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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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•
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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;
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•
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Financial statements and footnotes prepared using Extensible Business Reporting Language (“XBRL”);
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•
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Our earnings materials and selected management conference calls and presentations;
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•
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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
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•
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Our Corporate Governance Guidelines, Directors Code of Conduct and the Charters of the Audit,
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PART I
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•
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The Bank of New York Mellon, a New York state-chartered bank, which houses our Investment Services businesses, including Asset Servicing, Issuer Services, Treasury Services, Broker-Dealer and Advisor Services, as well as the bank-advised business of Asset Management; and
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•
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BNY Mellon, National Association (“BNY Mellon, N.A.”), a national bank, which houses our Wealth Management business.
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I.
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Distribution of Assets, Liabilities and Stockholders’ Equity; Interest Rates and Interest Differential
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A.
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Book Value of Investments;
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B.
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Maturity Distribution and Yields of Investments; and
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C.
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Aggregate Book Value and Market Value of Investments Where Issuer Exceeds 10% of Stockholders’ Equity
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A.
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Types of Loans; and
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B.
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Maturities and Sensitivities of Loans to Changes in Interest Rates
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C.
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Risk Elements; and
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D.
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Other Interest-bearing Assets
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PART II
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PART III
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Name and position
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Age
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||
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Gerald L. Hassell
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65
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(1)
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Chairman and Chief Executive Officer
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Thomas P. (Todd) Gibbons
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60
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(2)
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Vice Chairman
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Chief Financial Officer
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Brian T. Shea
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56
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(3)
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Vice Chairman
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Mitchell E. Harris
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62
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(4)
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Senior Executive Vice President
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Monique R. Herena
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46
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(5)
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Senior Executive Vice President
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J. Kevin McCarthy
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52
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(6)
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Senior Executive Vice President
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General Counsel
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James S. Wiener
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49
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(7)
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Senior Executive Vice President
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Kurtis R. Kurimsky
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43
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(8)
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Vice President and Controller
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Michelle M. Neal
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43
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(9)
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Managing Director
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(1)
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Mr. Hassell has served as Chairman and Chief Executive Officer of BNY Mellon since August 2011. Mr. Hassell also serves as Chairman and Chief Executive Officer of The Bank of New York Mellon and BNY Mellon, N.A. During 2012, Mr. Hassell served as President of BNY Mellon, The Bank of New York Mellon and BNY Mellon, N.A.
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(2)
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Mr. Gibbons has served as Vice Chairman and Chief Financial Officer of BNY Mellon since at least 2012. Mr. Gibbons also serves as Vice Chairman and Chief Financial Officer of The
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(3)
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Mr. Shea has served as Vice Chairman of BNY Mellon since June 2014. Mr. Shea also serves as Chief Executive Officer of Investment Services and Vice Chairman of The Bank of New York Mellon and BNY Mellon, N.A. From December 2012 to June 2014, Mr. Shea served as President of Investment Services, Head of the Broker Dealer and Advisor Services Group, Head of Client Service Delivery and Client Technology Solutions of BNY Mellon and Chairman of Pershing LLC. In 2012, Mr. Shea served as Chief Executive Officer of Pershing LLC.
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(4)
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Mr. Harris has served as Senior Executive Vice President of BNY Mellon since at least 2012. Mr. Harris also serves as Chief Executive Officer of Investment Management and Senior Executive Vice President of The Bank of New York Mellon and BNY Mellon, N.A.
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(5)
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Ms. Herena has served as Senior Executive Vice President and Chief Human Resources Officer of BNY Mellon since April 2014. Ms. Herena also serves as Senior Executive Vice President and Chief Human Resources Officer of The Bank of New York Mellon and BNY Mellon, N.A. From 2013 to April 2014, Ms. Herena served as Senior Vice President Human Resources and Chief Human Resources Officer Global Groups, Functions and Corporate for PepsiCo Inc., a global food and beverage firm. From at least 2012 to 2013, Ms. Herena served as Senior Vice President Human Resources and Chief Human Resources Officer for Asia, Middle East and Africa for PepsiCo.
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(6)
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Mr. McCarthy has served as Senior Executive Vice President and General Counsel of BNY Mellon since April 2014. Mr. McCarthy also serves as Senior Executive Vice President and General Counsel of The Bank of New York Mellon and BNY Mellon, N.A. From at least 2012 to 2013, Mr. McCarthy served as Deputy General Counsel for the Litigation, Enforcement and Employment Law functions at BNY Mellon. In 2013, Mr. McCarthy served as Senior Deputy General Counsel, with the added oversight of the legal teams supporting BNY Mellon’s Asset Servicing and corporate center functions.
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(7)
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Mr. Wiener has served as Senior Executive Vice President and Chief Risk Officer of BNY Mellon since November 2014. Mr. Wiener also serves as Senior Executive Vice President and Chief Risk Officer of The Bank of New York Mellon and BNY Mellon, N.A. From at least 2012 to November 2014, Mr. Wiener served as a senior partner at Oliver Wyman Group, a management consulting company.
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(8)
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Mr. Kurimsky has served as Vice President and Controller since July 2015 and was previously Acting Controller of BNY Mellon since February 2015. From May 2014 to February 2015, Mr. Kurimsky served as Deputy Controller of BNY Mellon. Mr. Kurimsky also serves as Managing Director and Controller of The Bank of New York Mellon and BNY Mellon, N.A. From at least 2012 to April 2014, Mr. Kurimsky served as a partner in the Financial Services Practice at KPMG LLP.
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(9)
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Ms. Neal has served as Managing Director of BNY Mellon since November 2015. Ms. Neal also serves as the President of BNY Mellon Markets and is Managing Director of The Bank of New York Mellon and BNY Mellon, N.A. From February 2014 to November 2015, Ms. Neal served as global head of listed derivatives, markets clearing and fixed income market structure at Deutsche Bank, a financial institution. From at least 2012 to January 2014, Ms. Neal served as global head of markets electronic trading, futures and prime services for Nomura International and Chief Operating Officer of Global Execution Services for Nomura Global Markets and Instinet.
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PART IV
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(a)
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The financial statements, schedules and exhibits required for this Form 10-K are incorporated by reference as indicated in the following index. Page numbers refer to pages of the Annual Report for Items (1) and (2) Financial Statements and Schedules.
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(1)(2)
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Financial Statements and Schedules
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Page No.
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Consolidated Income Statement
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138-139
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Consolidated Comprehensive Income Statement
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140
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Consolidated Balance Sheet
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141
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Consolidated Statement of Cash Flows
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142
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Consolidated Statement of Changes in Equity
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143-145
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Notes to Consolidated Financial Statements
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146-217
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Report of Independent Registered Public Accounting Firm
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218
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Selected Quarterly Data (unaudited)
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128
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(3)
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Exhibits
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See (b) below.
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(b)
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The exhibits listed on the Index to Exhibits on pages
15 through 23
hereof are incorporated by reference or filed or furnished herewith in response to this Item.
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(c)
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Other Financial Data
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The Bank of New York Mellon Corporation
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By:
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/s/ Gerald L. Hassell
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Gerald L. Hassell
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Chairman and Chief Executive Officer
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DATED: February 28, 2017
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Signature
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Capacities
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By:
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/s/ Gerald L. Hassell
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Director and Principal Executive Officer
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Gerald L. Hassell
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Chairman and Chief Executive Officer
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By:
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/s/ Thomas P. Gibbons
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Principal Financial Officer
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Thomas P. Gibbons
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Chief Financial Officer
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By:
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/s/ Kurtis R. Kurimsky
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Principal Accounting Officer
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Kurtis R. Kurimsky
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Corporate Controller
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Linda Z. Cook; Nicholas M. Donofrio; Joseph J. Echevarria; Edward P. Garden; Jeffrey A. Goldstein; John M. Hinshaw; Edmund F. Kelly; John A. Luke, Jr.; Jennifer B. Morgan; Mark A. Nordenberg; Catherine A. Rein; Elizabeth E. Robinson; Samuel C. Scott III
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Directors
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By:
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/s/ Craig T. Beazer
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DATED: February 28, 2017
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Craig T. Beazer
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Attorney-in-fact
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INDEX TO EXHIBITS
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Exhibit
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Description
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Method of Filing
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3.1
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Restated Certificate of Incorporation of The Bank of New York Mellon Corporation.
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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.
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3.2
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Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series A Noncumulative Preferred Stock, dated June 15, 2007.
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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.
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3.3
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Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series C Noncumulative Perpetual Preferred Stock, dated Sept. 13, 2012.
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Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 8-A12B (File No. 001-35651) as filed with the Commission on Sept. 14, 2012, and incorporated herein by reference.
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3.4
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Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series D Noncumulative Perpetual Preferred Stock, dated May 16, 2013.
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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.
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3.5
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Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series E Noncumulative Perpetual Preferred Stock, dated April 27, 2015.
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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.
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3.6
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Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series F Noncumulative Perpetual Preferred Stock, dated July 29, 2016.
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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.
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3.7
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Amended and Restated By-Laws of The Bank of New York Mellon Corporation, as amended and restated on July 10, 2007 and subsequently amended on April 14, 2009, Aug. 11, 2009, Feb. 9, 2010, July 2, 2010, Oct. 12, 2010, Oct. 8, 2013, March 5, 2015 and Oct. 13, 2015.
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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.
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INDEX TO EXHIBITS
(continued)
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INDEX TO EXHIBITS
(continued)
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Exhibit
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Description
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Method of Filing
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10.9
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*
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Amendment dated as of July 1, 1996 to The Bank of New York Company, Inc. Excess Benefit Plan.
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Previously filed as Exhibit 10(kk) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1999, and incorporated herein by reference.
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10.10
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*
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The Bank of New York Company, Inc. 2003 Long-Term Incentive Plan.
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Previously filed as Exhibit B to The Bank of New York Company, Inc.’s Definitive Proxy Statement (File No. 001-06152) dated March 31, 2003, and incorporated herein by reference.
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10.11
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*
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Amendment dated as of Dec. 28, 2005 to the 2003 Long-Term Incentive Plan of The Bank of New York Company, Inc.
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Previously filed as Exhibit 10(ee) to The Bank of New York Company, Inc.’s Form 10-K (File No. 001-06152) for the year ended Dec. 31, 2005, and incorporated herein by reference.
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10.12
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*
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Amendment dated as of Oct. 9, 2006 to the 2003 Long-Term Incentive Plan of The Bank of New York Company, Inc.
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Previously filed as Exhibit 10(gg) to The Bank of New York Company, Inc.’s Form 10-K (File No. 001-06152) for the year ended Dec. 31, 2006, and incorporated herein by reference.
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10.13
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*
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Amendment dated as of Feb. 21, 2008 to the 2003 Long-Term Incentive Plan of The Bank of New York Company, Inc.
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Previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on Feb. 27, 2008, and incorporated herein by reference.
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10.14
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*
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The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(n) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1992, and incorporated herein by reference.
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10.15
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*
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Amendment dated as of March 9, 1993 to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(k) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1993, and incorporated herein by reference.
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10.16
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*
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Amendment dated as of Oct. 11, 1994 to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(o) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1994, and incorporated herein by reference.
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10.17
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*
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Amendment dated as of July 1, 1996 to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(a) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1996, and incorporated herein by reference.
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10.18
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*
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Amendment dated as of Nov. 12, 1996 to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(b) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1996, and incorporated herein by reference.
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INDEX TO EXHIBITS
(continued)
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Exhibit
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Description
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Method of Filing
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10.19
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*
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Amendment dated as of July 11, 2000 to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(e) to The Bank of New York Company, Inc.’s Quarterly Report on Form 10-Q (File No. 001-06152) for the quarter ended Sept. 30, 2000, and incorporated herein by reference.
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10.20
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*
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Amendment dated as of Feb. 13, 2001 to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(ggg) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 2000, and incorporated herein by reference.
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10.21
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*
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Amendment dated as of Jan. 1, 2006 to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan.
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Previously filed as Exhibit 10(yy) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 2005, and incorporated herein by reference.
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10.22
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*
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Deferred Compensation Plan for Non-Employee Directors of The Bank of New York Company, Inc.
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Previously filed as Exhibit 10(s) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1993, and incorporated herein by reference.
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10.23
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*
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Amendment dated as of Nov. 8, 1994 to Deferred Compensation Plan for Non-Employee Directors of The Bank of New York Company, Inc.
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Previously filed as Exhibit 10(z) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1994, and incorporated herein by reference.
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10.24
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*
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Amendment dated Feb. 11, 1997 to Deferred Compensation Plan for Non-Employee Directors of The Bank of New York Company, Inc.
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Previously filed as Exhibit 10(j) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 1996, and incorporated herein by reference.
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10.25
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*
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Amendment to Deferred Compensation Plan for Non-Employee Directors of The Bank of New York Company, Inc. dated as of July 11, 2000.
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Previously filed as Exhibit 10(d) to The Bank of New York Company, Inc.’s Quarterly Report on Form 10-Q (File No. 001-06152) for the quarter ended Sept. 30, 2000, and incorporated herein by reference.
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10.26
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*
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Amendment dated as of Nov. 12, 2002 to Deferred Compensation Plan for Non-Employee Directors of The Bank of New York Company, Inc.
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Previously filed as Exhibit 10(yy) to The Bank of New York Company, Inc.’s Annual Report on Form 10-K (File No. 001-06152) for the year ended Dec. 31, 2003, and incorporated herein by reference.
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10.27
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*
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Form of Stock Option Agreement under The Bank of New York Company, Inc.’s 2003 Long-Term Incentive Plan.
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Previously filed as Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q (File No. 000-52710) for the quarter ended June 30, 2007, and incorporated herein by reference.
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INDEX TO EXHIBITS
(continued)
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Exhibit
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Description
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Method of Filing
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10.28
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*
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Mellon Financial Corporation Director Equity Plan (2006).
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Previously filed as Exhibit A to Mellon Financial Corporation’s Proxy Statement (File No. 001-07410) dated March 15, 2006, and incorporated herein by reference.
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10.29
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*
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Mellon Financial Corporation 1990 Elective Deferred Compensation Plan for Directors and Members of the Advisory Board, as amended, effective Jan. 1, 2002.
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Previously filed as Exhibit 10.9 to Mellon Financial Corporation’s Annual Report on Form 10-K (File No. 001-07410) for the year ended Dec. 31, 2001, and incorporated herein by reference.
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10.30
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*
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Form of Mellon Financial Corporation Elective Deferred Compensation Plan for Directors (Post Dec. 31, 2004).
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Previously filed as Exhibit 99.3 to Mellon Financial Corporation’s Current Report on Form 8-K (File No. 001-07410) as filed with the Commission on Oct. 20, 2006, and incorporated herein by reference.
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10.31
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*
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The Bank of New York Mellon Corporation Deferred Compensation Plan for Directors, effective Jan. 1, 2008.
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Previously filed as Exhibit 10.71 to the Company’s Annual Report on Form 10-K (File No. 000-52710) for the year ended Dec. 31, 2007, and incorporated herein by reference.
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10.32
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*
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Description regarding team equity incentive awards, replacement equity awards and special stock option award to executives named therein.
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Previously filed as Item 5.02 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 13, 2007, and incorporated herein by reference.
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10.33
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Lease dated as of Dec. 29, 2004, between 500 Grant Street Associates Limited Partnership and The Bank of New York Mellon with respect to BNY Mellon Center.
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Previously filed as Exhibit 99.1 to Mellon Financial Corporation’s Annual Report on Form 10-K (File No. 001-07410) for the year ended Dec. 31, 2004, and incorporated herein by reference.
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10.34
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*
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The Bank of New York Mellon Corporation Deferred Compensation Plan for Employees.
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Previously filed as Exhibit 4.4 to the Company’s Form S-8 (File No. 333-149473) filed on Feb. 29, 2008, and incorporated herein by reference.
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10.35
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*
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Form of 2008 Stock Option Agreement between The Bank of New York Mellon Corporation and Gerald L. Hassell.
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Previously filed as Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q (File No. 000-52710) for the quarter ended March 31, 2008, and incorporated herein by reference.
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10.36
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*
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Form of Long Term Incentive Plan Deferred Stock Unit Agreement for Directors of The Bank of New York Corporation.
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Previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 000-52710) for the quarter ended June 30, 2008, and incorporated herein by reference.
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10.37
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*
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Amendment to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan, dated as of Jan. 1, 2009.
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Previously filed as Exhibit 10.156 to the Company’s Annual Report on Form 10-K (File No. 000-52710) for the year ended Dec. 31, 2008, and incorporated herein by reference.
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INDEX TO EXHIBITS
(continued)
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Exhibit
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Description
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Method of Filing
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10.38
|
*
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Amendment to The Bank of New York Company, Inc. Amended and Restated 2003 Long-Term Incentive Plan, dated as of Jan. 1, 2009.
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Previously filed as Exhibit 10.157 to the Company’s Annual Report on Form 10-K (File No. 000-52710) for the year ended Dec. 31, 2008, and incorporated herein by reference.
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10.39
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*
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Amendment to The Bank of New York Company, Inc. Excess Benefit Plan, dated as of Jan. 1, 2009.
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Previously filed as Exhibit 10.158 to the Company’s Annual Report on Form 10-K (File No. 000-52710) for the year ended Dec. 31, 2008, and incorporated herein by reference.
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10.40
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*
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Amendment to The Bank of New York Company, Inc. Excess Contribution Plan, dated as of Jan. 1, 2009.
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Previously filed as Exhibit 10.159 to the Company’s Annual Report on Form 10-K (File No. 000-52710) for the year ended Dec. 31, 2008, and incorporated herein by reference.
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10.41
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*
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The Bank of New York Mellon Corporation Executive Severance Plan, effective July 13, 2010.
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Previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 16, 2010, and incorporated herein by reference.
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10.42
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*
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The Bank of New York Mellon Corporation Policy Regarding Shareholder Approval of Future Senior Officers Severance Arrangements, adopted July 12, 2010.
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Previously filed as Exhibit 99.3 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 16, 2010, and incorporated herein by reference.
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10.43
|
*
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Form of Executive Stock Option Agreement.
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Previously filed as Exhibit 10.135 to the Company’s Annual Report on Form 10-K (File No. 000-52710) for the year ended Dec. 31, 2010, and incorporated herein by reference.
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10.44
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*
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Amendment to The Bank of New York Mellon Corporation Executive Severance Plan, effective as of Aug. 11, 2014.
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Previously filed as Exhibit 10.1 to BNY Mellon’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended Sept. 30, 2014, and incorporated herein by reference.
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10.45
|
*
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2011 Form of Executive Stock Option Agreement.
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Previously filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 000-52710) for the quarter ended March 31, 2011, and incorporated herein by reference.
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10.46
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*
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Terms of Employment agreed to by The Bank of New York Mellon Corporation and Curtis Y. Arledge, dated July 26, 2010, and accepted July 29, 2010.
|
Previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No. 000-52710) for the quarter ended March 31, 2011, and incorporated herein by reference.
|
|
10.47
|
*
|
The Bank of New York Mellon Corporation Long-Term Incentive Plan.
|
Previously filed as Appendix A to the Company’s definitive proxy statement on Schedule 14A (File No. 000-52710) filed on March 11, 2011, and incorporated herein by reference.
|
INDEX TO EXHIBITS
(continued)
|
|
Exhibit
|
|
Description
|
Method of Filing
|
|
|
|
|
|
|
10.48
|
*
|
Amended and Restated Long-Term Incentive Plan of The Bank of New York Mellon Corporation.
|
Previously filed as Exhibit A to BNY Mellon’s definitive proxy statement on Schedule 14A (File No. 001-35651), filed on March 7, 2014, and incorporated herein by reference.
|
|
10.49
|
*
|
Form of Restricted Stock Unit Agreement under the Amended and Restated Long-Term Incentive Plan of The Bank of New York Mellon Corporation.
|
Previously filed as Exhibit 10.3 to BNY Mellon’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended June 30, 2014, and incorporated herein by reference.
|
|
10.50
|
*
|
Form of Performance Share Unit Agreement under the Amended and Restated Long-Term Incentive Plan of The Bank of New York Mellon Corporation.
|
Previously filed as Exhibit 10.4 to BNY Mellon’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended June 30, 2014, and incorporated herein by reference.
|
|
10.51
|
*
|
The Bank of New York Mellon Corporation
Executive Incentive Compensation Plan.
|
Previously filed as Appendix B to the Company’s definitive proxy statement on Schedule 14A (File No. 000-52710) filed on March 11, 2011, and incorporated herein by reference.
|
|
10.52
|
*
|
2012 Form of Nonstatutory Stock Option Agreement.
|
Previously filed as Exhibit 10.82 to the Company’s Annual Report on Form 10-K (File No. 001-35651) for the year ended Dec. 31, 2012, and incorporated herein by reference.
|
|
10.53
|
*
|
The Bank of New York Mellon Corporation Defined Contribution IRC 401(a)(17) Plan.
|
Previously filed as Exhibit 10.84 to the Company’s Annual Report on Form 10-K (File No. 001-35651) for the year ended Dec. 31, 2012, and incorporated herein by reference.
|
|
10.54
|
|
Lease agreement by and between The Bank of New York Mellon and WFP Tower Co. L.P., dated June 25, 2014.
|
Previously filed as Exhibit 10.2 to BNY Mellon’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended June 30, 2014, and incorporated herein by reference.
|
|
10.55
|
*
|
Amendment to The Bank of New York Company, Inc. Supplemental Executive Retirement Plan, dated as of Dec. 31, 2014.
|
Previously filed as Exhibit 10.76 to BNY Mellon’s Annual Report on Form 10-K (File No. 001-35651) for the year ended Dec. 31, 2014, and incorporated herein by reference.
|
|
10.56
|
*
|
2015 Form of Performance Share Unit Agreement.
|
Previously filed as Exhibit 10.1 to BNY Mellon’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended Sept. 30, 2015, and incorporated herein by reference.
|
|
10.57
|
*
|
2015 Form of Restricted Share Unit Agreement.
|
Previously filed as Exhibit 10.2 to BNY Mellon’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended Sept. 30, 2015, and incorporated herein by reference.
|
|
10.58
|
*
|
The Bank of New York Mellon Corporation Defined Contribution IRC 401(a)(17) Plan (as amended and restated).
|
Previously filed as Exhibit 10.69 to the Company’s Annual Report on Form 10-K (File No. 001-35651) for the year ended Dec. 31, 2015, and incorporated herein by reference.
|
INDEX TO EXHIBITS
(continued)
|
|
Exhibit
|
|
Description
|
Method of Filing
|
|
|
|
|
|
|
10.59
|
*
|
Amendment dated as of Dec. 14, 2015 to The Bank of New York Company, Inc. Excess Benefit Plan.
|
Previously filed as Exhibit 10.70 to the Company’s Annual Report on Form 10-K (File No. 001-35651) for the year ended Dec. 31, 2015, and incorporated herein by reference.
|
|
10.60
|
*
|
The Bank of New York Mellon Corporation Executive Severance Plan (as amended effective Feb. 19, 2016).
|
Previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended March 31, 2016, and incorporated herein by reference.
|
|
10.61
|
*
|
The Bank of New York Mellon Corporation 2016 Executive Incentive Compensation Plan.
|
Previously filed as Annex B to the Company’s definitive Proxy Statement on Schedule 14A filed on March 11, 2016 and incorporated herein by reference.
|
|
10.62
|
*
|
Form of Amended and Restated Indemnification Agreement with Directors of The Bank of New York Mellon Corporation.
|
Previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended June 30, 2016, and incorporated herein by reference.
|
|
10.63
|
*
|
Form of Amended and Restated Indemnification Agreement with Executive Officers of The Bank of New York Mellon Corporation.
|
Previously filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended June 30, 2016, and incorporated herein by reference.
|
|
10.64
|
*
|
The Bank of New York Mellon Corporation Executive Severance Plan, as amended.
|
Previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-35651) for the quarter ended Sept. 30, 2016, and incorporated herein by reference.
|
|
12.1
|
|
|
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
Filed herewith.
|
13.1
|
|
|
All portions of The Bank of New York Mellon Corporation 2016 Annual Report to Shareholders that are incorporated herein by reference. The remaining portions are furnished for the information of the SEC and are not “filed” as part of this filing.
|
Filed and furnished herewith.
|
18.1
|
|
|
Preferability Letter from KPMG LLP for Change in Accounting Principle.
|
Filed herewith.
|
21.1
|
|
|
Primary subsidiaries of the Company.
|
Filed herewith.
|
23.1
|
|
|
Consent of KPMG LLP.
|
Filed herewith.
|
24.1
|
|
|
Power of Attorney.
|
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.
|
INDEX TO EXHIBITS
(continued)
|
|
Exhibit
|
|
Description
|
Method of Filing
|
|
|
|
|
|
|
31.2
|
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Filed herewith.
|
32.1
|
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Furnished herewith.
|
32.2
|
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Furnished herewith.
|
101.INS
|
|
XBRL Instance Document.
|
Filed herewith.
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
Filed herewith.
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
Filed herewith.
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
Filed herewith.
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
Filed herewith.
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
Filed herewith.
|
|
* Management contract or compensatory plan arrangement.
|
|
Year ended Dec. 31,
|
||||||||||||||
(dollar amounts in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|||||
Earnings
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
4,725
|
|
$
|
4,235
|
|
$
|
3,563
|
|
$
|
3,777
|
|
$
|
3,357
|
|
Net (income) attributable to noncontrolling interests
|
(1
|
)
|
(64
|
)
|
(84
|
)
|
(81
|
)
|
(78
|
)
|
|||||
Income before income taxes attributable to shareholders of The Bank of New York Mellon Corporation
|
4,724
|
|
4,171
|
|
3,479
|
|
3,696
|
|
3,279
|
|
|||||
Fixed charges, excluding interest on deposits
|
521
|
|
373
|
|
380
|
|
349
|
|
484
|
|
|||||
Income from income taxes and fixed charges, excluding interest on deposits applicable to the shareholders of The Bank of New York Mellon Corporation
|
5,245
|
|
4,544
|
|
3,859
|
|
4,045
|
|
3,763
|
|
|||||
Interest on deposits
|
16
|
|
37
|
|
83
|
|
105
|
|
154
|
|
|||||
Income before income taxes and fixed charges, including interest on deposits applicable to shareholders of The Bank of New York Mellon Corporation
|
$
|
5,261
|
|
$
|
4,581
|
|
$
|
3,942
|
|
$
|
4,150
|
|
$
|
3,917
|
|
Fixed charges
|
|
|
|
|
|
||||||||||
Interest expense, excluding interest on deposits
|
$
|
421
|
|
$
|
263
|
|
$
|
271
|
|
$
|
238
|
|
$
|
380
|
|
One-third net rental expense
(a)
|
100
|
|
110
|
|
109
|
|
111
|
|
104
|
|
|||||
Total fixed charges, excluding interest on deposits
|
521
|
|
373
|
|
380
|
|
349
|
|
484
|
|
|||||
Interest on deposits
|
16
|
|
37
|
|
83
|
|
105
|
|
154
|
|
|||||
Total fixed charges, including interests on deposits
|
$
|
537
|
|
$
|
410
|
|
$
|
463
|
|
$
|
454
|
|
$
|
638
|
|
Preferred stock dividends
(b)
|
$
|
122
|
|
$
|
105
|
|
$
|
73
|
|
$
|
64
|
|
$
|
18
|
|
Total fixed charges and preferred stock dividends, excluding interest on deposits
|
$
|
643
|
|
$
|
478
|
|
$
|
453
|
|
$
|
413
|
|
$
|
502
|
|
Total fixed charges and preferred stock dividends, including interest on deposits
|
$
|
659
|
|
$
|
515
|
|
$
|
536
|
|
$
|
518
|
|
$
|
656
|
|
|
|
|
|
|
|
||||||||||
Earnings to fixed charges ratios
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
10.07
|
|
12.18
|
|
10.16
|
|
11.59
|
|
7.77
|
|
|||||
Including interest on deposits
|
9.80
|
|
11.17
|
|
8.51
|
|
9.14
|
|
6.14
|
|
|||||
|
|
|
|
|
|
||||||||||
Earnings to fixed charges and preferred stock dividends ratios
(b)
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
8.16
|
|
9.51
|
|
8.52
|
|
9.79
|
|
7.50
|
|
|||||
Including interest on deposits
|
7.98
|
|
8.90
|
|
7.35
|
|
8.01
|
|
5.97
|
|
(a)
|
The proportion deemed representative of the interest factor.
|
(b)
|
Dividends were paid in 2016, 2015, 2014, 2013 and 2012 on the Series A and Series C preferred stock, which were issued in 2012. Dividends paid in 2016, 2015, 2014 and 2013 also include the Series D preferred stock, which was issued in 2013. Dividends paid in 2016 and 2015 also include the Series E preferred stock, which was issued in 2015.
|
|
|
Page
|
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations:
|
|
Results of Operations:
|
|
|
|
Acronyms
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Financial Summary
|
|
(dollar amounts in millions, except per common share
amounts and unless otherwise noted)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|||||
Year ended Dec. 31
|
|
|
|
|
|
|
|||||||||
Fee and other revenue
|
$
|
12,073
|
|
$
|
12,082
|
|
$
|
12,649
|
|
$
|
11,856
|
|
$
|
11,448
|
|
Income from consolidated investment management funds
|
26
|
|
86
|
|
163
|
|
183
|
|
189
|
|
|||||
Net interest revenue
|
3,138
|
|
3,026
|
|
2,880
|
|
3,009
|
|
2,973
|
|
|||||
Total revenue
|
15,237
|
|
15,194
|
|
15,692
|
|
15,048
|
|
14,610
|
|
|||||
Provision for credit losses
|
(11
|
)
|
160
|
|
(48
|
)
|
(35
|
)
|
(80
|
)
|
|||||
Noninterest expense
|
10,523
|
|
10,799
|
|
12,177
|
|
11,306
|
|
11,333
|
|
|||||
Income before income taxes
|
4,725
|
|
4,235
|
|
3,563
|
|
3,777
|
|
3,357
|
|
|||||
Provision for income taxes
|
1,177
|
|
1,013
|
|
912
|
|
1,592
|
|
842
|
|
|||||
Net income
|
3,548
|
|
3,222
|
|
2,651
|
|
2,185
|
|
2,515
|
|
|||||
Net (income) attributable to noncontrolling interests
(a)
|
(1
|
)
|
(64
|
)
|
(84
|
)
|
(81
|
)
|
(78
|
)
|
|||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
3,547
|
|
3,158
|
|
2,567
|
|
2,104
|
|
2,437
|
|
|||||
Preferred stock dividends
|
(122
|
)
|
(105
|
)
|
(73
|
)
|
(64
|
)
|
(18
|
)
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
3,425
|
|
$
|
3,053
|
|
$
|
2,494
|
|
$
|
2,040
|
|
$
|
2,419
|
|
Earnings per share applicable to common shareholders of The Bank of New York Mellon Corporation:
|
|
|
|
|
|
||||||||||
Basic
|
$
|
3.16
|
|
$
|
2.73
|
|
$
|
2.17
|
|
$
|
1.74
|
|
$
|
2.03
|
|
Diluted
|
$
|
3.15
|
|
$
|
2.71
|
|
$
|
2.15
|
|
$
|
1.73
|
|
$
|
2.03
|
|
Average common shares and equivalents outstanding
(in thousands)
:
|
|
|
|
|
|
||||||||||
Basic
|
1,066,286
|
|
1,104,719
|
|
1,129,897
|
|
1,150,689
|
|
1,176,485
|
|
|||||
Diluted
|
1,072,013
|
|
1,112,511
|
|
1,137,480
|
|
1,154,441
|
|
1,178,430
|
|
|||||
At Dec. 31
|
|
|
|
|
|
||||||||||
Interest-earning assets
|
$
|
280,332
|
|
$
|
338,955
|
|
$
|
317,646
|
|
$
|
305,169
|
|
$
|
292,887
|
|
Assets of operations
|
332,238
|
|
392,379
|
|
376,021
|
|
363,244
|
|
347,745
|
|
|||||
Total assets
|
333,469
|
|
393,780
|
|
385,303
|
|
374,516
|
|
359,226
|
|
|||||
Deposits
|
221,490
|
|
279,610
|
|
265,869
|
|
261,129
|
|
246,095
|
|
|||||
Long-term debt
|
24,463
|
|
21,547
|
|
20,264
|
|
19,864
|
|
18,530
|
|
|||||
Preferred stock
|
3,542
|
|
2,552
|
|
1,562
|
|
1,562
|
|
1,068
|
|
|||||
Total The Bank of New York Mellon Corporation common shareholders’ equity
|
35,269
|
|
35,485
|
|
35,879
|
|
35,935
|
|
35,346
|
|
|||||
At Dec. 31
|
|
|
|
|
|
||||||||||
Assets under management
(in billions) (b)
|
$
|
1,648
|
|
$
|
1,625
|
|
$
|
1,686
|
|
$
|
1,557
|
|
$
|
1,349
|
|
Assets under custody and/or administration
(in trillions) (c)
|
29.9
|
|
28.9
|
|
28.5
|
|
27.6
|
|
26.3
|
|
|||||
Market value of securities on loan
(in billions) (d)
|
296
|
|
277
|
|
289
|
|
235
|
|
237
|
|
|||||
Return on common equity
(e)
|
9.6
|
%
|
8.6
|
%
|
6.8
|
%
|
5.9
|
%
|
7.0
|
%
|
|||||
Adjusted return on common equity – Non-GAAP
(e)(f)
|
10.2
|
|
9.5
|
|
8.1
|
|
8.3
|
|
8.8
|
|
|||||
Return on tangible common equity – Non-GAAP
(e)(f)(g)
|
21.2
|
|
19.7
|
|
16.0
|
|
15.3
|
|
19.3
|
|
|||||
Adjusted return on tangible common equity – Non-GAAP
(e)(f)(g)
|
21.4
|
|
20.7
|
|
17.6
|
|
19.7
|
|
21.8
|
|
|||||
Return on average assets
|
0.96
|
|
0.82
|
|
0.67
|
|
0.60
|
|
0.77
|
|
|||||
Pre-tax operating margin
(f)
|
31
|
|
28
|
|
23
|
|
25
|
|
23
|
|
|||||
Adjusted pre-tax operating margin – Non-GAAP
(e)(f)
|
33
|
|
31
|
|
28
|
|
28
|
|
29
|
|
|||||
Fee revenue as a percentage of total revenue
|
79
|
|
79
|
|
80
|
|
78
|
|
77
|
|
|||||
Percentage of non-U.S. total revenue
|
34
|
|
36
|
|
38
|
|
37
|
|
36
|
|
|||||
Net interest margin (on a fully taxable equivalent basis)
|
1.05
|
|
0.98
|
|
0.97
|
|
1.13
|
|
1.21
|
|
(a)
|
Primarily attributable to noncontrolling interests related to consolidated investment management funds.
|
(b)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business and the Other segment.
|
(c)
|
Includes the assets under custody and/or administration of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of
$1.2 trillion
at
Dec. 31, 2016
,
$1.0 trillion
at
Dec. 31, 2015
,
$1.1 trillion
at
Dec. 31, 2014
,
$1.2 trillion
at
Dec. 31, 2013
and
$1.1 trillion
at
Dec. 31, 2012
.
|
(d)
|
Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as an agent, beginning in 2013, on behalf of CIBC Mellon clients, which totaled
$63 billion
at
Dec. 31, 2016
,
$55 billion
at
Dec. 31, 2015
,
$65 billion
at
Dec. 31, 2014
and
$62 billion
at
Dec. 31, 2013
.
|
(e)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
121
for the reconciliation of Non-GAAP measures.
|
(f)
|
Non-GAAP information for all periods presented excludes net income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and merger and integration (“M&I”), litigation and restructuring charges. Non-GAAP information for 2016 also excludes a recovery of the previously impaired loan to Sentinel Management Group, Inc. (“Sentinel”). Non-GAAP information for 2015 also excludes the impairment charge related to a court decision regarding Sentinel. Non-GAAP information for 2014 also excludes the gains on the sales of our investment in Wing Hang Bank Limited (“Wing Hang”) and our One Wall Street building, the benefit primarily related to a tax carryback claim, and the charge related to investment management funds, net of incentives. Non-GAAP information for 2013 also excludes the charge related to investment management funds, net of incentives and the net charge related to the disallowance of certain foreign tax credits.
|
(g)
|
Tangible common equity excludes goodwill and intangible assets and related deferred tax liabilities for all periods presented.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Financial Summary
(continued)
|
|
(dollar amounts in millions, except per common share
amounts and unless otherwise noted)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||||
Cash dividends per common share
|
$
|
0.72
|
|
|
$
|
0.68
|
|
|
$
|
0.66
|
|
|
$
|
0.58
|
|
|
$
|
0.52
|
|
Common dividend payout ratio
|
23
|
%
|
|
25
|
%
|
|
31
|
%
|
(a)
|
34
|
%
|
(a)
|
26
|
%
|
|||||
Common dividend yield
|
1.5
|
%
|
|
1.6
|
%
|
|
1.6
|
%
|
|
1.7
|
%
|
|
2.0
|
%
|
|||||
Closing stock price per common share
|
$
|
47.38
|
|
|
$
|
41.22
|
|
|
$
|
40.57
|
|
|
$
|
34.94
|
|
|
$
|
25.70
|
|
Market capitalization
(in billions)
|
$
|
49.6
|
|
|
$
|
44.7
|
|
|
$
|
45.4
|
|
|
$
|
39.9
|
|
|
$
|
29.9
|
|
Book value per common share – GAAP
(b)
|
$
|
33.67
|
|
|
$
|
32.69
|
|
|
$
|
32.09
|
|
|
$
|
31.46
|
|
|
$
|
30.38
|
|
Tangible book value per common share – Non-GAAP
(b)(c)(d)
|
$
|
16.19
|
|
|
$
|
15.27
|
|
|
$
|
14.70
|
|
|
$
|
13.95
|
|
|
$
|
12.81
|
|
Full-time employees
|
52,000
|
|
|
51,200
|
|
|
50,300
|
|
|
51,100
|
|
|
49,500
|
|
|||||
Year-end common shares outstanding
(in thousands)
|
1,047,488
|
|
|
1,085,343
|
|
|
1,118,228
|
|
|
1,142,250
|
|
|
1,163,490
|
|
|||||
Average total equity to average total assets
|
10.7
|
%
|
|
10.2
|
%
|
|
10.2
|
%
|
|
10.6
|
%
|
|
11.0
|
%
|
|||||
Capital ratios at Dec. 31
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated regulatory capital ratios:
(e)(f)
|
|
|
|
|
|
|
|
|
|
||||||||||
Standardized:
|
|
|
|
|
|
|
|
|
|
||||||||||
CET1 ratio
|
12.3
|
%
|
|
11.5
|
%
|
|
15.0
|
%
|
|
14.5
|
%
|
|
13.5
|
%
|
|||||
Tier 1 capital ratio
|
14.5
|
|
|
13.1
|
|
|
16.3
|
|
|
16.2
|
|
|
15.0
|
|
|||||
Total (Tier 1 plus Tier 2) capital ratio
|
15.2
|
|
|
13.5
|
|
|
16.9
|
|
|
17.0
|
|
|
16.3
|
|
|||||
Advanced:
|
|
|
|
|
|
|
|
|
|
||||||||||
CET1 ratio
|
10.6
|
|
|
10.8
|
|
|
11.2
|
|
|
N/A
|
|
N/A
|
|||||||
Tier 1 capital ratio
|
12.6
|
|
|
12.3
|
|
|
12.2
|
|
|
N/A
|
|
N/A
|
|||||||
Total (Tier 1 plus Tier 2) capital ratio
|
13.0
|
|
|
12.5
|
|
|
12.5
|
|
|
N/A
|
|
N/A
|
|||||||
Leverage capital ratio
(f)
|
6.6
|
|
|
6.0
|
|
|
5.6
|
|
|
5.4
|
|
|
5.3
|
|
|||||
Supplementary leverage ratio
(f)
|
6.0
|
|
|
5.4
|
|
|
N/A
|
|
N/A
|
|
N/A
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
(b)
|
11.6
|
|
|
9.7
|
|
|
9.7
|
|
|
10.0
|
|
|
10.1
|
|
|||||
BNY Mellon common shareholders’ equity to total assets
ratio – GAAP
(b)
|
10.6
|
|
|
9.0
|
|
|
9.3
|
|
|
9.6
|
|
|
9.8
|
|
|||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
(b)(d)
|
6.7
|
|
|
6.5
|
|
|
6.5
|
|
|
6.8
|
|
|
6.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selected regulatory capital ratios - fully phased-in – Non-GAAP
(g)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Estimated CET1 ratio
(e)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Standardized Approach
|
11.3
|
|
|
10.2
|
|
|
10.6
|
|
|
10.6
|
|
|
N/A
|
||||||
Advanced Approach
|
9.7
|
|
|
9.5
|
|
|
9.8
|
|
|
11.3
|
|
|
9.8
|
|
|||||
Estimated SLR
|
5.6
|
|
|
4.9
|
|
|
4.4
|
|
|
N/A
|
|
N/A
|
(a)
|
The common dividend payout ratio was 25% for 2014 after adjusting for increased litigation expense, and 26% for 2013 after adjusting for the net impact of the U.S. Tax Court’s decisions regarding certain foreign tax credits.
|
(b)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
121
for the reconciliation of Non-GAAP measures.
|
(c)
|
Non-GAAP information for all periods presented excludes net income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for 2016 also excludes a recovery of the previously impaired loan to Sentinel. Non-GAAP information for 2015 also excludes the impairment charge related to a court decision regarding Sentinel. Non-GAAP information for 2014 also excludes the gains on the sales of our investment in Wing Hang and our One Wall Street building, the benefit primarily related to a tax carryback claim, and the charge related to investment management funds, net of incentives. Non-GAAP information for 2013 also excludes the charge related to investment management funds, net of incentives, and the net charge related to the disallowance of certain foreign tax credits.
|
(d)
|
Tangible book value and tangible common shareholders’ equity exclude goodwill and intangible assets and related deferred tax liabilities for all periods presented. Tangible assets of operations exclude goodwill, intangible assets, assets of consolidated investment management funds and cash deposited with the Federal Reserve and other central banks for all periods presented.
|
(e)
|
Risk-based capital ratios at Dec. 31, 2016 and Dec. 31, 2015 reflect the adoption of new accounting guidance related to Consolidations (ASU 2015-02). At Dec. 31, 2014, risk-based capital ratios include the net impact of the total consolidated assets of certain consolidated investment management funds in risk-weighted assets. These assets were not included in prior periods’ risk-based ratios. The leverage capital ratio was not impacted.
|
(f)
|
At Dec. 31, 2016, Dec. 31. 2015 and Dec. 31, 2014, the Common Equity Tier 1 (“CET1”), Tier 1 and Total risk-based consolidated regulatory capital ratios are based on Basel III components of capital, as phased-in, and credit risk asset risk-weightings using the U.S. capital rules’ advanced approaches framework (the “Advanced Approach”). The leverage capital ratio is based on Basel III’s definition of Tier 1 capital, as phased-in, and quarterly average assets. The supplementary leverage ratio (“SLR”) is based on Tier 1 capital, as phased-in, and quarterly average assets and certain off-balance sheet exposures. The capital ratios prior to Dec. 31, 2014 are based on Basel I rules (including Basel I Tier 1 common in the case of the CET1 ratio). For additional information on these ratios, see “Capital” beginning on page
53
.
|
(g)
|
The estimated fully phased-in CET1 and SLR 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
53
.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Results of Operations
|
Results of Operations
(continued)
|
|
•
|
driving profitable revenue growth and enhancing the client experience. We are leveraging our expertise and scale, making it easier to do business with us across our digital enterprise, and offering broad-based, innovative solutions to our clients;
|
•
|
executing our business improvement processes to increase productivity and effectiveness while
|
•
|
being a strong, trusted counterparty by maintaining our safety and soundness, low-risk business model and strong liquidity and capital positions;
|
•
|
generating excess capital and deploying it effectively; and
|
•
|
attracting, developing and retaining top talent.
|
Results of Operations
(continued)
|
|
•
|
AUC/A totaled
$29.9 trillion
at
Dec. 31, 2016
compared with
$28.9 trillion
at
Dec. 31, 2015
. The increase of
3%
primarily reflects higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar. (See “Investment Services business” beginning on page
22
.)
|
•
|
AUM totaled
$1.65 trillion
at
Dec. 31, 2016
compared with
$1.63 trillion
at
Dec. 31, 2015
. The increase of
1%
primarily resulted from
higher market values offset by the unfavorable impact of a stronger U.S. dollar (principally
|
Results of Operations
(continued)
|
|
•
|
Investment services fees totaled
$7.2 billion
in
2016
, an increase of
2%
compared with
$7.1 billion
in
2015
primarily reflecting higher money market fees and securities lending revenue, partially offset by the impact to clearing services of lost business, the impact of a stronger U.S. dollar and downsizing the UK retail transfer agency business. (See “Investment Services business” beginning on page
22
.)
|
•
|
Investment management and performance fees totaled
$3.35 billion
in
2016
compared with
$3.44 billion
in
2015
, a decrease of
3%
, due to
the unfavorable impact of a stronger U.S. dollar (principally versus the British pound), net outflows of AUM and lower performance fees, partially offset by higher market values and money market fees.
