revenue
|
83
|
|
|
662
|
|
|
14
|
|
|
759
|
|
|
||||
Total revenue
|
926
|
|
(a)
|
2,796
|
|
|
73
|
|
|
3,795
|
|
(a)
|
||||
Provision for credit losses
|
1
|
|
|
7
|
|
|
(7
|
)
|
|
1
|
|
|
||||
Noninterest expense
|
689
|
|
|
1,894
|
|
|
96
|
|
|
2,679
|
|
(b)
|
||||
Income (loss) before taxes
|
$
|
236
|
|
(a)
|
$
|
895
|
|
|
$
|
(16
|
)
|
|
$
|
1,115
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
25
|
%
|
|
32
|
%
|
|
N/M
|
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,960
|
|
|
$
|
285,195
|
|
|
$
|
57,298
|
|
|
$
|
373,453
|
|
|
(a)
|
Both fee and other revenue and total revenue include 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 (loss) before taxes is net of a loss attributable to noncontrolling interests of
$5 million
.
|
(b)
|
Noninterest expense 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 nine months ended Sept. 30, 2016
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
2,544
|
|
(a)
|
$
|
6,267
|
|
|
$
|
324
|
|
|
$
|
9,135
|
|
(a)
|
Net interest revenue
|
247
|
|
|
2,084
|
|
|
(24
|
)
|
|
2,307
|
|
|
||||
Total revenue
|
2,791
|
|
(a)
|
8,351
|
|
|
300
|
|
|
11,442
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
8
|
|
|
(26
|
)
|
|
(18
|
)
|
|
||||
Noninterest expense
|
2,084
|
|
|
5,518
|
|
|
284
|
|
|
7,886
|
|
(b)
|
||||
Income before taxes
|
$
|
707
|
|
(a)
|
$
|
2,825
|
|
|
$
|
42
|
|
|
$
|
3,574
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
25
|
%
|
|
34
|
%
|
|
N/M
|
|
|
31
|
%
|
|
||||
Average assets
|
$
|
30,048
|
|
|
$
|
275,410
|
|
|
$
|
57,832
|
|
|
$
|
363,290
|
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$15 million
, representing
$21 million
of income and noncontrolling interests of
$6 million
. Income before taxes is net of noncontrolling interests of
$6 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interest of
$6 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the nine months ended Sept. 30, 2015
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
2,672
|
|
(a)
|
$
|
6,220
|
|
|
$
|
247
|
|
|
$
|
9,139
|
|
(a)
|
Net interest revenue
|
235
|
|
|
1,958
|
|
|
73
|
|
|
2,266
|
|
|
||||
Total revenue
|
2,907
|
|
(a)
|
8,178
|
|
|
320
|
|
|
11,405
|
|
(a)
|
||||
Provision for credit losses
|
3
|
|
|
20
|
|
|
(26
|
)
|
|
(3
|
)
|
|
||||
Noninterest expense
|
2,146
|
|
|
5,671
|
|
|
288
|
|
|
8,105
|
|
(b)
|
||||
Income before taxes
|
$
|
758
|
|
(a)
|
$
|
2,487
|
|
|
$
|
58
|
|
|
$
|
3,303
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
26
|
%
|
|
30
|
%
|
|
N/M
|
|
|
29
|
%
|
|
||||
Average assets
|
$
|
30,910
|
|
|
$
|
288,252
|
|
|
$
|
54,238
|
|
|
$
|
373,400
|
|
|
(a)
|
Both total fee and other revenue and total revenue include 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)
|
Noninterest expense includes a loss attributable to noncontrolling interest of
$2 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
Noncash investing and financing transactions
|
Nine months ended Sept. 30,
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Transfers from loans to other assets for other real estate owned (“OREO”)
|
$
|
4
|
|
$
|
6
|
|
Change in assets of consolidated VIEs
|
392
|
|
6,985
|
|
||
Change in liabilities of consolidated VIEs
|
14
|
|
6,506
|
|
||
Change in nonredeemable noncontrolling interests of consolidated investment management funds
|
238
|
|
251
|
|
||
Securities purchased not settled
|
229
|
|
222
|
|
||
Securities sales not settled
|
218
|
|
676
|
|
||
Available-for-sale securities transferred to held-to-maturity
|
—
|
|
11,602
|
|
||
Held-to-maturity securities transferred to available-for-sale
|
10
|
|
—
|
|
||
Premises and equipment/capitalized software funded by capital lease obligations
|
12
|
|
48
|
|
Item 4. Controls and Procedures
|
|
Forward-looking Statements
|
|
Forward-looking Statements
(continued)
|
|
Part II - Other Information
|
|
Part II - Other Information
(continued)
|
|
Part II - Other Information
(continued)
|
|
(c)
|
The following table discloses repurchases of our common stock made in the
third quarter of 2016
. 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
36 thousand
shares repurchased at a purchase price of
$1 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
$40.18
.
|
(b)
|
Represents the maximum value of the shares authorized to be repurchased through the second quarter of 2017, including employee benefit plan repurchases, in connection with the Federal Reserve’s non-objection to our 2016 capital plan.