(See “Investment Management business” beginning on page
18
.)
|
•
|
Foreign exchange and other trading revenue totaled
$701 million
in
2016
compared with
$768 million
in
2015
. Foreign exchange revenue totaled
$687 million
in
2016
, a decrease of
8%
compared with
$743 million
in
2015
.
The decrease in foreign exchange revenue primarily reflects
the
continued trend of clients migrating to lower margin products and lower volumes.
(See “Fee and other revenue” beginning on page
9
.)
|
•
|
Financing-related fees totaled
$219 million
in
2016
compared with
$220 million
in
2015
. (See “Fee and other revenue” beginning on page
9
.)
|
•
|
Net interest revenue totaled
$3.1 billion
in
2016
compared with
$3.0 billion
in
2015
.
The increase was primarily driven by an increase in interest rates, partially offset by lower interest-earning assets.
Net interest margin (FTE) was
1.05%
in
2016
compared with
0.98%
in
2015
.
The increase primarily reflects higher yields on interest-earning assets, partially offset by higher rates paid on interest-bearing liabilities.
(See “Net interest revenue” beginning on page
12
.)
|
•
|
The provision for credit losses was a credit of
$11 million
in
2016
and a provision of
$160 million
in
2015
. The provision in 2015 was primarily driven by an impairment charge related to a court decision regarding Sentinel. (See “Asset quality
|
•
|
Noninterest expense totaled
$10.5 billion
in
2016
compared with
$10.8 billion
in
2015
.
The decrease primarily reflects lower expenses in nearly all categories, except distribution and servicing and software expenses, primarily driven by the favorable impact of a stronger U.S. dollar, lower staff, litigation and legal expenses and the continued benefit of the business improvement process.
(See “Noninterest expense” beginning on page
15
.)
|
•
|
The provision for income taxes was
$1.2 billion
(
24.9%
effective tax rate) in
2016
. (See “Income taxes” on page
16
.)
|
•
|
The net unrealized pre-tax loss on the investment securities portfolio was
$221 million
at
Dec. 31, 2016
, compared with a pre-tax gain of $357 million at
Dec. 31, 2015
. The decrease was primarily driven by higher market interest rates. (See “Investment securities” beginning on page
37
.)
|
•
|
Our CET1 ratio determined under the Advanced Approach was
10.6%
at
Dec. 31, 2016
and
10.8%
at
Dec. 31, 2015
.
The decrease reflects lower regulatory capital primarily due to common stock repurchases, foreign currency translation, defined benefit plan adjustments and unrealized losses on securities, partially offset by earnings retention.
(See “Capital” beginning on page
53
.)
|
•
|
Our estimated CET1 ratio (Non-GAAP) calculated under the Advanced Approach on a fully phased-in basis was 9.7% at
Dec. 31, 2016
and
9.5%
at
Dec. 31, 2015
. Our estimated CET1 ratio (Non-GAAP) calculated under the Standardized Approach on a fully phased-in basis was
11.3%
at
Dec. 31, 2016
and
10.2%
at
Dec. 31, 2015
. (See “Capital” beginning on page
53
.)
|
•
|
Investment services fees totaled
$7.1 billion
in
2015
, an increase of
2%
compared with
$6.9 billion
in 2014. Higher asset servicing fees, reflecting growth in collateral, broker-dealer and other asset services, and higher clearing services
|
Results of Operations
(continued)
|
|
•
|
Investment management and performance fees totaled
$3.4 billion
in
2015
, a
2%
decrease compared with
$3.5 billion
in 2014. The decrease primarily reflects the impact of the July 2015 sale of Meriten Investment Management GmbH (“Meriten”) and lower performance fees, partially offset by the impact of the January 2015 acquisition of Cutwater Asset Management (“Cutwater”) and strategic initiatives and higher money market fees and equity market values.
|
•
|
Foreign exchange and other trading revenue totaled
$768 million
in
2015
, compared with
$570 million
in 2014. The increase primarily reflects lower volumes in standing instruction programs, which were more than offset by higher volumes in the other trading programs, higher volatility and the impact of hedging activity for foreign currency placements.
|
•
|
The provision for credit losses was
$160 million
in
2015
compared with a credit of
$48 million
in 2014. The provision in 2015 was primarily driven by an impairment charge related to a court decision regarding Sentinel.
|
•
|
Noninterest expense totaled
$10.8 billion
in
2015
compared with
$12.2 billion
in 2014. The decrease primarily reflects lower expenses in nearly all categories, except distribution and servicing and software expenses. The lower expenses were primarily driven by the favorable impact of a stronger U.S. dollar, lower staff, litigation and legal expenses and the continued benefit of the business improvement process which focuses on reducing structural costs.
|
•
|
The provision for income taxes was
$1.0 billion
(23.9% effective tax rate) in 2015.
|
•
|
Investment services fees totaled $6.9 billion primarily reflecting higher asset servicing fees, driven by organic growth, higher market values, higher collateral management fees and net new business, as well as higher clearing services fees, primarily driven by higher mutual fund and asset-based fees, partially offset by lower Corporate Trust fees and lower corporate actions and dividend fees in Depositary Receipts.
|
•
|
Investment management and performance fees totaled $3.5 billion primarily driven by higher equity market values, net new business and the favorable impact of a weaker U.S. dollar, partially offset by higher money market fee waivers and lower performance fees.
|
•
|
Foreign exchange and other trading revenue totaled $570 million primarily reflecting lower volatility, partially offset by higher volumes.
|
•
|
Investment and other income totaled $1.2 billion primarily reflecting the gains on the sales of our equity investment in Wing Hang and the One Wall Street building, partially offset by lower equity investment revenue.
|
•
|
Noninterest expense totaled $12.2 billion primarily reflecting higher litigation expense and restructuring charges, partially offset by lower staff expense.
|
•
|
The provision for income taxes was $912 million (25.6% effective tax rate) including a net benefit primarily related to litigation expense and the approval of a tax carryback claim, offset by the sales of our investment in Wing Hang and our One Wall Street building.
|
Results of Operations
(continued)
|
|
Fee and other revenue
|
|
|
|
2016
|
|
2015
|
|
||||||
|
|
|
|
vs.
|
|
vs.
|
|
||||||
(dollars in millions, unless otherwise noted)
|
2016
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|||
Investment services fees:
|
|
|
|
|
|
||||||||
Asset servicing
(a)
|
$
|
4,244
|
|
$
|
4,187
|
|
$
|
4,075
|
|
1
|
%
|
3
|
%
|
Clearing services
|
1,404
|
|
1,375
|
|
1,335
|
|
2
|
|
3
|
|
|||
Issuer services
|
1,026
|
|
978
|
|
968
|
|
5
|
|
1
|
|
|||
Treasury services
|
547
|
|
555
|
|
564
|
|
(1
|
)
|
(2
|
)
|
|||
Total investment services fees
|
7,221
|
|
7,095
|
|
6,942
|
|
2
|
|
2
|
|
|||
Investment management and performance fees
|
3,350
|
|
3,438
|
|
3,492
|
|
(3
|
)
|
(2
|
)
|
|||
Foreign exchange and other trading revenue
|
701
|
|
768
|
|
570
|
|
(9
|
)
|
35
|
|
|||
Financing-related fees
|
219
|
|
220
|
|
169
|
|
—
|
|
30
|
|
|||
Distribution and servicing
|
166
|
|
162
|
|
173
|
|
2
|
|
(6
|
)
|
|||
Investment and other income
|
341
|
|
316
|
|
1,212
|
|
8
|
|
N/M
|
||||
Total fee revenue
|
11,998
|
|
11,999
|
|
12,558
|
|
—
|
|
(4
|
)
|
|||
Net securities gains
|
75
|
|
83
|
|
91
|
|
(10
|
)
|
(9
|
)
|
|||
Total fee and other revenue
|
$
|
12,073
|
|
$
|
12,082
|
|
$
|
12,649
|
|
—
|
%
|
(4
|
)%
|
|
|
|
|
|
|
||||||||
Fee revenue as a percentage of total revenue
|
79
|
%
|
79
|
%
|
80
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
AUM at period end
(in billions) (b)
|
$
|
1,648
|
|
$
|
1,625
|
|
$
|
1,686
|
|
1
|
%
|
(4
|
)%
|
AUC/A at period end
(in trillions) (c)
|
$
|
29.9
|
|
$
|
28.9
|
|
$
|
28.5
|
|
3
|
%
|
1
|
%
|
(a)
|
Asset servicing fees include securities lending revenue of
$207 million
in
2016
,
$176 million
in
2015
and
$158 million
in
2014
.
|
(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
Dec. 31, 2016
,
$1.0 trillion
at
Dec. 31, 2015
and
$1.1 trillion
at
Dec. 31, 2014
.
|
•
|
Asset servicing fees increased
1%
, primarily reflecting
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 retail transfer agency business.
|
•
|
Clearing services fees increased
2%
, primarily driven by
higher money market fees, partially offset by the impact of lost business and client business exits related to the broker-dealer industry consolidations.
|
•
|
Issuer services fees increased
5%
, primarily reflecting
higher money market fees in Corporate Trust and higher fees in Depositary Receipts.
|
•
|
Treasury services fees decreased
1%
, primarily reflecting
higher compensating balance credits provided to clients, which reduced fee revenue and increased net interest revenue, partially offset by higher payments and banking transaction services volumes.
|
Results of Operations
(continued)
|
|
Foreign exchange and other trading revenue
|
|
|
|||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Foreign exchange
|
$
|
687
|
|
$
|
743
|
|
$
|
578
|
|
Other trading revenue (loss)
|
14
|
|
25
|
|
(8
|
)
|
|||
Total foreign exchange and other trading revenue
|
$
|
701
|
|
$
|
768
|
|
$
|
570
|
|
Results of Operations
(continued)
|
|
Investment and other income
|
|
|
|
||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Corporate/bank-owned life insurance
|
$
|
149
|
|
$
|
139
|
|
$
|
131
|
|
Expense reimbursements from joint venture
|
67
|
|
63
|
|
55
|
|
|||
Seed capital gains
(a)
|
44
|
|
35
|
|
20
|
|
|||
Lease-related gains
|
38
|
|
45
|
|
49
|
|
|||
Asset-related gains
|
10
|
|
—
|
|
872
|
|
|||
Equity investment (losses) income
|
(10
|
)
|
(19
|
)
|
1
|
|
|||
Other income
|
43
|
|
53
|
|
84
|
|
|||
Total investment and other income
|
$
|
341
|
|
$
|
316
|
|
$
|
1,212
|
|
(a)
|
Does not include the gain 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 on seed capital investments in consolidated investment management funds was
$16 million
in
2016
,
$18 million
in
2015
and
$79 million
in
2014
.
|
Results of Operations
(continued)
|
|
Net interest revenue
|
|
|
|
2016
|
|
2015
|
|
||||||
|
|
|
|
vs.
|
|
vs.
|
|
||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|||
Net interest revenue (non-FTE)
|
$
|
3,138
|
|
$
|
3,026
|
|
$
|
2,880
|
|
4%
|
|
5%
|
|
Tax equivalent adjustment
|
51
|
|
58
|
|
62
|
|
(12
|
)
|
(6
|
)
|
|||
Net interest revenue (FTE)
|
$
|
3,189
|
|
$
|
3,084
|
|
$
|
2,942
|
|
3%
|
|
5%
|
|
Average interest-earning assets
|
$
|
303,379
|
|
$
|
313,763
|
|
$
|
303,991
|
|
(3)%
|
|
3%
|
|
Net interest margin (FTE)
|
1.05
|
%
|
0.98
|
%
|
0.97
|
%
|
7
|
bps
|
1
|
bps
|
Results of Operations
(continued)
|
|
Average balances and interest rates
|
2016
|
|||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average balance
|
|
|
Interest
|
|
|
Average rates
|
|
||
Assets
|
|
|
|
|
|
|||||
Interest-earning assets:
|
|
|
|
|
|
|||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
14,704
|
|
|
$
|
104
|
|
|
0.70
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
80,593
|
|
|
198
|
|
|
0.25
|
|
||
Federal funds sold and securities purchased under resale agreements
|
25,767
|
|
|
233
|
|
|
0.91
|
|
||
Margin loans
|
18,201
|
|
|
265
|
|
|
1.46
|
|
||
Non-margin loans:
|
|
|
|
|
|
|||||
Domestic offices:
|
|
|
|
|
|
|||||
Consumer
|
8,483
|
|
|
259
|
|
|
3.05
|
|
||
Commercial
|
21,820
|
|
|
417
|
|
|
1.91
|
|
||
Foreign offices
|
13,177
|
|
|
197
|
|
|
1.50
|
|
||
Total non-margin loans
|
43,480
|
|
|
873
|
|
(a)
|
2.01
|
|
||
Securities:
|
|
|
|
|
|
|||||
U.S. government obligations
|
25,074
|
|
|
378
|
|
|
1.51
|
|
||
U.S. government agency obligations
|
56,384
|
|
|
986
|
|
|
1.75
|
|
||
State and political subdivisions – tax-exempt
|
3,703
|
|
|
110
|
|
|
2.96
|
|
||
Other securities:
|
|
|
|
|
|
|||||
Domestic offices
|
12,326
|
|
|
210
|
|
|
1.71
|
|
||
Foreign offices
|
20,664
|
|
|
206
|
|
|
1.00
|
|
||
Total other securities
|
32,990
|
|
|
416
|
|
|
1.26
|
|
||
Trading securities (primarily domestic)
|
2,483
|
|
|
63
|
|
|
2.56
|
|
||
Total securities
|
120,634
|
|
|
1,953
|
|
|
1.62
|
|
||
Total interest-earning assets
|
$
|
303,379
|
|
|
$
|
3,626
|
|
(b)
|
1.20
|
%
|
Allowance for loan losses
|
(158
|
)
|
|
|
|
|
||||
Cash and due from banks
|
4,308
|
|
|
|
|
|
||||
Other assets
|
49,799
|
|
|
|
|
|
||||
Assets of consolidated investment management funds
|
1,149
|
|
|
|
|
|
||||
Total assets
|
$
|
358,477
|
|
|
|
|
|
|||
Liabilities
|
|
|
|
|
|
|||||
Interest-bearing liabilities:
|
|
|
|
|
|
|||||
Interest-bearing deposits:
|
|
|
|
|
|
|||||
Domestic offices:
|
|
|
|
|
|
|||||
Money market rate accounts
|
$
|
7,780
|
|
|
$
|
4
|
|
|
0.06
|
%
|
Savings
|
1,191
|
|
|
4
|
|
|
0.37
|
|
||
Demand deposits
|
2,520
|
|
|
7
|
|
|
0.28
|
|
||
Time deposits
|
43,056
|
|
|
26
|
|
|
0.06
|
|
||
Total domestic offices
|
54,547
|
|
|
41
|
|
|
0.08
|
|
||
Foreign offices:
|
|
|
|
|
|
|||||
Banks
|
13,130
|
|
|
12
|
|
|
0.09
|
|
||
Government and official institutions
|
4,159
|
|
|
—
|
|
|
0.01
|
|
||
Other
|
85,110
|
|
|
(37
|
)
|
|
(0.04
|
)
|
||
Total foreign offices
|
102,399
|
|
|
(25
|
)
|
|
(0.02
|
)
|
||
Total interest-bearing deposits
|
156,946
|
|
|
16
|
|
|
0.01
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
14,489
|
|
|
36
|
|
|
0.25
|
|
||
Trading liabilities
|
711
|
|
|
6
|
|
|
0.89
|
|
||
Other borrowed funds:
|
|
|
|
|
|
|||||
Domestic offices
|
93
|
|
|
4
|
|
|
4.15
|
|
||
Foreign offices
|
753
|
|
|
4
|
|
|
0.51
|
|
||
Total other borrowed funds
|
846
|
|
|
8
|
|
|
0.91
|
|
||
Commercial paper
|
1,337
|
|
|
5
|
|
|
0.37
|
|
||
Payables to customers and broker-dealers
|
16,925
|
|
|
12
|
|
|
0.07
|
|
||
Long-term debt
|
23,334
|
|
|
354
|
|
|
1.52
|
|
||
Total interest-bearing liabilities
|
$
|
214,588
|
|
|
$
|
437
|
|
|
0.20
|
%
|
Total noninterest-bearing deposits
|
82,712
|
|
|
|
|
|
||||
Other liabilities
|
21,683
|
|
|
|
|
|
||||
Liabilities and obligations of consolidated investment management funds
|
245
|
|
|
|
|
|
||||
Total liabilities
|
319,228
|
|
|
|
|
|
||||
Temporary equity
|
|
|
|
|
|
|||||
Redeemable noncontrolling interests
|
182
|
|
|
|
|
|
||||
Permanent equity
|
|
|
|
|
|
|||||
Total BNY Mellon shareholders’ equity
|
38,489
|
|
|
|
|
|
||||
Noncontrolling interests
|
578
|
|
|
|
|
|
||||
Total permanent equity
|
39,067
|
|
|
|
|
|
||||
Total liabilities, temporary equity and permanent equity
|
$
|
358,477
|
|
|
|
|
|
|||
Net interest margin (FTE)
|
|
|
|
|
1.05
|
%
|
||||
Percentage of assets attributable to foreign offices
(c)
|
29
|
%
|
|
|
|
|
||||
Percentage of liabilities attributable to foreign offices
|
36
|
|
|
|
|
|
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)
|
Includes fees of
$10 million
in
2016
. Non-accrual loans are included in average loans; the associated income, which was recognized on a cash basis, is included in interest income.
|
(b)
|
The tax equivalent adjustment was
$51 million
in
2016
, and was based on the applicable tax rate (35%).
|
(c)
|
Includes the Cayman Islands branch office.
|
Results of Operations
(continued)
|
|
Average balances and interest rates
(continued)
|
2015
|
|
2014
|
||||||||||||||||||
(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)
|
$
|
20,531
|
|
|
$
|
104
|
|
|
0.51
|
%
|
|
$
|
35,588
|
|
|
$
|
238
|
|
|
0.67
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
83,029
|
|
|
170
|
|
|
0.20
|
|
|
86,594
|
|
|
207
|
|
|
0.24
|
|
||||
Federal funds sold and securities purchased under resale agreements
|
23,384
|
|
|
147
|
|
|
0.63
|
|
|
14,704
|
|
|
86
|
|
|
0.59
|
|
||||
Margin loans
|
19,917
|
|
|
207
|
|
|
1.04
|
|
|
17,484
|
|
|
182
|
|
|
1.04
|
|
||||
Non-margin loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic offices:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer
|
7,145
|
|
|
217
|
|
|
3.03
|
|
|
6,461
|
|
|
199
|
|
|
3.08
|
|
||||
Commercial
|
19,647
|
|
|
346
|
|
|
1.76
|
|
|
16,923
|
|
|
328
|
|
|
1.93
|
|
||||
Foreign offices
|
13,963
|
|
|
164
|
|
|
1.18
|
|
|
13,342
|
|
|
170
|
|
|
1.28
|
|
||||
Total non-margin loans
|
40,755
|
|
|
727
|
|
(a)
|
1.78
|
|
|
36,726
|
|
|
697
|
|
(a)
|
1.90
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
25,904
|
|
|
378
|
|
|
1.46
|
|
|
20,545
|
|
|
310
|
|
|
1.51
|
|
||||
U.S. government agency obligations
|
55,044
|
|
|
967
|
|
|
1.76
|
|
|
45,313
|
|
|
781
|
|
|
1.72
|
|
||||
State and political subdivisions – tax-exempt
|
4,712
|
|
|
128
|
|
|
2.73
|
|
|
6,070
|
|
|
154
|
|
|
2.56
|
|
||||
Other securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic offices
|
14,644
|
|
|
302
|
|
|
2.06
|
|
|
15,116
|
|
|
235
|
|
|
1.56
|
|
||||
Foreign offices
|
22,889
|
|
|
176
|
|
|
0.77
|
|
|
20,827
|
|
|
283
|
|
|
1.36
|
|
||||
Total other securities
|
37,533
|
|
|
478
|
|
|
1.27
|
|
|
35,943
|
|
|
518
|
|
|
1.44
|
|
||||
Trading securities (primarily domestic)
|
2,954
|
|
|
78
|
|
|
2.65
|
|
|
5,024
|
|
|
123
|
|
|
2.43
|
|
||||
Total securities
|
126,147
|
|
|
2,029
|
|
|
1.61
|
|
|
112,895
|
|
|
1,886
|
|
|
1.67
|
|
||||
Total interest-earning assets
|
$
|
313,763
|
|
|
$
|
3,384
|
|
(b)
|
1.08
|
%
|
|
$
|
303,991
|
|
|
$
|
3,296
|
|
(b)
|
1.08
|
%
|
Allowance for loan losses
|
(186
|
)
|
|
|
|
|
|
(195
|
)
|
|
|
|
|
||||||||
Cash and due from banks
|
6,180
|
|
|
|
|
|
|
5,472
|
|
|
|
|
|
||||||||
Other assets
|
50,320
|
|
|
|
|
|
|
52,648
|
|
|
|
|
|
||||||||
Assets of consolidated investment management funds
|
2,110
|
|
|
|
|
|
|
10,650
|
|
|
|
|
|
||||||||
Total assets
|
$
|
372,187
|
|
|
|
|
|
|
$
|
372,566
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic offices:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market rate accounts
|
$
|
7,272
|
|
|
$
|
6
|
|
|
0.08
|
%
|
|
$
|
5,605
|
|
|
$
|
7
|
|
|
0.12
|
%
|
Savings
|
1,312
|
|
|
4
|
|
|
0.28
|
|
|
1,186
|
|
|
3
|
|
|
0.28
|
|
||||
Demand deposits
|
2,792
|
|
|
6
|
|
|
0.23
|
|
|
2,810
|
|
|
4
|
|
|
0.14
|
|
||||
Time deposits
|
44,162
|
|
|
14
|
|
|
0.03
|
|
|
41,779
|
|
|
15
|
|
|
0.04
|
|
||||
Total domestic office
|
55,538
|
|
|
30
|
|
|
0.06
|
|
|
51,380
|
|
|
29
|
|
|
0.06
|
|
||||
Foreign offices:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Banks
|
16,626
|
|
|
10
|
|
|
0.06
|
|
|
7,303
|
|
|
31
|
|
|
0.42
|
|
||||
Government and official institutions
|
5,591
|
|
|
—
|
|
|
—
|
|
|
4,572
|
|
|
—
|
|
|
0.01
|
|
||||
Other
|
87,341
|
|
|
(3
|
)
|
|
—
|
|
|
97,543
|
|
|
23
|
|
|
0.02
|
|
||||
Total foreign offices
|
109,558
|
|
|
7
|
|
|
0.01
|
|
|
109,418
|
|
|
54
|
|
|
0.05
|
|
||||
Total interest-bearing deposits
|
165,096
|
|
|
37
|
|
|
0.02
|
|
|
160,798
|
|
|
83
|
|
|
0.05
|
|
||||
Federal funds purchased and securities sold under repurchase agreements
|
16,452
|
|
|
(6
|
)
|
|
(0.04
|
)
|
|
18,631
|
|
|
(13
|
)
|
|
(0.07
|
)
|
||||
Trading liabilities
|
634
|
|
|
9
|
|
|
1.39
|
|
|
2,199
|
|
|
25
|
|
|
1.12
|
|
||||
Other borrowed funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic offices
|
162
|
|
|
4
|
|
|
2.77
|
|
|
183
|
|
|
2
|
|
|
1.32
|
|
||||
Foreign offices
|
652
|
|
|
5
|
|
|
0.71
|
|
|
844
|
|
|
4
|
|
|
0.45
|
|
||||
Total other borrowed funds
|
814
|
|
|
9
|
|
|
1.12
|
|
|
1,027
|
|
|
6
|
|
|
0.61
|
|
||||
Commercial paper
|
1,549
|
|
|
2
|
|
|
0.10
|
|
|
2,546
|
|
|
2
|
|
|
0.08
|
|
||||
Payables to customers and broker-dealers
|
11,649
|
|
|
7
|
|
|
0.06
|
|
|
9,502
|
|
|
9
|
|
|
0.09
|
|
||||
Long-term debt
|
20,832
|
|
|
242
|
|
|
1.16
|
|
|
20,601
|
|
|
242
|
|
|
1.17
|
|
||||
Total interest-bearing liabilities
|
$
|
217,026
|
|
|
$
|
300
|
|
|
0.14
|
%
|
|
$
|
215,304
|
|
|
$
|
354
|
|
|
0.16
|
%
|
Total noninterest-bearing deposits
|
86,338
|
|
|
|
|
|
|
81,741
|
|
|
|
|
|
||||||||
Other liabilities
|
29,127
|
|
|
|
|
|
|
26,912
|
|
|
|
|
|
||||||||
Liabilities and obligations of consolidated investment management funds
|
832
|
|
|
|
|
|
|
9,315
|
|
|
|
|
|
||||||||
Total liabilities
|
333,323
|
|
|
|
|
|
|
333,272
|
|
|
|
|
|
||||||||
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
240
|
|
|
|
|
|
|
242
|
|
|
|
|
|
||||||||
Permanent equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total BNY Mellon shareholders’ equity
|
37,812
|
|
|
|
|
|
|
38,180
|
|
|
|
|
|
||||||||
Noncontrolling interests
|
812
|
|
|
|
|
|
|
872
|
|
|
|
|
|
||||||||
Total permanent equity
|
38,624
|
|
|
|
|
|
|
39,052
|
|
|
|
|
|
||||||||
Total liabilities, temporary equity and permanent equity
|
$
|
372,187
|
|
|
|
|
|
|
$
|
372,566
|
|
|
|
|
|
||||||
Net interest margin (FTE)
|
|
|
|
|
0.98
|
%
|
|
|
|
|
|
0.97
|
%
|
||||||||
Percentage of assets attributable to foreign offices
(c)
|
30
|
%
|
|
|
|
|
|
31
|
%
|
|
|
|
|
||||||||
Percentage of liabilities attributable to foreign offices
|
37
|
|
|
|
|
|
|
35
|
|
|
|
|
|
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)
|
Includes fees of
$21 million
in
2015
and
$29 million
in
2014
. Non-accrual loans are included in the average loans; the associated income, which was recognized on a cash basis, is included in interest income.
|
(b)
|
The tax equivalent adjustment was
$58 million
in
2015
and
$62 million
in
2014
, and was based on the applicable tax rate (35%).
|
(c)
|
Includes the Cayman Islands branch office.
|
Results of Operations
(continued)
|
|
Noninterest expense
|
|
|
|
2016
|
|
2015
|
|
||||||
|
|
|
|
vs.
|
|
vs.
|
|
||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|||
Staff
|
$
|
5,733
|
|
$
|
5,837
|
|
$
|
5,845
|
|
(2
|
)%
|
—
|
%
|
Professional, legal and other purchased services
|
1,185
|
|
1,230
|
|
1,339
|
|
(4
|
)
|
(8
|
)
|
|||
Software
|
647
|
|
627
|
|
620
|
|
3
|
|
1
|
|
|||
Net occupancy
|
590
|
|
600
|
|
610
|
|
(2
|
)
|
(2
|
)
|
|||
Distribution and servicing
|
405
|
|
381
|
|
428
|
|
6
|
|
(11
|
)
|
|||
Furniture and equipment
|
247
|
|
280
|
|
322
|
|
(12
|
)
|
(13
|
)
|
|||
Sub-custodian
|
245
|
|
270
|
|
286
|
|
(9
|
)
|
(6
|
)
|
|||
Business development
|
245
|
|
267
|
|
268
|
|
(8
|
)
|
—
|
|
|||
Other
|
940
|
|
961
|
|
1,031
|
|
(2
|
)
|
(7
|
)
|
|||
Amortization of intangible assets
|
237
|
|
261
|
|
298
|
|
(9
|
)
|
(12
|
)
|
|||
M&I, litigation and restructuring charges
|
49
|
|
85
|
|
1,130
|
|
N/M
|
N/M
|
|||||
Total noninterest expense – GAAP
|
$
|
10,523
|
|
$
|
10,799
|
|
$
|
12,177
|
|
(3
|
)%
|
(11
|
)%
|
|
|
|
|
|
|
||||||||
Staff expense as a percentage of total revenue
|
38
|
%
|
38
|
%
|
37
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
Full-time employees at period end
|
52,000
|
|
51,200
|
|
50,300
|
|
2
|
%
|
2
|
%
|
|||
|
|
|
|
|
|
||||||||
Memo:
|
|
|
|
|
|
||||||||
Adjusted total noninterest expense excluding amortization of intangible assets, M&I, litigation and restructuring charges and the charge related to investment management funds, net of incentives – Non-GAAP
(a)
|
$
|
10,237
|
|
$
|
10,453
|
|
$
|
10,645
|
|
(2
|
)%
|
(2
|
)%
|
(a)
|
The charge related to investment management funds, net of incentives, was $104 million in 2014.
|
•
|
compensation expense, which includes:
|
•
|
incentive expense, which includes:
|
•
|
employee benefit expense, primarily medical benefits, payroll taxes, pension and other retirement benefits.
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
Key market metrics
|
|
|
|
Increase (Decrease)
|
|||||||||
|
|
|
2016 vs.
|
|
2015 vs.
|
|
|||||||
2016
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||
Standard & Poor’s (“S&P”) 500 Index
(a)
|
2239
|
|
2044
|
|
2059
|
|
10 %
|
|
(1) %
|
|
|||
S&P 500 Index – daily average
|
2095
|
|
2061
|
|
1931
|
|
2
|
|
7
|
|
|||
FTSE 100 Index
(a)
|
7143
|
|
6242
|
|
6566
|
|
14
|
|
(5
|
)
|
|||
FTSE 100 Index – daily average
|
6474
|
|
6590
|
|
6681
|
|
(2
|
)
|
(1
|
)
|
|||
MSCI EAFE
(a)
|
1684
|
|
1716
|
|
1775
|
|
(2
|
)
|
(3
|
)
|
|||
MSCI EAFE – daily average
|
1645
|
|
1810
|
|
1888
|
|
(9
|
)
|
(4
|
)
|
|||
Barclays Capital Global Aggregate Bond
SM
Index
(a)(b)
|
451
|
|
442
|
|
457
|
|
2
|
|
(3
|
)
|
|||
NYSE and NASDAQ share volume
(in billions)
|
797
|
|
776
|
|
754
|
|
3
|
|
3
|
|
|||
JPMorgan G7 Volatility Index – daily average
(c)
|
10.54
|
|
9.97
|
|
7.19
|
|
6
|
|
39
|
|
|||
Average interest on excess reserves paid by the Federal Reserve
|
0.51
|
%
|
0.26
|
%
|
0.25
|
%
|
25 bps
|
|
1 bps
|
|
|||
Foreign exchange rates vs. U.S. dollar:
|
|
|
|
|
|
||||||||
British pound
(a)
|
$
|
1.23
|
|
$
|
1.48
|
|
$
|
1.56
|
|
(17) %
|
|
(5) %
|
|
British pound – average rate
|
1.35
|
|
1.53
|
|
1.65
|
|
(12
|
)
|
(7
|
)
|
|||
Euro
(a)
|
1.05
|
|
1.09
|
|
1.22
|
|
(4
|
)
|
(11
|
)
|
|||
Euro – average rate
|
1.11
|
|
1.11
|
|
1.33
|
|
—
|
|
(17
|
)
|
(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.
|
Results of Operations
(continued)
|
|
|
|
|
|
2016
|
|
2015
|
|
||||||
(dollar amounts in millions)
|
|
|
|
vs.
|
|
vs.
|
|
||||||
2016
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||
Revenue:
|
|
|
|
|
|
||||||||
Investment management fees:
|
|
|
|
|
|
||||||||
Mutual funds
|
$
|
1,210
|
|
$
|
1,208
|
|
$
|
1,231
|
|
—
|
%
|
(2
|
)%
|
Institutional clients
|
1,380
|
|
1,425
|
|
1,466
|
|
(3
|
)
|
(3
|
)
|
|||
Wealth management
|
642
|
|
630
|
|
624
|
|
2
|
|
1
|
|
|||
Investment management fees
(a)
|
3,232
|
|
3,263
|
|
3,321
|
|
(1
|
)
|
(2
|
)
|
|||
Performance fees
|
60
|
|
97
|
|
111
|
|
(38
|
)
|
(13
|
)
|
|||
Investment management and performance fees
|
3,292
|
|
3,360
|
|
3,432
|
|
(2
|
)
|
(2
|
)
|
|||
Distribution and servicing
|
192
|
|
152
|
|
157
|
|
26
|
|
(3
|
)
|
|||
Other
(a)
|
(60
|
)
|
75
|
|
68
|
|
N/M
|
|
N/M
|
|
|||
Total fee and other revenue
(a)
|
3,424
|
|
3,587
|
|
3,657
|
|
(5
|
)
|
(2
|
)
|
|||
Net interest revenue
|
327
|
|
319
|
|
274
|
|
3
|
|
16
|
|
|||
Total revenue
|
3,751
|
|
3,906
|
|
3,931
|
|
(4
|
)
|
(1
|
)
|
|||
Provision for credit losses
|
6
|
|
(1
|
)
|
—
|
|
N/M
|
|
N/M
|
|
|||
Noninterest expense (ex. amortization of intangible assets and the charge related to investment management funds, net of incentives)
|
2,696
|
|
2,762
|
|
2,817
|
|
(2
|
)
|
(2
|
)
|
|||
Amortization of intangible assets
|
82
|
|
97
|
|
118
|
|
(15
|
)
|
(18
|
)
|
|||
Charge related to investment management funds, net of incentives
|
—
|
|
—
|
|
104
|
|
N/M
|
|
N/M
|
|
|||
Total noninterest expense
|
2,778
|
|
2,859
|
|
3,039
|
|
(3
|
)
|
(6
|
)
|
|||
Income before taxes
|
$
|
967
|
|
$
|
1,048
|
|
$
|
892
|
|
(8
|
)%
|
17
|
%
|
Income before taxes (ex. amortization of intangible assets and the charge related to investment management funds, net of incentives)
–
Non-GAAP
|
$
|
1,049
|
|
$
|
1,145
|
|
$
|
1,114
|
|
(8
|
)%
|
3
|
%
|
|
|
|
|
|
|
||||||||
Pre-tax operating margin
|
26
|
%
|
27
|
%
|
23
|
%
|
|
|
|||||
Adjusted pre-tax operating margin
–
Non-GAAP
(b)
|
32
|
%
|
32
|
%
|
32
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
Average balances:
|
|
|
|
|
|
||||||||
Average loans
|
$
|
15,015
|
|
$
|
12,545
|
|
$
|
10,589
|
|
20
|
%
|
18
|
%
|
Average deposits
|
$
|
15,650
|
|
$
|
15,160
|
|
$
|
14,154
|
|
3
|
%
|
7
|
%
|
(a)
|
Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests.
See page
126
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 amortization of intangible assets, provision for credit losses, the charge recorded in 2014 related to investment management funds, net of incentives and distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
121
for the reconciliation of this Non-GAAP measure.
|
Results of Operations
(continued)
|
|
AUM trends
(a)
|
|
|
|
|
|
||||||||||
(dollar amounts in billions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|||||
AUM at period end, by product type:
|
|
|
|
|
|
||||||||||
Equity
|
$
|
228
|
|
$
|
224
|
|
$
|
260
|
|
$
|
272
|
|
$
|
232
|
|
Fixed income
|
214
|
|
216
|
|
204
|
|
200
|
|
188
|
|
|||||
Index
|
316
|
|
329
|
|
356
|
|
322
|
|
239
|
|
|||||
Liability-driven investments
(b)
|
553
|
|
514
|
|
504
|
|
403
|
|
329
|
|
|||||
Alternative investments
|
69
|
|
63
|
|
65
|
|
61
|
|
59
|
|
|||||
Cash
|
268
|
|
279
|
|
297
|
|
299
|
|
302
|
|
|||||
Total AUM
|
$
|
1,648
|
|
$
|
1,625
|
|
$
|
1,686
|
|
$
|
1,557
|
|
$
|
1,349
|
|
|
|
|
|
|
|
||||||||||
AUM at period end, by client type:
|
|
|
|
|
|
||||||||||
Institutional
|
$
|
1,182
|
|
$
|
1,127
|
|
$
|
1,164
|
|
$
|
1,047
|
|
$
|
864
|
|
Mutual funds
|
381
|
|
420
|
|
438
|
|
426
|
|
410
|
|
|||||
Private client
|
85
|
|
78
|
|
84
|
|
84
|
|
75
|
|
|||||
Total AUM
|
$
|
1,648
|
|
$
|
1,625
|
|
$
|
1,686
|
|
$
|
1,557
|
|
$
|
1,349
|
|
|
|
|
|
|
|
||||||||||
Changes in AUM:
|
|
|
|
|
|
||||||||||
Beginning balance of AUM
|
$
|
1,625
|
|
$
|
1,686
|
|
$
|
1,557
|
|
$
|
1,349
|
|
$
|
1,226
|
|
Net inflows (outflows):
|
|
|
|
|
|
||||||||||
Long-term strategies:
|
|
|
|
|
|
||||||||||
Equity
|
(12
|
)
|
(31
|
)
|
(13
|
)
|
—
|
|
—
|
|
|||||
Fixed income
|
(3
|
)
|
(1
|
)
|
4
|
|
11
|
|
20
|
|
|||||
Liability-driven investments
(b)
|
26
|
|
35
|
|
46
|
|
65
|
|
25
|
|
|||||
Alternative investments
|
6
|
|
7
|
|
6
|
|
2
|
|
3
|
|
|||||
Total long-term active strategies inflows
|
17
|
|
10
|
|
43
|
|
78
|
|
48
|
|
|||||
Index
|
(31
|
)
|
(27
|
)
|
5
|
|
20
|
|
9
|
|
|||||
Total long-term strategies (outflows) inflows
|
(14
|
)
|
(17
|
)
|
48
|
|
98
|
|
57
|
|
|||||
Short term strategies:
|
|
|
|
|
|
||||||||||
Cash
|
(9
|
)
|
(18
|
)
|
—
|
|
5
|
|
(20
|
)
|
|||||
Total net (outflows) inflows
|
(23
|
)
|
(35
|
)
|
48
|
|
103
|
|
37
|
|
|||||
Net market impact/other
|
181
|
|
(8
|
)
|
122
|
|
94
|
|
73
|
|
|||||
Net currency impact
|
(137
|
)
|
(36
|
)
|
(41
|
)
|
11
|
|
13
|
|
|||||
Acquisition
|
2
|
|
18
|
|
—
|
|
—
|
|
—
|
|
|||||
Ending balance of AUM
|
$
|
1,648
|
|
$
|
1,625
|
|
$
|
1,686
|
|
$
|
1,557
|
|
$
|
1,349
|
|
(a)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business and the Other segment.
|
(b)
|
Includes currency overlay AUM.
|
Results of Operations
(continued)
|
|
•
|
the beginning level of AUM;
|
•
|
the net flows of new assets during the period resulting from new business wins and existing client enrichments, reduced by the loss of clients and withdrawals; and
|
•
|
the impact of market price appreciation or depreciation, acquisitions or divestitures and foreign exchange rates.
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
(dollars in millions, unless otherwise noted)
|
|
|
|
2016
|
|
2015
|
|
||||||
|
|
|
vs.
|
|
vs.
|
|
|||||||
2016
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||
Revenue:
|
|
|
|
|
|
||||||||
Investment services fees:
|
|
|
|
|
|
||||||||
Asset servicing
|
$
|
4,141
|
|
$
|
4,098
|
|
$
|
3,983
|
|
1
|
%
|
3
|
%
|
Clearing services
|
1,399
|
|
1,370
|
|
1,329
|
|
2
|
|
3
|
|
|||
Issuer services
|
1,024
|
|
976
|
|
966
|
|
5
|
|
1
|
|
|||
Treasury services
|
541
|
|
546
|
|
555
|
|
(1
|
)
|
(2
|
)
|
|||
Total investment services fees
|
7,105
|
|
6,990
|
|
6,833
|
|
2
|
|
2
|
|
|||
Foreign exchange and other trading revenue
|
663
|
|
722
|
|
643
|
|
(8
|
)
|
12
|
|
|||
Other
(a)
|
531
|
|
465
|
|
406
|
|
14
|
|
15
|
|
|||
Total fee and other revenue
|
8,299
|
|
8,177
|
|
7,882
|
|
1
|
|
4
|
|
|||
Net interest revenue
|
2,797
|
|
2,622
|
|
2,468
|
|
7
|
|
6
|
|
|||
Total revenue
|
11,096
|
|
10,799
|
|
10,350
|
|
3
|
|
4
|
|
|||
Provision for credit losses
|
8
|
|
28
|
|
(21
|
)
|
N/M
|
N/M
|
|||||
Noninterest expense (ex. amortization of intangible assets)
|
7,187
|
|
7,340
|
|
8,066
|
|
(2
|
)
|
(9
|
)
|
|||
Amortization of intangible assets
|
155
|
|
162
|
|
175
|
|
(4
|
)
|
(7
|
)
|
|||
Total noninterest expense
|
7,342
|
|
7,502
|
|
8,241
|
|
(2
|
)
|
(9
|
)
|
|||
Income before taxes
|
$
|
3,746
|
|
$
|
3,269
|
|
$
|
2,130
|
|
15
|
%
|
53
|
%
|
Income before taxes (ex. amortization of intangible assets)
–
Non-GAAP
|
$
|
3,901
|
|
$
|
3,431
|
|
$
|
2,305
|
|
14
|
%
|
49
|
%
|
|
|
|
|
|
|
||||||||
Pre-tax operating margin
|
34
|
%
|
30
|
%
|
21
|
%
|
|
|
|||||
Adjusted pre-tax operating margin (ex. provision for credit losses and amortization of intangible assets)
–
Non-GAAP
|
35
|
%
|
32
|
%
|
22
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
Investment services fees as a percentage of noninterest
expense (ex. amortization of intangible assets)
|
99
|
%
|
95
|
%
|
85
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
Securities lending revenue
|
$
|
170
|
|
$
|
153
|
|
$
|
135
|
|
11
|
%
|
13
|
%
|
|
|
|
|
|
|
||||||||
Metrics:
|
|
|
|
|
|
||||||||
Average loans
|
$
|
44,740
|
|
$
|
45,743
|
|
$
|
40,137
|
|
(2
|
)%
|
14
|
%
|
Average deposits
|
$
|
217,882
|
|
$
|
233,833
|
|
$
|
225,503
|
|
(7
|
)%
|
4
|
%
|
|
|
|
|
|
|
||||||||
AUC/A at period end
(in trillions) (b)
|
$
|
29.9
|
|
$
|
28.9
|
|
$
|
28.5
|
|
3
|
%
|
1
|
%
|
Market value of securities on loan at period end
(in billions) (c)
|
$
|
296
|
|
$
|
277
|
|
$
|
289
|
|
7
|
%
|
(4
|
)%
|
|
|
|
|
|
|
|
|
||||||
Asset servicing:
|
|
|
|
|
|
|
|
||||||
Estimated new business wins (AUC/A)
(in billions)
|
$
|
498
|
|
$
|
1,191
|
|
$
|
554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depositary Receipts:
|
|
|
|
|
|
|
|
||||||
Number of sponsored programs
|
1,062
|
|
1,145
|
|
1,279
|
|
(7
|
)%
|
(10
|
)%
|
|||
|
|
|
|
|
|
|
|
||||||
Clearing services:
|
|
|
|
|
|
|
|
||||||
Average active clearing accounts (U.S. platform) (
in thousands)
|
5,949
|
|
6,023
|
|
5,788
|
|
(1
|
)%
|
4
|
%
|
|||
Average long-term mutual fund assets (U.S. platform)
|
$
|
431,937
|
|
$
|
451,924
|
|
$
|
434,959
|
|
(4
|
)%
|
4
|
%
|
Average investor margin loans (U.S. platform)
|
$
|
10,772
|
|
$
|
11,627
|
|
$
|
9,687
|
|
(7
|
)%
|
20
|
%
|
|
|
|
|
|
|
|
|
||||||
Broker-Dealer:
|
|
|
|
|
|
|
|
||||||
Average tri-party repo balances (
in billions)
|
$
|
2,183
|
|
$
|
2,156
|
|
$
|
2,042
|
|
1
|
%
|
6
|
%
|
(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
Dec. 31, 2016
,
$1.0 trillion
at
Dec. 31, 2015
and
$1.1 trillion
at
Dec. 31, 2014
.
|
(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
$63 billion
at
Dec. 31, 2016
,
$55 billion
at
Dec. 31, 2015
and
$65 billion
at
Dec. 31, 2014
.
|
Results of Operations
(continued)
|
|
•
|
We are a leader in both global and U.S. government securities clearance, settling securities transactions in over 100 markets.
|
•
|
We are a leader in servicing tri-party repo collateral with approximately $2.3 trillion serviced globally.
|
•
|
We service approximately $1.5 trillion, or approximately 86%, of the $1.8 trillion tri-party repo market in the U.S.
|
•
|
Our agency securities lending program is one of the largest lenders of U.S and non-U.S. securities, servicing a lendable asset pool of approximately $3.0 trillion in 33 separate markets.
|
•
|
We serve as trustee and/or paying agent on more than 50,000 debt-related issues globally.
|
•
|
As one of the largest providers of depositary receipts services in the world, we served as depositary for
1,062
sponsored American and global depositary receipt programs at
Dec. 31, 2016
, acting in partnership with leading companies from 63 countries—an estimated 56% market share.
|
Results of Operations
(continued)
|
|
•
|
Asset servicing fees (global custody, accounting, broker-dealer services, securities lending, collateral and liquidity services) were
$4.141 billion
compared with
$4.098 billion
in
2015
. The increase 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 retail transfer agency business.
|
•
|
Clearing services fees were
$1.399 billion
compared with
$1.370 billion
in
2015
. The increase was primarily driven by
higher money market fees, partially offset by the impact of lost business and client business exits related to the broker-dealer industry consolidations.
|
•
|
Issuer services fees (Corporate Trust and Depositary Receipts) were
$1.024 billion
compared with
$976 million
in
2015
. The increase was driven by
higher money market fees in Corporate Trust and higher fees in Depositary Receipts.
|
Results of Operations
(continued)
|
|
•
|
Treasury services fees (global payments, trade finance and cash management) were
$541 million
compared with
$546 million
in
2015
. The decrease reflects
higher compensating balance credits provided to clients, which reduced fee revenue and increased net interest revenue, partially offset by higher payments and banking transaction services volumes.
|
|
|
|
|
||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Revenue:
|
|
|
|
||||||
Fee and other revenue
|
$
|
366
|
|
$
|
336
|
|
$
|
1,189
|
|
Net interest revenue
|
14
|
|
85
|
|
138
|
|
|||
Total revenue
|
380
|
|
421
|
|
1,327
|
|
|||
Provision for credit losses
|
(25
|
)
|
133
|
|
(27
|
)
|
|||
Noninterest expense (ex. amortization of intangible assets and M&I and restructuring charges (recoveries))
|
390
|
|
434
|
|
715
|
|
|||
Amortization of intangible assets
|
—
|
|
2
|
|
5
|
|
|||
M&I and restructuring charges (recoveries)
|
4
|
|
(2
|
)
|
177
|
|
|||
Total noninterest expense
|
394
|
|
434
|
|
897
|
|
|||
Income (loss) before taxes
|
$
|
11
|
|
$
|
(146
|
)
|
$
|
457
|
|
Income (loss) before taxes (ex. amortization of
intangible assets and M&I and restructuring charges (recoveries))
–
Non-GAAP
|
$
|
15
|
|
$
|
(146
|
)
|
$
|
639
|
|
|
|
|
|
||||||
Average loans and leases
|
$
|
1,926
|
|
$
|
2,384
|
|
$
|
3,484
|
|
Results of Operations
(continued)
|
|
•
|
the leasing portfolio;
|
•
|
corporate treasury activities, including our investment securities portfolio;
|
•
|
derivatives and other trading activity;
|
•
|
corporate and bank-owned life insurance and renewable energy investments; and
|
•
|
business exits.
|
•
|
net interest revenue and lease-related gains (losses) from leasing operations;
|
•
|
net interest revenue from corporate treasury activity;
|
•
|
fee and other revenue from corporate and bank- owned life insurance and business exits; and
|
•
|
gains (losses) associated with the valuation of investment securities and other assets.
|
•
|
M&I expenses;
|
•
|
restructuring charges recorded relate to corporate-level initiatives and were therefore recorded in the Other segment;
|
•
|
direct expenses supporting leasing, investing, and funding activities; and
|
•
|
expenses not directly attributable to the Investment Management and Investment Services operations.
|
Results of Operations
(continued)
|
|
Foreign exchange rates
vs. U.S. dollar
|
2016
|
|
2015
|
|
2014
|
|
|||
Spot rate (at Dec. 31):
|
|
|
|
||||||
British pound
|
$
|
1.2323
|
|
$
|
1.4799
|
|
$
|
1.5609
|
|
Euro
|
1.0538
|
|
1.0883
|
|
1.2155
|
|
|||
Yearly average rate:
|
|
|
|
||||||
British pound
|
$
|
1.3548
|
|
$
|
1.5282
|
|
$
|
1.6475
|
|
Euro
|
1.1065
|
|
1.1100
|
|
1.3257
|
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
Cross-border outstandings
|
Banks and other financial institutions
(a)
|
|
|
Public sector
|
|
|
Commercial, industrial
and other
|
|
|
Total
cross-border
outstandings
(b)
|
|
|||||||
(in millions)
|
|
|
|
|||||||||||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||
France*
|
|
$
|
1,662
|
|
|
$
|
2,559
|
|
|
|
$
|
109
|
|
|
|
$
|
4,330
|
|
Germany*
|
|
2,398
|
|
|
1,408
|
|
|
|
357
|
|
|
|
4,163
|
|
||||
Canada*
|
|
2,199
|
|
|
1
|
|
|
|
1,211
|
|
|
|
3,411
|
|
||||
United Kingdom**
|
|
1,325
|
|
|
1,584
|
|
|
|
405
|
|
|
|
3,314
|
|
||||
2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||
United Kingdom*
|
|
$
|
1,732
|
|
|
$
|
569
|
|
|
|
$
|
2,265
|
|
|
|
$
|
4,566
|
|
France*
|
|
968
|
|
|
2,855
|
|
|
|
120
|
|
|
|
3,943
|
|
||||
Germany**
|
|
1,882
|
|
|
1,666
|
|
|
|
363
|
|
|
|
3,911
|
|
||||
2014:
|
|
|
|
|
|
|
|
|
|
|
||||||||
France*
|
|
$
|
410
|
|
|
$
|
3,770
|
|
|
|
$
|
183
|
|
|
|
$
|
4,363
|
|
United Kingdom**
|
|
2,583
|
|
|
544
|
|
|
|
655
|
|
|
|
3,782
|
|
||||
China**
|
|
3,459
|
|
|
—
|
|
|
|
30
|
|
|
|
3,489
|
|
||||
Germany**
|
|
1,207
|
|
|
1,505
|
|
|
|
569
|
|
|
|
3,281
|
|
||||
Netherlands**
|
|
526
|
|
|
1,737
|
|
|
|
664
|
|
(c)
|
|
2,927
|
|
(a)
|
Primarily short-term interest-bearing deposits with banks. Also includes global trade finance loans.
|
(b)
|
Excludes assets of consolidated investment management funds.
|
(c)
|
Primarily European floating rate notes.
|
Results of Operations
(continued)
|
|
•
|
an allowance for impaired credits of $1 million or greater;
|
•
|
an allowance for higher risk-rated credits and pass-rated credits; and
|
•
|
an allowance for residential mortgage loans.
|
•
|
Nonperforming loans to total non-margin loans;
|
•
|
Criticized assets to total loans and lending-related commitments;
|
•
|
Borrower concentration; and
|
•
|
Significant concentrations in high-risk industries and countries.
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
(dollars in millions,
except per share
amounts)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
||||
Domestic plans:
|
|
|
|
|
||||||||
Long-term rate of return on plan assets
|
6.625
|
%
|
7.00
|
%
|
7.25
|
%
|
7.25
|
%
|
||||
Discount rate
(a)
|
4.35
|
%
|
4.48
|
%
|
4.13
|
%
|
4.99
|
%
|
||||
Market-related value of plan assets
(b)
|
$
|
5,026
|
|
$
|
4,830
|
|
$
|
4,696
|
|
$
|
4,430
|
|
ESOP stock price
(b)
|
$
|
44.19
|
|
$
|
41.66
|
|
$
|
39.18
|
|
$
|
32.81
|
|
Net U.S. pension credit/(expense)
|
N/A
|
|
$
|
77
|
|
$
|
52
|
|
$
|
(34
|
)
|
|
All other net pension credit/(expense)
|
N/A
|
|
(33
|
)
|
(42
|
)
|
(34
|
)
|
||||
Total net pension credit/(expense)
|
N/A
|
|
$
|
44
|
|
$
|
10
|
|
$
|
(68
|
)
|
(a)
|
As a result of the amendment to the U.S. pension plans, liabilities for 2015 were re-measured as of Jan. 29, 2015 at a discount rate of 3.73%.
|
(b)
|
Market-related value of plan assets and ESOP stock price are for the beginning of the plan year. See “Summary of significant accounting and reporting policies” in Note 1 of the Notes to Consolidated Financial Statements. The market-related value of plan assets was $4,713 million as of the Jan. 29, 2015 re-measurement.
|
Pension expense
|
||||||||||||||||
(dollar amounts in millions, except per share amounts)
|
Increase in
pension expense
|
|
(Decrease) in
pension expense
|
|
||||||||||||
Long-term rate of return on plan assets
|
(100
|
)
|
bps
|
(50
|
)
|
bps
|
50
|
|
bps
|
100
|
|
bps
|
||||
Change in pension expense
|
$
|
60
|
|
|
$
|
30
|
|
|
$
|
(30
|
)
|
|
$
|
(60
|
)
|
|
Discount rate
|
(50
|
)
|
bps
|
(25
|
)
|
bps
|
25
|
|
bps
|
50
|
|
bps
|
||||
Change in pension expense
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
(14
|
)
|
|
$
|
(27
|
)
|
|
Market-related value of plan assets
|
(20
|
)
|
%
|
(10
|
)
|
%
|
10
|
|
%
|
20
|
|
%
|
||||
Change in pension expense
|
$
|
170
|
|
|
$
|
85
|
|
|
$
|
(84
|
)
|
|
$
|
(159
|
)
|
|
ESOP stock price
|
$
|
(10
|
)
|
|
$
|
(5
|
)
|
|
$
|
5
|
|
|
$
|
10
|
|
|
Change in pension expense
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
Investment securities
portfolio
(dollars in millions)
|
Dec. 31, 2015
|
|
|
2016
change in
unrealized
gain (loss)
|
|
Dec. 31, 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
|
$
|
49,464
|
|
|
$
|
(314
|
)
|
$
|
48,150
|
|
$
|
47,715
|
|
|
99
|
%
|
$
|
(435
|
)
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S. Treasury
|
23,920
|
|
|
(147
|
)
|
25,490
|
|
25,244
|
|
|
99
|
|
(246
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Sovereign debt/sovereign guaranteed
(b)
|
16,708
|
|
|
80
|
|
14,159
|
|
14,373
|
|
|
102
|
|
214
|
|
|
75
|
|
5
|
|
20
|
|
—
|
|
—
|
|
|||||
Non-agency RMBS
(c)
|
1,789
|
|
|
(77
|
)
|
1,080
|
|
1,357
|
|
|
80
|
|
277
|
|
|
—
|
|
1
|
|
2
|
|
87
|
|
10
|
|
|||||
Non-agency RMBS
|
914
|
|
|
6
|
|
698
|
|
718
|
|
|
94
|
|
20
|
|
|
8
|
|
4
|
|
15
|
|
72
|
|
1
|
|
|||||
European floating rate
notes
(d)
|
1,345
|
|
|
13
|
|
717
|
|
706
|
|
|
98
|
|
(11
|
)
|
|
68
|
|
24
|
|
8
|
|
—
|
|
—
|
|
|||||
Commercial MBS
|
5,826
|
|
|
(27
|
)
|
8,106
|
|
8,037
|
|
|
99
|
|
(69
|
)
|
|
98
|
|
2
|
|
—
|
|
—
|
|
—
|
|
|||||
State and political subdivisions
|
4,065
|
|
|
(92
|
)
|
3,411
|
|
3,396
|
|
|
100
|
|
(15
|
)
|
|
80
|
|
17
|
|
—
|
|
—
|
|
3
|
|
|||||
Foreign covered bonds
(e)
|
2,242
|
|
|
(25
|
)
|
2,200
|
|
2,216
|
|
|
101
|
|
16
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Corporate bonds
|
1,752
|
|
|
(7
|
)
|
1,391
|
|
1,396
|
|
|
100
|
|
5
|
|
|
18
|
|
67
|
|
15
|
|
—
|
|
—
|
|
|||||
CLOs
|
2,351
|
|
|
17
|
|
2,593
|
|
2,598
|
|
|
100
|
|
5
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
U.S. government agencies
|
1,810
|
|
|
16
|
|
1,955
|
|
1,964
|
|
|
101
|
|
9
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Consumer ABS
|
2,893
|
|
|
14
|
|
1,729
|
|
1,727
|
|
|
100
|
|
(2
|
)
|
|
90
|
|
4
|
|
5
|
|
1
|
|
—
|
|
|||||
Other
(f)
|
3,700
|
|
|
(35
|
)
|
2,822
|
|
2,833
|
|
|
100
|
|
11
|
|
|
83
|
|
—
|
|
14
|
|
—
|
|
3
|
|
|||||
Total investment securities
|
$
|
118,779
|
|
(g)
|
$
|
(578
|
)
|
$
|
114,501
|
|
$
|
114,280
|
|
(g)
|
99
|
%
|
$
|
(221
|
)
|
(g)(h)
|
93
|
%
|
2
|
%
|
3
|
%
|
2
|
%
|
—
|
%
|
(a)
|
Amortized cost before impairments.
|
(b)
|
Primarily consists of exposure to UK, France, Germany, Spain and the Netherlands.
|
(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 the Netherlands.
|
(e)
|
Primarily consists of exposure to Canada, UK, the Netherlands and Sweden.
|
(f)
|
Includes commercial paper with a fair value of
$1,900 million
and
$401 million
and money market funds with a fair value of
$886 million
and
$842 million
at
Dec. 31, 2015
and
Dec. 31, 2016
, respectively.
|
(g)
|
Includes net unrealized losses on derivatives hedging securities available-for-sale of
$292 million
at
Dec. 31, 2015
and
$211 million
at
Dec. 31, 2016
.
|
(h)
|
Unrealized gains of
$15 million
at
Dec. 31, 2016
related to available-for-sale securities, net of hedges.
|
Results of Operations
(continued)
|
|
Net premium amortization and discount accretion of investment securities
(a)
|
|
|
|
||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Amortizable purchase premium (net of discount) relating to investment securities:
|
|
|
|
||||||
Balance at period end
|
$
|
2,188
|
|
$
|
2,319
|
|
$
|
2,432
|
|
Estimated average life remaining at period end
(in years)
|
4.9
|
|
4.7
|
|
4.8
|
|
|||
Amortization
|
$
|
641
|
|
$
|
693
|
|
$
|
626
|
|
Accretable discount related to the prior restructuring of the investment securities portfolio:
|
|
|
|
||||||
Balance at period end
|
$
|
315
|
|
$
|
355
|
|
$
|
413
|
|
Estimated average life remaining at period end
(in years)
|
6.2
|
|
6.1
|
|
5.9
|
|
|||
Accretion
|
$
|
102
|
|
$
|
126
|
|
$
|
163
|
|
(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.
|
Net securities gains
|
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Agency RMBS
|
$
|
22
|
|
$
|
10
|
|
$
|
13
|
|
Foreign covered bonds
|
10
|
|
2
|
|
3
|
|
|||
Non-agency RMBS
|
8
|
|
7
|
|
17
|
|
|||
U.S. Treasury
|
4
|
|
45
|
|
25
|
|
|||
Other
|
31
|
|
19
|
|
33
|
|
|||
Total net securities gains
|
$
|
75
|
|
$
|
83
|
|
$
|
91
|
|
(a)
|
Sixty-eight percent
of these securities are in the AAA to AA- ratings category.
|
(a)
|
Represents investments in small business investment companies (“SBICs”), which are compliant with the Volcker Rule.
|
Results of Operations
(continued)
|
|
Total exposure – consolidated
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||
(in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||||
Financial institutions
|
$
|
14.7
|
|
$
|
33.7
|
|
$
|
48.4
|
|
|
$
|
15.9
|
|
$
|
36.0
|
|
$
|
51.9
|
|
Commercial
|
2.6
|
|
17.5
|
|
20.1
|
|
|
2.3
|
|
18.2
|
|
20.5
|
|
||||||
Subtotal institutional
|
17.3
|
|
51.2
|
|
68.5
|
|
|
18.2
|
|
54.2
|
|
72.4
|
|
||||||
Wealth management loans and mortgages
|
15.6
|
|
1.3
|
|
16.9
|
|
|
13.3
|
|
1.6
|
|
14.9
|
|
||||||
Commercial real estate
|
4.7
|
|
3.2
|
|
7.9
|
|
|
3.9
|
|
3.3
|
|
7.2
|
|
||||||
Lease financings
|
1.7
|
|
—
|
|
1.7
|
|
|
1.9
|
|
—
|
|
1.9
|
|
||||||
Other residential mortgages
|
0.9
|
|
—
|
|
0.9
|
|
|
1.1
|
|
—
|
|
1.1
|
|
||||||
Overdrafts
|
5.5
|
|
—
|
|
5.5
|
|
|
4.5
|
|
—
|
|
4.5
|
|
||||||
Other
|
1.2
|
|
—
|
|
1.2
|
|
|
1.2
|
|
—
|
|
1.2
|
|
||||||
Subtotal non-margin loans
|
46.9
|
|
55.7
|
|
102.6
|
|
|
44.1
|
|
59.1
|
|
103.2
|
|
||||||
Margin loans
|
17.6
|
|
0.1
|
|
17.7
|
|
|
19.6
|
|
0.6
|
|
20.2
|
|
||||||
Total
|
$
|
64.5
|
|
$
|
55.8
|
|
$
|
120.3
|
|
|
$
|
63.7
|
|
$
|
59.7
|
|
$
|
123.4
|
|
Financial institutions
portfolio exposure
(dollar amounts in billions)
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
% Inv.
grade
|
|
% due
<1 yr.
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|||||||
Securities industry
|
$
|
3.8
|
|
$
|
19.2
|
|
$
|
23.0
|
|
99
|
%
|
99
|
%
|
|
$
|
3.1
|
|
$
|
20.6
|
|
$
|
23.7
|
|
Banks
|
7.9
|
|
2.0
|
|
9.9
|
|
69
|
|
95
|
|
|
9.4
|
|
2.1
|
|
11.5
|
|
||||||
Asset managers
|
1.5
|
|
6.2
|
|
7.7
|
|
97
|
|
82
|
|
|
2.0
|
|
5.6
|
|
7.6
|
|
||||||
Insurance
|
0.1
|
|
3.8
|
|
3.9
|
|
99
|
|
25
|
|
|
0.2
|
|
4.5
|
|
4.7
|
|
||||||
Government
|
0.1
|
|
0.9
|
|
1.0
|
|
91
|
|
40
|
|
|
0.1
|
|
1.9
|
|
2.0
|
|
||||||
Other
|
1.3
|
|
1.6
|
|
2.9
|
|
99
|
|
32
|
|
|
1.1
|
|
1.3
|
|
2.4
|
|
||||||
Total
|
$
|
14.7
|
|
$
|
33.7
|
|
$
|
48.4
|
|
92
|
%
|
84
|
%
|
|
$
|
15.9
|
|
$
|
36.0
|
|
$
|
51.9
|
|
Results of Operations
(continued)
|
|
Commercial portfolio exposure
|
Dec. 31, 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
|
|
$
|
6.7
|
|
$
|
7.8
|
|
94
|
%
|
11
|
%
|
|
$
|
0.6
|
|
$
|
6.3
|
|
$
|
6.9
|
|
Energy and utilities
|
0.6
|
|
4.7
|
|
5.3
|
|
95
|
|
8
|
|
|
0.6
|
|
4.9
|
|
5.5
|
|
||||||
Services and other
|
0.6
|
|
4.3
|
|
4.9
|
|
94
|
|
24
|
|
|
0.8
|
|
5.5
|
|
6.3
|
|
||||||
Media and telecom
|
0.3
|
|
1.8
|
|
2.1
|
|
96
|
|
2
|
|
|
0.3
|
|
1.5
|
|
1.8
|
|
||||||
Total
|
$
|
2.6
|
|
$
|
17.5
|
|
$
|
20.1
|
|
94
|
%
|
12
|
%
|
|
$
|
2.3
|
|
$
|
18.2
|
|
$
|
20.5
|
|
Percentage of the portfolios that are investment grade
|
Dec. 31,
|
|||||
2016
|
|
2015
|
|
2014
|
|
|
Financial institutions
|
92
|
%
|
96
|
%
|
93
|
%
|
Commercial
|
94
|
%
|
94
|
%
|
94
|
%
|
Results of Operations
(continued)
|
|
•
|
42% of the counterparties were A, or equivalent;
|
•
|
51% were BBB; and
|
•
|
7% were non-investment grade.
|
Results of Operations
(continued)
|
|
Loans by category – at year-end
|
Dec. 31,
|
||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|||||
Domestic:
|
|
|
|
|
|
||||||||||
Financial institutions
|
$
|
6,342
|
|
$
|
6,640
|
|
$
|
5,603
|
|
$
|
4,511
|
|
$
|
5,455
|
|
Commercial
|
2,286
|
|
2,115
|
|
1,390
|
|
1,534
|
|
1,306
|
|
|||||
Wealth management loans and mortgages
|
15,555
|
|
13,247
|
|
11,095
|
|
9,743
|
|
8,796
|
|
|||||
Commercial real estate
|
4,639
|
|
3,899
|
|
2,524
|
|
2,001
|
|
1,677
|
|
|||||
Lease financings
|
989
|
|
1,007
|
|
1,282
|
|
1,322
|
|
1,329
|
|
|||||
Other residential mortgages
|
854
|
|
1,055
|
|
1,222
|
|
1,385
|
|
1,632
|
|
|||||
Overdrafts
|
1,055
|
|
911
|
|
1,348
|
|
1,314
|
|
2,228
|
|
|||||
Other
|
1,202
|
|
1,137
|
|
1,113
|
|
768
|
|
639
|
|
|||||
Margin loans
|
17,503
|
|
19,340
|
|
20,034
|
|
15,652
|
|
13,397
|
|
|||||
Total domestic
|
50,425
|
|
49,351
|
|
45,611
|
|
38,230
|
|
36,459
|
|
|||||
Foreign:
|
|
|
|
|
|
||||||||||
Financial institutions
|
8,347
|
|
9,259
|
|
7,716
|
|
9,848
|
|
5,833
|
|
|||||
Commercial
|
331
|
|
227
|
|
252
|
|
113
|
|
111
|
|
|||||
Wealth management loans and mortgages
|
99
|
|
100
|
|
89
|
|
75
|
|
68
|
|
|||||
Commercial real estate
|
15
|
|
46
|
|
6
|
|
9
|
|
63
|
|
|||||
Lease financings
|
736
|
|
850
|
|
889
|
|
945
|
|
1,025
|
|
|||||
Other (primarily overdrafts)
|
4,418
|
|
3,637
|
|
4,569
|
|
2,437
|
|
3,070
|
|
|||||
Margin loans
|
87
|
|
233
|
|
—
|
|
—
|
|
—
|
|
|||||
Total foreign
|
14,033
|
|
14,352
|
|
13,521
|
|
13,427
|
|
10,170
|
|
|||||
Total loans
(a)
|
$
|
64,458
|
|
$
|
63,703
|
|
$
|
59,132
|
|
$
|
51,657
|
|
$
|
46,629
|
|
(a)
|
Net of unearned income of $527 million at Dec. 31, 2016, $674 million at Dec. 31, 2015, $866 million at Dec. 31, 2014, $1,020 million at Dec. 31, 2013 and $1,135 million at Dec. 31, 2012, primarily on domestic and foreign lease financings.
|
(a)
|
Excludes loans collateralized by residential properties, lease financings and wealth management loans and mortgages.
|
(b)
|
Variable rate loans due after one year totaled $8.3 billion and fixed rate loans totaled $69 million.
|
Results of Operations
(continued)
|
|
Allowance for credit losses activity
(dollar amounts in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|||||
Margin loans
|
$
|
17,590
|
|
$
|
19,573
|
|
$
|
20,034
|
|
$
|
15,652
|
|
$
|
13,397
|
|
Non-margin loans
|
46,868
|
|
43,708
|
|
39,077
|
|
36,005
|
|
33,232
|
|
|||||
Total loans
|
$
|
64,458
|
|
$
|
63,281
|
|
$
|
59,111
|
|
$
|
51,657
|
|
$
|
46,629
|
|
Average loans outstanding
|
$
|
61,681
|
|
$
|
60,672
|
|
$
|
54,210
|
|
$
|
48,316
|
|
$
|
43,060
|
|
Balance, Jan. 1
|
|
|
|
|
|
||||||||||
Domestic
|
$
|
240
|
|
$
|
236
|
|
$
|
288
|
|
$
|
339
|
|
$
|
439
|
|
Foreign
|
35
|
|
44
|
|
56
|
|
48
|
|
58
|
|
|||||
Total allowance at Jan. 1
|
275
|
|
280
|
|
344
|
|
387
|
|
497
|
|
|||||
Charge-offs:
|
|
|
|
|
|
||||||||||
Commercial
|
—
|
|
—
|
|
(12
|
)
|
(4
|
)
|
(2
|
)
|
|||||
Commercial real estate
|
—
|
|
—
|
|
(2
|
)
|
(1
|
)
|
—
|
|
|||||
Financial institutions
|
—
|
|
(170
|
)
|
—
|
|
—
|
|
(13
|
)
|
|||||
Wealth management loans and mortgages
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|||||
Other residential mortgages
|
(2
|
)
|
(2
|
)
|
(2
|
)
|
(8
|
)
|
(22
|
)
|
|||||
Foreign
|
—
|
|
—
|
|
(3
|
)
|
(3
|
)
|
—
|
|
|||||
Total charge-offs
|
(2
|
)
|
(172
|
)
|
(20
|
)
|
(17
|
)
|
(38
|
)
|
|||||
Recoveries:
|
|
|
|
|
|
||||||||||
Commercial
|
—
|
|
—
|
|
1
|
|
1
|
|
2
|
|
|||||
Financial institutions
|
13
|
|
1
|
|
1
|
|
4
|
|
—
|
|
|||||
Other residential mortgages
|
5
|
|
6
|
|
2
|
|
4
|
|
6
|
|
|||||
Foreign
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Total recoveries
|
19
|
|
7
|
|
4
|
|
9
|
|
8
|
|
|||||
Net recoveries (charge-offs)
|
17
|
|
(165
|
)
|
(16
|
)
|
(8
|
)
|
(30
|
)
|
|||||
Provision for credit losses
|
(11
|
)
|
160
|
|
(48
|
)
|
(35
|
)
|
(80
|
)
|
|||||
Balance, Dec. 31,
|
|
|
|
|
|
||||||||||
Domestic
|
245
|
|
240
|
|
236
|
|
288
|
|
339
|
|
|||||
Foreign
|
36
|
|
35
|
|
44
|
|
56
|
|
48
|
|
|||||
Total allowance, Dec. 31,
|
$
|
281
|
|
$
|
275
|
|
$
|
280
|
|
$
|
344
|
|
$
|
387
|
|
Allowance for loan losses
|
$
|
169
|
|
$
|
157
|
|
$
|
191
|
|
$
|
210
|
|
$
|
266
|
|
Allowance for lending-related commitments
|
112
|
|
118
|
|
89
|
|
134
|
|
121
|
|
|||||
Net (recoveries) charge-offs to average loans outstanding
|
(0.03
|
)%
|
0.27
|
%
|
0.03
|
%
|
0.02
|
%
|
0.07
|
%
|
|||||
Net (recoveries) charge-offs to total allowance for credit losses
|
(6.05
|
)
|
60.00
|
|
5.71
|
|
2.33
|
|
7.75
|
|
|||||
Allowance for loan losses as a percentage of total loans
|
0.26
|
|
0.25
|
|
0.32
|
|
0.41
|
|
0.57
|
|
|||||
Allowance for loan losses as a percentage of non-margin loans
|
0.36
|
|
0.36
|
|
0.49
|
|
0.58
|
|
0.80
|
|
|||||
Total allowance for credit losses as a percentage of total loans
|
0.44
|
|
0.43
|
|
0.47
|
|
0.67
|
|
0.83
|
|
|||||
Total allowance for credit losses as a percentage of non-margin loans
|
0.60
|
|
0.63
|
|
0.72
|
|
0.96
|
|
1.16
|
|
Results of Operations
(continued)
|
|
Allocation of allowance
|
Dec. 31,
|
|||||||||
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|
Commercial
|
29
|
%
|
30
|
%
|
21
|
%
|
24
|
%
|
27
|
%
|
Commercial real estate
|
26
|
|
22
|
|
18
|
|
12
|
|
8
|
|
Foreign
|
13
|
|
13
|
|
16
|
|
16
|
|
12
|
|
Other residential mortgages
|
10
|
|
12
|
|
14
|
|
16
|
|
23
|
|
Financial institutions
|
9
|
|
11
|
|
11
|
|
14
|
|
9
|
|
Wealth management
(a)
|
8
|
|
7
|
|
8
|
|
7
|
|
8
|
|
Lease financing
|
5
|
|
5
|
|
12
|
|
11
|
|
13
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Includes the allowance for wealth management mortgages.
|
Nonperforming assets
|
Dec. 31,
|
||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|||||
Nonperforming loans:
|
|
|
|
|
|
||||||||||
Other residential mortgages
|
$
|
91
|
|
$
|
102
|
|
$
|
112
|
|
$
|
117
|
|
$
|
158
|
|
Wealth management loans and mortgages
|
8
|
|
11
|
|
12
|
|
11
|
|
30
|
|
|||||
Lease financings
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Financial institutions
|
—
|
|
171
|
|
—
|
|
—
|
|
3
|
|
|||||
Commercial real estate
|
—
|
|
2
|
|
1
|
|
4
|
|
18
|
|
|||||
Commercial
|
—
|
|
—
|
|
—
|
|
15
|
|
27
|
|
|||||
Foreign
|
—
|
|
—
|
|
—
|
|
6
|
|
9
|
|
|||||
Total nonperforming loans
|
103
|
|
286
|
|
125
|
|
153
|
|
245
|
|
|||||
Other assets owned
|
4
|
|
6
|
|
3
|
|
3
|
|
4
|
|
|||||
Total nonperforming assets
(a)
|
$
|
107
|
|
$
|
292
|
|
$
|
128
|
|
$
|
156
|
|
$
|
249
|
|
Nonperforming assets ratio
|
0.17
|
%
|
0.46
|
%
|
0.22
|
%
|
0.30
|
%
|
0.53
|
%
|
|||||
Nonperforming assets ratio, excluding margin loans
|
0.23
|
|
0.67
|
|
0.33
|
|
0.43
|
|
0.75
|
|
|||||
Allowance for loan losses/nonperforming loans
|
164.1
|
|
54.9
|
|
152.8
|
|
137.3
|
|
108.6
|
|
|||||
Allowance for loan losses/nonperforming assets
|
157.9
|
|
53.8
|
|
149.2
|
|
134.6
|
|
106.8
|
|
|||||
Total allowance for credit losses/nonperforming loans
|
272.8
|
|
96.2
|
|
224.0
|
|
224.8
|
|
158.0
|
|
|||||
Total allowance for credit losses/nonperforming assets
|
262.6
|
|
94.2
|
|
218.8
|
|
220.5
|
|
155.4
|
|
(a)
|
Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in the loans of consolidated investment management funds are nonperforming loans of $53 million at Dec. 31, 2014, $16 million at Dec. 31, 2013 and $174 million at Dec. 31, 2012. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above. In the second quarter of 2015, BNY Mellon adopted the accounting guidance included in ASU 2015-02, Consolidations. As a result, we deconsolidated substantially all of the loans of consolidated investment management funds retrospectively to Jan. 1, 2015.
|
Results of Operations
(continued)
|
|
Nonperforming assets activity
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
||
(in millions)
|
||||||
Balance at beginning of period
|
$
|
292
|
|
$
|
128
|
|
Additions
|
20
|
|
360
|
|
||
Return to accrual status
|
(2
|
)
|
(3
|
)
|
||
Charge-offs
|
(1
|
)
|
(172
|
)
|
||
Paydowns/sales
|
(202
|
)
|
(21
|
)
|
||
Balance at end of period
|
$
|
107
|
|
$
|
292
|
|
Results of Operations
(continued)
|
|
(dollars in millions)
|
2016
|
2015
|
2014
|
||||||
Maximum month-end balance during the year
|
$
|
25,995
|
|
$
|
30,160
|
|
$
|
24,422
|
|
Average daily balance
|
$
|
14,489
|
|
$
|
16,452
|
|
$
|
18,631
|
|
Weighted-average rate during the year
|
0.25
|
%
|
(0.04
|
)%
|
(0.07
|
)%
|
|||
Ending balance at Dec. 31
|
$
|
9,989
|
|
$
|
15,002
|
|
$
|
11,469
|
|
Weighted-average rate at Dec. 31
|
0.38
|
%
|
0.10
|
%
|
(0.02
|
)%
|
Payables to customers and broker-dealers
|
|
||||||||
(dollars in millions)
|
2016
|
2015
|
2014
|
||||||
Maximum month-end balance during the year
|
$
|
22,327
|
|
$
|
23,027
|
|
$
|
21,181
|
|
Average daily balance
(a)
|
$
|
21,149
|
|
$
|
22,062
|
|
$
|
17,950
|
|
Weighted-average rate during the year
(a)
|
0.07
|
%
|
0.06
|
%
|
0.09
|
%
|
|||
Ending balance at Dec. 31
|
$
|
20,987
|
|
$
|
21,900
|
|
$
|
21,181
|
|
Weighted-average rate at Dec. 31
|
0.09
|
%
|
0.07
|
%
|
0.09
|
%
|
(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
$16,925 million
in
2016
,
$11,649 million
in
2015
and
$9,502 million
in
2014
.
|
(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
$17,091 million
in the
fourth quarter of 2016
,
$16,873 million
in the
third quarter of 2016
and
$12,904 million
in the
fourth quarter of 2015
.