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
(Registrant)
|
|
|
|
|
Date: November 8, 2016
|
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 No. 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 No. 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
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series F Noncumulative Perpetual Preferred Stock, dated July 29, 2016.
|
|
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 Aug. 1, 2016, and incorporated herein by reference.
|
3.7
|
|
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.
|
Index to Exhibits
(continued)
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
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, 2016. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument.
|
|
N/A
|
10.1
|
*
|
The Bank of New York Mellon Corporation Executive Severance Plan, as amended.
|
|
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, contract or arrangement.
|
|
|
|
|
|
Corporation
|
|
Executive
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
|
|
Date:
|
|
Quarter ended
|
Year-to-date
|
|||||||||||||
(dollar amounts in millions)
|
Sept. 30, 2016
|
|
June 30,
2016 |
|
Sept. 30, 2015
|
|
Sept. 30, 2016
|
|
Sept. 30, 2015
|
|
|||||
Earnings
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
1,317
|
|
$
|
1,165
|
|
$
|
1,109
|
|
$
|
3,573
|
|
$
|
3,364
|
|
Net (income) loss attributable to noncontrolling interests
|
(6
|
)
|
(2
|
)
|
6
|
|
1
|
|
(61
|
)
|
|||||
Income before income taxes attributable to shareholders of The Bank of New York Mellon Corporation
|
1,311
|
|
1,163
|
|
1,115
|
|
3,574
|
|
3,303
|
|
|||||
Fixed charges, excluding interest on deposits
|
130
|
|
136
|
|
97
|
|
394
|
|
276
|
|
|||||
Income before income taxes and fixed charges, excluding interest on deposits applicable to the shareholders of The Bank of New York Mellon Corporation
|
1,441
|
|
1,299
|
|
1,212
|
|
3,968
|
|
3,579
|
|
|||||
Interest on deposits
|
(6
|
)
|
12
|
|
9
|
|
21
|
|
32
|
|
|||||
Income before income taxes and fixed charges, including interest on deposits applicable to shareholders of The Bank of New York Mellon Corporation
|
$
|
1,435
|
|
$
|
1,311
|
|
$
|
1,221
|
|
$
|
3,989
|
|
$
|
3,611
|
|
Fixed charges
|
|
|
|
|
|
||||||||||
Interest expense, excluding interest on deposits
|
$
|
106
|
|
$
|
111
|
|
$
|
70
|
|
$
|
319
|
|
$
|
194
|
|
One-third net rental expense
(a)
|
24
|
|
25
|
|
27
|
|
75
|
|
82
|
|
|||||
Total fixed charges, excluding interest on deposits
|
130
|
|
136
|
|
97
|
|
394
|
|
276
|
|
|||||
Interest on deposits
|
(6
|
)
|
12
|
|
9
|
|
21
|
|
32
|
|
|||||
Total fixed charges, including interests on deposits
|
$
|
124
|
|
$
|
148
|
|
$
|
106
|
|
$
|
415
|
|
$
|
308
|
|
Preferred stock dividends
|
$
|
13
|
|
$
|
48
|
|
$
|
13
|
|
$
|
74
|
|
$
|
49
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges and preferred stock dividends, excluding interest on deposits
|
$
|
143
|
|
$
|
184
|
|
$
|
110
|
|
$
|
468
|
|
$
|
325
|
|
Total fixed charges and preferred stock dividends, including interest on deposits
|
$
|
137
|
|
$
|
196
|
|
$
|
119
|
|
$
|
489
|
|
$
|
357
|
|
|
|
|
|
|
|
||||||||||
Earnings to fixed charges ratios
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
11.08
|
|
9.55
|
|
12.49
|
|
10.07
|
|
12.97
|
|
|||||
Including interest on deposits
|
11.57
|
|
8.86
|
|
11.52
|
|
9.61
|
|
11.72
|
|
|||||
|
|
|
|
|
|
||||||||||
Earnings to fixed charges and preferred stock dividends ratios
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
10.08
|
|
7.06
|
|
11.02
|
|
8.48
|
|
11.01
|
|
|||||
Including interest on deposits
|
10.47
|
|
6.69
|
|
10.26
|
|
8.16
|
|
10.11
|
|
(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 8, 2016
|
|
/s/ Gerald L. Hassell
|
|
|
|
|
Name:
|
Gerald L. Hassell
|
|
|
|
Title:
|
Chief Executive Officer
|
|
Dated: November 8, 2016
|
|
/s/ Thomas P. Gibbons
|
|
|
|
|
Name:
|
Thomas P. Gibbons
|
|
|
|
Title:
|
Chief Financial Officer
|
|