|
Commercial paper
|
|
||||||||
(dollars in millions)
|
2016
|
2015
|
2014
|
||||||
Maximum month-end balance during the year
|
$
|
4,950
|
|
$
|
4,849
|
|
$
|
5,003
|
|
Average daily balance
|
$
|
1,337
|
|
$
|
1,549
|
|
$
|
2,546
|
|
Weighted-average rate during the year
|
0.37
|
%
|
0.10
|
%
|
0.08
|
%
|
|||
Ending balance at Dec. 31
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Weighted-average rate at Dec. 31
|
—
|
%
|
—
|
%
|
—
|
%
|
Results of Operations
(continued)
|
|
Commercial paper
|
Quarter ended
|
||||||||
(dollars in millions)
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
|||
Maximum month-end balance during the quarter
|
$
|
1,239
|
|
$
|
1,000
|
|
$
|
—
|
|
Average daily balance
|
$
|
383
|
|
$
|
1,173
|
|
$
|
—
|
|
Weighted-average rate during the quarter
|
0.34
|
%
|
0.35
|
%
|
—
|
%
|
|||
Ending balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Weighted-average rate at period end
|
—
|
%
|
—
|
%
|
—
|
%
|
Other borrowed funds
|
|
||||||||
(dollars in millions)
|
2016
|
2015
|
2014
|
||||||
Maximum month-end balance during the year
|
$
|
1,280
|
|
$
|
1,151
|
|
$
|
1,723
|
|
Average daily balance
|
$
|
846
|
|
$
|
814
|
|
$
|
1,027
|
|
Weighted-average rate during the year
|
0.91
|
%
|
1.12
|
%
|
0.61
|
%
|
|||
Ending balance at Dec. 31
|
$
|
754
|
|
$
|
523
|
|
$
|
786
|
|
Weighted-average rate at Dec. 31
|
0.89
|
%
|
0.97
|
%
|
1.15
|
%
|
Other borrowed funds
|
Quarter ended
|
||||||||
(dollars in millions)
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
Dec. 31, 2015
|
|
|||
Maximum month-end balance during the quarter
|
$
|
1,280
|
|
$
|
993
|
|
$
|
846
|
|
Average daily balance
|
$
|
903
|
|
$
|
874
|
|
$
|
733
|
|
Weighted-average rate during the quarter
|
0.95
|
%
|
0.76
|
%
|
1.13
|
%
|
|||
Ending balance
|
$
|
754
|
|
$
|
993
|
|
$
|
523
|
|
Weighted-average rate at period end
|
0.89
|
%
|
0.75
|
%
|
0.97
|
%
|
Results of Operations
(continued)
|
|
Available and liquid funds
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
Average
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||||||||
Available funds:
|
|
|
|
|
|
||||||||||
Liquid funds:
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with banks
|
$
|
15,086
|
|
$
|
15,146
|
|
$
|
14,704
|
|
$
|
20,531
|
|
$
|
35,588
|
|
Federal funds sold and securities purchased under resale agreements
|
25,801
|
|
24,373
|
|
25,767
|
|
23,384
|
|
14,704
|
|
|||||
Total liquid funds
|
40,887
|
|
39,519
|
|
40,471
|
|
43,915
|
|
50,292
|
|
|||||
Cash and due from banks
|
4,822
|
|
6,537
|
|
4,308
|
|
6,180
|
|
5,472
|
|
|||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
58,041
|
|
113,203
|
|
80,593
|
|
83,029
|
|
86,594
|
|
|||||
Total available funds
|
$
|
103,750
|
|
$
|
159,259
|
|
$
|
125,372
|
|
$
|
133,124
|
|
$
|
142,358
|
|
Total available funds as a percentage of total assets
|
31
|
%
|
40
|
%
|
35
|
%
|
36
|
%
|
38
|
%
|
Results of Operations
(continued)
|
|
(a)
|
Represents senior debt issuer default rating.
|
Results of Operations
(continued)
|
|
Debt issuances
|
|
||
(in millions)
|
2016
|
|
|
Senior notes:
|
|
||
2.50% senior notes due 2021
|
$
|
1,000
|
|
2.05% senior notes due 2021
|
1,250
|
|
|
2.20% senior notes due 2023
|
1,250
|
|
|
3-month LIBOR + 105 bps senior notes due 2023
|
750
|
|
|
2.45% senior notes due 2026
|
750
|
|
|
2.80% senior notes due 2026
|
750
|
|
|
Senior subordinated notes:
|
|
||
3.00% senior subordinated notes due 2028
|
500
|
|
|
Total debt issuances
|
$
|
6,250
|
|
Results of Operations
(continued)
|
|
Consolidated HQLA and LCR
|
Dec. 31, 2016
|
|
|
(in billions)
|
|||
Securities
(a)
|
$
|
104
|
|
Cash
(b)
|
52
|
|
|
Total consolidated HQLA
(c)
|
$
|
156
|
|
|
|
||
Liquidity coverage ratio
|
114
|
%
|
(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 adjustments. After haircuts and the impact of trapped liquidity, consolidated HQLA totaled
$127 billion
.
|
Results of Operations
(continued)
|
|
Contractual obligations at Dec. 31, 2016
|
|
Payments due by period
|
|||||||||||||
(in millions)
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
Over
5 years
|
|
|||||
Deposits without a stated maturity
|
$
|
103,328
|
|
$
|
103,328
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Term deposits
|
39,820
|
|
39,816
|
|
3
|
|
1
|
|
—
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
9,989
|
|
9,989
|
|
—
|
|
—
|
|
—
|
|
|||||
Payables to customers and broker-dealers
|
20,987
|
|
20,987
|
|
—
|
|
—
|
|
—
|
|
|||||
Other borrowed funds
|
754
|
|
754
|
|
—
|
|
—
|
|
—
|
|
|||||
Long-term debt
(a)
|
27,875
|
|
1,385
|
|
9,002
|
|
8,960
|
|
8,528
|
|
|||||
Unfunded pension and post-retirement benefits
|
302
|
|
35
|
|
76
|
|
58
|
|
133
|
|
|||||
Capital leases
|
36
|
|
22
|
|
14
|
|
—
|
|
—
|
|
|||||
Investment commitments
(b)
|
369
|
|
152
|
|
200
|
|
3
|
|
14
|
|
|||||
Total contractual obligations
|
$
|
203,460
|
|
$
|
176,468
|
|
$
|
9,295
|
|
$
|
9,022
|
|
$
|
8,675
|
|
(a)
|
Includes interest.
|
(b)
|
Includes Community Reinvestment Act commitments.
|
Results of Operations
(continued)
|
|
Other commitments at Dec. 31, 2016
|
|
Amount of commitment expiration per period
|
|||||||||||||
(in millions)
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
Over
5 years
|
|
|||||
Securities lending indemnifications
(a)
|
$
|
317,690
|
|
$
|
317,690
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Lending commitments
|
51,270
|
|
28,855
|
|
8,760
|
|
13,378
|
|
277
|
|
|||||
Standby letters of credit
|
4,185
|
|
2,679
|
|
1,227
|
|
277
|
|
2
|
|
|||||
Operating leases
|
2,129
|
|
334
|
|
506
|
|
419
|
|
870
|
|
|||||
Purchase obligations
(b)
|
1,033
|
|
557
|
|
359
|
|
80
|
|
37
|
|
|||||
Commercial letters of credit
|
339
|
|
335
|
|
—
|
|
—
|
|
4
|
|
|||||
Private equity commitments
(c)
|
46
|
|
2
|
|
24
|
|
20
|
|
—
|
|
|||||
Total commitments
|
$
|
376,692
|
|
$
|
350,452
|
|
$
|
10,876
|
|
$
|
14,174
|
|
$
|
1,190
|
|
(a)
|
Excludes the indemnifications for securities booked at BNY Mellon beginning in late 2013 resulting from the CIBC Mellon joint venture which totaled
$61 billion
at Dec. 31, 2016.
|
(b)
|
Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and specify all significant terms.
|
(c)
|
Related to SBIC investments, which are compliant with the Volcker Rule.
|
Capital data
(dollar amounts in millions except per share amounts; common shares in thousands)
|
2016
|
|
2015
|
|
||
At period end:
|
|
|
||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
(a)
|
11.6
|
%
|
9.7
|
%
|
||
BNY Mellon common shareholders’ equity to total assets ratio – GAAP
(a)
|
10.6
|
%
|
9.0
|
%
|
||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
(a)
|
6.7
|
%
|
6.5
|
%
|
||
Total BNY Mellon shareholders’ equity – GAAP
|
$
|
38,811
|
|
$
|
38,037
|
|
Total BNY Mellon common shareholders’ equity – GAAP
|
$
|
35,269
|
|
$
|
35,485
|
|
BNY Mellon tangible common shareholders’ equity – Non-GAAP
(a)
|
$
|
16,957
|
|
$
|
16,574
|
|
Book value per common share – GAAP
(a)
|
$
|
33.67
|
|
$
|
32.69
|
|
Tangible book value per common share – Non-GAAP
(a)
|
$
|
16.19
|
|
$
|
15.27
|
|
Closing stock price per common share
|
$
|
47.38
|
|
$
|
41.22
|
|
Market capitalization
|
$
|
49,630
|
|
$
|
44,738
|
|
Common shares outstanding
|
1,047,488
|
|
1,085,343
|
|
||
|
|
|
||||
Full-year:
|
|
|
||||
Average common equity to average assets
|
9.9
|
%
|
9.6
|
%
|
||
Cash dividends per common share
|
$
|
0.72
|
|
$
|
0.68
|
|
Common dividend payout ratio
|
23
|
%
|
25
|
%
|
||
Common dividend yield
|
1.5
|
%
|
1.6
|
%
|
(a)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
121
for a reconciliation of GAAP to Non-GAAP.
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
Consolidated and largest bank subsidiary regulatory capital ratios
|
Dec. 31, 2016
|
|
|
||||||||
Well capitalized
|
|
|
Minimum
required |
|
|
Capital
ratios
|
|
|
Dec. 31, 2015
|
|
|
|
(a)
|
|
|||||||||
Consolidated regulatory capital ratios
:
(b)
|
|
|
|
|
|
|
|
||||
Standardized:
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
N/A
|
|
(c)
|
5.5
|
%
|
|
12.3
|
%
|
|
11.5
|
%
|
Tier 1 capital ratio
|
6
|
%
|
|
7
|
|
|
14.5
|
|
|
13.1
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
|
|
9
|
|
|
15.2
|
|
|
13.5
|
|
Advanced:
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
N/A
|
|
(c)
|
5.5
|
%
|
|
10.6
|
%
|
|
10.8
|
%
|
Tier 1 capital ratio
|
6
|
%
|
|
7
|
|
|
12.6
|
|
|
12.3
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
|
|
9
|
|
|
13.0
|
|
|
12.5
|
|
Leverage capital ratio
(b)
|
N/A
|
|
(c)
|
4
|
|
|
6.6
|
|
|
6.0
|
|
SLR
(d)
|
5
|
|
(c)(e)
|
3
|
|
|
6.0
|
|
|
5.4
|
|
|
|
|
|
|
|
|
|
||||
Selected regulatory capital ratios
–
fully phased-in
–
Non-GAAP:
(c)
|
|
|
|
|
|
|
|
||||
Estimated CET1 ratio:
|
|
|
|
|
|
|
|
||||
Standardized Approach
|
8.5
|
%
|
(e)
|
5.5
|
%
|
|
11.3
|
%
|
|
10.2
|
%
|
Advanced Approach
|
8.5
|
|
(e)
|
5.5
|
|
|
9.7
|
|
|
9.5
|
|
Estimated SLR
(d)
|
5
|
|
(e)
|
3
|
|
|
5.6
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
||||
The Bank of New York Mellon regulatory capital ratios
:
(b)
|
|
|
|
|
|
|
|
||||
Advanced:
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
6.5
|
%
|
|
5.125
|
%
|
|
13.6
|
%
|
|
11.8
|
%
|
Tier 1 capital ratio
|
8
|
|
|
6.625
|
|
|
13.9
|
|
|
12.3
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
10
|
|
|
8.625
|
|
|
14.2
|
|
|
12.5
|
|
Leverage capital ratio
|
5
|
|
|
4
|
|
|
7.2
|
|
|
5.9
|
|
SLR
(d)
|
6
|
|
|
3
|
|
|
6.5
|
|
|
5.3
|
|
|
|
|
|
|
|
|
|
||||
Selected regulatory capital ratios – fully phased-in – Non-GAAP
:
|
|
|
|
|
|
|
|
||||
Estimated SLR
(d)
|
6
|
%
|
|
3
|
%
|
|
6.1
|
%
|
|
4.8
|
%
|
(a)
|
Minimum requirements for Dec. 31, 2016 include Basel III minimum thresholds plus then applicable buffers. See page
57
for the minimum ratios with buffers phased-in to 2017 levels.
|
(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
57
for the capital ratios with the phase-in of the capital conservation buffer and the U.S. G-SIB surcharge, as well as the introduction of the SLR buffer.
|
Results of Operations
(continued)
|
|
Results of Operations
(continued)
|
|
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 fully phased-in 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
|
Year ended Dec. 31, 2016
|
|||||
(in millions)
|
Transitional basis
(b)
|
|
Fully phased-in Non-GAAP
(c)
|
|
||
CET1 – Beginning of period
|
$
|
18,417
|
|
$
|
16,082
|
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
3,425
|
|
3,425
|
|
||
Goodwill and intangible assets, net of related deferred tax liabilities
|
(19
|
)
|
599
|
|
||
Gross CET1 generated
|
3,406
|
|
4,024
|
|
||
Capital deployed:
|
|
|
||||
Common stock dividends
|
(778
|
)
|
(778
|
)
|
||
Common stock repurchased
|
(2,398
|
)
|
(2,398
|
)
|
||
Total capital deployed
|
(3,176
|
)
|
(3,176
|
)
|
||
Other comprehensive income:
|
|
|
||||
Foreign currency translation
|
(819
|
)
|
(819
|
)
|
||
Unrealized loss on assets available-for-sale
|
(109
|
)
|
(291
|
)
|
||
Defined benefit plans
|
(289
|
)
|
(51
|
)
|
||
Unrealized gain on cash flow hedges
|
(5
|
)
|
(4
|
)
|
||
Total other comprehensive income
|
(1,222
|
)
|
(1,165
|
)
|
||
Additional paid-in capital
(a)
|
700
|
|
700
|
|
||
Other additions (deductions):
|
|
|
||||
Net pension fund assets
|
(8
|
)
|
26
|
|
||
Deferred tax assets
|
(11
|
)
|
(12
|
)
|
||
Embedded goodwill
|
(17
|
)
|
3
|
|
||
Other
|
4
|
|
8
|
|
||
Total other additions
|
(32
|
)
|
25
|
|
||
Net CET1 generated
|
(324
|
)
|
408
|
|
||
CET1 – End of period
|
$
|
18,093
|
|
$
|
16,490
|
|
(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.
|
Results of Operations
(continued)
|
|
Capital components and ratios
|
Dec. 31, 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)
|
|
||||
CET1:
|
|
|
|
|
|
||||||||
Common shareholders’ equity
|
$
|
35,794
|
|
$
|
35,269
|
|
|
$
|
36,067
|
|
$
|
35,485
|
|
Goodwill and intangible assets
|
(17,314
|
)
|
(18,312
|
)
|
|
(17,295
|
)
|
(18,911
|
)
|
||||
Net pension fund assets
|
(55
|
)
|
(90
|
)
|
|
(46
|
)
|
(116
|
)
|
||||
Equity method investments
|
(313
|
)
|
(344
|
)
|
|
(296
|
)
|
(347
|
)
|
||||
Deferred tax assets
|
(19
|
)
|
(32
|
)
|
|
(8
|
)
|
(20
|
)
|
||||
Other
|
—
|
|
(1
|
)
|
|
(5
|
)
|
(9
|
)
|
||||
Total CET1
|
18,093
|
|
16,490
|
|
|
18,417
|
|
16,082
|
|
||||
Other Tier 1 capital:
|
|
|
|
|
|
||||||||
Preferred stock
|
3,542
|
|
3,542
|
|
|
2,552
|
|
2,552
|
|
||||
Trust preferred securities
|
—
|
|
—
|
|
|
74
|
|
—
|
|
||||
Deferred tax assets
|
(13
|
)
|
—
|
|
|
(12
|
)
|
—
|
|
||||
Net pension fund assets
|
(36
|
)
|
—
|
|
|
(70
|
)
|
—
|
|
||||
Other
|
(121
|
)
|
(121
|
)
|
|
(25
|
)
|
(22
|
)
|
||||
Total Tier 1 capital
|
$
|
21,465
|
|
$
|
19,911
|
|
|
$
|
20,936
|
|
$
|
18,612
|
|
Tier 2 capital:
|
|
|
|
|
|
||||||||
Trust preferred securities
|
$
|
148
|
|
$
|
—
|
|
|
$
|
222
|
|
$
|
—
|
|
Subordinated debt
|
550
|
|
550
|
|
|
149
|
|
149
|
|
||||
Allowance for credit losses
|
281
|
|
281
|
|
|
275
|
|
275
|
|
||||
Other
|
(12
|
)
|
(11
|
)
|
|
(12
|
)
|
(12
|
)
|
||||
Total Tier 2 capital - Standardized Approach
|
967
|
|
820
|
|
|
634
|
|
412
|
|
||||
Excess of expected credit losses
|
50
|
|
50
|
|
|
37
|
|
37
|
|
||||
Less: Allowance for credit losses
|
281
|
|
281
|
|
|
275
|
|
275
|
|
||||
Total Tier 2 capital - Advanced Approach
|
$
|
736
|
|
$
|
589
|
|
|
$
|
396
|
|
$
|
174
|
|
Total capital:
|
|
|
|
|
|
||||||||
Standardized Approach
|
$
|
22,432
|
|
$
|
20,731
|
|
|
$
|
21,570
|
|
$
|
19,024
|
|
Advanced Approach
|
$
|
22,201
|
|
$
|
20,500
|
|
|
$
|
21,332
|
|
$
|
18,786
|
|
|
|
|
|
|
|
||||||||
Risk-weighted assets:
|
|
|
|
|
|
||||||||
Standardized Approach
|
$
|
147,671
|
|
$
|
146,475
|
|
|
$
|
159,893
|
|
$
|
158,015
|
|
Advanced Approach:
|
|
|
|
|
|
||||||||
Credit Risk
|
$
|
97,659
|
|
$
|
96,391
|
|
|
$
|
106,974
|
|
$
|
105,099
|
|
Market Risk
|
2,836
|
|
2,836
|
|
|
2,148
|
|
2,148
|
|
||||
Operational Risk
|
70,000
|
|
70,000
|
|
|
61,262
|
|
61,262
|
|
||||
Total Advanced Approach
|
$
|
170,495
|
|
$
|
169,227
|
|
|
$
|
170,384
|
|
$
|
168,509
|
|
|
|
|
|
|
|
||||||||
Standardized Approach:
|
|
|
|
|
|
||||||||
CET1 ratio
|
12.3
|
%
|
11.3
|
%
|
|
11.5
|
%
|
10.2
|
%
|
||||
Tier 1 capital ratio
|
14.5
|
|
13.6
|
|
|
13.1
|
|
11.8
|
|
||||
Total (Tier 1 plus Tier 2) capital ratio
|
15.2
|
|
14.2
|
|
|
13.5
|
|
12.0
|
|
||||
Advanced Approach:
|
|
|
|
|
|
||||||||
CET1 ratio
|
10.6
|
%
|
9.7
|
%
|
|
10.8
|
%
|
9.5
|
%
|
||||
Tier 1 capital ratio
|
12.6
|
|
11.8
|
|
|
12.3
|
|
11.0
|
|
||||
Total (Tier 1 plus Tier 2) capital ratio
|
13.0
|
|
12.1
|
|
|
12.5
|
|
11.1
|
|
||||
|
|
|
|
|
|
||||||||
Average assets for leverage capital purposes
|
$
|
326,809
|
|
|
|
$
|
351,435
|
|
|
||||
Total leverage exposure for SLR purposes
|
|
$
|
355,083
|
|
|
|
$
|
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.
|
Results of Operations
(continued)
|
|
Capital above thresholds at Dec. 31, 2016
|
|||||||
(in millions)
|
Consolidated
|
|
|
The Bank of New York Mellon
(b)
|
|
||
CET1
|
$
|
8,716
|
|
(a)
|
$
|
9,644
|
|
Tier 1 capital
|
9,530
|
|
(a)
|
8,091
|
|
||
Total capital
|
5,152
|
|
(b)
|
5,747
|
|
||
Leverage capital
|
8,393
|
|
(a)
|
5,824
|
|
(a)
|
Based on minimum required standards, with applicable buffers.
|
(b)
|
Based on well capitalized standards.
|
Results of Operations
(continued)
|
|
SLR
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
||||||||||
(dollars in millions)
|
Transitional basis
|
|
Fully
phased-in
Non-GAAP
(a)
|
|
|
Transitional basis
|
|
Fully
phased-in
Non-GAAP
(a)
|
|
||||
Consolidated:
|
|
|
|
|
|
||||||||
Total Tier 1 capital
|
$
|
21,465
|
|
$
|
19,911
|
|
|
$
|
20,936
|
|
$
|
18,612
|
|
|
|
|
|
|
|
||||||||
Total leverage exposure:
|
|
|
|
|
|
||||||||
Quarterly average total assets
|
$
|
344,142
|
|
$
|
344,142
|
|
|
$
|
368,590
|
|
$
|
368,590
|
|
Less: Amounts deducted from Tier 1 capital
|
17,333
|
|
18,887
|
|
|
17,650
|
|
19,403
|
|
||||
Total on-balance sheet assets, as adjusted
|
326,809
|
|
325,255
|
|
|
350,940
|
|
349,187
|
|
||||
Off-balance sheet exposures:
|
|
|
|
|
|
||||||||
Potential future exposure for derivatives contracts (plus certain other items)
|
6,021
|
|
6,021
|
|
|
7,158
|
|
7,158
|
|
||||
Repo-style transaction exposures
|
533
|
|
533
|
|
|
440
|
|
440
|
|
||||
Credit-equivalent amount of other off-balance sheet exposures (less SLR exclusions)
|
23,274
|
|
23,274
|
|
|
26,025
|
|
26,025
|
|
||||
Total off-balance sheet exposures
|
29,828
|
|
29,828
|
|
|
33,623
|
|
33,623
|
|
||||
Total leverage exposure
|
$
|
356,637
|
|
$
|
355,083
|
|
|
$
|
384,563
|
|
$
|
382,810
|
|
|
|
|
|
|
|
||||||||
SLR - Consolidated
|
6.0
|
%
|
5.6
|
%
|
|
5.4
|
%
|
4.9
|
%
|
||||
|
|
|
|
|
|
||||||||
The Bank of New York Mellon, our largest bank subsidiary:
|
|
|
|
|
|
||||||||
Tier 1 capital
|
$
|
19,011
|
|
$
|
17,708
|
|
|
$
|
16,814
|
|
$
|
15,142
|
|
Total leverage exposure
|
$
|
291,022
|
|
$
|
290,230
|
|
|
$
|
316,812
|
|
$
|
316,270
|
|
|
|
|
|
|
|
||||||||
SLR - The Bank of New York Mellon
|
6.5
|
%
|
6.1
|
%
|
|
5.3
|
%
|
4.8
|
%
|
(a)
|
Estimated.
|
(a)
|
Includes
17 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
$46.10
.
|
(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.
|
Results of Operations
(continued)
|
|
VaR
(a)
|
2016
|
|||||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
Dec. 31,
|
|
||||
Interest rate
|
$
|
6.3
|
|
$
|
4.3
|
|
$
|
8.9
|
|
$
|
5.5
|
|
Foreign exchange
|
2.9
|
|
1.2
|
|
11.1
|
|
2.8
|
|
||||
Equity
|
0.6
|
|
0.3
|
|
0.8
|
|
0.4
|
|
||||
Credit
|
0.3
|
|
0.2
|
|
0.4
|
|
0.3
|
|
||||
Diversification
|
(4.2
|
)
|
N/M
|
|
N/M
|
|
(3.7
|
)
|
||||
Overall portfolio
|
5.9
|
|
4.3
|
|
7.7
|
|
5.3
|
|
VaR
(a)
|
2015
|
|||||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
Dec. 31,
|
|
||||
Interest rate
|
$
|
5.1
|
|
$
|
3.6
|
|
$
|
8.0
|
|
$
|
5.2
|
|
Foreign exchange
|
1.0
|
|
0.5
|
|
1.9
|
|
1.2
|
|
||||
Equity
|
1.0
|
|
0.5
|
|
1.9
|
|
0.6
|
|
||||
Credit
|
—
|
|
—
|
|
0.3
|
|
0.3
|
|
||||
Diversification
|
(1.9
|
)
|
N/M
|
|
N/M
|
|
(2.2
|
)
|
||||
Overall portfolio
|
5.2
|
|
3.9
|
|
8.5
|
|
5.1
|
|
(a)
|
VaR figures do not reflect the impact of the credit valuation adjustment (“CVA”) guidance in ASC 820, Fair Value Measurement. 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.
|
Results of Operations
(continued)
|
|
Distribution of trading revenue (loss)
(a)
|
Quarter ended
|
|||||||||
(dollar amounts in millions)
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
June 30,
2016 |
|
March 31,
2016 |
|
Dec. 31, 2015
|
|
Revenue range:
|
Number of days
|
|||||||||
Less than $(2.5)
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
$(2.5) – $0
|
3
|
|
6
|
|
2
|
|
3
|
|
4
|
|
$0 – $2.5
|
28
|
|
22
|
|
20
|
|
29
|
|
23
|
|
$2.5 – $5.0
|
23
|
|
25
|
|
38
|
|
21
|
|
29
|
|
More than $5.0
|
7
|
|
11
|
|
3
|
|
9
|
|
6
|
|
(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.
|
Foreign exchange and other trading counterparty risk rating profile
(a)
|
Quarter ended
|
|||||||||
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
June 30,
2016 |
|
March 31,
2016 |
|
Dec. 31, 2015
|
|
Rating:
|
|
|
|
|
|
|||||
AAA to AA-
|
35
|
%
|
45
|
%
|
38
|
%
|
44
|
%
|
43
|
%
|
A+ to A-
|
39
|
|
32
|
|
40
|
|
37
|
|
42
|
|
BBB+ to BBB-
|
22
|
|
19
|
|
18
|
|
14
|
|
13
|
|
Non-investment grade (BB+ and lower)
|
4
|
|
4
|
|
4
|
|
5
|
|
2
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Represents credit rating agency equivalent of internal credit ratings.
|
Results of Operations
(continued)
|
|
Estimated changes in net interest revenue
(dollars in millions) |
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
June 30,
2016 |
|
March 31,
2016 |
|
Dec. 31, 2015
|
|
|||||
up 200 bps parallel rate ramp vs. baseline
(a)
|
$
|
6
|
|
$
|
62
|
|
$
|
91
|
|
$
|
103
|
|
$
|
179
|
|
up 100 bps parallel rate ramp vs. baseline
(a)
|
145
|
|
147
|
|
158
|
|
189
|
|
191
|
|
|||||
Long-term up 50 bps, short-term unchanged
(b)
|
81
|
|
116
|
|
130
|
|
104
|
|
33
|
|
|||||
Long-term down 50 bps, short-term unchanged
(b)
|
(88
|
)
|
(128
|
)
|
(96
|
)
|
(93
|
)
|
(91
|
)
|
(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.
|
Results of Operations
(continued)
|
|
•
|
Monetary policy;
|
•
|
Global economic uncertainty;
|
•
|
Our ratings relative to other financial institutions’ ratings; and
|
•
|
Regulatory reform.
|
Risk Management
|
|
Type of risk
|
Description
|
Operational
|
The risk of loss resulting from inadequate or failed internal processes, human factors and systems, breaches of technology and information systems, or from external events. Also includes fiduciary risk, reputational risk, and litigation risk.
|
Market
|
The risk of loss due to adverse changes in the financial markets. Our market risks are primarily interest rate, foreign exchange, and equity risk. Market risk particularly impacts our exposures that are marked-to-market such as the securities portfolio, trading book, and equity investments.
|
Credit
|
The risk of loss if any of our borrowers or other counterparties were to default on their obligations to us. Credit risk is resident in the majority of our assets, but primarily concentrated in the loan and securities books, as well as off-balance sheet exposures such as lending commitments, letters of credit, and securities lending indemnifications.
|
Liquidity
|
The risk that BNY Mellon cannot meet its cash and collateral obligations at a reasonable cost for both expected and unexpected cash flows, without adversely affecting daily operations or financial conditions. Liquidity risk can arise from cash flow mismatches, market constraints from the inability to convert assets to cash, the inability to raise cash in the markets, deposit run-off, or contingent liquidity events.
|
Strategic
|
The risk that BNY Mellon doesn’t effectively manage and protect the firm’s market positioning and stability. This includes risks associated with the inability to maintain a strong understanding of clients’ needs, provide suitable product offerings that are financially viable and fit within the firm’s operating model and adapt to transformational change in the industry.
|
Risk Management
(continued)
|
|
•
|
Board Oversight and Governance – The Risk Committee of the Board approves and oversees our operational risk management strategy in addition to credit and market risk. The Risk
|
Risk Management
(continued)
|
|
•
|
Accountability of Businesses – Business managers are responsible for maintaining an effective system of internal controls commensurate with their risk profiles and in accordance with BNY Mellon policies and procedures.
|
•
|
Corporate Operational Risk Management is responsible for developing risk management policies and tools for assessing, measuring, monitoring and managing operational risk for BNY Mellon. The primary objectives of Corporate Operational Risk Management are to promote effective risk management, identify emerging risks, create incentives for generating continuous improvement in controls and to optimize capital.
|
•
|
The Information Risk Management Group is responsible for developing policies, methods and tools for identifying, assessing, measuring, monitoring and governing information and technology risk for BNY Mellon. The Information Risk Management Group partners with the businesses to help maintain and protect the confidentiality, integrity and availability of the firm’s information and technology assets from internal and external threats such as cyberattacks.
|
•
|
Reporting of all new Monitoring Limits and changes to existing limits; and
|
•
|
Monitoring of trading exposures, VaR, market sensitivities and stress testing results.
|
Risk Management
(continued)
|
|
Risk Management
(continued)
|
|
Risk Management
(continued)
|
|
Economic capital required at Dec. 31, 2016
|
|
||
(in millions)
|
|||
Credit
|
$
|
4,680
|
|
Market
|
3,388
|
|
|
Operational
|
5,545
|
|
|
Other
(a)
|
853
|
|
|
Economic capital required - consolidated
|
$
|
14,466
|
|
|
|
||
CET1
|
$
|
18,093
|
|
|
|
||
Capital cushion
|
$
|
3,627
|
|
(a)
|
Includes interest rate risk, reputational risk and diversification benefit.
|
Supervision and Regulation
|
|
•
|
liquidity requirements;
|
•
|
stress testing of capital; and
|
•
|
overall risk management requirements.
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
•
|
cyber risk governance;
|
•
|
cyber risk management;
|
•
|
internal dependency management;
|
•
|
external dependency management;
|
•
|
incident response, cyber resilience, and situational awareness.
|
•
|
Transfer any of the depository institution’s assets and liabilities to a new obligor, including a newly formed “bridge” bank without the approval of the depository institution’s creditors;
|
•
|
Enforce the terms of the depository institution’s contracts pursuant to their terms without regard to any provisions triggered by the appointment of the FDIC in that capacity; or
|
•
|
Repudiate or disaffirm any contract or lease to which the depository institution is a party, the performance of which is determined by the FDIC to be burdensome and the disaffirmance or repudiation of which is determined by the FDIC to
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Supervision and Regulation
(continued)
|
|
Risk Factors
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
•
|
A continuing low interest rate environment, geopolitical tension, continuing low oil prices, and economic instability in countries around the world can at times increase the demand for low-risk investments, particularly in U.S. Treasuries and the dollar. A “flight to safety” has historically increased BNY Mellon’s balance sheet, which has negatively impacted, and could continue to negatively impact, our leverage-based regulatory capital measures. A sustained “flight to safety” has historically triggered a decline in trading, capital markets and cross-border activity. Declining volumes in these activities would likely decrease our revenue, which would negatively impact our results of operations, financial condition and, if sustained in the long term, our business.
|
•
|
The fees earned by our Investment Management business are higher as assets under management and/or investment performance increase. Those fees are also impacted by the composition of the assets under management, with higher fees for some asset categories as compared to others. Uncertain and volatile capital markets could result in reductions in assets under management because of investors’ decisions to withdraw assets or from simple declines in the value of assets under management as markets decline. Uncertain and volatile financial markets may also result in changes in customer allocations of funds among money market, equity, fixed income or other investment alternatives. Those changes in allocation may be from higher fee investments to lower fee investments. For example, at Dec. 31, 2016, we estimate that a 5% change in global equity markets, spread evenly throughout the year, would impact fee revenue by less than 1% and diluted earnings per common share by $0.02 to $0.04.
|
•
|
Market conditions resulting in lower transaction volumes could have an adverse effect on the revenues and profitability of certain of our businesses such as clearing, settlement, payments and trading.
|
•
|
Uncertain and volatile capital markets, particularly declines, could reduce the value of our investments in securities, including pension and other post-retirement plan assets.
|
•
|
Derivative instruments we hold to hedge and manage exposure to market risks including interest rate risk, equity price risk, foreign currency risk and credit risk associated with our products and businesses might not perform as intended or expected, resulting in higher realized losses and unforeseen stresses on liquidity. Our derivative-based hedging strategies also rely on the performance of counterparties to such derivatives. These counterparties may fail to perform for various reasons resulting in losses on under-collateralized positions.
|
•
|
Our ability to continue to operate certain pooled investment funds at a net asset value of $1.00 per unit and to allow unrestricted cash redemptions by investors in those pooled funds (or by investors in other funds managed by us which are invested in those pooled investment funds) may be adversely affected by depressed mark-to-market prices of the underlying portfolio securities held by such funds, or by material defaults on such securities or by the level of liquidity that could be achieved from the portfolio securities in such funds. We may be faced with claims from investors and exposed to financial loss as a result of our operation of such funds.
|
•
|
Continuing weakness in oil prices may continue to negatively impact capital markets and may impact the ability of certain of our clients, including oil and gas exploration and production companies and sovereign funds in oil-exporting countries, to continue using our services or repay outstanding loans. Increased defaults among oil and gas exploration and production companies may also negatively impact the high-yield market and our high-yield funds.
|
•
|
Market volatility could produce downward pressure on our stock price and credit availability without regard to our underlying financial strength.
|
•
|
The process we use to estimate our projected credit losses and to ascertain the fair value of securities held by us is subject to uncertainty in that it requires use of statistical models and difficult, subjective and complex judgments, including forecasts of economic conditions and how these conditions might impair the ability of our borrowers and others to meet their obligations. In uncertain and volatile capital markets, our ability to estimate our projected
|
Risk Factors
(continued)
|
|
•
|
continued compression of our net interest spreads, depending on our balance sheet position;
|
•
|
constraining our ability to achieve a net interest margin consistent with historical averages;
|
•
|
sustained weakness of our spread-based revenues, resulting in continued voluntary waiving of particular fees on certain money market mutual funds and related distribution fees by us in order to prevent the yields on such funds from becoming uneconomic; and
|
•
|
adversely impacting the value of fixed-rate mortgage-backed securities we hold if there are increases in mortgage prepayment speeds, which can be caused by refinancing activity.
|
•
|
less liquidity in bonds and fixed income funds in the case of a sharp rise in interest rates resulting in lower performance, yield and fees;
|
•
|
increased number of delinquencies, bankruptcies or defaults and more nonperforming assets and net charge-offs,
as borrowers may have more difficulty making higher interest payments
;
|
•
|
difficulty in modeling predicted deposit levels and depositor behavior, which could impact our ability to manage liquidity and capital;
|
•
|
decreases in deposit levels and higher redemptions from our fixed income funds or separate accounts, as clients move funds into investments with higher rates of return;
|
•
|
decreases in stable deposit levels, which may result in further pressure on our LCR measure;
|
•
|
a decline in our risk-based capital ratios;
|
•
|
reduction in accumulated other comprehensive income (“OCI”) in our shareholders’ equity and therefore our tangible common equity due to the impact of rising long term rates on our available for sale securities in our investment portfolio; and
|
•
|
higher funding costs.
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Risk Factors
(continued)
|
|
Recent Accounting Developments
|
|
Recent Accounting Developments
(continued)
|
|
Recent Accounting Developments
(continued)
|
|
Business Continuity
|
|
Supplemental Information (unaudited)
|
|
Supplemental Information
(unaudited)
(continued)
|
|
Reconciliation of net income and diluted EPS – GAAP to Non-GAAP
|
2016
|
|
2015
|
|
2014
|
|
Growth in
diluted EPS
|
||||||||||||||||||
(in millions, except per common share amounts)
|
Net income
|
|
Diluted EPS
|
|
|
Net income
|
|
Diluted EPS
|
|
|
Net income
|
|
Diluted EPS
|
|
|
2016 vs.
2015
|
|
2016 vs.
2014
(a)
|
|
||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
3,425
|
|
$
|
3.15
|
|
|
$
|
3,053
|
|
$
|
2.71
|
|
|
$
|
2,494
|
|
$
|
2.15
|
|
|
16
|
%
|
21
|
%
|
Add: M&I, litigation and restructuring charges
|
49
|
|
|
|
85
|
|
|
|
1,130
|
|
|
|
|
|
|||||||||||
Tax impact of M&I, litigation and restructuring charges
|
(16
|
)
|
|
|
(29
|
)
|
|
|
(270
|
)
|
|
|
|
|
|||||||||||
Impact of M&I, litigation and restructuring charges – after-tax
|
33
|
|
0.03
|
|
|
56
|
|
0.05
|
|
|
860
|
|
0.74
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Add: (Recovery) impairment charge related to Sentinel
|
(13
|
)
|
|
|
170
|
|
|
|
—
|
|
|
|
|
|
|||||||||||
Tax impact of net recovery (impairment charge) related to Sentinel
|
5
|
|
|
|
(64
|
)
|
|
|
—
|
|
|
|
|
|
|||||||||||
(Recovery) impairment charge related to Sentinel – after-tax
|
(8
|
)
|
(0.01
|
)
|
|
106
|
|
0.09
|
|
|
—
|
|
—
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Add: Charge related to investment management funds, net of incentives
|
—
|
|
|
|
—
|
|
|
|
104
|
|
|
|
|
|
|||||||||||
Tax impact of charge related to investment management funds, net of incentives
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
|
|
|||||||||||
Charge related to investment management funds, net of incentives – after-tax
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
81
|
|
0.07
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Less: Gain on the sale of our investment in Wing Hang
|
—
|
|
|
|
—
|
|
|
|
490
|
|
|
|
|
|
|||||||||||
Tax impact of gain on the sale of our investment in Wing Hang
|
—
|
|
|
|
—
|
|
|
|
(175
|
)
|
|
|
|
|
|||||||||||
Gain on the sale of our investment in Wing Hang – after-tax
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
315
|
|
0.27
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Less: Gain on the sale of our One Wall Street building
|
—
|
|
|
|
—
|
|
|
|
346
|
|
|
|
|
|
|||||||||||
Tax impact of gain on the sale of our One Wall Street building
|
—
|
|
|
|
—
|
|
|
|
(142
|
)
|
|
|
|
|
|||||||||||
Gain on the sale of our One Wall Street building – after-tax
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
204
|
|
0.18
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Less: Benefit primarily related to a tax carryback claim
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|||||||||||
Tax benefit primarily related to a tax carryback claim
|
—
|
|
|
|
—
|
|
|
|
150
|
|
|
|
|
|
|||||||||||
Benefit primarily related to a tax carryback claim – after-tax
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
150
|
|
0.13
|
|
|
|
|
||||||||
Non-GAAP adjustments – after-tax
|
25
|
|
0.02
|
|
|
162
|
|
0.14
|
|
|
272
|
|
0.23
|
|
|
|
|
||||||||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP
|
$
|
3,450
|
|
$
|
3.17
|
|
|
$
|
3,215
|
|
$
|
2.85
|
|
|
$
|
2,766
|
|
$
|
2.39
|
|
(b)
|
11
|
%
|
15
|
%
|
(a)
|
Annualized.
|
(b)
|
Does not foot due to rounding.
|
Reconciliation of revenue – GAAP to Non-GAAP
|
|
|
|
Growth
|
|||||||||
(in millions, except per common share amounts)
|
2016
|
|
2015
|
|
2014
|
|
2016 vs.
2015
|
|
2016 vs.
2014
(a)
|
|
|||
Fee and other revenue – GAAP
|
$
|
12,073
|
|
$
|
12,082
|
|
$
|
12,649
|
|
|
|
||
Income from consolidated investment management funds – GAAP
|
26
|
|
86
|
|
163
|
|
|
|
|||||
Net interest revenue – GAAP
|
3,138
|
|
3,026
|
|
2,880
|
|
|
|
|||||
Total revenue – GAAP
|
15,237
|
|
15,194
|
|
15,692
|
|
—
|
%
|
(1
|
)%
|
|||
|
|
|
|
|
|
||||||||
Less: Net income attributable to noncontrolling interests of consolidated investment management funds
|
10
|
|
68
|
|
84
|
|
|
|
|||||
Gain on the sale of our equity investment in Wing Hang
|
—
|
|
—
|
|
490
|
|
|
|
|||||
Gain on the sale of our One Wall Street building
|
—
|
|
—
|
|
346
|
|
|
|
|||||
Total revenue, as adjusted – Non-GAAP (a)
|
$
|
15,227
|
|
$
|
15,126
|
|
$
|
14,772
|
|
1
|
%
|
2
|
%
|
(a)
|
Annualized.
|
Supplemental Information
(unaudited)
(continued)
|
|
Total payout ratio
|
2016
|
|
|
(dollars in millions)
|
|||
Capital deployed:
|
|
||
Common stock dividends
|
$
|
778
|
|
Common stock repurchased
|
2,398
|
|
|
Total capital deployed
|
$
|
3,176
|
|
|
|
||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
3,425
|
|
Add: M&I, Litigation and restructuring charges – after-tax
|
33
|
|
|
Recovery related to Sentinel – after-tax
|
(8
|
)
|
|
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP
|
$
|
3,450
|
|
|
|
||
Payout ratio – GAAP
|
93
|
%
|
|
Adjusted payout ratio – Non-GAAP
|
92
|
%
|
Reconciliation of income before income taxes – pre-tax operating margin
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||||
(dollars in millions)
|
|||||||||||||||||||
Income before income taxes – GAAP
|
$
|
4,725
|
|
|
$
|
4,235
|
|
|
$
|
3,563
|
|
|
$
|
3,777
|
|
|
$
|
3,357
|
|
Less: Net income attributable to noncontrolling interests of consolidated investment management funds
|
10
|
|
|
68
|
|
|
84
|
|
|
80
|
|
|
76
|
|
|||||
Gain on the sale of our equity investment in Wing Hang
|
—
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|||||
Gain on the sale of our One Wall Street building
|
—
|
|
|
—
|
|
|
346
|
|
|
—
|
|
|
—
|
|
|||||
Add: Amortization of intangible assets
|
237
|
|
|
261
|
|
|
298
|
|
|
342
|
|
|
384
|
|
|||||
M&I, litigation and restructuring charges
|
49
|
|
|
85
|
|
|
1,130
|
|
|
70
|
|
|
559
|
|
|||||
(Recovery) impairment charge related to Sentinel
|
(13
|
)
|
|
170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Charge related to investment management funds, net of incentives
|
—
|
|
|
—
|
|
|
104
|
|
|
12
|
|
|
16
|
|
|||||
Income before income taxes, as adjusted – Non-GAAP
(a)
|
$
|
4,988
|
|
|
$
|
4,683
|
|
|
$
|
4,175
|
|
|
$
|
4,121
|
|
|
$
|
4,240
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fee and other revenue – GAAP
|
$
|
12,073
|
|
|
$
|
12,082
|
|
|
$
|
12,649
|
|
|
$
|
11,856
|
|
|
$
|
11,448
|
|
Income from consolidated investment management funds – GAAP
|
26
|
|
|
86
|
|
|
163
|
|
|
183
|
|
|
189
|
|
|||||
Net interest revenue – GAAP
|
3,138
|
|
|
3,026
|
|
|
2,880
|
|
|
3,009
|
|
|
2,973
|
|
|||||
Total revenue – GAAP
|
15,237
|
|
|
15,194
|
|
|
15,692
|
|
|
15,048
|
|
|
14,610
|
|
|||||
Less: Net income attributable to noncontrolling interests of consolidated investment management funds
|
10
|
|
|
68
|
|
|
84
|
|
|
80
|
|
|
76
|
|
|||||
Gain on the sale of our equity investment in Wing Hang
|
—
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|||||
Gain on the sale of our One Wall Street building
|
—
|
|
|
—
|
|
|
346
|
|
|
—
|
|
|
—
|
|
|||||
Total revenue, as adjusted – Non-GAAP
(a)
|
$
|
15,227
|
|
|
$
|
15,126
|
|
|
$
|
14,772
|
|
|
$
|
14,968
|
|
|
$
|
14,534
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax operating margin – GAAP
(b)
|
31
|
%
|
(c)
|
28
|
%
|
(c)
|
23
|
%
|
|
25
|
%
|
|
23
|
%
|
|||||
Adjusted pre-tax operating margin – Non-GAAP
(a)(b)
|
33
|
%
|
(c)
|
31
|
%
|
(c)
|
28
|
%
|
|
28
|
%
|
|
29
|
%
|
(a)
|
Non-GAAP information for all periods presented excludes the net income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for 2016 and 2015 also excludes the (recovery) impairment charge related to the Sentinel loan. Non-GAAP information for 2014 also excludes the gains on the sales of our equity investment in Wing Hang and our One Wall Street building and the charge related to investment management funds, net of incentives. Non-GAAP information for 2013 and 2012 also excludes the charge related to investment management funds, net of incentives.
|
(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 $317 million for
2016
and $242 million for
2015
and would increase our pre-tax operating margin by approximately 1.4% for
2016
and 1.1% for
2015
.
|
Supplemental Information
(unaudited)
(continued)
|
|
Operating leverage
|
2016
|
|
2015
|
|
2016 vs.
|
|
||
(dollars in millions)
|
2015
|
|
||||||
Total revenue – GAAP
|
$
|
15,237
|
|
$
|
15,194
|
|
0.28%
|
|
Less: Net income attributable to noncontrolling interests of consolidated investment management funds
|
10
|
|
68
|
|
|
|||
Total revenue, as adjusted – Non-GAAP
|
$
|
15,227
|
|
$
|
15,126
|
|
0.67%
|
|
|
|
|
|
|||||
Total noninterest expense – GAAP
|
$
|
10,523
|
|
$
|
10,799
|
|
(2.56)%
|
|
Less: Amortization of intangible assets
|
237
|
|
261
|
|
|
|||
M&I, litigation and restructuring charges
|
49
|
|
85
|
|
|
|||
Total noninterest expense, as adjusted – Non-GAAP
|
$
|
10,237
|
|
$
|
10,453
|
|
(2.07)%
|
|
|
|
|
|
|||||
Operating leverage – GAAP
(a)
|
|
|
284
|
bps
|
||||
Adjusted operating leverage – Non-GAAP
(a)(b)
|
|
|
274
|
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 attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges.
|
Equity to assets and book value per common share
|
Dec. 31,
|
||||||||||||||
(dollars in millions, unless otherwise noted)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
|||||
BNY Mellon shareholders’ equity at period end – GAAP
|
$
|
38,811
|
|
$
|
38,037
|
|
$
|
37,441
|
|
$
|
37,497
|
|
$
|
36,414
|
|
Less: Preferred stock
|
3,542
|
|
2,552
|
|
1,562
|
|
1,562
|
|
1,068
|
|
|||||
BNY Mellon common shareholders’ equity at period end – GAAP
|
35,269
|
|
35,485
|
|
35,879
|
|
35,935
|
|
35,346
|
|
|||||
Less: Goodwill
|
17,316
|
|
17,618
|
|
17,869
|
|
18,073
|
|
18,075
|
|
|||||
Intangible assets
|
3,598
|
|
3,842
|
|
4,127
|
|
4,452
|
|
4,809
|
|
|||||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,497
|
|
1,401
|
|
1,340
|
|
1,302
|
|
1,130
|
|
|||||
Deferred tax liability – intangible assets
(a)
|
1,105
|
|
1,148
|
|
1,216
|
|
1,222
|
|
1,310
|
|
|||||
BNY Mellon tangible common shareholders’ equity at
period end – Non-GAAP
|
$
|
16,957
|
|
$
|
16,574
|
|
$
|
16,439
|
|
$
|
15,934
|
|
$
|
14,902
|
|
|
|
|
|
|
|
||||||||||
Total assets at period end – GAAP
|
$
|
333,469
|
|
$
|
393,780
|
|
$
|
385,303
|
|
$
|
374,516
|
|
$
|
359,226
|
|
Less: Assets of consolidated investment management funds
|
1,231
|
|
1,401
|
|
9,282
|
|
11,272
|
|
11,481
|
|
|||||
Subtotal assets of operations – Non-GAAP
|
332,238
|
|
392,379
|
|
376,021
|
|
363,244
|
|
347,745
|
|
|||||
Less: Goodwill
|
17,316
|
|
17,618
|
|
17,869
|
|
18,073
|
|
18,075
|
|
|||||
Intangible assets
|
3,598
|
|
3,842
|
|
4,127
|
|
4,452
|
|
4,809
|
|
|||||
Cash on deposit with the Federal Reserve and other central banks
(b)
|
58,146
|
|
116,211
|
|
99,901
|
|
105,384
|
|
90,040
|
|
|||||
Tangible total assets of operations at period end – Non-GAAP
|
$
|
253,178
|
|
$
|
254,708
|
|
$
|
254,124
|
|
$
|
235,335
|
|
$
|
234,821
|
|
|
|
|
|
|
|
||||||||||
BNY Mellon shareholders’ equity to total assets ratio – GAAP
|
11.6
|
%
|
9.7
|
%
|
9.7
|
%
|
10.0
|
%
|
10.1
|
%
|
|||||
BNY Mellon common shareholders’ equity to total
assets ratio – GAAP
|
10.6
|
%
|
9.0
|
%
|
9.3
|
%
|
9.6
|
%
|
9.8
|
%
|
|||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
|
6.7
|
%
|
6.5
|
%
|
6.5
|
%
|
6.8
|
%
|
6.3
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Year-end common shares outstanding
(in thousands)
|
1,047,488
|
|
1,085,343
|
|
1,118,228
|
|
1,142,250
|
|
1,163,490
|
|
|||||
|
|
|
|
|
|
||||||||||
Book value per common share – GAAP
|
$
|
33.67
|
|
$
|
32.69
|
|
$
|
32.09
|
|
$
|
31.46
|
|
$
|
30.38
|
|
Tangible book value per common share – Non-GAAP
|
$
|
16.19
|
|
$
|
15.27
|
|
$
|
14.70
|
|
$
|
13.95
|
|
$
|
12.81
|
|
(a)
|
Deferred tax liabilities are based on fully phased-in Basel III rules.
|
(b)
|
Assigned a zero percentage risk-weighting by the regulators.
|
Supplemental Information
(unaudited)
(continued)
|
|
Return on common equity and tangible common equity
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2015 -
2016
(a)
|
|
|||||
(dollars in millions)
|
|||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
3,425
|
|
$
|
3,053
|
|
$
|
2,494
|
|
$
|
2,040
|
|
$
|
2,419
|
|
|
|
Add: Amortization of intangible assets
|
237
|
|
261
|
|
298
|
|
342
|
|
384
|
|
|
||||||
Less: Tax impact of amortization of intangible assets
|
81
|
|
89
|
|
104
|
|
122
|
|
137
|
|
|
||||||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation excluding amortization of intangible assets – Non-GAAP
|
3,581
|
|
3,225
|
|
2,688
|
|
2,260
|
|
2,666
|
|
|
||||||
Add: M&I, litigation and restructuring charges
|
49
|
|
85
|
|
1,130
|
|
70
|
|
559
|
|
|
||||||
(Recovery) impairment charge related to Sentinel
|
(13
|
)
|
170
|
|
—
|
|
—
|
|
—
|
|
|
||||||
Tax impact of gain on the sale of our equity investment in Wing Hang
|
—
|
|
—
|
|
175
|
|
—
|
|
—
|
|
|
||||||
Tax impact of the gain on the sale of our One Wall Street building
|
—
|
|
—
|
|
142
|
|
—
|
|
—
|
|
|
||||||
Charge related to investment management funds, net of incentives
|
—
|
|
—
|
|
104
|
|
12
|
|
16
|
|
|
||||||
Net charge related to the disallowance of certain foreign tax credits
|
—
|
|
—
|
|
—
|
|
593
|
|
—
|
|
|
||||||
Less: Tax impact of M&I, litigation and restructuring charges
|
16
|
|
29
|
|
270
|
|
25
|
|
220
|
|
|
||||||
Tax impact of (recovery) impairment charge related to Sentinel
|
(5
|
)
|
64
|
|
—
|
|
—
|
|
—
|
|
|
||||||
Gain on the sale of our equity investment in Wing Hang
|
—
|
|
—
|
|
490
|
|
—
|
|
—
|
|
|
||||||
Gain on the sale of our One Wall Street building
|
—
|
|
—
|
|
346
|
|
—
|
|
—
|
|
|
||||||
Tax impact of charge related to investment management funds, net of incentives
|
—
|
|
—
|
|
23
|
|
3
|
|
4
|
|
|
||||||
Benefit primarily related to a tax carryback claim
|
—
|
|
—
|
|
150
|
|
—
|
|
—
|
|
|
||||||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, as adjusted – Non-GAAP
(b)
|
$
|
3,606
|
|
$
|
3,387
|
|
$
|
2,960
|
|
$
|
2,907
|
|
$
|
3,017
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average common shareholders’ equity
|
$
|
35,504
|
|
$
|
35,564
|
|
$
|
36,618
|
|
$
|
34,832
|
|
$
|
34,333
|
|
|
|
Less: Average goodwill
|
17,497
|
|
17,731
|
|
18,063
|
|
17,988
|
|
17,967
|
|
|
||||||
Average intangible assets
|
3,737
|
|
3,992
|
|
4,305
|
|
4,619
|
|
4,982
|
|
|
||||||
Add: Deferred tax liability – tax deductible goodwill
(c)
|
1,497
|
|
1,401
|
|
1,340
|
|
1,302
|
|
1,130
|
|
|
||||||
Deferred tax liability – intangible assets
(c)
|
1,105
|
|
1,148
|
|
1,216
|
|
1,222
|
|
1,310
|
|
|
||||||
Average tangible common shareholders’ equity – Non-GAAP
|
$
|
16,872
|
|
$
|
16,390
|
|
$
|
16,806
|
|
$
|
14,749
|
|
$
|
13,824
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Return on common equity – GAAP
|
9.6
|
%
|
8.6
|
%
|
6.8
|
%
|
5.9
|
%
|
7.0
|
%
|
9.1
|
%
|
|||||
Adjusted return on common equity – Non-GAAP
(b)
|
10.2
|
%
|
9.5
|
%
|
8.1
|
%
|
8.3
|
%
|
8.8
|
%
|
9.8
|
%
|
|||||
|
|
|
|
|
|
|
|||||||||||
Return on tangible common equity – Non-GAAP
|
21.2
|
%
|
19.7
|
%
|
16.0
|
%
|
15.3
|
%
|
19.3
|
%
|
20.4
|
%
|
|||||
Adjusted return on tangible common equity – Non-GAAP
(b)
|
21.4
|
%
|
20.7
|
%
|
17.6
|
%
|
19.7
|
%
|
21.8
|
%
|
21.0
|
%
|
(a)
|
Annualized.
|
(b)
|
Non-GAAP information for all periods presented excludes the amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for 2016 and 2015 also excludes the (recovery) impairment charge related to the Sentinel loan. Non-GAAP information for 2014 also excludes the gains on the sales of our equity investment in Wing Hang and our One Wall Street building, the charge related to investment management funds, net of incentives, and benefit primarily related to a tax carryback claim. Non-GAAP information for 2013 also excludes the charge related to investment management funds, net of incentives, and the net charge related to the disallowance of certain foreign tax credits. Non-GAAP information for 2012 also excludes the charge related to investment management funds, net of incentives.
|
(c)
|
Deferred tax liabilities are based on fully phased-in Basel III rules.
|
Supplemental Information
(unaudited)
(continued)
|
|
Pre-tax operating margin - Investment Management business
|
|
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Income before income taxes – GAAP
|
$
|
967
|
|
$
|
1,048
|
|
$
|
892
|
|
Add: Amortization of intangible assets
|
82
|
|
97
|
|
118
|
|
|||
Provision for credit losses
|
6
|
|
(1
|
)
|
—
|
|
|||
Charge related to investment management funds, net of incentives
|
—
|
|
—
|
|
104
|
|
|||
Adjusted income before income taxes excluding amortization of intangible assets, provision for credit losses and the charge related to investment management funds, net of incentives – Non-GAAP
|
$
|
1,055
|
|
$
|
1,144
|
|
$
|
1,114
|
|
|
|
|
|
||||||
Total revenue – GAAP
|
$
|
3,751
|
|
$
|
3,906
|
|
$
|
3,931
|
|
Less:
Distribution and servicing expense
|
404
|
|
378
|
|
423
|
|
|||
Adjusted total revenue net of distribution and servicing expense – Non-GAAP
|
$
|
3,347
|
|
$
|
3,528
|
|
$
|
3,508
|
|
|
|
|
|
||||||
Pre-tax operating margin – GAAP
(a)
|
26
|
%
|
27
|
%
|
23
|
%
|
|||
Adjusted pre-tax operating margin, excluding amortization of intangible assets, provision for credit losses, the charge related to investment management funds, net of incentives and distribution and servicing expense – Non-GAAP
(a)
|
32
|
%
|
32
|
%
|
32
|
%
|
(a)
|
Income before taxes divided by total revenue.
|
Supplemental Information
(unaudited)
(continued)
|
|
Rate/volume analysis
(a)
|
2016 over (under) 2015
|
|
2015 over (under) 2014
|
||||||||||||||||
|
Due to change in
|
|
|
Due to change in
|
|
||||||||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average
balance
|
|
Average
rate
|
|
Net
change
|
|
|
Average
balance
|
|
Average
rate
|
|
Net
change
|
|
||||||
Interest revenue
|
|
|
|
|
|
|
|
||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
(34
|
)
|
$
|
34
|
|
$
|
—
|
|
|
$
|
(85
|
)
|
$
|
(49
|
)
|
$
|
(134
|
)
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
(5
|
)
|
33
|
|
28
|
|
|
(8
|
)
|
(29
|
)
|
(37
|
)
|
||||||
Federal funds sold and securities purchased under resale agreements
|
16
|
|
70
|
|
86
|
|
|
54
|
|
7
|
|
61
|
|
||||||
Margin loans
|
(19
|
)
|
77
|
|
58
|
|
|
25
|
|
—
|
|
25
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||||
Domestic offices:
|
|
|
|
|
|
|
|
||||||||||||
Consumer
|
41
|
|
1
|
|
42
|
|
|
21
|
|
(3
|
)
|
18
|
|
||||||
Commercial
|
40
|
|
31
|
|
71
|
|
|
49
|
|
(31
|
)
|
18
|
|
||||||
Foreign offices
|
(10
|
)
|
43
|
|
33
|
|
|
7
|
|
(13
|
)
|
(6
|
)
|
||||||
Total non-margin loans
|
71
|
|
75
|
|
146
|
|
|
77
|
|
(47
|
)
|
30
|
|
||||||
Securities:
|
|
|
|
|
|
|
|
||||||||||||
U.S. government obligations
|
(13
|
)
|
13
|
|
—
|
|
|
79
|
|
(11
|
)
|
68
|
|
||||||
U.S. government agency obligations
|
23
|
|
(4
|
)
|
19
|
|
|
171
|
|
15
|
|
186
|
|
||||||
State and political subdivisions - tax exempt
|
(28
|
)
|
10
|
|
(18
|
)
|
|
(36
|
)
|
10
|
|
(26
|
)
|
||||||
Other securities:
|
|
|
|
|
|
|
|
||||||||||||
Domestic offices
|
(44
|
)
|
(48
|
)
|
(92
|
)
|
|
(7
|
)
|
74
|
|
67
|
|
||||||
Foreign offices
|
(18
|
)
|
48
|
|
30
|
|
|
25
|
|
(132
|
)
|
(107
|
)
|
||||||
Total other securities
|
(62
|
)
|
—
|
|
(62
|
)
|
|
18
|
|
(58
|
)
|
(40
|
)
|
||||||
Trading securities (primarily domestic)
|
(12
|
)
|
(3
|
)
|
(15
|
)
|
|
(55
|
)
|
10
|
|
(45
|
)
|
||||||
Total securities
|
(92
|
)
|
16
|
|
(76
|
)
|
|
177
|
|
(34
|
)
|
143
|
|
||||||
Total interest revenue
|
$
|
(63
|
)
|
$
|
305
|
|
$
|
242
|
|
|
$
|
240
|
|
$
|
(152
|
)
|
$
|
88
|
|
Interest expense
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
||||||||||||
Domestic offices:
|
|
|
|
|
|
|
|
||||||||||||
Money market rate accounts
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
(2
|
)
|
|
$
|
1
|
|
$
|
(2
|
)
|
$
|
(1
|
)
|
Savings
|
—
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
1
|
|
||||||
Demand deposits
|
—
|
|
1
|
|
1
|
|
|
—
|
|
2
|
|
2
|
|
||||||
Time deposits
|
—
|
|
12
|
|
12
|
|
|
1
|
|
(2
|
)
|
(1
|
)
|
||||||
Total domestic offices
|
—
|
|
11
|
|
11
|
|
|
3
|
|
(2
|
)
|
1
|
|
||||||
Foreign offices:
|
|
|
|
|
|
|
|
||||||||||||
Banks
|
(2
|
)
|
4
|
|
2
|
|
|
19
|
|
(40
|
)
|
(21
|
)
|
||||||
Other
|
—
|
|
(34
|
)
|
(34
|
)
|
|
(2
|
)
|
(24
|
)
|
(26
|
)
|
||||||
Total foreign offices
|
(2
|
)
|
(30
|
)
|
(32
|
)
|
|
17
|
|
(64
|
)
|
(47
|
)
|
||||||
Total interest-bearing deposits
|
(2
|
)
|
(19
|
)
|
(21
|
)
|
|
20
|
|
(66
|
)
|
(46
|
)
|
||||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
42
|
|
42
|
|
|
2
|
|
5
|
|
7
|
|
||||||
Trading liabilities
|
1
|
|
(4
|
)
|
(3
|
)
|
|
(21
|
)
|
5
|
|
(16
|
)
|
||||||
Other borrowed funds:
|
|
|
|
|
|
|
|
||||||||||||
Domestic offices
|
(2
|
)
|
2
|
|
—
|
|
|
—
|
|
2
|
|
2
|
|
||||||
Foreign offices
|
1
|
|
(2
|
)
|
(1
|
)
|
|
(1
|
)
|
2
|
|
1
|
|
||||||
Total other borrowed funds
|
(1
|
)
|
—
|
|
(1
|
)
|
|
(1
|
)
|
4
|
|
3
|
|
||||||
Commercial paper
|
—
|
|
3
|
|
3
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Payables to customers and broker-dealers
|
4
|
|
1
|
|
5
|
|
|
1
|
|
(3
|
)
|
(2
|
)
|
||||||
Long-term debt
|
32
|
|
80
|
|
112
|
|
|
3
|
|
(3
|
)
|
—
|
|
||||||
Total interest expense
|
$
|
34
|
|
$
|
103
|
|
$
|
137
|
|
|
$
|
4
|
|
$
|
(58
|
)
|
$
|
(54
|
)
|
Changes in net interest revenue
|
$
|
(97
|
)
|
$
|
202
|
|
$
|
105
|
|
|
$
|
236
|
|
$
|
(94
|
)
|
$
|
142
|
|
(a)
|
Changes which are solely due to balance changes or rate changes are allocated to such categories on the basis of the respective percentage changes in average balances and average rates. Changes in interest revenue or interest expense arising from the combination of rate and volume variances are allocated proportionately to rate and volume based on their relative absolute magnitudes.
|
Selected Quarterly Data (unaudited)
|
|
Selected Quarterly Data
|
Quarter ended
|
||||||||||||||||||||||||
(dollar amounts in millions,
except per share amounts)
|
2016
|
|
2015
|
||||||||||||||||||||||
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
March 31
|
|
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
March 31
|
|
|||||||||
Consolidated income statement
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total fee and other revenue
|
$
|
2,954
|
|
$
|
3,150
|
|
$
|
2,999
|
|
$
|
2,970
|
|
|
$
|
2,950
|
|
$
|
3,053
|
|
$
|
3,067
|
|
$
|
3,012
|
|
Income (loss) from consolidated investment management funds
|
5
|
|
17
|
|
10
|
|
(6
|
)
|
|
16
|
|
(22
|
)
|
40
|
|
52
|
|
||||||||
Net interest revenue
|
831
|
|
774
|
|
767
|
|
766
|
|
|
760
|
|
759
|
|
779
|
|
728
|
|
||||||||
Total revenue
|
3,790
|
|
3,941
|
|
3,776
|
|
3,730
|
|
|
3,726
|
|
3,790
|
|
3,886
|
|
3,792
|
|
||||||||
Provision for credit losses
|
7
|
|
(19
|
)
|
(9
|
)
|
10
|
|
|
163
|
|
1
|
|
(6
|
)
|
2
|
|
||||||||
Noninterest expense
|
2,631
|
|
2,643
|
|
2,620
|
|
2,629
|
|
|
2,692
|
|
2,680
|
|
2,727
|
|
2,700
|
|
||||||||
Income before taxes
|
1,152
|
|
1,317
|
|
1,165
|
|
1,091
|
|
|
871
|
|
1,109
|
|
1,165
|
|
1,090
|
|
||||||||
Provision for income taxes
|
280
|
|
324
|
|
290
|
|
283
|
|
|
175
|
|
282
|
|
276
|
|
280
|
|
||||||||
Net income
|
872
|
|
993
|
|
875
|
|
808
|
|
|
696
|
|
827
|
|
889
|
|
810
|
|
||||||||
Net (income) loss attributable to noncontrolling interests
|
(2
|
)
|
(6
|
)
|
(2
|
)
|
9
|
|
|
(3
|
)
|
6
|
|
(36
|
)
|
(31
|
)
|
||||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
870
|
|
987
|
|
873
|
|
817
|
|
|
693
|
|
833
|
|
853
|
|
779
|
|
||||||||
Preferred stock dividends
|
(48
|
)
|
(13
|
)
|
(48
|
)
|
(13
|
)
|
|
(56
|
)
|
(13
|
)
|
(23
|
)
|
(13
|
)
|
||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
822
|
|
$
|
974
|
|
$
|
825
|
|
$
|
804
|
|
|
$
|
637
|
|
$
|
820
|
|
$
|
830
|
|
$
|
766
|
|
Basic earnings per common share
|
$
|
0.77
|
|
$
|
0.90
|
|
$
|
0.76
|
|
$
|
0.73
|
|
|
$
|
0.58
|
|
$
|
0.74
|
|
$
|
0.74
|
|
$
|
0.67
|
|
Diluted earnings per common share
|
0.77
|
|
0.90
|
|
0.75
|
|
0.73
|
|
|
0.57
|
|
0.74
|
|
0.73
|
|
0.67
|
|
||||||||
Average balances
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest-bearing deposits with banks
|
$
|
77,119
|
|
$
|
88,168
|
|
$
|
112,182
|
|
$
|
104,001
|
|
|
$
|
104,181
|
|
$
|
104,724
|
|
$
|
102,081
|
|
$
|
103,231
|
|
Securities
|
117,660
|
|
118,405
|
|
118,002
|
|
118,538
|
|
|
119,532
|
|
121,188
|
|
128,641
|
|
123,476
|
|
||||||||
Trading assets
|
2,288
|
|
2,176
|
|
2,152
|
|
3,320
|
|
|
2,786
|
|
2,737
|
|
3,253
|
|
3,046
|
|
||||||||
Loans
|
63,647
|
|
61,578
|
|
60,284
|
|
61,196
|
|
|
61,964
|
|
61,657
|
|
61,076
|
|
57,935
|
|
||||||||
Total interest-earning assets
|
287,947
|
|
296,703
|
|
318,433
|
|
310,678
|
|
|
312,610
|
|
315,672
|
|
318,596
|
|
308,104
|
|
||||||||
Assets of operations
|
343,138
|
|
350,190
|
|
372,974
|
|
363,245
|
|
|
366,875
|
|
371,328
|
|
375,999
|
|
366,083
|
|
||||||||
Total assets
|
344,142
|
|
351,230
|
|
374,220
|
|
364,554
|
|
|
368,590
|
|
373,453
|
|
378,279
|
|
368,411
|
|
||||||||
Deposits
|
227,948
|
|
236,728
|
|
249,155
|
|
244,961
|
|
|
246,212
|
|
254,799
|
|
255,606
|
|
249,112
|
|
||||||||
Long-term debt
|
24,986
|
|
23,930
|
|
22,838
|
|
21,556
|
|
|
21,418
|
|
21,070
|
|
20,625
|
|
20,199
|
|
||||||||
Preferred stock
|
3,542
|
|
3,284
|
|
2,552
|
|
2,552
|
|
|
2,552
|
|
2,552
|
|
2,313
|
|
1,562
|
|
||||||||
Total The Bank of New York Mellon Corporation common shareholders’ equity
|
35,171
|
|
35,767
|
|
35,827
|
|
35,252
|
|
|
35,664
|
|
35,588
|
|
35,516
|
|
35,486
|
|
||||||||
Net interest margin (FTE)
|
1.17
|
%
|
1.06
|
%
|
0.98
|
%
|
1.01
|
%
|
|
0.99
|
%
|
0.98
|
%
|
1.00
|
%
|
0.97
|
%
|
||||||||
Annualized return on common equity
(a)
|
9.3
|
%
|
10.8
|
%
|
9.3
|
%
|
9.2
|
%
|
|
7.1
|
%
|
9.1
|
%
|
9.4
|
%
|
8.8
|
%
|
||||||||
Pre-tax operating margin
|
30
|
%
|
33
|
%
|
31
|
%
|
29
|
%
|
|
23
|
%
|
29
|
%
|
30
|
%
|
29
|
%
|
||||||||
Common stock data
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Market price per share range:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
High
|
$
|
49.54
|
|
$
|
42.02
|
|
$
|
42.61
|
|
$
|
40.29
|
|
|
$
|
44.73
|
|
$
|
45.45
|
|
$
|
44.10
|
|
$
|
41.44
|
|
Low
|
38.68
|
|
36.50
|
|
35.44
|
|
32.20
|
|
|
37.48
|
|
36.46
|
|
39.87
|
|
35.63
|
|
||||||||
Average
|
45.10
|
|
39.94
|
|
39.78
|
|
36.26
|
|
|
42.02
|
|
41.56
|
|
42.61
|
|
38.95
|
|
||||||||
Period end close
|
47.38
|
|
39.88
|
|
38.85
|
|
36.83
|
|
|
41.22
|
|
39.15
|
|
41.97
|
|
40.24
|
|
||||||||
Cash dividends per common share
|
0.19
|
|
0.19
|
|
0.17
|
|
0.17
|
|
|
0.17
|
|
0.17
|
|
0.17
|
|
0.17
|
|
||||||||
Market capitalization
(b)
|
49,630
|
|
42,167
|
|
41,479
|
|
39,669
|
|
|
44,738
|
|
42,789
|
|
46,441
|
|
45,130
|
|
(a)
|
At
Dec. 31, 2016
, there were
28,015
shareholders registered with our stock transfer agent, compared with
29,136
at
Dec. 31, 2015
and
30,525
at
Dec. 31, 2014
. In addition, there were
44,542
of BNY Mellon’s current and former employees at
Dec. 31, 2016
who participate in BNY Mellon’s 401(k) Retirement Savings Plan. All shares of BNY Mellon’s common stock held by the Plan for its participants are registered in the name of The Bank of New York Mellon Corporation, as trustee.
|
(b)
|
At period end.
|
Forward-looking Statements
|
|
Forward-looking Statements
(continued)
|
|
Acronyms
|
|
ABS
|
Asset-backed security
|
APAC
|
Asia-Pacific region
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
AUC/A
|
Assets under custody and/or administration
|
AUM
|
Assets under management
|
BHCs
|
Bank holding companies
|
bps
|
basis points
|
CCAR
|
Comprehensive Capital Analysis and Review
|
CD
|
Certificates of deposit
|
CET1
|
Common Equity Tier 1 capital
|
CFTC
|
Commodity Futures Trading Commission
|
CLO
|
Collateralized loan obligation
|
CVA
|
Credit valuation adjustment
|
DVA
|
Debit valuation adjustment
|
EMEA
|
Europe, the Middle East and Africa
|
ERISA
|
Employee Retirement Income Security Act of 1974
|
ESOP
|
Employee Stock Ownership Plan
|
EVE
|
Economic Value of Equity
|
FASB
|
Financial Accounting Standards Board
|
FCA
|
Financial Conduct Authority
|
FDIC
|
Federal Deposit Insurance Corporation
|
FHC
|
Financial holding company
|
FINRA
|
Financial Industry Regulatory Authority, Inc.
|
FTE
|
Fully taxable equivalent
|
GAAP
|
Generally accepted accounting principles
|
G-SIBs
|
Global systemically important banks
|
HQLA
|
High-quality liquid assets
|
LIBOR
|
London Interbank Offered Rate
|
LCR
|
Liquidity coverage ratio
|
LTD
|
External long-term debt
|
M&I
|
Merger and integration
|
MBS
|
Mortgage-backed security
|
MMF
|
Money market funds
|
N/A
|
Not applicable or Not available
|
NAV
|
Net asset value
|
N/M
|
Not meaningful
|
NSFR
|
Net stable funding ratio
|
NYSE
|
New York Stock Exchange
|
OCC
|
Office of the Comptroller of the Currency
|
OCI
|
Other comprehensive income
|
OTC
|
Over-the-counter
|
OTTI
|
Other-than-temporary impairment
|
PSU
|
Performance units
|
REIT
|
Real estate investment trust
|
RMBS
|
Residential mortgage-backed security
|
RSU
|
Restricted stock units
|
RWA
|
Risk-weighted assets
|
S&P
|
Standard & Poor’s
|
SBIC
|
Small Business Investment Company
|
SBLC
|
Standby letters of credit
|
SEC
|
Securities and Exchange Commission
|
SIFIs
|
Systemically important financial institutions
|
SLR
|
Supplementary Leverage Ratio
|
TCE
|
Tangible common equity
|
TDR
|
Troubled debt restructuring
|
TLAC
|
Total loss-absorbing capacity
|
VaR
|
Value-at-risk
|
VIE
|
Variable interest entity
|
VME
|
Voting model entity
|
Glossary
|
|
Glossary
(continued)
|
|
Glossary
(continued)
|
|
Glossary
(continued)
|
|
Report of Management on Internal Control Over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm
|
|
Item 1. Financial Statements
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Fee and other revenue
|
|
|
|
||||||
Investment services fees:
|
|
|
|
||||||
Asset servicing
|
$
|
4,244
|
|
$
|
4,187
|
|
$
|
4,075
|
|
Clearing services
|
1,404
|
|
1,375
|
|
1,335
|
|
|||
Issuer services
|
1,026
|
|
978
|
|
968
|
|
|||
Treasury services
|
547
|
|
555
|
|
564
|
|
|||
Total investment services fees
|
7,221
|
|
7,095
|
|
6,942
|
|
|||
Investment management and performance fees
|
3,350
|
|
3,438
|
|
3,492
|
|
|||
Foreign exchange and other trading revenue
|
701
|
|
768
|
|
570
|
|
|||
Financing-related fees
|
219
|
|
220
|
|
169
|
|
|||
Distribution and servicing
|
166
|
|
162
|
|
173
|
|
|||
Investment and other income
|
341
|
|
316
|
|
1,212
|
|
|||
Total fee revenue
|
11,998
|
|
11,999
|
|
12,558
|
|
|||
Net securities gains — including other-than-temporary impairment
|
79
|
|
82
|
|
92
|
|
|||
Noncredit-related portion of other-than-temporary impairment
(recognized in other comprehensive income)
|
4
|
|
(1
|
)
|
1
|
|
|||
Net securities gains
|
75
|
|
83
|
|
91
|
|
|||
Total fee and other revenue
|
12,073
|
|
12,082
|
|
12,649
|
|
|||
Operations of consolidated investment management funds
|
|
|
|
||||||
Investment income
|
35
|
|
115
|
|
503
|
|
|||
Interest of investment management fund note holders
|
9
|
|
29
|
|
340
|
|
|||
Income from consolidated investment management funds
|
26
|
|
86
|
|
163
|
|
|||
Net interest revenue
|
|
|
|
||||||
Interest revenue
|
3,575
|
|
3,326
|
|
3,234
|
|
|||
Interest expense
|
437
|
|
300
|
|
354
|
|
|||
Net interest revenue
|
3,138
|
|
3,026
|
|
2,880
|
|
|||
Total revenue
|
15,237
|
|
15,194
|
|
15,692
|
|
|||
Provision for credit losses
|
(11
|
)
|
160
|
|
(48
|
)
|
|||
Noninterest expense
|
|
|
|
||||||
Staff
|
5,733
|
|
5,837
|
|
5,845
|
|
|||
Professional, legal and other purchased services
|
1,185
|
|
1,230
|
|
1,339
|
|
|||
Software
|
647
|
|
627
|
|
620
|
|
|||
Net occupancy
|
590
|
|
600
|
|
610
|
|
|||
Distribution and servicing
|
405
|
|
381
|
|
428
|
|
|||
Furniture and equipment
|
247
|
|
280
|
|
322
|
|
|||
Sub-custodian
|
245
|
|
270
|
|
286
|
|
|||
Business development
|
245
|
|
267
|
|
268
|
|
|||
Other
|
940
|
|
961
|
|
1,031
|
|
|||
Amortization of intangible assets
|
237
|
|
261
|
|
298
|
|
|||
Merger and integration, litigation and restructuring charges
|
49
|
|
85
|
|
1,130
|
|
|||
Total noninterest expense
|
10,523
|
|
10,799
|
|
12,177
|
|
|||
Income
|
|
|
|
||||||
Income before income taxes
|
4,725
|
|
4,235
|
|
3,563
|
|
|||
Provision for income taxes
|
1,177
|
|
1,013
|
|
912
|
|
|||
Net income
|
3,548
|
|
3,222
|
|
2,651
|
|
|||
Net (income) attributable to noncontrolling interests (includes $(10), $(68) and $(84) related to consolidated investment management funds, respectively)
|
(1
|
)
|
(64
|
)
|
(84
|
)
|
|||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
3,547
|
|
3,158
|
|
2,567
|
|
|||
Preferred stock dividends
|
(122
|
)
|
(105
|
)
|
(73
|
)
|
|||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
3,425
|
|
$
|
3,053
|
|
$
|
2,494
|
|
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
|
|
||||||||
Year ended Dec. 31,
|
|||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
3,425
|
|
$
|
3,053
|
|
$
|
2,494
|
|
Less: Earnings allocated to participating securities
|
52
|
|
43
|
|
43
|
|
|||
Net income applicable to the common shareholders of The Bank of New York Mellon Corporation after required adjustment for the calculation of basic and diluted earnings per common share
|
$
|
3,373
|
|
$
|
3,010
|
|
$
|
2,451
|
|
Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation
|
|
|||||
Year ended Dec. 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
|
Basic
|
1,066,286
|
|
1,104,719
|
|
1,129,897
|
|
Common stock equivalents
|
15,672
|
|
17,290
|
|
20,037
|
|
Less: Participating securities
|
(9,945
|
)
|
(9,498
|
)
|
(12,454
|
)
|
Diluted
|
1,072,013
|
|
1,112,511
|
|
1,137,480
|
|
|
|
|
|
|||
Anti-dilutive securities
(a)
|
31,695
|
|
28,736
|
|
43,735
|
|
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
(b)
|
|
||||||||
Year ended Dec. 31,
|
|||||||||
(in dollars)
|
2016
|
|
2015
|
|
2014
|
|
|||
Basic
|
$
|
3.16
|
|
$
|
2.73
|
|
$
|
2.17
|
|
Diluted
|
$
|
3.15
|
|
$
|
2.71
|
|
$
|
2.15
|
|
(a)
|
Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive.
|
(b)
|
Basic and diluted earnings per share under the two-class method are determined on the net income applicable to common shareholders of The Bank of New York Mellon Corporation reported on the income statement less earnings allocated to participating securities.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Net income
|
$
|
3,548
|
|
$
|
3,222
|
|
$
|
2,651
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||||
Foreign currency translation adjustments
|
(850
|
)
|
(599
|
)
|
(806
|
)
|
|||
Unrealized (loss) gain on assets available-for-sale:
|
|
|
|
||||||
Unrealized (loss) gain arising during the period
|
(242
|
)
|
(363
|
)
|
413
|
|
|||
Reclassification adjustment
|
(49
|
)
|
(52
|
)
|
(58
|
)
|
|||
Total unrealized (loss) gain on assets available-for-sale
|
(291
|
)
|
(415
|
)
|
355
|
|
|||
Defined benefit plans:
|
|
|
|
||||||
Prior service cost arising during the period
|
—
|
|
—
|
|
2
|
|
|||
Net (loss) arising during the period
|
(108
|
)
|
(65
|
)
|
(479
|
)
|
|||
Foreign exchange adjustment
|
—
|
|
—
|
|
(1
|
)
|
|||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
|
57
|
|
69
|
|
77
|
|
|||
Total defined benefit plans
|
(51
|
)
|
4
|
|
(401
|
)
|
|||
Net unrealized gain (loss) on cash flow hedges
|
(4
|
)
|
8
|
|
(15
|
)
|
|||
Total other comprehensive (loss), net of tax
(a)
|
(1,196
|
)
|
(1,002
|
)
|
(867
|
)
|
|||
Total comprehensive income
|
2,352
|
|
2,220
|
|
1,784
|
|
|||
Net (income) attributable to noncontrolling interests
|
(1
|
)
|
(64
|
)
|
(84
|
)
|
|||
Other comprehensive loss attributable to noncontrolling interests
|
31
|
|
36
|
|
125
|
|
|||
Comprehensive income applicable to the shareholders of The Bank of New York Mellon Corporation
|
$
|
2,382
|
|
$
|
2,192
|
|
$
|
1,825
|
|
(a)
|
Other comprehensive (loss) attributable to The Bank of New York Mellon Corporation shareholders was
$(1,165) million
for the
year ended
Dec. 31, 2016
,
$(966) million
for the
year ended
Dec. 31, 2015
and
$(742) million
for the
year ended
Dec. 31, 2014
.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Dec. 31,
|
|||||
(dollars in millions, except per share amounts)
|
2016
|
|
2015
|
|
||
Assets
|
|
|
||||
Cash and due from:
|
|
|
||||
Banks
|
$
|
4,822
|
|
$
|
6,537
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
58,041
|
|
113,203
|
|
||
Interest-bearing deposits with banks
|
15,086
|
|
15,146
|
|
||
Federal funds sold and securities purchased under resale agreements
|
25,801
|
|
24,373
|
|
||
Securities:
|
|
|
||||
Held-to-maturity (fair value of $40,669 and $43,204)
|
40,905
|
|
43,312
|
|
||
Available-for-sale
|
73,822
|
|
75,867
|
|
||
Total securities
|
114,727
|
|
119,179
|
|
||
Trading assets
|
5,733
|
|
7,368
|
|
||
Loans (includes $- and $422, at fair value)
|
64,458
|
|
63,703
|
|
||
Allowance for loan losses
|
(169
|
)
|
(157
|
)
|
||
Net loans
|
64,289
|
|
63,546
|
|
||
Premises and equipment
|
1,303
|
|
1,379
|
|
||
Accrued interest receivable
|
568
|
|
562
|
|
||
Goodwill
|
17,316
|
|
17,618
|
|
||
Intangible assets
|
3,598
|
|
3,842
|
|
||
Other assets (includes $1,339 and $1,087, at fair value)
|
20,954
|
|
19,626
|
|
||
Subtotal assets of operations
|
332,238
|
|
392,379
|
|
||
Assets of consolidated investment management funds, at fair value:
|
|
|
||||
Trading assets
|
979
|
|
1,228
|
|
||
Other assets
|
252
|
|
173
|
|
||
Subtotal assets of consolidated investment management funds, at fair value
|
1,231
|
|
1,401
|
|
||
Total assets
|
$
|
333,469
|
|
$
|
393,780
|
|
Liabilities
|
|
|
||||
Deposits:
|
|
|
||||
Noninterest-bearing (principally U.S. offices)
|
$
|
78,342
|
|
$
|
96,277
|
|
Interest-bearing deposits in U.S. offices
|
52,049
|
|
51,704
|
|
||
Interest-bearing deposits in Non-U.S. offices
|
91,099
|
|
131,629
|
|
||
Total deposits
|
221,490
|
|
279,610
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
9,989
|
|
15,002
|
|
||
Trading liabilities
|
4,389
|
|
4,501
|
|
||
Payables to customers and broker-dealers
|
20,987
|
|
21,900
|
|
||
Other borrowed funds
|
754
|
|
523
|
|
||
Accrued taxes and other expenses
|
5,867
|
|
5,986
|
|
||
Other liabilities (including allowance for lending-related commitments of $112 and $118, also includes $597 and $392, at fair value)
|
5,635
|
|
5,490
|
|
||
Long-term debt (includes $363 and $359, at fair value)
|
24,463
|
|
21,547
|
|
||
Subtotal liabilities of operations
|
293,574
|
|
354,559
|
|
||
Liabilities of consolidated investment management funds, at fair value:
|
|
|
||||
Trading liabilities
|
282
|
|
229
|
|
||
Other liabilities
|
33
|
|
17
|
|
||
Subtotal liabilities of consolidated investment management funds, at fair value
|
315
|
|
246
|
|
||
Total liabilities
|
293,889
|
|
354,805
|
|
||
Temporary equity
|
|
|
||||
Redeemable noncontrolling interests
|
151
|
|
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 1,333,706,427 and 1,312,941,113 shares
|
13
|
|
13
|
|
||
Additional paid-in capital
|
25,962
|
|
25,262
|
|
||
Retained earnings
|
22,621
|
|
19,974
|
|
||
Accumulated other comprehensive loss, net of tax
|
(3,765
|
)
|
(2,600
|
)
|
||
Less: Treasury stock of 286,218,126 and 227,598,128 common shares, at cost
|
(9,562
|
)
|
(7,164
|
)
|
||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
38,811
|
|
38,037
|
|
||
Nonredeemable noncontrolling interests of consolidated investment management funds
|
618
|
|
738
|
|
||
Total permanent equity
|
39,429
|
|
38,775
|
|
||
Total liabilities, temporary equity and permanent equity
|
$
|
333,469
|
|
$
|
393,780
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
3,548
|
|
$
|
3,222
|
|
$
|
2,651
|
|
Net (income) attributable to noncontrolling interests
|
(1
|
)
|
(64
|
)
|
(84
|
)
|
|||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
3,547
|
|
3,158
|
|
2,567
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Provision for credit losses
|
(11
|
)
|
160
|
|
(48
|
)
|
|||
Pension plan contributions
|
(108
|
)
|
(70
|
)
|
(72
|
)
|
|||
Depreciation and amortization
|
1,502
|
|
1,457
|
|
1,292
|
|
|||
Deferred tax (benefit) expense
|
(126
|
)
|
47
|
|
(853
|
)
|
|||
Net securities (gains)
|
(75
|
)
|
(83
|
)
|
(91
|
)
|
|||
Change in trading assets and liabilities
|
1,522
|
|
(414
|
)
|
2,636
|
|
|||
Originations of loans held-for-sale
|
(350
|
)
|
(1,106
|
)
|
—
|
|
|||
Proceeds from the sales of loans originated for sale
|
831
|
|
725
|
|
—
|
|
|||
Change in accruals and other, net
|
(486
|
)
|
253
|
|
(947
|
)
|
|||
Net cash provided by operating activities
|
6,246
|
|
4,127
|
|
4,484
|
|
|||
Investing activities
|
|
|
|
||||||
Change in interest-bearing deposits with banks
|
(327
|
)
|
4,225
|
|
16,010
|
|
|||
Change in interest-bearing deposits with the Federal Reserve and other central banks
|
53,347
|
|
(16,521
|
)
|
7,677
|
|
|||
Purchases of securities held-to-maturity
|
(6,673
|
)
|
(16,060
|
)
|
(3,498
|
)
|
|||
Paydowns of securities held-to-maturity
|
4,907
|
|
3,698
|
|
1,885
|
|
|||
Maturities of securities held-to-maturity
|
3,738
|
|
1,222
|
|
102
|
|
|||
Purchases of securities available-for-sale
|
(27,470
|
)
|
(33,785
|
)
|
(69,101
|
)
|
|||
Sales of securities available-for-sale
|
7,580
|
|
19,016
|
|
31,254
|
|
|||
Paydowns of securities available-for-sale
|
8,826
|
|
8,776
|
|
7,253
|
|
|||
Maturities of securities available-for-sale
|
11,347
|
|
14,689
|
|
11,012
|
|
|||
Net change in loans
|
(1,483
|
)
|
(4,615
|
)
|
(7,904
|
)
|
|||
Sales of loans and other real estate
|
173
|
|
362
|
|
312
|
|
|||
Change in federal funds sold and securities purchased under resale agreements
|
(1,407
|
)
|
(4,071
|
)
|
(11,141
|
)
|
|||
Net change in seed capital investments
|
(114
|
)
|
287
|
|
(253
|
)
|
|||
Purchases of premises and equipment/capitalized software
|
(825
|
)
|
(601
|
)
|
(791
|
)
|
|||
Proceeds from the sale of premises and equipment
|
65
|
|
—
|
|
585
|
|
|||
Acquisitions, net of cash
|
(38
|
)
|
(9
|
)
|
(28
|
)
|
|||
Dispositions, net of cash
|
1
|
|
17
|
|
64
|
|
|||
Other, net
|
(444
|
)
|
3,583
|
|
4,887
|
|
|||
Net cash provided by (used for) investing activities
|
51,203
|
|
(19,787
|
)
|
(11,675
|
)
|
|||
Financing activities
|
|
|
|
||||||
Change in deposits
|
(54,738
|
)
|
11,890
|
|
2,247
|
|
|||
Change in federal funds purchased and securities sold under repurchase agreements
|
(5,013
|
)
|
3,533
|
|
1,821
|
|
|||
Change in payables to customers and broker-dealers
|
(911
|
)
|
719
|
|
5,474
|
|
|||
Change in other borrowed funds
|
225
|
|
(394
|
)
|
135
|
|
|||
Change in commercial paper
|
—
|
|
—
|
|
(96
|
)
|
|||
Net proceeds from the issuance of long-term debt
|
6,229
|
|
4,986
|
|
4,686
|
|
|||
Repayments of long-term debt
|
(2,953
|
)
|
(3,659
|
)
|
(4,376
|
)
|
|||
Proceeds from the exercise of stock options
|
438
|
|
326
|
|
370
|
|
|||
Issuance of common stock
|
27
|
|
26
|
|
26
|
|
|||
Issuance of preferred stock
|
990
|
|
990
|
|
—
|
|
|||
Treasury stock acquired
|
(2,398
|
)
|
(2,355
|
)
|
(1,669
|
)
|
|||
Common cash dividends paid
|
(778
|
)
|
(760
|
)
|
(760
|
)
|
|||
Preferred cash dividends paid
|
(122
|
)
|
(105
|
)
|
(73
|
)
|
|||
Other, net
|
(46
|
)
|
(12
|
)
|
44
|
|
|||
Net cash (used for) provided by financing activities
|
(59,050
|
)
|
15,185
|
|
7,829
|
|
|||
Effect of exchange rate changes on cash
|
(114
|
)
|
42
|
|
(128
|
)
|
|||
Change in cash and due from banks
|
|
|
|
||||||
Change in cash and due from banks
|
(1,715
|
)
|
(433
|
)
|
510
|
|
|||
Cash and due from banks at beginning of period
|
6,537
|
|
6,970
|
|
6,460
|
|
|||
Cash and due from banks at end of period
|
$
|
4,822
|
|
$
|
6,537
|
|
$
|
6,970
|
|
Supplemental disclosures
|
|
|
|
||||||
Interest paid
|
$
|
406
|
|
$
|
295
|
|
$
|
344
|
|
Income taxes paid
|
1,010
|
|
1,015
|
|
1,363
|
|
|||
Income taxes refunded
|
307
|
|
901
|
|
144
|
|
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
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
55
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(102
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(24
|
)
|
—
|
|
—
|
|
—
|
|
(130
|
)
|
(154
|
)
|
|
38
|
|
|||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
3,547
|
|
—
|
|
—
|
|
10
|
|
3,557
|
|
|
(9
|
)
|
|||||||||
Other comprehensive (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,165
|
)
|
—
|
|
—
|
|
(1,165
|
)
|
|
(31
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.72 per share
|
—
|
|
—
|
|
—
|
|
(778
|
)
|
—
|
|
—
|
|
—
|
|
(778
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(122
|
)
|
—
|
|
—
|
|
—
|
|
(122
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,398
|
)
|
—
|
|
(2,398
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
27
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
21
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|
—
|
|
|||||||||
Preferred stock issued
|
990
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
990
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
676
|
|
—
|
|
—
|
|
—
|
|
—
|
|
676
|
|
|
—
|
|
|||||||||
Balance at Dec. 31, 2016
|
$
|
3,542
|
|
$
|
13
|
|
$
|
25,962
|
|
$
|
22,621
|
|
$
|
(3,765
|
)
|
$
|
(9,562
|
)
|
$
|
618
|
|
$
|
39,429
|
|
(a)
|
$
|
151
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$35,485 million
at
Dec. 31, 2015
and
$35,269 million
at
Dec. 31, 2016
.
|
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
income (loss),
net of tax
|
|
Treasury
stock
|
|
||||||||||||||||
Balance at Dec. 31, 2014
|
$
|
1,562
|
|
$
|
13
|
|
$
|
24,626
|
|
$
|
17,683
|
|
$
|
(1,634
|
)
|
$
|
(4,809
|
)
|
$
|
1,033
|
|
$
|
38,474
|
|
(a)
|
$
|
229
|
|
Adjustment for the cumulative effect of applying ASU 2015-02 for the consolidation of a legal entity
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
602
|
|
602
|
|
|
—
|
|
|||||||||
Adjustment for the cumulative effect of applying ASU 2015-02 for the deconsolidation of a legal entity
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(866
|
)
|
(866
|
)
|
|
—
|
|
|||||||||
Adjusted balance at Jan. 1, 2015
|
1,562
|
|
13
|
|
24,626
|
|
17,683
|
|
(1,634
|
)
|
(4,809
|
)
|
769
|
|
38,210
|
|
|
229
|
|
|||||||||
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
48
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(92
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(26
|
)
|
—
|
|
—
|
|
—
|
|
(73
|
)
|
(99
|
)
|
|
29
|
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
3,158
|
|
—
|
|
—
|
|
68
|
|
3,226
|
|
|
(4
|
)
|
|||||||||
Other comprehensive (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(966
|
)
|
—
|
|
(26
|
)
|
(992
|
)
|
|
(10
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.68 per share
|
—
|
|
—
|
|
—
|
|
(762
|
)
|
—
|
|
—
|
|
—
|
|
(762
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(105
|
)
|
—
|
|
—
|
|
—
|
|
(105
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,355
|
)
|
—
|
|
(2,355
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
25
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
21
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|
—
|
|
|||||||||
Preferred stock issued
|
990
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
990
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
616
|
|
—
|
|
—
|
|
—
|
|
—
|
|
616
|
|
|
—
|
|
|||||||||
Balance at Dec. 31, 2015
|
$
|
2,552
|
|
$
|
13
|
|
$
|
25,262
|
|
$
|
19,974
|
|
$
|
(2,600
|
)
|
$
|
(7,164
|
)
|
$
|
738
|
|
$
|
38,775
|
|
(a)
|
$
|
200
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$35,879 million
at
Dec. 31, 2014
and
$35,485 million
at
Dec. 31, 2015
.
|
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
income (loss),
net of tax
|
|
Treasury
stock
|
|
||||||||||||||||
Balance at Dec. 31, 2013
|
$
|
1,562
|
|
$
|
13
|
|
$
|
24,002
|
|
$
|
15,952
|
|
$
|
(892
|
)
|
$
|
(3,140
|
)
|
$
|
783
|
|
$
|
38,280
|
|
(a)
|
$
|
230
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
63
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
(31
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(31
|
)
|
|
(103
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
|
—
|
|
277
|
|
287
|
|
|
53
|
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
2,567
|
|
—
|
|
—
|
|
84
|
|
2,651
|
|
|
—
|
|
|||||||||
Other comprehensive (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(742
|
)
|
—
|
|
(111
|
)
|
(853
|
)
|
|
(14
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.66 per share
|
—
|
|
—
|
|
—
|
|
(763
|
)
|
—
|
|
—
|
|
—
|
|
(763
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(73
|
)
|
—
|
|
—
|
|
—
|
|
(73
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,669
|
)
|
—
|
|
(1,669
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
21
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
600
|
|
—
|
|
—
|
|
—
|
|
—
|
|
600
|
|
|
—
|
|
|||||||||
Balance at Dec. 31, 2014
|
$
|
1,562
|
|
$
|
13
|
|
$
|
24,626
|
|
$
|
17,683
|
|
$
|
(1,634
|
)
|
$
|
(4,809
|
)
|
$
|
1,033
|
|
$
|
38,474
|
|
(a)
|
$
|
229
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$35,935 million
at Dec. 31, 2013 and
$35,879 million
at
Dec. 31, 2014
.
|
Notes to Consolidated Financial Statements
|
|
•
|
investment management;
|
•
|
trust and custody;
|
•
|
foreign exchange;
|
•
|
fund administration;
|
•
|
global collateral services;
|
•
|
securities lending;
|
•
|
depositary receipts;
|
•
|
corporate trust;
|
•
|
global payment/cash management;
|
•
|
banking services; and
|
•
|
clearing services.
|
Notes to Consolidated Financial Statements
(continued)
|
|
(a)
|
In addition to the common ownership interest noted, BNY Mellon also holds an interest in ConvergEx nonvoting Series B preferred units. The book value at Dec. 31, 2016 is reflective of our combined common and preferred interests in ConvergEx.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support; or
|
•
|
lack one or more of the following characteristics of a controlling financial interest:
|
•
|
the power, through voting rights or similar rights, to direct the activities of an entity that most significantly impact the entity’s economic performance;
|
•
|
the obligation to absorb the expected losses of the entity; and
|
•
|
the right to receive the expected residual returns of the entity.
|
•
|
The length of time and the extent to which the fair value has been less than the amortized cost basis;
|
•
|
Whether management has an intent to sell the security;
|
•
|
Whether the decline in fair value is attributable to specific adverse conditions affecting a particular investment;
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Whether the decline in fair value is attributable to specific conditions, such as conditions in an industry or in a geographic area;
|
•
|
Whether a debt security has been downgraded by a rating agency;
|
•
|
Whether a debt security exhibits cash flow deterioration; and
|
•
|
For each non-agency RMBS, we compare the remaining credit enhancement that protects the individual security from losses against the projected losses of principal and/or interest expected to come from the underlying mortgage collateral, to determine whether such credit losses might directly impact the relevant security.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
an allowance for impaired credits of
$1 million
or greater;
|
•
|
an allowance for higher risk-rated credits and pass-rated credits; and
|
•
|
an allowance for residential mortgage loans.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Nonperforming loans to total non-margin loans;
|
•
|
Criticized assets to total loans and lending-related commitments;
|
•
|
Borrower concentration; and
|
•
|
Significant concentrations in high risk industries and countries.
|
•
|
U.S. non-investment grade default rate;
|
•
|
Unemployment rate; and
|
•
|
Change in real gross domestic product.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Securities at Dec. 31, 2016
|
Gross
unrealized
|
|
||||||||||
|
Amortized cost
|
|
Fair
value
|
|
||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
14,373
|
|
$
|
115
|
|
$
|
181
|
|
$
|
14,307
|
|
U.S. government agencies
|
366
|
|
2
|
|
9
|
|
359
|
|
||||
State and political subdivisions
|
3,392
|
|
38
|
|
52
|
|
3,378
|
|
||||
Agency RMBS
|
22,929
|
|
148
|
|
341
|
|
22,736
|
|
||||
Non-agency RMBS
|
620
|
|
31
|
|
13
|
|
638
|
|
||||
Other RMBS
|
517
|
|
4
|
|
8
|
|
513
|
|
||||
Commercial MBS
|
931
|
|
8
|
|
11
|
|
928
|
|
||||
Agency commercial MBS
|
6,505
|
|
28
|
|
84
|
|
6,449
|
|
||||
CLOs
|
2,593
|
|
6
|
|
1
|
|
2,598
|
|
||||
Other asset-backed securities
|
1,729
|
|
4
|
|
6
|
|
1,727
|
|
||||
Foreign covered bonds
|
2,126
|
|
24
|
|
9
|
|
2,141
|
|
||||
Corporate bonds
|
1,391
|
|
22
|
|
17
|
|
1,396
|
|
||||
Sovereign debt/sovereign guaranteed
|
12,248
|
|
261
|
|
20
|
|
12,489
|
|
||||
Other debt securities
|
1,952
|
|
19
|
|
10
|
|
1,961
|
|
||||
Equity securities
|
2
|
|
1
|
|
—
|
|
3
|
|
||||
Money market funds
|
842
|
|
—
|
|
—
|
|
842
|
|
||||
Non-agency RMBS
(a)
|
1,080
|
|
286
|
|
9
|
|
1,357
|
|
||||
Total securities available-for-sale
(b)
|
$
|
73,596
|
|
$
|
997
|
|
$
|
771
|
|
$
|
73,822
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
11,117
|
|
$
|
22
|
|
$
|
41
|
|
$
|
11,098
|
|
U.S. government agencies
|
1,589
|
|
—
|
|
6
|
|
1,583
|
|
||||
State and political subdivisions
|
19
|
|
—
|
|
1
|
|
18
|
|
||||
Agency RMBS
|
25,221
|
|
57
|
|
299
|
|
24,979
|
|
||||
Non-agency RMBS
|
78
|
|
4
|
|
2
|
|
80
|
|
||||
Other RMBS
|
142
|
|
—
|
|
4
|
|
138
|
|
||||
Commercial MBS
|
7
|
|
—
|
|
—
|
|
7
|
|
||||
Agency commercial MBS
|
721
|
|
1
|
|
10
|
|
712
|
|
||||
Foreign covered bonds
|
74
|
|
1
|
|
—
|
|
75
|
|
||||
Sovereign debt/sovereign guaranteed
|
1,911
|
|
42
|
|
—
|
|
1,953
|
|
||||
Other debt securities
|
26
|
|
—
|
|
—
|
|
26
|
|
||||
Total securities held-to-maturity
|
$
|
40,905
|
|
$
|
127
|
|
$
|
363
|
|
$
|
40,669
|
|
Total securities
|
$
|
114,501
|
|
$
|
1,124
|
|
$
|
1,134
|
|
$
|
114,491
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized gains of
$62 million
and gross unrealized losses of
$190 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 contractual 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 contractual lives of the securities.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Securities at Dec. 31, 2014
|
Gross
unrealized |
|
||||||||||
|
Amortized cost
|
|
Fair
value
|
|
||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
19,592
|
|
$
|
420
|
|
$
|
15
|
|
$
|
19,997
|
|
U.S. government agencies
|
342
|
|
3
|
|
2
|
|
343
|
|
||||
State and political subdivisions
|
5,176
|
|
95
|
|
24
|
|
5,247
|
|
||||
Agency RMBS
|
32,568
|
|
357
|
|
325
|
|
32,600
|
|
||||
Non-agency RMBS
|
942
|
|
37
|
|
26
|
|
953
|
|
||||
Other RMBS
|
1,551
|
|
25
|
|
25
|
|
1,551
|
|
||||
Commercial MBS
|
1,927
|
|
39
|
|
7
|
|
1,959
|
|
||||
Agency commercial MBS
|
3,105
|
|
36
|
|
9
|
|
3,132
|
|
||||
CLOs
|
2,128
|
|
9
|
|
7
|
|
2,130
|
|
||||
Other asset-backed securities
|
3,241
|
|
5
|
|
6
|
|
3,240
|
|
||||
Foreign covered bonds
|
2,788
|
|
80
|
|
—
|
|
2,868
|
|
||||
Corporate bonds
|
1,747
|
|
45
|
|
7
|
|
1,785
|
|
||||
Sovereign debt/sovereign guaranteed
|
17,062
|
|
224
|
|
2
|
|
17,284
|
|
||||
Other debt securities
|
2,162
|
|
7
|
|
—
|
|
2,169
|
|
||||
Equity securities
|
94
|
|
1
|
|
—
|
|
95
|
|
||||
Money market funds
|
763
|
|
—
|
|
—
|
|
763
|
|
||||
Non-agency RMBS
(a)
|
1,747
|
|
471
|
|
4
|
|
2,214
|
|
||||
Total securities available-for-sale
(b)
|
$
|
96,935
|
|
$
|
1,854
|
|
$
|
459
|
|
$
|
98,330
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
5,047
|
|
$
|
32
|
|
$
|
16
|
|
$
|
5,063
|
|
U.S. government agencies
|
344
|
|
—
|
|
3
|
|
341
|
|
||||
State and political subdivisions
|
24
|
|
1
|
|
1
|
|
24
|
|
||||
Agency RMBS
|
14,006
|
|
200
|
|
44
|
|
14,162
|
|
||||
Non-agency RMBS
|
153
|
|
9
|
|
2
|
|
160
|
|
||||
Other RMBS
|
315
|
|
2
|
|
8
|
|
309
|
|
||||
Commercial MBS
|
13
|
|
—
|
|
—
|
|
13
|
|
||||
Sovereign debt/sovereign guaranteed
|
1,031
|
|
24
|
|
—
|
|
1,055
|
|
||||
Total securities held-to-maturity
|
$
|
20,933
|
|
$
|
268
|
|
$
|
74
|
|
$
|
21,127
|
|
Total securities
|
$
|
117,868
|
|
$
|
2,122
|
|
$
|
533
|
|
$
|
119,457
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized gains of
$60 million
and gross unrealized losses of
$282 million
recorded in accumulated other comprehensive income related to investment securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.
|
Net securities gains (losses)
|
|
|
|||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Realized gross gains
|
$
|
86
|
|
$
|
90
|
|
$
|
114
|
|
Realized gross losses
|
(4
|
)
|
(2
|
)
|
(4
|
)
|
|||
Recognized gross impairments
|
(7
|
)
|
(5
|
)
|
(19
|
)
|
|||
Total net securities gains
|
$
|
75
|
|
$
|
83
|
|
$
|
91
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Temporarily impaired securities at Dec. 31, 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
|
$
|
8,489
|
|
$
|
181
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
8,489
|
|
$
|
181
|
|
U.S. government agencies
|
257
|
|
9
|
|
|
—
|
|
—
|
|
|
257
|
|
9
|
|
||||||
State and political subdivisions
|
1,058
|
|
33
|
|
|
131
|
|
19
|
|
|
1,189
|
|
52
|
|
||||||
Agency RMBS
|
14,766
|
|
141
|
|
|
1,673
|
|
200
|
|
|
16,439
|
|
341
|
|
||||||
Non-agency RMBS
|
21
|
|
—
|
|
|
332
|
|
13
|
|
|
353
|
|
13
|
|
||||||
Other RMBS
|
26
|
|
—
|
|
|
136
|
|
8
|
|
|
162
|
|
8
|
|
||||||
Commercial MBS
|
302
|
|
7
|
|
|
163
|
|
4
|
|
|
465
|
|
11
|
|
||||||
Agency commercial MBS
|
3,570
|
|
78
|
|
|
589
|
|
6
|
|
|
4,159
|
|
84
|
|
||||||
CLOs
|
443
|
|
1
|
|
|
404
|
|
—
|
|
|
847
|
|
1
|
|
||||||
Other asset-backed securities
|
276
|
|
1
|
|
|
357
|
|
5
|
|
|
633
|
|
6
|
|
||||||
Corporate bonds
|
594
|
|
16
|
|
|
7
|
|
1
|
|
|
601
|
|
17
|
|
||||||
Sovereign debt/sovereign guaranteed
|
1,521
|
|
20
|
|
|
63
|
|
—
|
|
|
1,584
|
|
20
|
|
||||||
Non-agency RMBS
(a)
|
25
|
|
—
|
|
|
47
|
|
9
|
|
|
72
|
|
9
|
|
||||||
Other debt securities
|
742
|
|
10
|
|
|
50
|
|
—
|
|
|
792
|
|
10
|
|
||||||
Foreign covered bonds
|
712
|
|
9
|
|
|
—
|
|
—
|
|
|
712
|
|
9
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
32,802
|
|
$
|
506
|
|
|
$
|
3,952
|
|
$
|
265
|
|
|
$
|
36,754
|
|
$
|
771
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
6,112
|
|
$
|
41
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
6,112
|
|
$
|
41
|
|
U.S. government agencies
|
1,533
|
|
6
|
|
|
—
|
|
—
|
|
|
1,533
|
|
6
|
|
||||||
State and political subdivisions
|
—
|
|
—
|
|
|
4
|
|
1
|
|
|
4
|
|
1
|
|
||||||
Agency RMBS
|
19,498
|
|
297
|
|
|
102
|
|
2
|
|
|
19,600
|
|
299
|
|
||||||
Non-agency RMBS
|
4
|
|
—
|
|
|
48
|
|
2
|
|
|
52
|
|
2
|
|
||||||
Agency commercial MBS
|
621
|
|
10
|
|
|
—
|
|
—
|
|
|
621
|
|
10
|
|
||||||
Other RMBS
|
15
|
|
—
|
|
|
123
|
|
4
|
|
|
138
|
|
4
|
|
||||||
Total securities held-to-maturity
|
$
|
27,783
|
|
$
|
354
|
|
|
$
|
277
|
|
$
|
9
|
|
|
$
|
28,060
|
|
$
|
363
|
|
Total temporarily impaired securities
|
$
|
60,585
|
|
$
|
860
|
|
|
$
|
4,229
|
|
$
|
274
|
|
|
$
|
64,814
|
|
$
|
1,134
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Gross unrealized losses for 12 months or more of
$190 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 are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual 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 are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.
|
Maturity distribution and yield on investment securities at Dec. 31, 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
|
$
|
2,195
|
|
0.85
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
274
|
|
2.71
|
%
|
|
$
|
3,745
|
|
0.97
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
6,214
|
|
Over 1 through 5 years
|
5,472
|
|
1.49
|
|
|
113
|
|
1.30
|
|
|
1,738
|
|
2.92
|
|
|
11,688
|
|
1.02
|
|
|
—
|
|
—
|
|
|
19,011
|
|
||||||
Over 5 through 10 years
|
3,292
|
|
1.71
|
|
|
246
|
|
2.34
|
|
|
1,147
|
|
3.51
|
|
|
2,378
|
|
1.13
|
|
|
—
|
|
—
|
|
|
7,063
|
|
||||||
Over 10 years
|
3,348
|
|
3.11
|
|
|
—
|
|
—
|
|
|
219
|
|
1.90
|
|
|
176
|
|
1.67
|
|
|
—
|
|
—
|
|
|
3,743
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
32,621
|
|
2.59
|
|
|
32,621
|
|
||||||
Asset-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
4,325
|
|
1.95
|
|
|
4,325
|
|
||||||
Equity securities
(b)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
845
|
|
—
|
|
|
845
|
|
||||||
Total
|
$
|
14,307
|
|
1.82
|
%
|
|
$
|
359
|
|
2.01
|
%
|
|
$
|
3,378
|
|
3.04
|
%
|
|
$
|
17,987
|
|
1.03
|
%
|
|
$
|
37,791
|
|
2.46
|
%
|
|
$
|
73,822
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
1,327
|
|
0.86
|
%
|
|
$
|
350
|
|
0.83
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
511
|
|
0.57
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
2,188
|
|
Over 1 through 5 years
|
7,890
|
|
1.23
|
|
|
1,189
|
|
1.19
|
|
|
1
|
|
7.03
|
|
|
847
|
|
0.61
|
|
|
—
|
|
—
|
|
|
9,927
|
|
||||||
Over 5 through 10 years
|
1,900
|
|
1.91
|
|
|
50
|
|
2.02
|
|
|
3
|
|
6.76
|
|
|
653
|
|
0.71
|
|
|
—
|
|
—
|
|
|
2,606
|
|
||||||
Over 10 years
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
15
|
|
5.34
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
15
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
26,169
|
|
2.73
|
|
|
26,169
|
|
||||||
Total
|
$
|
11,117
|
|
1.30
|
%
|
|
$
|
1,589
|
|
1.13
|
%
|
|
$
|
19
|
|
5.69
|
%
|
|
$
|
2,011
|
|
0.63
|
%
|
|
$
|
26,169
|
|
2.73
|
%
|
|
$
|
40,905
|
|
(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.
|
Net securities gains
|
|
|
|||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Agency RMBS
|
$
|
22
|
|
$
|
10
|
|
$
|
13
|
|
Foreign covered bonds
|
10
|
|
2
|
|
3
|
|
|||
Non-agency RMBS
|
8
|
|
7
|
|
17
|
|
|||
U.S. Treasury
|
4
|
|
45
|
|
25
|
|
|||
Other
|
31
|
|
19
|
|
33
|
|
|||
Total net securities gains
|
$
|
75
|
|
$
|
83
|
|
$
|
91
|
|
Debt securities credit loss roll forward
|
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Beginning balance as of Jan. 1
|
$
|
91
|
|
$
|
93
|
|
Add: Initial OTTI credit losses
|
—
|
|
—
|
|
||
Subsequent OTTI credit losses
|
7
|
|
5
|
|
||
Less: Realized losses for securities sold
|
10
|
|
7
|
|
||
Ending balance as of Dec. 31
|
$
|
88
|
|
$
|
91
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Loans
|
Dec. 31,
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Domestic:
|
|
|
||||
Financial institutions
|
$
|
6,342
|
|
$
|
6,640
|
|
Commercial
|
2,286
|
|
2,115
|
|
||
Wealth management loans and mortgages
|
15,555
|
|
13,247
|
|
||
Commercial real estate
|
4,639
|
|
3,899
|
|
||
Lease financings
|
989
|
|
1,007
|
|
||
Other residential mortgages
|
854
|
|
1,055
|
|
||
Overdrafts
|
1,055
|
|
911
|
|
||
Other
|
1,202
|
|
1,137
|
|
||
Margin loans
|
17,503
|
|
19,340
|
|
||
Total domestic
|
50,425
|
|
49,351
|
|
||
Foreign:
|
|
|
||||
Financial institutions
|
8,347
|
|
9,259
|
|
||
Commercial
|
331
|
|
227
|
|
||
Wealth management loans and mortgages
|
99
|
|
100
|
|
||
Commercial real estate
|
15
|
|
46
|
|
||
Lease financings
|
736
|
|
850
|
|
||
Other (primarily overdrafts)
|
4,418
|
|
3,637
|
|
||
Margin loans
|
87
|
|
233
|
|
||
Total foreign
|
14,033
|
|
14,352
|
|
||
Total loans
(a)
|
$
|
64,458
|
|
$
|
63,703
|
|
(a)
|
Net of unearned income of
$527 million
at
Dec. 31, 2016
and
$674 million
at
Dec. 31, 2015
primarily on domestic and foreign lease financings.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the year ended Dec. 31, 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
|
$
|
82
|
|
$
|
59
|
|
$
|
31
|
|
$
|
15
|
|
$
|
19
|
|
$
|
34
|
|
$
|
—
|
|
|
$
|
35
|
|
$
|
275
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
|
—
|
|
(2
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
13
|
|
—
|
|
—
|
|
5
|
|
—
|
|
|
1
|
|
19
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
13
|
|
—
|
|
—
|
|
3
|
|
—
|
|
|
1
|
|
17
|
|
|||||||||
Provision
|
—
|
|
14
|
|
(18
|
)
|
(2
|
)
|
4
|
|
(9
|
)
|
—
|
|
|
—
|
|
(11
|
)
|
|||||||||
Ending balance
|
$
|
82
|
|
$
|
73
|
|
$
|
26
|
|
$
|
13
|
|
$
|
23
|
|
$
|
28
|
|
$
|
—
|
|
|
$
|
36
|
|
$
|
281
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
25
|
|
$
|
52
|
|
$
|
8
|
|
$
|
13
|
|
$
|
19
|
|
$
|
28
|
|
$
|
—
|
|
|
$
|
24
|
|
$
|
169
|
|
Lending-related commitments
|
57
|
|
21
|
|
18
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
12
|
|
112
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4
|
|
$
|
5
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
9
|
|
Allowance for loan losses
|
—
|
|
—
|
|
—
|
|
2
|
|
3
|
|
—
|
|
—
|
|
|
—
|
|
5
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
2,286
|
|
$
|
4,639
|
|
$
|
6,342
|
|
$
|
985
|
|
$
|
15,550
|
|
$
|
854
|
|
$
|
19,760
|
|
(a)
|
$
|
14,033
|
|
$
|
64,449
|
|
Allowance for loan losses
|
25
|
|
52
|
|
8
|
|
11
|
|
16
|
|
28
|
|
—
|
|
|
24
|
|
164
|
|
(a)
|
Includes
$1,055 million
of domestic overdrafts,
$17,503 million
of margin loans and
$1,202 million
of other loans at
Dec. 31, 2016
.
|
Allowance for credit losses activity for the year ended Dec. 31, 2015
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
60
|
|
$
|
50
|
|
$
|
31
|
|
$
|
32
|
|
$
|
22
|
|
$
|
41
|
|
$
|
—
|
|
|
$
|
44
|
|
$
|
280
|
|
Charge-offs
|
—
|
|
—
|
|
(170
|
)
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
|
—
|
|
(172
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
6
|
|
—
|
|
|
—
|
|
7
|
|
|||||||||
Net (charge-offs) recoveries
|
—
|
|
—
|
|
(169
|
)
|
—
|
|
—
|
|
4
|
|
—
|
|
|
—
|
|
(165
|
)
|
|||||||||
Provision
|
22
|
|
9
|
|
169
|
|
(17
|
)
|
(3
|
)
|
(11
|
)
|
—
|
|
|
(9
|
)
|
160
|
|
|||||||||
Ending balance
|
$
|
82
|
|
$
|
59
|
|
$
|
31
|
|
$
|
15
|
|
$
|
19
|
|
$
|
34
|
|
$
|
—
|
|
|
$
|
35
|
|
$
|
275
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
24
|
|
$
|
37
|
|
$
|
9
|
|
$
|
15
|
|
$
|
15
|
|
$
|
34
|
|
$
|
—
|
|
|
$
|
23
|
|
$
|
157
|
|
Lending-related commitments
|
58
|
|
22
|
|
22
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
12
|
|
118
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
1
|
|
$
|
171
|
|
$
|
—
|
|
$
|
8
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
180
|
|
Allowance for loan losses
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
2
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
2,115
|
|
$
|
3,496
|
|
$
|
6,469
|
|
$
|
1,007
|
|
$
|
13,239
|
|
$
|
1,035
|
|
$
|
21,388
|
|
(a)
|
$
|
14,352
|
|
$
|
63,101
|
|
Allowance for loan losses
|
24
|
|
36
|
|
9
|
|
15
|
|
14
|
|
34
|
|
—
|
|
|
23
|
|
155
|
|
(a)
|
Includes
$911 million
of domestic overdrafts,
$19,340 million
of margin loans and
$1,137 million
of other loans at
Dec. 31, 2015
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the year ended Dec. 31, 2014
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
83
|
|
$
|
41
|
|
$
|
49
|
|
$
|
37
|
|
$
|
24
|
|
$
|
54
|
|
$
|
—
|
|
|
$
|
56
|
|
$
|
344
|
|
Charge-offs
|
(12
|
)
|
(2
|
)
|
—
|
|
—
|
|
(1
|
)
|
(2
|
)
|
—
|
|
|
(3
|
)
|
(20
|
)
|
|||||||||
Recoveries
|
1
|
|
—
|
|
1
|
|
—
|
|
—
|
|
2
|
|
—
|
|
|
—
|
|
4
|
|
|||||||||
Net (charge-offs) recoveries
|
(11
|
)
|
(2
|
)
|
1
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
|
(3
|
)
|
(16
|
)
|
|||||||||
Provision
|
(12
|
)
|
11
|
|
(19
|
)
|
(5
|
)
|
(1
|
)
|
(13
|
)
|
—
|
|
|
(9
|
)
|
(48
|
)
|
|||||||||
Ending balance
|
$
|
60
|
|
$
|
50
|
|
$
|
31
|
|
$
|
32
|
|
$
|
22
|
|
$
|
41
|
|
$
|
—
|
|
|
$
|
44
|
|
$
|
280
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
17
|
|
$
|
32
|
|
$
|
17
|
|
$
|
32
|
|
$
|
17
|
|
$
|
41
|
|
$
|
—
|
|
|
$
|
35
|
|
$
|
191
|
|
Lending-related commitments
|
43
|
|
18
|
|
14
|
|
—
|
|
5
|
|
—
|
|
—
|
|
|
9
|
|
89
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
8
|
|
Allowance for loan losses
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,390
|
|
$
|
2,503
|
|
$
|
5,603
|
|
$
|
1,282
|
|
$
|
11,087
|
|
$
|
1,222
|
|
$
|
22,495
|
|
(a)
|
$
|
13,521
|
|
$
|
59,103
|
|
Allowance for loan losses
|
17
|
|
32
|
|
17
|
|
32
|
|
16
|
|
41
|
|
—
|
|
|
35
|
|
190
|
|
(a)
|
Includes
$1,348 million
of domestic overdrafts,
$20,034 million
of margin loans and
$1,113 million
of other loans at
Dec. 31, 2014
.
|
Nonperforming assets
(in millions)
|
Dec. 31,
|
|||||
2016
|
|
2015
|
|
|||
Nonperforming loans:
|
|
|
||||
Other residential mortgages
|
$
|
91
|
|
$
|
102
|
|
Wealth management loans and mortgages
|
8
|
|
11
|
|
||
Lease financings
|
4
|
|
—
|
|
||
Commercial real estate
|
—
|
|
2
|
|
||
Financial institutions
|
—
|
|
171
|
|
||
Total nonperforming loans
|
103
|
|
286
|
|
||
Other assets owned
|
4
|
|
6
|
|
||
Total nonperforming assets
|
$
|
107
|
|
$
|
292
|
|
Lost interest
|
|
|
|
||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Amount by which interest income recognized on nonperforming loans exceeded reversals
|
|
|
|
||||||
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
1
|
|
Foreign
|
—
|
|
—
|
|
—
|
|
|||
Amount by which interest income would have increased if nonperforming loans at year-end had been performing for the entire year
|
|
|
|
||||||
Total
|
$
|
6
|
|
$
|
6
|
|
$
|
7
|
|
Foreign
|
—
|
|
—
|
|
—
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Impaired loans
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(in millions)
|
Average
recorded investment |
|
Interest
income recognized |
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
||||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
11
|
|
$
|
—
|
|
Commercial real estate
|
1
|
|
—
|
|
|
1
|
|
—
|
|
|
2
|
|
—
|
|
||||||
Wealth management loans and mortgages
|
5
|
|
—
|
|
|
6
|
|
—
|
|
|
8
|
|
—
|
|
||||||
Lease financings
|
3
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Foreign
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
3
|
|
—
|
|
||||||
Total impaired loans with an allowance
|
9
|
|
—
|
|
|
7
|
|
—
|
|
|
24
|
|
—
|
|
||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate
|
1
|
|
—
|
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
||||||
Financial institutions
|
102
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Wealth management loans and mortgages
|
2
|
|
—
|
|
|
2
|
|
—
|
|
|
2
|
|
—
|
|
||||||
Total impaired loans without an allowance
(a)
|
105
|
|
—
|
|
|
2
|
|
—
|
|
|
3
|
|
—
|
|
||||||
Total impaired loans
|
$
|
114
|
|
$
|
—
|
|
|
$
|
9
|
|
$
|
—
|
|
|
$
|
27
|
|
$
|
—
|
|
(a)
|
When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.
|
Impaired loans
|
Dec. 31, 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
|
$
|
—
|
|
$
|
3
|
|
$
|
—
|
|
|
$
|
1
|
|
$
|
3
|
|
$
|
1
|
|
Wealth management loans and mortgages
|
3
|
|
3
|
|
3
|
|
|
6
|
|
7
|
|
1
|
|
||||||
Lease financings
|
4
|
|
4
|
|
2
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Total impaired loans with an allowance
|
7
|
|
10
|
|
5
|
|
|
7
|
|
10
|
|
2
|
|
||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
||||||||||||
Financial institutions
|
—
|
|
—
|
|
N/A
|
|
|
171
|
|
312
|
|
N/A
|
|
||||||
Wealth management loans and mortgages
|
2
|
|
2
|
|
N/A
|
|
|
2
|
|
2
|
|
N/A
|
|
||||||
Total impaired loans without an allowance
(b)
|
2
|
|
2
|
|
N/A
|
|
|
173
|
|
314
|
|
N/A
|
|
||||||
Total impaired loans
(c)
|
$
|
9
|
|
$
|
12
|
|
$
|
5
|
|
|
$
|
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 an aggregate of less than
$1 million
and
$2 million
of impaired loans in amounts individually less than
$1 million
at
Dec. 31, 2016
and
Dec. 31, 2015
, respectively. The allowance for loan loss associated with these loans totaled less than
$1 million
at both
Dec. 31, 2016
and
Dec. 31, 2015
, respectively.
|
Past due loans and still accruing interest
|
Dec. 31, 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
|
|
|||||||||||||
Commercial real estate
|
$
|
78
|
|
$
|
—
|
|
$
|
—
|
|
$
|
78
|
|
|
$
|
57
|
|
$
|
11
|
|
$
|
—
|
|
$
|
68
|
|
Other residential mortgages
|
20
|
|
6
|
|
7
|
|
33
|
|
|
22
|
|
5
|
|
4
|
|
31
|
|
||||||||
Financial institutions
|
1
|
|
27
|
|
—
|
|
28
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Wealth management loans and mortgages
|
21
|
|
2
|
|
—
|
|
23
|
|
|
69
|
|
2
|
|
1
|
|
72
|
|
||||||||
Total past due loans
|
$
|
120
|
|
$
|
35
|
|
$
|
7
|
|
$
|
162
|
|
|
$
|
148
|
|
$
|
18
|
|
$
|
5
|
|
$
|
171
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
TDRs
|
2016
|
|
2015
|
||||||||||||||||||
|
|
Outstanding
recorded investment
|
|
|
Outstanding
recorded investment
|
||||||||||||||||
(dollars in millions)
|
Number of
contracts
|
|
Pre-modification
|
|
Post-modification
|
|
|
Number of contracts
|
|
Pre-modification
|
|
Post-modification
|
|
||||||||
Other residential mortgages
|
70
|
|
|
$
|
14
|
|
|
$
|
16
|
|
|
68
|
|
|
$
|
13
|
|
|
$
|
16
|
|
Wealth management loans and mortgages
|
2
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Total TDRs
|
72
|
|
|
$
|
14
|
|
|
$
|
16
|
|
|
72
|
|
|
$
|
13
|
|
|
$
|
16
|
|
Commercial loan portfolio – Credit risk profile
by creditworthiness category
|
Commercial
|
|
Commercial real estate
|
|
Financial institutions
|
|||||||||||||||
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
|||||||
(in millions)
|
|
|
||||||||||||||||||
Investment grade
|
$
|
2,397
|
|
$
|
2,026
|
|
|
$
|
3,823
|
|
$
|
2,678
|
|
|
$
|
11,459
|
|
$
|
13,965
|
|
Non-investment grade
|
220
|
|
316
|
|
|
831
|
|
1,267
|
|
|
3,230
|
|
1,934
|
|
||||||
Total
|
$
|
2,617
|
|
$
|
2,342
|
|
|
$
|
4,654
|
|
$
|
3,945
|
|
|
$
|
14,689
|
|
$
|
15,899
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Wealth management loans and mortgages – Credit risk
profile by internally assigned grade
|
||||||
(in millions)
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
||
Wealth management loans:
|
|
|
||||
Investment grade
|
$
|
7,127
|
|
$
|
6,529
|
|
Non-investment grade
|
260
|
|
171
|
|
||
Wealth management mortgages
|
8,267
|
|
6,647
|
|
||
Total
|
$
|
15,654
|
|
$
|
13,347
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Goodwill by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
(b)
|
Other
|
|
(a)(b)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2014
|
$
|
9,328
|
|
|
$
|
8,471
|
|
|
$
|
70
|
|
|
$
|
17,869
|
|
Acquisition (dispositions)
|
10
|
|
|
—
|
|
|
(22
|
)
|
|
(12
|
)
|
||||
Foreign currency translation
|
(128
|
)
|
|
(105
|
)
|
|
(3
|
)
|
|
(236
|
)
|
||||
Other
(c)
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Balance at Dec. 31, 2015
|
$
|
9,207
|
|
|
$
|
8,366
|
|
|
$
|
45
|
|
|
$
|
17,618
|
|
Acquisitions (dispositions)
|
29
|
|
|
(2
|
)
|
|
—
|
|
|
27
|
|
||||
Foreign currency translation
|
(238
|
)
|
|
(91
|
)
|
|
—
|
|
|
(329
|
)
|
||||
Other
(c)
|
2
|
|
|
(4
|
)
|
|
2
|
|
|
—
|
|
||||
Balance at Dec. 31, 2016
|
$
|
9,000
|
|
|
$
|
8,269
|
|
|
$
|
47
|
|
|
$
|
17,316
|
|
(a)
|
Includes the reclassification of goodwill associated with Meriten from Investment Management to the Other segment in 2015.
|
(b)
|
Includes the reclassification of goodwill associated with credit-related activities from the Other segment to Investment Services in 2016.
|
(c)
|
Other changes in goodwill include purchase price adjustments and certain other reclassifications.
|
Intangible assets – net carrying amount by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2014
|
$
|
1,911
|
|
|
$
|
1,355
|
|
|
$
|
861
|
|
|
$
|
4,127
|
|
Acquisitions (dispositions)
|
9
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
||||
Amortization
|
(97
|
)
|
|
(162
|
)
|
|
(2
|
)
|
|
(261
|
)
|
||||
Foreign currency translation
|
(16
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
(24
|
)
|
||||
Balance at Dec. 31, 2015
|
$
|
1,807
|
|
|
$
|
1,186
|
|
|
$
|
849
|
|
|
$
|
3,842
|
|
Acquisitions (dispositions)
|
30
|
|
|
2
|
|
|
—
|
|
|
32
|
|
||||
Amortization
(b)
|
(82
|
)
|
|
(155
|
)
|
|
—
|
|
|
(237
|
)
|
||||
Foreign currency translation
|
(38
|
)
|
|
(1
|
)
|
|
—
|
|
|
(39
|
)
|
||||
Balance at Dec. 31, 2016
|
$
|
1,717
|
|
|
$
|
1,032
|
|
|
$
|
849
|
|
|
$
|
3,598
|
|
(a)
|
Includes the reclassification of intangible assets associated with Meriten from Investment Management to the Other segment in 2015.
|
(b)
|
Includes
$6 million
of impairment charges related to the write-down of intangible assets in the Investment Management business, to their respective fair values.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Intangible assets
|
Dec. 31, 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
|
$
|
1,439
|
|
$
|
(1,136
|
)
|
$
|
303
|
|
12 years
|
|
$
|
1,593
|
|
$
|
(1,235
|
)
|
$
|
358
|
|
Customer contracts—Investment Services
|
2,249
|
|
(1,590
|
)
|
659
|
|
10 years
|
|
2,260
|
|
(1,450
|
)
|
810
|
|
||||||
Other
|
37
|
|
(33
|
)
|
4
|
|
2 years
|
|
40
|
|
(31
|
)
|
9
|
|
||||||
Total subject to amortization
|
3,725
|
|
(2,759
|
)
|
966
|
|
10 years
|
|
3,893
|
|
(2,716
|
)
|
1,177
|
|
||||||
Not subject to amortization:
(b)
|
|
|
|
|
|
|
|
|
||||||||||||
Trade name
|
1,348
|
|
N/A
|
|
1,348
|
|
N/A
|
|
1,358
|
|
N/A
|
|
1,358
|
|
||||||
Customer relationships
|
1,284
|
|
N/A
|
|
1,284
|
|
N/A
|
|
1,307
|
|
N/A
|
|
1,307
|
|
||||||
Total not subject to amortization
|
2,632
|
|
N/A
|
|
2,632
|
|
N/A
|
|
2,665
|
|
N/A
|
|
2,665
|
|
||||||
Total intangible assets
|
$
|
6,357
|
|
$
|
(2,759
|
)
|
$
|
3,598
|
|
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.
|
For the year ended
Dec. 31, |
Estimated amortization expense
(in millions)
|
|
||
2017
|
|
$
|
208
|
|
2018
|
|
178
|
|
|
2019
|
|
108
|
|
|
2020
|
|
98
|
|
|
2021
|
|
75
|
|
Other assets
|
Dec. 31,
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Corporate/bank-owned life insurance
|
$
|
4,789
|
|
$
|
4,704
|
|
Accounts receivable
|
4,060
|
|
3,535
|
|
||
Fails to deliver
|
1,732
|
|
1,494
|
|
||
Software
|
1,451
|
|
1,355
|
|
||
Renewable energy investments
|
1,282
|
|
640
|
|
||
Income taxes receivable
|
1,172
|
|
1,554
|
|
||
Equity in a joint venture and other investments
|
1,063
|
|
1,039
|
|
||
Tax advantaged low income housing investments
|
914
|
|
918
|
|
||
Prepaid pension assets
|
836
|
|
727
|
|
||
Fair value of hedging derivatives
|
784
|
|
716
|
|
||
Federal Reserve Bank stock
|
466
|
|
453
|
|
||
Prepaid expenses
|
438
|
|
464
|
|
||
Seed capital
|
395
|
|
245
|
|
||
Due from customers on acceptances
|
340
|
|
258
|
|
||
Private equity
|
43
|
|
34
|
|
||
Other
|
1,189
|
|
1,490
|
|
||
Total other assets
|
$
|
20,954
|
|
$
|
19,626
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
(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
|
|
|
|||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Interest revenue
|
|
|
|
||||||
Non-margin loans
|
$
|
873
|
|
$
|
727
|
|
$
|
697
|
|
Margin loans
|
265
|
|
207
|
|
182
|
|
|||
Securities:
|
|
|
|
||||||
Taxable
|
1,772
|
|
1,813
|
|
1,603
|
|
|||
Exempt from federal income taxes
|
70
|
|
82
|
|
100
|
|
|||
Total securities
|
1,842
|
|
1,895
|
|
1,703
|
|
|||
Deposits with banks
|
104
|
|
104
|
|
238
|
|
|||
Deposits with the Federal Reserve and other central banks
|
198
|
|
170
|
|
207
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
233
|
|
147
|
|
86
|
|
|||
Trading assets
|
60
|
|
76
|
|
121
|
|
|||
Total interest revenue
|
3,575
|
|
3,326
|
|
3,234
|
|
|||
Interest expense
|
|
|
|
||||||
Deposits in domestic offices
|
41
|
|
30
|
|
29
|
|
|||
Deposits in foreign offices
|
(25
|
)
|
7
|
|
54
|
|
|||
Federal funds purchased and securities sold under repurchase agreements
|
36
|
|
(6
|
)
|
(13
|
)
|
|||
Trading liabilities
|
6
|
|
9
|
|
25
|
|
|||
Other borrowed funds
|
8
|
|
9
|
|
6
|
|
|||
Commercial paper
|
5
|
|
2
|
|
2
|
|
|||
Customer payables
|
12
|
|
7
|
|
9
|
|
|||
Long-term debt
|
354
|
|
242
|
|
242
|
|
|||
Total interest expense
|
437
|
|
300
|
|
354
|
|
|||
Net interest revenue
|
3,138
|
|
3,026
|
|
2,880
|
|
|||
Provision for credit losses
|
(11
|
)
|
160
|
|
(48
|
)
|
|||
Net interest revenue after provision for credit losses
|
$
|
3,149
|
|
$
|
2,866
|
|
$
|
2,928
|
|
Noninterest expense
|
|
|
|
|
||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|
|||
Staff
|
$
|
5,733
|
|
$
|
5,837
|
|
$
|
5,845
|
|
|
Professional, legal and other purchased services
|
1,185
|
|
1,230
|
|
1,339
|
|
|
|||
Software
|
647
|
|
627
|
|
620
|
|
|
|||
Net occupancy
|
590
|
|
600
|
|
610
|
|
|
|||
Distribution and servicing
|
405
|
|
381
|
|
428
|
|
|
|||
Furniture and equipment
|
247
|
|
280
|
|
322
|
|
|
|||
Sub-custodian
|
245
|
|
270
|
|
286
|
|
|
|||
Business development
|
245
|
|
267
|
|
268
|
|
|
|||
Bank assessment charges
|
219
|
|
157
|
|
146
|
|
|
|||
Clearing
|
155
|
|
150
|
|
129
|
|
|
|||
Communications
|
87
|
|
103
|
|
119
|
|
|
|||
Other
|
479
|
|
551
|
|
637
|
|
|
|||
Amortization of intangible assets
|
237
|
|
261
|
|
298
|
|
|
|||
Litigation
|
45
|
|
87
|
|
953
|
|
|
|||
Merger and integration and restructuring charges (recoveries)
|
4
|
|
(2
|
)
|
177
|
|
(a)
|
|||
Total noninterest expense
|
$
|
10,523
|
|
$
|
10,799
|
|
$
|
12,177
|
|
|
(a)
|
Primarily includes restructuring charges related to the Streamlining actions program initiated in 2014 and severance. Streamlining actions included rationalizing our staff and simplifying and automating global processes.
|
Provision (benefit) for
income taxes
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Current taxes:
|
|
|
|
||||||
Federal
|
$
|
823
|
|
$
|
551
|
|
$
|
1,273
|
|
Foreign
|
327
|
|
306
|
|
337
|
|
|||
State and local
|
153
|
|
109
|
|
155
|
|
|||
Total current tax expense
|
1,303
|
|
966
|
|
1,765
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
||||||
Federal
|
(75
|
)
|
114
|
|
(672
|
)
|
|||
Foreign
|
(14
|
)
|
(1
|
)
|
(98
|
)
|
|||
State and local
|
(37
|
)
|
(66
|
)
|
(83
|
)
|
|||
Total deferred tax expense (benefits)
|
(126
|
)
|
47
|
|
(853
|
)
|
|||
Provision for income taxes
|
$
|
1,177
|
|
$
|
1,013
|
|
$
|
912
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Income before taxes
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Domestic
|
$
|
3,147
|
|
$
|
2,698
|
|
$
|
2,456
|
|
Foreign
|
1,578
|
|
1,537
|
|
1,107
|
|
|||
Income before taxes
|
$
|
4,725
|
|
$
|
4,235
|
|
$
|
3,563
|
|
Net deferred tax liability
|
Dec. 31,
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Depreciation and amortization
|
$
|
2,694
|
|
$
|
2,631
|
|
Lease financings
|
391
|
|
569
|
|
||
Pension obligation
|
184
|
|
155
|
|
||
Renewable energy investment
|
179
|
|
68
|
|
||
Equity investments
|
104
|
|
113
|
|
||
Employee benefits
|
(471
|
)
|
(470
|
)
|
||
Reserves not deducted for tax
|
(136
|
)
|
(274
|
)
|
||
Credit losses on loans
|
(100
|
)
|
(102
|
)
|
||
Securities valuation
|
(55
|
)
|
156
|
|
||
Other assets
|
(101
|
)
|
(109
|
)
|
||
Other liabilities
|
162
|
|
42
|
|
||
Net deferred tax liability
|
$
|
2,851
|
|
$
|
2,779
|
|
Effective tax rate
|
Year ended Dec. 31,
|
|||||
|
2016
|
|
2015
|
|
2014
|
|
Federal rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
State and local income taxes, net of federal income tax benefit
|
1.6
|
|
0.6
|
|
1.3
|
|
Foreign operations
|
(5.6
|
)
|
(6.6
|
)
|
(3.0
|
)
|
Tax credits
|
(2.2
|
)
|
(1.4
|
)
|
(0.8
|
)
|
Tax-exempt income
|
(1.8
|
)
|
(2.5
|
)
|
(3.3
|
)
|
Leverage lease adjustment
|
(0.9
|
)
|
(1.3
|
)
|
(1.1
|
)
|
Carryback claim
|
—
|
|
—
|
|
(4.7
|
)
|
Nondeductible litigation expense
|
—
|
|
—
|
|
2.1
|
|
Other – net
|
(1.2
|
)
|
0.1
|
|
0.1
|
|
Effective tax rate
|
24.9
|
%
|
23.9
|
%
|
25.6
|
%
|
Unrecognized tax positions
|
|
|
|
||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Beginning balance at Jan. 1, – gross
|
$
|
649
|
|
$
|
669
|
|
$
|
866
|
|
Prior period tax positions:
|
|
|
|
||||||
Increases
|
8
|
|
13
|
|
58
|
|
|||
Decreases
|
(40
|
)
|
(21
|
)
|
(257
|
)
|
|||
Current period tax positions
|
16
|
|
14
|
|
19
|
|
|||
Settlements
|
(477
|
)
|
(26
|
)
|
(17
|
)
|
|||
Statute expiration
|
(10
|
)
|
—
|
|
—
|
|
|||
Ending balance at Dec. 31, – gross
|
$
|
146
|
|
$
|
649
|
|
$
|
669
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Long-term debt
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
||||||||
(in millions)
|
Rate
|
Maturity
|
Amount
|
|
|
Rate
|
|
Amount
|
|
||
Senior debt:
|
|
|
|
|
|
|
|||||
Fixed rate
|
1.30 - 5.94%
|
2017 - 2026
|
$
|
20,005
|
|
|
0.70 - 5.94%
|
|
$
|
17,724
|
|
Floating rate
|
0.80 - 2.05%
|
2018 - 2038
|
2,828
|
|
|
0.41 - 1.48%
|
|
2,378
|
|
||
Subordinated debt
(a)
|
3.00 - 7.50%
|
2017 - 2028
|
1,383
|
|
|
5.45 - 7.50%
|
|
1,150
|
|
||
Junior subordinated debentures
(b)
|
1.87%
|
2036
|
247
|
|
|
6.37
|
%
|
295
|
|
||
Total
|
|
|
$
|
24,463
|
|
|
|
$
|
21,547
|
|
(a)
|
Fixed rate.
|
(b)
|
Floating rate at
Dec. 31, 2016
and fixed rate at
Dec. 31, 2015
.
|
Trust preferred securities at Dec. 31, 2016
(dollar amounts in millions)
|
Trust-preferred securities issued
by the trust
|
|
Interest
rate
|
|
Assets of
the trust
|
|
(a)
|
Due date
|
|
Call date
|
|
Call price
|
|
|||
MEL Capital III
(b)(c)
|
|
$
|
247
|
|
1.87
|
%
|
$
|
247
|
|
|
2036
|
|
2016
|
|
Par
|
|
MEL Capital IV
|
|
—
|
|
—
|
%
|
500
|
|
|
—
|
|
—
|
|
—
|
|
||
Total
|
|
$
|
247
|
|
|
$
|
747
|
|
|
|
|
|
(a)
|
Represents junior subordinated deferrable interest debentures of BNY Mellon in the case of MEL Capital III and BNY Mellon’s Series A preferred stock in the case of MEL Capital IV.
|
(b)
|
Amount was translated from British pound sterling into U.S. dollars on a basis of U.S.
$1.23
to £1, the rate of exchange on Dec. 31, 2016.
|
(c)
|
Interest rate changed from fixed rate of
6.37%
to floating rate of £ LIBOR plus
134
bps at the first call date.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Trust preferred securities at Dec. 31, 2015
(dollar amounts in millions)
|
Trust-preferred securities issued
by the trust |
|
Interest
rate |
|
Assets of
the trust |
|
(a)
|
Due date
|
|
Call date
|
|
Call price
|
|
|||
MEL Capital III
(b)
|
|
$
|
296
|
|
6.37
|
%
|
$
|
295
|
|
|
2036
|
|
2016
|
|
Par
|
|
MEL Capital IV
|
|
—
|
|
—
|
%
|
500
|
|
|
—
|
|
—
|
|
—
|
|
||
Total
|
|
$
|
296
|
|
|
$
|
795
|
|
|
|
|
|
(a)
|
Represents junior subordinated deferrable interest debentures of BNY Mellon in the case of MEL Capital III and BNY Mellon’s Series A preferred stock in the case of MEL Capital IV.
|
(b)
|
Amount was translated from British pound sterling into U.S. dollars on a basis of U.S.
$1.48
to £1, the rate of exchange on Dec. 31, 2015.
|
(a)
|
Includes VMEs with assets of
$114 million
, liabilities of
$3 million
and nonredeemable noncontrolling interests of
$25 million
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Investments consolidated at Dec. 31, 2015
|
||||||||||
(in millions)
|
Investment
Management
funds
|
Securitizations
|
|
Total
consolidated
investments
|
|
|||||
Available-for-sale securities
|
$
|
—
|
|
|
$
|
400
|
|
$
|
400
|
|
Trading assets
|
1,228
|
|
|
—
|
|
1,228
|
|
|||
Other assets
|
173
|
|
|
—
|
|
173
|
|
|||
Total assets
|
$
|
1,401
|
|
(a)
|
$
|
400
|
|
$
|
1,801
|
|
Trading liabilities
|
$
|
229
|
|
|
$
|
—
|
|
$
|
229
|
|
Other liabilities
|
17
|
|
|
359
|
|
376
|
|
|||
Total liabilities
|
$
|
246
|
|
(a)
|
$
|
359
|
|
$
|
605
|
|
Nonredeemable noncontrolling interests
|
$
|
738
|
|
(a)
|
$
|
—
|
|
$
|
738
|
|
(a)
|
Includes VMEs with assets of
$190 million
, liabilities of
$1 million
and nonredeemable noncontrolling interests of
$5 million
.
|
Non-consolidated VIEs at Dec. 31, 2016
|
|||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|||
Other
|
$
|
2,442
|
|
$
|
369
|
|
$
|
2,811
|
|
Non-consolidated VIEs at Dec. 31, 2015
|
|||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|||
Other
(a)
|
$
|
1,754
|
|
$
|
393
|
|
$
|
2,147
|
|
(a)
|
The presentation of non-consolidated VIEs was adjusted to place them on a basis comparable with the current period.
|
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
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
Dec. 31, 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 March 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)
|
|
•
|
$1,011.11
per share on the Series A Preferred Stock (equivalent to
$10.1111
per Normal Preferred Capital Security of Mellon Capital IV, each representing a 1/100th interest in a share of the Series A Preferred Stock);
|
•
|
$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);
|
•
|
$2,250.00
per share on the Series D Preferred Stock (equivalent to
$22.5000
per depositary share, each representing a 1/100th interest in a share of the Series D Preferred Stock); and
|
•
|
$2,475.00
per share on the Series E Preferred Stock (equivalent to
$24.7500
per depositary share, each representing a 1/100th interest in a share of the Series E Preferred Stock).
|
Notes to Consolidated Financial Statements
(continued)
|
|
Consolidated and largest bank subsidiary regulatory capital ratios
(a)
|
Dec. 31,
|
|||
2016
|
|
2015
|
|
|
Consolidated regulatory capital
ratios:
|
|
|
||
CET1
|
10.6
|
%
|
10.8
|
%
|
Tier 1 capital ratio
|
12.6
|
|
12.3
|
%
|
Total (Tier 1 plus Tier 2) capital ratio
|
13.0
|
|
12.5
|
|
Leverage capital ratio
|
6.6
|
|
6.0
|
|
|
|
|
||
The Bank of New York Mellon regulatory capital ratios:
|
|
|
||
CET1
|
13.6
|
%
|
11.8
|
%
|
Tier 1 capital ratio
|
13.9
|
|
12.3
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
14.2
|
|
12.5
|
|
Leverage capital ratio
|
7.2
|
|
5.9
|
|
(a)
|
For the CET1, Tier 1 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. For BNY Mellon to qualify as “well capitalized,” its Tier 1 and Total (Tier 1 plus Tier 2) capital ratios must be at least
6%
and
10%
, respectively. For The Bank of New York Mellon, our largest bank subsidiary, to qualify as “well capitalized,” its CET1, Tier 1, Total and leverage capital ratios must be at least
6.5%
,
8%
,
10%
and
5%
, respectively.
|
Components of transitional capital
(a)
(in millions)
|
Dec. 31,
|
|||||
2016
|
|
2015
|
|
|||
CET1:
|
|
|
||||
Common shareholders’ equity
|
$
|
35,794
|
|
$
|
36,067
|
|
Goodwill and intangible assets
|
(17,314
|
)
|
(17,295
|
)
|
||
Net pension fund assets
|
(55
|
)
|
(46
|
)
|
||
Equity method investments
|
(313
|
)
|
(296
|
)
|
||
Deferred tax assets
|
(19
|
)
|
(8
|
)
|
||
Other
|
—
|
|
(5
|
)
|
||
Total CET1
|
18,093
|
|
18,417
|
|
||
Other Tier 1 capital:
|
|
|
||||
Preferred stock
|
3,542
|
|
2,552
|
|
||
Trust preferred securities
|
—
|
|
74
|
|
||
Disallowed deferred tax assets
|
(13
|
)
|
(12
|
)
|
||
Net pension fund assets
|
(36
|
)
|
(70
|
)
|
||
Other
|
(121
|
)
|
(25
|
)
|
||
Total Tier 1 capital
|
$
|
21,465
|
|
$
|
20,936
|
|
|
|
|
||||
Tier 2 capital:
|
|
|
||||
Trust preferred securities
|
$
|
148
|
|
$
|
222
|
|
Subordinated debt
|
550
|
|
149
|
|
||
Allowance for credit losses
|
281
|
|
275
|
|
||
Other
|
(12
|
)
|
(12
|
)
|
||
Total Tier 2 capital - Standardized Approach
|
967
|
|
634
|
|
||
Excess of expected credit losses
|
50
|
|
37
|
|
||
Less: Allowance for credit losses
|
281
|
|
275
|
|
||
Total Tier 2 capital - Advanced Approach
|
$
|
736
|
|
$
|
396
|
|
|
|
|
||||
Total capital:
|
|
|
||||
Standardized Approach
|
$
|
22,432
|
|
$
|
21,570
|
|
Advanced Approach
|
$
|
22,201
|
|
$
|
21,332
|
|
|
|
|
||||
Risk-weighted assets:
|
|
|
||||
Standardized Approach
|
$
|
147,671
|
|
$
|
159,893
|
|
Advanced Approach:
|
|
|
||||
Credit Risk
|
$
|
97,659
|
|
$
|
106,974
|
|
Market Risk
|
2,836
|
|
2,148
|
|
||
Operational Risk
|
70,000
|
|
61,262
|
|
||
Total Advanced Approach
|
$
|
170,495
|
|
$
|
170,384
|
|
|
|
|
||||
Average assets for leverage capital purposes
|
$
|
326,809
|
|
$
|
351,435
|
|
(a)
|
Reflects transitional adjustments to CET1, Tier 1 capital and Tier 2 capital required in 2016 and 2015 under the U.S. capital rules.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Capital above thresholds at Dec. 31, 2016
|
||||||||
(in millions)
|
Consolidated
|
|
|
The Bank of
New York
Mellon
|
|
(b)
|
||
CET1
|
$
|
8,716
|
|
(a)
|
$
|
9,644
|
|
|
Tier 1 capital
|
9,530
|
|
(a)
|
$
|
8,091
|
|
|
|
Total capital
|
5,152
|
|
(b)
|
5,747
|
|
|
||
Leverage capital
|
8,393
|
|
(a)
|
5,824
|
|
|
(a)
|
Based on minimum required standards, with applicable buffers.
|
(b)
|
Based on well capitalized standards.
|
Components of other comprehensive income (loss)
|
Year ended
|
||||||||||||||||||||||||||||
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
Dec. 31, 2014
|
|||||||||||||||||||||||||
(in millions)
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|||||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign currency translation adjustments arising during the period
(a)
|
$
|
(518
|
)
|
$
|
(332
|
)
|
$
|
(850
|
)
|
|
$
|
(518
|
)
|
$
|
(81
|
)
|
$
|
(599
|
)
|
|
$
|
(715
|
)
|
$
|
(91
|
)
|
$
|
(806
|
)
|
Total foreign currency translation
|
(518
|
)
|
(332
|
)
|
(850
|
)
|
|
(518
|
)
|
(81
|
)
|
(599
|
)
|
|
(715
|
)
|
(91
|
)
|
(806
|
)
|
|||||||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized gain (loss) arising during period
|
(388
|
)
|
146
|
|
(242
|
)
|
|
(535
|
)
|
172
|
|
(363
|
)
|
|
582
|
|
(169
|
)
|
413
|
|
|||||||||
Reclassification adjustment
(b)
|
(75
|
)
|
26
|
|
(49
|
)
|
|
(83
|
)
|
31
|
|
(52
|
)
|
|
(91
|
)
|
33
|
|
(58
|
)
|
|||||||||
Net unrealized gain (loss) on assets available-for-sale
|
(463
|
)
|
172
|
|
(291
|
)
|
|
(618
|
)
|
203
|
|
(415
|
)
|
|
491
|
|
(136
|
)
|
355
|
|
|||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service cost arising during the period
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
3
|
|
(1
|
)
|
2
|
|
|||||||||
Net gain (loss) arising during the period
|
(151
|
)
|
43
|
|
(108
|
)
|
|
(105
|
)
|
40
|
|
(65
|
)
|
|
(766
|
)
|
287
|
|
(479
|
)
|
|||||||||
Foreign exchange adjustment
|
(1
|
)
|
1
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(2
|
)
|
1
|
|
(1
|
)
|
|||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
(b)
|
88
|
|
(31
|
)
|
57
|
|
|
104
|
|
(35
|
)
|
69
|
|
|
127
|
|
(50
|
)
|
77
|
|
|||||||||
Total defined benefit plans
|
(64
|
)
|
13
|
|
(51
|
)
|
|
(1
|
)
|
5
|
|
4
|
|
|
(638
|
)
|
237
|
|
(401
|
)
|
|||||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized hedge gain (loss) arising during period
|
(52
|
)
|
18
|
|
(34
|
)
|
|
—
|
|
—
|
|
—
|
|
|
23
|
|
(13
|
)
|
10
|
|
|||||||||
Reclassification adjustment
(b)
|
45
|
|
(15
|
)
|
30
|
|
|
11
|
|
(3
|
)
|
8
|
|
|
(41
|
)
|
16
|
|
(25
|
)
|
|||||||||
Net unrealized gain (loss) on cash flow hedges
|
(7
|
)
|
3
|
|
(4
|
)
|
|
11
|
|
(3
|
)
|
8
|
|
|
(18
|
)
|
3
|
|
(15
|
)
|
|||||||||
Total other comprehensive income (loss)
|
$
|
(1,052
|
)
|
$
|
(144
|
)
|
$
|
(1,196
|
)
|
|
$
|
(1,126
|
)
|
$
|
124
|
|
$
|
(1,002
|
)
|
|
$
|
(880
|
)
|
$
|
13
|
|
$
|
(867
|
)
|
(a)
|
Includes the impact of hedges of net investments in foreign subsidiaries. See Note 21 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 21 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)
|
|
Changes in accumulated other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders
|
||||||||||||||||||||||||
|
|
|
|
ASC 820 Adjustments
|
Unrealized gain (loss) on assets available-for-sale
|
|
Unrealized gain (loss) on cash flow hedges
|
|
Total accumulated
other comprehensive
income (loss),
net of tax
|
|
||||||||||||||
(in millions)
|
Foreign currency translation
|
|
Pensions
|
|
Other post-retirement benefits
|
|
||||||||||||||||||
2013 ending balance
|
|
$
|
(388
|
)
|
|
$
|
(840
|
)
|
|
$
|
(60
|
)
|
|
$
|
387
|
|
|
$
|
9
|
|
|
$
|
(892
|
)
|
Change in 2014
|
|
(681
|
)
|
|
(396
|
)
|
|
(5
|
)
|
|
355
|
|
|
(15
|
)
|
|
(742
|
)
|
||||||
2014 ending balance
|
|
$
|
(1,069
|
)
|
|
$
|
(1,236
|
)
|
|
$
|
(65
|
)
|
|
$
|
742
|
|
|
$
|
(6
|
)
|
|
$
|
(1,634
|
)
|
Change in 2015
|
|
(563
|
)
|
|
(14
|
)
|
|
18
|
|
|
(415
|
)
|
|
8
|
|
|
(966
|
)
|
||||||
2015 ending balance
|
|
$
|
(1,632
|
)
|
|
$
|
(1,250
|
)
|
|
$
|
(47
|
)
|
|
$
|
327
|
|
|
$
|
2
|
|
|
$
|
(2,600
|
)
|
Change in 2016
|
|
(819
|
)
|
|
(56
|
)
|
|
5
|
|
|
(291
|
)
|
|
(4
|
)
|
|
(1,165
|
)
|
||||||
2016 ending balance
|
|
$
|
(2,451
|
)
|
|
$
|
(1,306
|
)
|
|
$
|
(42
|
)
|
|
$
|
36
|
|
|
$
|
(2
|
)
|
|
$
|
(3,765
|
)
|
Stock option activity
|
Shares subject
to option
|
|
Weighted-average
exercise price
|
|
Weighted-average remaining contractual term
(in years)
|
|
Balance at Dec. 31, 2015
|
35,735,264
|
|
$
|
33.57
|
|
3.4
|
Granted
|
—
|
|
—
|
|
|
|
Exercised
|
(12,746,946
|
)
|
34.17
|
|
|
|
Canceled/Expired
|
(1,746,750
|
)
|
41.38
|
|
|
|
Balance at Dec. 31, 2016
|
21,241,568
|
|
$
|
32.57
|
|
2.8
|
Vested and expected to vest at Dec. 31, 2016
|
21,241,568
|
|
32.57
|
|
2.8
|
|
Exercisable at Dec. 31, 2016
|
21,241,568
|
|
32.57
|
|
2.8
|
(a)
|
At
Dec. 31, 2015
and
2014
,
33,703,283
and
42,137,574
options were exercisable at an average price per common share of
$34.27
and
$34.38
, respectively.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Aggregate intrinsic value of options
|
|
|
|||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Outstanding at Dec. 31,
|
$
|
315
|
|
$
|
306
|
|
$
|
409
|
|
Exercisable at Dec. 31,
|
$
|
315
|
|
$
|
267
|
|
$
|
307
|
|
Nonvested PSU, restricted stock and RSU activity
|
Number of
shares
|
|
Weighted-
average
fair value
|
|
|
Nonvested PSUs, restricted stock and RSUs at Dec. 31, 2015
|
16,983,971
|
|
$
|
34.07
|
|
Granted
|
8,331,206
|
|
35.10
|
|
|
Vested
|
(6,808,038
|
)
|
32.10
|
|
|
Forfeited
|
(511,624
|
)
|
34.63
|
|
|
Nonvested PSUs, restricted stock and RSUs at Dec. 31, 2016
|
17,995,515
|
|
$
|
35.98
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
|
Pension Benefits
|
|
Healthcare Benefits
|
||||||||||||||||||||||||
|
Domestic
|
|
Foreign
|
|
Domestic
|
|
Foreign
|
||||||||||||||||||||
(dollar amounts in millions)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||
Weighted-average assumptions used to determine benefit obligations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Discount rate
|
4.35
|
%
|
4.48
|
%
|
|
2.53
|
%
|
3.45
|
%
|
|
4.35
|
%
|
4.48
|
%
|
|
2.60
|
%
|
3.60
|
%
|
||||||||
Rate of compensation increase
|
N/A
|
|
N/A
|
|
|
3.60
|
|
3.51
|
|
|
3.00
|
|
3.00
|
|
|
N/A
|
|
N/A
|
|
||||||||
Change in benefit obligation
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Benefit obligation at beginning of period
|
$
|
(4,177
|
)
|
$
|
(4,460
|
)
|
|
$
|
(1,147
|
)
|
$
|
(1,177
|
)
|
|
$
|
(184
|
)
|
$
|
(210
|
)
|
|
$
|
(4
|
)
|
$
|
(8
|
)
|
Service cost
|
—
|
|
(30
|
)
|
|
(29
|
)
|
(32
|
)
|
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
||||||||
Interest cost
|
(182
|
)
|
(170
|
)
|
|
(36
|
)
|
(38
|
)
|
|
(8
|
)
|
(8
|
)
|
|
—
|
|
—
|
|
||||||||
Employee contributions
|
—
|
|
—
|
|
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Amendments
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Actuarial (loss) gain
|
(106
|
)
|
178
|
|
|
(221
|
)
|
(1
|
)
|
|
9
|
|
17
|
|
|
1
|
|
1
|
|
||||||||
Divestitures
|
—
|
|
—
|
|
|
—
|
|
12
|
|
|
—
|
|
—
|
|
|
—
|
|
2
|
|
||||||||
Curtailments
|
—
|
|
94
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Special termination benefits
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Benefits paid
|
191
|
|
211
|
|
|
23
|
|
17
|
|
|
15
|
|
18
|
|
|
—
|
|
—
|
|
||||||||
Foreign exchange adjustment
|
N/A
|
|
N/A
|
|
|
163
|
|
73
|
|
|
N/A
|
|
N/A
|
|
|
1
|
|
1
|
|
||||||||
Benefit obligation at end of period
|
(4,274
|
)
|
(4,177
|
)
|
|
(1,248
|
)
|
(1,147
|
)
|
|
(169
|
)
|
(184
|
)
|
|
(2
|
)
|
(4
|
)
|
||||||||
Change in fair value of plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fair value at beginning of period
|
4,689
|
|
4,942
|
|
|
1,014
|
|
997
|
|
|
92
|
|
93
|
|
|
—
|
|
—
|
|
||||||||
Actual return on plan assets
|
387
|
|
(61
|
)
|
|
162
|
|
40
|
|
|
5
|
|
(1
|
)
|
|
—
|
|
—
|
|
||||||||
Employer contributions
|
21
|
|
19
|
|
|
87
|
|
51
|
|
|
15
|
|
18
|
|
|
—
|
|
—
|
|
||||||||
Employee contributions
|
—
|
|
—
|
|
|
1
|
|
1
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Acquisitions
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Benefit payments
|
(191
|
)
|
(211
|
)
|
|
(23
|
)
|
(17
|
)
|
|
(15
|
)
|
(18
|
)
|
|
—
|
|
—
|
|
||||||||
Foreign exchange adjustment
|
N/A
|
|
N/A
|
|
|
(151
|
)
|
(59
|
)
|
|
N/A
|
|
N/A
|
|
|
—
|
|
—
|
|
||||||||
Fair value at end of period
|
4,906
|
|
4,689
|
|
|
1,090
|
|
1,014
|
|
|
97
|
|
92
|
|
|
—
|
|
—
|
|
||||||||
Funded status at end of period
|
$
|
632
|
|
$
|
512
|
|
|
$
|
(158
|
)
|
$
|
(133
|
)
|
|
$
|
(72
|
)
|
$
|
(92
|
)
|
|
$
|
(2
|
)
|
$
|
(4
|
)
|
Amounts recognized in accumulated other comprehensive (income) loss consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loss (gain)
|
$
|
1,656
|
|
$
|
1,678
|
|
|
$
|
461
|
|
$
|
368
|
|
|
$
|
96
|
|
$
|
111
|
|
|
$
|
(2
|
)
|
$
|
(1
|
)
|
Prior service cost (credit)
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|
(59
|
)
|
(69
|
)
|
|
—
|
|
—
|
|
||||||||
Total (before tax effects)
|
$
|
1,656
|
|
$
|
1,678
|
|
|
$
|
461
|
|
$
|
369
|
|
|
$
|
37
|
|
$
|
42
|
|
|
$
|
(2
|
)
|
$
|
(1
|
)
|
(a)
|
The benefit obligation for pension benefits is the projected benefit obligation and for healthcare benefits, it is the accumulated benefit obligation.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net periodic benefit cost (credit)
|
Pension Benefits
|
|
Healthcare Benefits
|
|||||||||||||||||||||||||||||||||||||
|
Domestic
|
|
Foreign
|
|
Domestic
|
|
Foreign
|
|||||||||||||||||||||||||||||||||
(dollar amounts in millions)
|
2016
|
|
2015
|
|
(a)
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||||
Weighted-average assumptions as of Jan. 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Market-related value of plan assets
|
$
|
4,830
|
|
$
|
4,696
|
|
|
$
|
4,430
|
|
|
$
|
994
|
|
$
|
959
|
|
$
|
898
|
|
|
$
|
97
|
|
$
|
92
|
|
$
|
86
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|||
Discount rate
|
4.48
|
%
|
4.13
|
%
|
|
4.99
|
%
|
|
3.45
|
%
|
3.33
|
%
|
4.29
|
%
|
|
4.48
|
%
|
4.13
|
%
|
4.99
|
%
|
|
3.60
|
%
|
3.10
|
%
|
4.21
|
%
|
||||||||||||
Expected rate of return on plan assets
|
7.00
|
|
7.25
|
|
|
7.25
|
|
|
5.35
|
|
5.25
|
|
6.26
|
|
|
7.00
|
|
7.25
|
|
7.25
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
||||||||||||
Rate of compensation increase
|
N/A
|
|
3.00
|
|
|
3.00
|
|
|
3.51
|
|
3.29
|
|
3.71
|
|
|
3.00
|
|
3.00
|
|
3.00
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
||||||||||||
Components of net periodic benefit cost (credit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Service cost
|
$
|
—
|
|
$
|
30
|
|
|
$
|
58
|
|
|
$
|
29
|
|
$
|
32
|
|
$
|
33
|
|
|
$
|
1
|
|
$
|
1
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Interest cost
|
182
|
|
170
|
|
|
180
|
|
|
36
|
|
38
|
|
43
|
|
|
8
|
|
8
|
|
11
|
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Expected return on assets
|
(330
|
)
|
(333
|
)
|
|
(315
|
)
|
|
(51
|
)
|
(51
|
)
|
(58
|
)
|
|
(7
|
)
|
(6
|
)
|
(6
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Prior service (credit) cost
|
—
|
|
(1
|
)
|
|
(15
|
)
|
|
1
|
|
—
|
|
1
|
|
|
(10
|
)
|
(10
|
)
|
(10
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Net actuarial loss
|
69
|
|
111
|
|
|
125
|
|
|
17
|
|
23
|
|
15
|
|
|
8
|
|
10
|
|
11
|
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Settlement loss
|
2
|
|
1
|
|
|
—
|
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Curtailment (gain)
|
—
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Special termination benefit charge
|
—
|
|
—
|
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Net periodic benefit cost (credit)
|
$
|
(77
|
)
|
$
|
(52
|
)
|
|
$
|
34
|
|
|
$
|
33
|
|
$
|
42
|
|
$
|
34
|
|
|
$
|
—
|
|
$
|
3
|
|
$
|
7
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
(a)
|
As a result of the amendment to the U.S. pension plans, liabilities were re-measured as of Jan. 29, 2015 at a discount rate of 3.73% and the market-related value of plan assets was $4,713 million at Jan. 29, 2015.
|
Changes in other comprehensive (income) loss in 2016
|
Pension Benefits
|
|
Healthcare Benefits
|
||||||||||
(in millions)
|
Domestic
|
|
Foreign
|
|
|
Domestic
|
|
Foreign
|
|
||||
Net loss (gain) arising during period
|
$
|
49
|
|
$
|
110
|
|
|
$
|
(7
|
)
|
$
|
(1
|
)
|
Recognition of prior years’ net (loss)
|
(71
|
)
|
(18
|
)
|
|
(8
|
)
|
—
|
|
||||
Recognition of prior years’ service (cost) credit
|
—
|
|
(1
|
)
|
|
10
|
|
—
|
|
||||
Foreign exchange adjustment
|
N/A
|
|
1
|
|
|
N/A
|
|
—
|
|
||||
Total recognized in other comprehensive (income) loss (before tax effects)
|
$
|
(22
|
)
|
$
|
92
|
|
|
$
|
(5
|
)
|
$
|
(1
|
)
|
|
Domestic
|
|
Foreign
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||
Pension benefits:
|
|
|
|
|
|
||||||||
Prepaid benefit cost
|
$
|
836
|
|
$
|
724
|
|
|
$
|
—
|
|
$
|
3
|
|
Accrued benefit cost
|
(204
|
)
|
(212
|
)
|
|
(158
|
)
|
(136
|
)
|
||||
Total pension benefits
|
$
|
632
|
|
$
|
512
|
|
|
$
|
(158
|
)
|
$
|
(133
|
)
|
Healthcare benefits:
|
|
|
|
|
|
||||||||
Accrued benefit cost
|
$
|
(72
|
)
|
$
|
(92
|
)
|
|
$
|
(4
|
)
|
$
|
(4
|
)
|
Total healthcare benefits
|
$
|
(72
|
)
|
$
|
(92
|
)
|
|
$
|
(4
|
)
|
$
|
(4
|
)
|
Plans with obligations in
excess of plan assets
|
Domestic
|
|
Foreign
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||
Projected benefit obligation
|
$
|
224
|
|
$
|
233
|
|
|
$
|
149
|
|
$
|
132
|
|
Accumulated benefit obligation
|
224
|
|
233
|
|
|
142
|
|
115
|
|
||||
Fair value of plan assets
|
20
|
|
20
|
|
|
76
|
|
79
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Asset allocations
|
Domestic
|
|
Foreign
|
||||||
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
Equities
|
58
|
%
|
63
|
%
|
|
52
|
%
|
57
|
%
|
Fixed income
|
36
|
|
31
|
|
|
29
|
|
34
|
|
Private equities
|
1
|
|
1
|
|
|
—
|
|
—
|
|
Alternative investment
|
3
|
|
3
|
|
|
3
|
|
3
|
|
Real estate
|
—
|
|
—
|
|
|
4
|
|
5
|
|
Cash
|
2
|
|
2
|
|
|
12
|
|
1
|
|
Total pension benefits
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Fair value measurements using significant unobservable inputs—foreign plans—for the year ended Dec. 31, 2015
|
|||
(in millions)
|
Corporate
debt funds
|
|
|
Fair value at Dec. 31, 2014
|
$
|
20
|
|
Total gains or (losses) included in earnings
|
(1
|
)
|
|
Fair value at Dec. 31, 2015
|
$
|
19
|
|
Change in unrealized gains or (losses) for the period included in earnings for assets held at the end of the reporting period
|
$
|
(1
|
)
|
(a)
|
Funds of funds include multi-strategy hedge funds that utilize investment strategies that invest over both long-term investment and short-term investment horizons.
|
(b)
|
Venture capital and partnership interests do not have redemption rights. Distributions from such funds will be received as the underlying investments are liquidated.
|
(c)
|
Property funds include funds invested in regional real estate vehicles that hold direct interest in real estate properties.
|
(d)
|
Other contracts include assets invested in pooled accounts at insurance companies that are privately valued by the asset manager.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Dividends from bank subsidiaries
|
$
|
125
|
|
$
|
145
|
|
$
|
775
|
|
Dividends from nonbank subsidiaries
|
798
|
|
207
|
|
44
|
|
|||
Interest revenue from bank subsidiaries
|
70
|
|
68
|
|
67
|
|
|||
Interest revenue from nonbank subsidiaries
|
121
|
|
91
|
|
98
|
|
|||
Gain on securities held for sale
|
—
|
|
3
|
|
1
|
|
|||
Other revenue
|
39
|
|
25
|
|
24
|
|
|||
Total revenue
|
1,153
|
|
539
|
|
1,009
|
|
|||
Interest (including, $88, $69, $62, to subsidiaries, respectively)
|
427
|
|
288
|
|
257
|
|
|||
Other expense
|
262
|
|
64
|
|
71
|
|
|||
Total expense
|
689
|
|
352
|
|
328
|
|
|||
Income before income taxes and equity in undistributed net income of subsidiaries
|
464
|
|
187
|
|
681
|
|
|||
(Benefit) for income taxes
|
(333
|
)
|
(98
|
)
|
(155
|
)
|
|||
Equity in undistributed net income:
|
|
|
|
||||||
Bank subsidiaries
|
2,474
|
|
2,004
|
|
910
|
|
|||
Nonbank subsidiaries
|
276
|
|
869
|
|
821
|
|
|||
Net income
|
3,547
|
|
3,158
|
|
2,567
|
|
|||
Preferred stock dividends
|
(122
|
)
|
(105
|
)
|
(73
|
)
|
|||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
3,425
|
|
$
|
3,053
|
|
$
|
2,494
|
|
|
Dec. 31,
|
|||||
(in millions)
|
2016
|
|
2015
|
|
||
Assets:
|
|
|
||||
Cash and due from banks
|
$
|
9,117
|
|
$
|
9,383
|
|
Securities
|
1,693
|
|
26
|
|
||
Loans, net of allowance
|
7
|
|
20
|
|
||
Investment in and advances to subsidiaries and associated companies:
|
|
|
||||
Banks
|
32,771
|
|
30,156
|
|
||
Other
|
26,630
|
|
27,405
|
|
||
Subtotal
|
59,401
|
|
57,561
|
|
||
Corporate-owned life insurance
|
744
|
|
728
|
|
||
Other assets
|
885
|
|
1,509
|
|
||
Total assets
|
$
|
71,847
|
|
$
|
69,227
|
|
Liabilities:
|
|
|
||||
Deferred compensation
|
$
|
464
|
|
$
|
473
|
|
Affiliate borrowings
|
7,107
|
|
8,243
|
|
||
Other liabilities
|
1,445
|
|
1,623
|
|
||
Long-term debt
|
24,020
|
|
20,851
|
|
||
Total liabilities
|
33,036
|
|
31,190
|
|
||
Shareholders’ equity
|
38,811
|
|
38,037
|
|
||
Total liabilities and shareholders’ equity
|
$
|
71,847
|
|
$
|
69,227
|
|
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Operating activities:
|
|
|
|
||||||
Net income
|
$
|
3,547
|
|
$
|
3,158
|
|
$
|
2,567
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||||
Equity in undistributed net (income) of subsidiaries
|
(2,750
|
)
|
(2,873
|
)
|
(1,731
|
)
|
|||
Change in accrued interest receivable
|
2
|
|
(4
|
)
|
23
|
|
|||
Change in accrued interest payable
|
4
|
|
15
|
|
18
|
|
|||
Change in taxes payable
(a)
|
452
|
|
132
|
|
91
|
|
|||
Other, net
|
(31
|
)
|
66
|
|
2
|
|
|||
Net cash provided by operating activities
|
1,224
|
|
494
|
|
970
|
|
|||
Investing activities:
|
|
|
|
||||||
Purchases of securities
|
(1,739
|
)
|
—
|
|
—
|
|
|||
Proceeds from sales of securities
|
—
|
|
3
|
|
7
|
|
|||
Change in loans
|
13
|
|
56
|
|
(57
|
)
|
|||
Acquisitions of, investments in, and advances to subsidiaries
|
(317
|
)
|
(358
|
)
|
(1,603
|
)
|
|||
Other, net
|
—
|
|
14
|
|
107
|
|
|||
Net cash (used in) investing activities
|
(2,043
|
)
|
(285
|
)
|
(1,546
|
)
|
|||
Financing activities:
|
|
|
|
||||||
Net change in commercial paper
|
—
|
|
—
|
|
(96
|
)
|
|||
Proceeds from issuance of long-term debt
|
6,229
|
|
4,986
|
|
4,686
|
|
|||
Repayments of long-term debt
|
(2,700
|
)
|
(3,650
|
)
|
(4,071
|
)
|
|||
Change in advances from subsidiaries
|
(1,136
|
)
|
2,123
|
|
2,704
|
|
|||
Issuance of common stock
|
465
|
|
352
|
|
396
|
|
|||
Treasury stock acquired
|
(2,398
|
)
|
(2,355
|
)
|
(1,669
|
)
|
|||
Issuance of preferred stock
|
990
|
|
990
|
|
—
|
|
|||
Cash dividends paid
|
(900
|
)
|
(865
|
)
|
(833
|
)
|
|||
Tax benefit realized on share based payment awards
|
3
|
|
76
|
|
17
|
|
|||
Net cash provided by financing activities
|
553
|
|
1,657
|
|
1,134
|
|
|||
Change in cash and due from banks
|
(266
|
)
|
1,866
|
|
558
|
|
|||
Cash and due from banks at beginning of year
|
9,383
|
|
7,517
|
|
6,959
|
|
|||
Cash and due from banks at end of year
|
$
|
9,117
|
|
$
|
9,383
|
|
$
|
7,517
|
|
Supplemental disclosures
|
|
|
|
||||||
Interest paid
|
$
|
409
|
|
$
|
302
|
|
$
|
275
|
|
Income taxes paid
|
1
|
|
158
|
|
946
|
|
|||
Income taxes refunded
|
12
|
|
103
|
|
54
|
|
(a)
|
Includes payments received from subsidiaries for taxes of
$189 million
in
2016
,
$24 million
in
2015
and
$452 million
in
2014
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a recurring basis at Dec. 31, 2016
|
Total carrying
value |
|
|||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
14,307
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
14,307
|
|
U.S. government agencies
|
—
|
|
359
|
|
—
|
|
—
|
|
359
|
|
|||||
Sovereign debt/sovereign guaranteed
|
66
|
|
12,423
|
|
—
|
|
—
|
|
12,489
|
|
|||||
State and political subdivisions
|
—
|
|
3,378
|
|
—
|
|
—
|
|
3,378
|
|
|||||
Agency RMBS
|
—
|
|
22,736
|
|
—
|
|
—
|
|
22,736
|
|
|||||
Non-agency RMBS
|
—
|
|
638
|
|
—
|
|
—
|
|
638
|
|
|||||
Other RMBS
|
—
|
|
513
|
|
—
|
|
—
|
|
513
|
|
|||||
Commercial MBS
|
—
|
|
928
|
|
—
|
|
—
|
|
928
|
|
|||||
Agency commercial MBS
|
—
|
|
6,449
|
|
—
|
|
—
|
|
6,449
|
|
|||||
CLOs
|
—
|
|
2,598
|
|
—
|
|
—
|
|
2,598
|
|
|||||
Other asset-backed securities
|
—
|
|
1,727
|
|
—
|
|
—
|
|
1,727
|
|
|||||
Equity securities
|
3
|
|
—
|
|
—
|
|
—
|
|
3
|
|
|||||
Money market funds
(b)
|
842
|
|
—
|
|
—
|
|
—
|
|
842
|
|
|||||
Corporate bonds
|
—
|
|
1,396
|
|
—
|
|
—
|
|
1,396
|
|
|||||
Other debt securities
|
—
|
|
1,961
|
|
—
|
|
—
|
|
1,961
|
|
|||||
Foreign covered bonds
|
1,876
|
|
265
|
|
—
|
|
—
|
|
2,141
|
|
|||||
Non-agency RMBS
(c)
|
—
|
|
1,357
|
|
—
|
|
—
|
|
1,357
|
|
|||||
Total available-for-sale securities
|
17,094
|
|
56,728
|
|
—
|
|
—
|
|
73,822
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(b)
|
240
|
|
2,013
|
|
—
|
|
—
|
|
2,253
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
4
|
|
7,583
|
|
—
|
|
(6,047
|
)
|
1,540
|
|
|||||
Foreign exchange
|
—
|
|
6,104
|
|
—
|
|
(4,172
|
)
|
1,932
|
|
|||||
Equity and other contracts
|
—
|
|
46
|
|
—
|
|
(38
|
)
|
8
|
|
|||||
Total derivative assets not designated as hedging
|
4
|
|
13,733
|
|
—
|
|
(10,257
|
)
|
3,480
|
|
|||||
Total trading assets
|
244
|
|
15,746
|
|
—
|
|
(10,257
|
)
|
5,733
|
|
|||||
Other assets:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
415
|
|
—
|
|
—
|
|
415
|
|
|||||
Foreign exchange
|
—
|
|
369
|
|
—
|
|
—
|
|
369
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
784
|
|
—
|
|
—
|
|
784
|
|
|||||
Other assets
(d)
|
268
|
|
73
|
|
—
|
|
—
|
|
341
|
|
|||||
Other assets measured at net asset value
(d)
|
|
|
|
|
214
|
|
|||||||||
Total other assets
|
268
|
|
857
|
|
—
|
|
—
|
|
1,339
|
|
|||||
Subtotal assets of operations at fair value
|
17,606
|
|
73,331
|
|
—
|
|
(10,257
|
)
|
80,894
|
|
|||||
Percentage of assets prior to netting
|
19
|
%
|
81
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading assets
|
296
|
|
683
|
|
—
|
|
—
|
|
979
|
|
|||||
Other assets
|
168
|
|
84
|
|
—
|
|
—
|
|
252
|
|
|||||
Total assets of consolidated investment management funds
|
464
|
|
767
|
|
—
|
|
—
|
|
1,231
|
|
|||||
Total assets
|
$
|
18,070
|
|
$
|
74,098
|
|
$
|
—
|
|
$
|
(10,257
|
)
|
$
|
82,125
|
|
Percentage of assets prior to netting
|
20
|
%
|
80
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Dec. 31, 2016
|
Total carrying
value |
|
|||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
349
|
|
$
|
236
|
|
$
|
—
|
|
$
|
—
|
|
$
|
585
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
4
|
|
7,629
|
|
—
|
|
(6,634
|
)
|
999
|
|
|||||
Foreign exchange
|
—
|
|
6,103
|
|
—
|
|
(3,363
|
)
|
2,740
|
|
|||||
Equity and other contracts
|
—
|
|
115
|
|
—
|
|
(50
|
)
|
65
|
|
|||||
Total derivative liabilities not designated as hedging
|
4
|
|
13,847
|
|
—
|
|
(10,047
|
)
|
3,804
|
|
|||||
Total trading liabilities
|
353
|
|
14,083
|
|
—
|
|
(10,047
|
)
|
4,389
|
|
|||||
Long-term debt
(b)
|
—
|
|
363
|
|
—
|
|
—
|
|
363
|
|
|||||
Other liabilities - derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
545
|
|
—
|
|
—
|
|
545
|
|
|||||
Foreign exchange
|
—
|
|
52
|
|
—
|
|
—
|
|
52
|
|
|||||
Total other liabilities - derivative liabilities designated as hedging
|
—
|
|
597
|
|
—
|
|
—
|
|
597
|
|
|||||
Subtotal liabilities of operations at fair value
|
353
|
|
15,043
|
|
—
|
|
(10,047
|
)
|
5,349
|
|
|||||
Percentage of liabilities prior to netting
|
2
|
%
|
98
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading liabilities
|
—
|
|
282
|
|
—
|
|
—
|
|
282
|
|
|||||
Other liabilities
|
3
|
|
30
|
|
—
|
|
—
|
|
33
|
|
|||||
Total liabilities of consolidated investment management funds
|
3
|
|
312
|
|
—
|
|
—
|
|
315
|
|
|||||
Total liabilities
|
$
|
356
|
|
$
|
15,355
|
|
$
|
—
|
|
$
|
(10,047
|
)
|
$
|
5,664
|
|
Percentage of liabilities prior to netting
|
2
|
%
|
98
|
%
|
—
|
%
|
|
|
(a)
|
ASC 815, Derivatives and Hedging, 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, Derivatives and Hedging, 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
|
Dec. 31, 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
|
$
|
58
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
66
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
2006
|
98
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
115
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
||
2005
|
180
|
|
|
23
|
|
5
|
|
9
|
|
63
|
|
|
234
|
|
|
19
|
|
9
|
|
13
|
|
59
|
|
||
2004 and earlier
|
302
|
|
|
5
|
|
3
|
|
24
|
|
68
|
|
|
378
|
|
|
4
|
|
4
|
|
26
|
|
66
|
|
||
Total non-agency RMBS
|
$
|
638
|
|
|
9
|
%
|
3
|
%
|
14
|
%
|
74
|
%
|
|
$
|
793
|
|
|
8
|
%
|
4
|
%
|
16
|
%
|
72
|
%
|
Commercial MBS - Domestic, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2009-2016
|
$
|
674
|
|
|
84
|
%
|
16
|
%
|
—
|
%
|
—
|
%
|
|
$
|
626
|
|
|
83
|
%
|
17
|
%
|
—
|
%
|
—
|
%
|
2008
|
14
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
16
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
2007
|
190
|
|
|
71
|
|
29
|
|
—
|
|
—
|
|
|
304
|
|
|
62
|
|
22
|
|
16
|
|
—
|
|
||
2006
|
3
|
|
|
7
|
|
93
|
|
—
|
|
—
|
|
|
384
|
|
|
76
|
|
24
|
|
—
|
|
—
|
|
||
Total commercial MBS - Domestic
|
$
|
881
|
|
|
81
|
%
|
19
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,330
|
|
|
76
|
%
|
20
|
%
|
4
|
%
|
—
|
%
|
Foreign covered bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada
|
$
|
1,320
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,014
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
United Kingdom
|
280
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
363
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Netherlands
|
160
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
214
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
|
381
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
577
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total foreign covered bonds
|
$
|
2,141
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,168
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
European floating rate notes - available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
379
|
|
|
90
|
%
|
10
|
%
|
—
|
%
|
—
|
%
|
|
$
|
780
|
|
|
85
|
%
|
15
|
%
|
—
|
%
|
—
|
%
|
Netherlands
|
125
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
222
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
58
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
121
|
|
|
—
|
|
45
|
|
55
|
|
—
|
|
||
Total European floating rate notes - available-for-sale
|
$
|
562
|
|
|
83
|
%
|
7
|
%
|
10
|
%
|
—
|
%
|
|
$
|
1,123
|
|
|
79
|
%
|
15
|
%
|
6
|
%
|
—
|
%
|
Sovereign debt/sovereign guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
3,209
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,941
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
France
|
1,998
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
2,008
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Spain
|
1,749
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,955
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Germany
|
1,347
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,683
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Italy
|
1,130
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,398
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Netherlands
|
1,061
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,055
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Belgium
|
1,005
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,108
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
736
|
|
|
—
|
|
100
|
|
—
|
|
—
|
|
|
772
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Other
(b)
|
254
|
|
|
71
|
|
—
|
|
—
|
|
29
|
|
|
297
|
|
|
68
|
|
—
|
|
32
|
|
—
|
|
||
Total sovereign debt/sovereign guaranteed
|
$
|
12,489
|
|
|
70
|
%
|
6
|
%
|
23
|
%
|
1
|
%
|
|
$
|
13,217
|
|
|
68
|
%
|
—
|
%
|
32
|
%
|
—
|
%
|
Non-agency RMBS
(c)
, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007
|
$
|
387
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
502
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
2006
|
391
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
530
|
|
|
—
|
|
1
|
|
—
|
|
99
|
|
||
2005
|
437
|
|
|
—
|
|
2
|
|
1
|
|
97
|
|
|
580
|
|
|
—
|
|
2
|
|
1
|
|
97
|
|
||
2004 and earlier
|
142
|
|
|
2
|
|
2
|
|
17
|
|
79
|
|
|
177
|
|
|
—
|
|
3
|
|
9
|
|
88
|
|
||
Total non-agency RMBS
(c)
|
$
|
1,357
|
|
|
—
|
%
|
1
|
%
|
2
|
%
|
97
|
%
|
|
$
|
1,789
|
|
|
—
|
%
|
1
|
%
|
1
|
%
|
98
|
%
|
(a)
|
At
Dec. 31, 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
$73 million
of noninvestment grade sovereign debt at
Dec. 31, 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)
|
|
Assets measured at fair value on a nonrecurring basis at Dec. 31, 2016
|
Total
carrying
value
|
|
||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||
Loans
(a)
|
$
|
—
|
|
$
|
84
|
|
$
|
7
|
|
$
|
91
|
|
Other assets
(b)
|
—
|
|
4
|
|
—
|
|
4
|
|
||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
$
|
88
|
|
$
|
7
|
|
$
|
95
|
|
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 years ended
Dec. 31, 2016
and
Dec. 31, 2015
, the fair value of these loans decreased
$2 million
and
$2 million
, respectively, based on the fair value of the underlying collateral based on guidance in ASC 310, Receivables, with an offset to the allowance for credit losses.
|
(b)
|
Includes other assets received in satisfaction of debt.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Summary of financial instruments
|
Dec. 31, 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
|
$
|
—
|
|
$
|
58,041
|
|
$
|
—
|
|
$
|
58,041
|
|
$
|
58,041
|
|
Interest-bearing deposits with banks
|
—
|
|
15,091
|
|
—
|
|
15,091
|
|
15,086
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
25,801
|
|
—
|
|
25,801
|
|
25,801
|
|
|||||
Securities held-to-maturity
|
11,173
|
|
29,496
|
|
—
|
|
40,669
|
|
40,905
|
|
|||||
Loans
(a)
|
—
|
|
62,829
|
|
—
|
|
62,829
|
|
62,564
|
|
|||||
Other financial assets
|
4,822
|
|
1,112
|
|
—
|
|
5,934
|
|
5,934
|
|
|||||
Total
|
$
|
15,995
|
|
$
|
192,370
|
|
$
|
—
|
|
$
|
208,365
|
|
$
|
208,331
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
78,342
|
|
$
|
—
|
|
$
|
78,342
|
|
$
|
78,342
|
|
Interest-bearing deposits
|
—
|
|
141,418
|
|
—
|
|
141,418
|
|
143,148
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
9,989
|
|
—
|
|
9,989
|
|
9,989
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
20,987
|
|
—
|
|
20,987
|
|
20,987
|
|
|||||
Borrowings
|
—
|
|
960
|
|
—
|
|
960
|
|
960
|
|
|||||
Long-term debt
|
—
|
|
24,184
|
|
—
|
|
24,184
|
|
24,100
|
|
|||||
Total
|
$
|
—
|
|
$
|
275,880
|
|
$
|
—
|
|
$
|
275,880
|
|
$
|
277,526
|
|
(a)
|
Does not include the leasing portfolio.
|
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
(a)
|
—
|
|
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
|
|
(a)
|
Does not include the leasing portfolio.
|
Hedged financial instruments
|
Carrying
amount
|
|
Notional amount of hedge
|
|
|
|
||||||
|
Unrealized
|
|||||||||||
(in millions)
|
Gain
|
|
(Loss)
|
|
||||||||
Dec. 31, 2016
|
|
|
|
|
||||||||
Securities available-for-sale
|
$
|
9,184
|
|
$
|
9,233
|
|
$
|
83
|
|
$
|
(342
|
)
|
Long-term debt
|
20,511
|
|
20,450
|
|
330
|
|
(203
|
)
|
||||
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)
|
|
(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.
|
Financial institutions
portfolio exposure
(in billions)
|
Dec. 31, 2016
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Securities industry
|
$
|
3.8
|
|
$
|
19.2
|
|
$
|
23.0
|
|
Banks
|
7.9
|
|
2.0
|
|
9.9
|
|
|||
Asset managers
|
1.5
|
|
6.2
|
|
7.7
|
|
|||
Insurance
|
0.1
|
|
3.8
|
|
3.9
|
|
|||
Government
|
0.1
|
|
0.9
|
|
1.0
|
|
|||
Other
|
1.3
|
|
1.6
|
|
2.9
|
|
|||
Total
|
$
|
14.7
|
|
$
|
33.7
|
|
$
|
48.4
|
|
Commercial portfolio
exposure
(in billions)
|
Dec. 31, 2016
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Manufacturing
|
$
|
1.1
|
|
$
|
6.7
|
|
$
|
7.8
|
|
Energy and utilities
|
0.6
|
|
4.7
|
|
5.3
|
|
|||
Services and other
|
0.6
|
|
4.3
|
|
4.9
|
|
|||
Media and telecom
|
0.3
|
|
1.8
|
|
2.1
|
|
|||
Total
|
$
|
2.6
|
|
$
|
17.5
|
|
$
|
20.1
|
|
Off-balance sheet credit risks
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
||
(in millions)
|
||||||
Lending commitments
|
$
|
51,270
|
|
$
|
54,505
|
|
Standby letters of credit
(a)
|
4,185
|
|
4,915
|
|
||
Commercial letters of credit
|
339
|
|
303
|
|
||
Securities lending indemnifications
(b)
|
317,690
|
|
294,108
|
|
(a)
|
Net of participations totaling
$662 million
at
Dec. 31, 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
$61 billion
at
Dec. 31, 2016
and
$54 billion
at
Dec. 31, 2015
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Standby letters of credit
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
|
||||
Investment grade
|
89
|
%
|
86
|
%
|
Non-investment grade
|
11
|
%
|
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)
|
|
Ineffectiveness
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Fair value hedges of securities
|
$
|
(0.5
|
)
|
$
|
4.1
|
|
$
|
(20.6
|
)
|
Fair value hedges of long-term debt
|
(3.1
|
)
|
(6.3
|
)
|
(14.6
|
)
|
|||
Cash flow hedges
|
—
|
|
—
|
|
0.1
|
|
|||
Other
(a)
|
—
|
|
—
|
|
(0.1
|
)
|
|||
Total
|
$
|
(3.6
|
)
|
$
|
(2.2
|
)
|
$
|
(35.2
|
)
|
(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)
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
|
Dec. 31, 2016
|
|
Dec. 31, 2015
|
|
||||||
Derivatives designated as hedging instruments:
(a)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
29,683
|
|
$
|
25,768
|
|
|
$
|
415
|
|
$
|
497
|
|
|
$
|
545
|
|
$
|
372
|
|
Foreign exchange contracts
|
7,796
|
|
6,839
|
|
|
369
|
|
219
|
|
|
52
|
|
20
|
|
||||||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
784
|
|
$
|
716
|
|
|
$
|
597
|
|
$
|
392
|
|
||||
Derivatives not designated as hedging instruments:
(b)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
325,412
|
|
$
|
519,428
|
|
|
$
|
7,587
|
|
$
|
10,044
|
|
|
$
|
7,633
|
|
$
|
9,962
|
|
Foreign exchange contracts
|
530,729
|
|
576,253
|
|
|
6,104
|
|
4,905
|
|
|
6,103
|
|
4,682
|
|
||||||
Equity contracts
|
1,167
|
|
1,923
|
|
|
46
|
|
127
|
|
|
112
|
|
151
|
|
||||||
Credit contracts
|
160
|
|
319
|
|
|
—
|
|
8
|
|
|
3
|
|
1
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
13,737
|
|
$
|
15,084
|
|
|
$
|
13,851
|
|
$
|
14,796
|
|
||||
Total derivatives fair value
(c)
|
|
|
|
$
|
14,521
|
|
$
|
15,800
|
|
|
$
|
14,448
|
|
$
|
15,188
|
|
||||
Effect of master netting agreements
(d)
|
|
|
|
(10,257
|
)
|
(11,115
|
)
|
|
(10,047
|
)
|
(10,869
|
)
|
||||||||
Fair value after effect of master netting agreements
|
|
|
|
$
|
4,264
|
|
$
|
4,685
|
|
|
$
|
4,401
|
|
$
|
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, Derivatives and Hedging.
|
(d)
|
Effect of master netting agreements includes cash collateral received and paid of
$1,119 million
and
$909 million
, respectively, at
Dec. 31, 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)
Year ended Dec. 31,
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
Year ended Dec. 31,
|
|
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)
Year ended Dec. 31,
|
||||||||||||||||||||||||
2016
|
|
2015
|
|
2014
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||||
FX contracts
|
$
|
(18
|
)
|
$
|
(1
|
)
|
$
|
(2
|
)
|
|
Net interest revenue
|
|
$
|
(18
|
)
|
$
|
(1
|
)
|
$
|
(2
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
FX contracts
|
—
|
|
—
|
|
(6
|
)
|
|
Other revenue
|
|
—
|
|
—
|
|
(3
|
)
|
|
Other revenue
|
|
—
|
|
—
|
|
0.1
|
|
|||||||||
FX contracts
|
(16
|
)
|
9
|
|
36
|
|
|
Trading revenue
|
|
(16
|
)
|
9
|
|
36
|
|
|
Trading revenue
|
|
—
|
|
—
|
|
—
|
|
|||||||||
FX contracts
|
(18
|
)
|
(8
|
)
|
(6
|
)
|
|
Salary expense
|
|
(11
|
)
|
(19
|
)
|
10
|
|
|
Salary expense
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Total
|
$
|
(52
|
)
|
$
|
—
|
|
$
|
22
|
|
|
|
|
$
|
(45
|
)
|
$
|
(11
|
)
|
$
|
41
|
|
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.1
|
|
Derivatives in net
investment hedging
relationships
|
Gain or (loss) recognized in accumulated OCI
on derivatives
(effective portion)
Year ended Dec. 31,
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
Year ended Dec. 31,
|
|
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)
Year ended Dec. 31,
|
||||||||||||||||||||||||
2016
|
|
2015
|
|
2014
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||||
FX contracts
|
$
|
652
|
|
$
|
474
|
|
$
|
(367
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
1
|
|
$
|
(1
|
)
|
|
Other revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.1
|
)
|
Notes to Consolidated Financial Statements
(continued)
|
|
Foreign exchange and other trading revenue
|
Year ended Dec. 31,
|
|||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
||||
Foreign exchange
|
$
|
687
|
|
$
|
743
|
|
$
|
578
|
|
|
Other trading revenue (loss)
|
14
|
|
25
|
|
(8
|
)
|
||||
Total foreign exchange and other trading revenue
|
$
|
701
|
|
$
|
768
|
|
$
|
570
|
|
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-
|
|
$
|
121
|
million
|
Baa2/BBB
|
|
$
|
805
|
million
|
Ba1/BB+
|
|
$
|
2,066
|
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)
|
|
(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 assets and financial assets at Dec. 31, 2015
|
|
|
|
|
|||||||||||||||
|
Gross assets recognized
|
|
Gross amounts offset in the balance sheet
|
|
|
Net assets recognized
on the
balance sheet
|
|
Gross amounts not offset in the balance sheet
|
|
||||||||||
(in millions)
|
(a)
|
Financial instruments
|
|
Cash collateral received
|
|
Net amount
|
|
||||||||||||
Derivatives subject to netting arrangements:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
9,554
|
|
$
|
8,071
|
|
|
$
|
1,483
|
|
$
|
432
|
|
$
|
—
|
|
$
|
1,051
|
|
Foreign exchange contracts
|
3,981
|
|
2,981
|
|
|
1,000
|
|
63
|
|
—
|
|
937
|
|
||||||
Equity and other contracts
|
123
|
|
63
|
|
|
60
|
|
—
|
|
—
|
|
60
|
|
||||||
Total derivatives subject to netting arrangements
|
13,658
|
|
11,115
|
|
|
2,543
|
|
495
|
|
—
|
|
2,048
|
|
||||||
Total derivatives not subject to netting arrangements
|
2,142
|
|
—
|
|
|
2,142
|
|
—
|
|
—
|
|
2,142
|
|
||||||
Total derivatives
|
15,800
|
|
11,115
|
|
|
4,685
|
|
495
|
|
—
|
|
4,190
|
|
||||||
Reverse repurchase agreements
|
17,088
|
|
357
|
|
(b)
|
16,731
|
|
16,726
|
|
—
|
|
5
|
|
||||||
Securities borrowing
|
7,630
|
|
—
|
|
|
7,630
|
|
7,373
|
|
—
|
|
257
|
|
||||||
Total
|
$
|
40,518
|
|
$
|
11,472
|
|
|
$
|
29,046
|
|
$
|
24,594
|
|
$
|
—
|
|
$
|
4,452
|
|
(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 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)
|
|
Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2015
|
|
|
|
||||||||||||||||
|
Gross liabilities recognized
|
|
Gross amounts offset in the balance sheet
|
|
|
Net liabilities recognized
on the
balance sheet
|
|
Gross amounts not offset in the balance sheet
|
|
||||||||||
(in millions)
|
(a)
|
Financial instruments
|
|
Cash collateral pledged
|
|
Net amount
|
|
||||||||||||
Derivatives subject to netting arrangements:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
10,188
|
|
$
|
8,235
|
|
|
$
|
1,953
|
|
$
|
1,795
|
|
$
|
—
|
|
$
|
158
|
|
Foreign exchange contracts
|
3,409
|
|
2,567
|
|
|
842
|
|
274
|
|
—
|
|
568
|
|
||||||
Equity and other contracts
|
145
|
|
67
|
|
|
78
|
|
71
|
|
—
|
|
7
|
|
||||||
Total derivatives subject to netting arrangements
|
13,742
|
|
10,869
|
|
|
2,873
|
|
2,140
|
|
—
|
|
733
|
|
||||||
Total derivatives not subject to netting arrangements
|
1,446
|
|
—
|
|
|
1,446
|
|
—
|
|
—
|
|
1,446
|
|
||||||
Total derivatives
|
15,188
|
|
10,869
|
|
|
4,319
|
|
2,140
|
|
—
|
|
2,179
|
|
||||||
Repurchase agreements
|
7,737
|
|
357
|
|
(b)
|
7,380
|
|
7,380
|
|
—
|
|
—
|
|
||||||
Securities lending
|
1,801
|
|
—
|
|
|
1,801
|
|
1,727
|
|
—
|
|
74
|
|
||||||
Total
|
$
|
24,726
|
|
$
|
11,226
|
|
|
$
|
13,500
|
|
$
|
11,247
|
|
$
|
—
|
|
$
|
2,253
|
|
(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)
|
|
Repurchase agreements and securities lending transactions accounted for as secured borrowings at Dec. 31, 2015
|
||||||||||||
|
Remaining contractual maturity of the agreements
|
|||||||||||
(in millions)
|
Overnight and continuous
|
|
Up to 30 days
|
|
30 days or more
|
|
Total
|
|
||||
Repurchase agreements:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
2,226
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,226
|
|
U.S. government agencies
|
319
|
|
42
|
|
5
|
|
366
|
|
||||
Agency RMBS
|
3,158
|
|
—
|
|
—
|
|
3,158
|
|
||||
Corporate bonds
|
372
|
|
—
|
|
665
|
|
1,037
|
|
||||
Other debt securities
|
106
|
|
—
|
|
149
|
|
255
|
|
||||
Equity securities
|
664
|
|
—
|
|
31
|
|
695
|
|
||||
Total
|
$
|
6,845
|
|
$
|
42
|
|
$
|
850
|
|
$
|
7,737
|
|
Securities lending:
|
|
|
|
|
||||||||
U.S. government agencies
|
$
|
35
|
|
$
|
—
|
|
$
|
—
|
|
$
|
35
|
|
Other debt securities
|
254
|
|
—
|
|
—
|
|
254
|
|
||||
Equity securities
|
1,512
|
|
—
|
|
—
|
|
1,512
|
|
||||
Total
|
$
|
1,801
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,801
|
|
Total borrowings
|
$
|
8,646
|
|
$
|
42
|
|
$
|
850
|
|
$
|
9,538
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Business
|
Primary types of revenue
|
Investment Management
|
•
Investment management and performance fees from:
Mutual funds
Institutional clients
Private clients
High net worth individuals and families, endowments and foundations and related entities
•
Distribution and servicing fees
•
Other revenue from seed capital investments
|
Investment Services
|
•
Asset servicing fees, including institutional trust and custody fees, accounting, broker-dealer services, securities lending and collateral and liquidity services
•
Issuer services fees, including Corporate Trust and Depositary Receipts
•
Clearing services fees
•
Treasury services fees, including global payment services, trade finance and cash management
•
Foreign exchange revenue
•
Financing-related fees and net interest revenue from credit-related activities
|
Other segment
|
•
Net interest-revenue and lease-related gains (losses) from leasing operations
•
Gain (loss) on securities and net interest revenue from corporate treasury activity
•
Other trading revenue from derivatives and other trading activity
•
Results of business exits
|
•
|
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.
|
•
|
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 assigned to each business. Businesses with a net liability position have been allocated assets.
|
•
|
Goodwill and intangible assets are reflected within individual businesses.
|
Notes to Consolidated Financial Statements
(continued)
|
|
For the year ended Dec. 31, 2016
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
3,424
|
|
(a)
|
$
|
8,299
|
|
|
$
|
366
|
|
|
$
|
12,089
|
|
(a)
|
Net interest revenue
|
327
|
|
|
2,797
|
|
|
14
|
|
|
3,138
|
|
|
||||
Total revenue
|
3,751
|
|
(a)
|
11,096
|
|
|
380
|
|
|
15,227
|
|
(a)
|
||||
Provision for credit losses
|
6
|
|
|
8
|
|
|
(25
|
)
|
|
(11
|
)
|
|
||||
Noninterest expense
|
2,778
|
|
|
7,342
|
|
|
394
|
|
|
10,514
|
|
(b)
|
||||
Income before taxes
|
$
|
967
|
|
(a)
|
$
|
3,746
|
|
|
$
|
11
|
|
|
$
|
4,724
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
26
|
%
|
|
34
|
%
|
|
N/M
|
|
|
31
|
%
|
|
||||
Average assets
|
$
|
30,169
|
|
|
$
|
273,808
|
|
|
$
|
54,500
|
|
|
$
|
358,477
|
|
|
(a)
|
Both fee and other revenue and total revenue include the net income from consolidated investment management funds of
$16 million
, representing
$26 million
of income and noncontrolling interests of
$10 million
.
Income before taxes is net of noncontrolling interests of
$10 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interest of
$9 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the year ended Dec. 31, 2015
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
3,587
|
|
(a)
|
$
|
8,177
|
|
|
$
|
336
|
|
|
$
|
12,100
|
|
(a)
|
Net interest revenue
|
319
|
|
|
2,622
|
|
|
85
|
|
|
3,026
|
|
|
||||
Total revenue
|
3,906
|
|
(a)
|
10,799
|
|
|
421
|
|
|
15,126
|
|
(a)
|
||||
Provision for credit losses
|
(1
|
)
|
|
28
|
|
|
133
|
|
|
160
|
|
|
||||
Noninterest expense
|
2,859
|
|
|
7,502
|
|
|
434
|
|
|
10,795
|
|
(b)
|
||||
Income (loss) before taxes
|
$
|
1,048
|
|
(a)
|
$
|
3,269
|
|
|
$
|
(146
|
)
|
|
$
|
4,171
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
27
|
%
|
|
30
|
%
|
|
N/M
|
|
|
28
|
%
|
|
||||
Average assets
|
$
|
30,928
|
|
|
$
|
286,617
|
|
|
$
|
54,642
|
|
|
$
|
372,187
|
|
|
(a)
|
Both fee and other revenue and total revenue include the net income from consolidated investment management funds of
$18 million
, representing
$86 million
of income and noncontrolling interests of
$68 million
. Income before taxes is net of noncontrolling interests of
$68 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interest of
$4 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the year ended Dec. 31, 2014
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollar amounts in millions)
|
||||||||||||||||
Fee and other revenue
|
$
|
3,657
|
|
(a)
|
$
|
7,882
|
|
|
$
|
1,189
|
|
|
$
|
12,728
|
|
(a)
|
Net interest revenue
|
274
|
|
|
2,468
|
|
|
138
|
|
|
2,880
|
|
|
||||
Total revenue
|
3,931
|
|
(a)
|
10,350
|
|
|
1,327
|
|
|
15,608
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
(21
|
)
|
|
(27
|
)
|
|
(48
|
)
|
|
||||
Noninterest expense
|
3,039
|
|
|
8,241
|
|
|
897
|
|
|
12,177
|
|
|
||||
Income before taxes
|
$
|
892
|
|
(a)
|
$
|
2,130
|
|
|
$
|
457
|
|
|
$
|
3,479
|
|
(a)
|
Pre-tax operating margin
(b)
|
23
|
%
|
|
21
|
%
|
|
N/M
|
|
|
22
|
%
|
|
||||
Average assets
|
$
|
37,655
|
|
|
$
|
271,477
|
|
|
$
|
63,434
|
|
|
$
|
372,566
|
|
|
(a)
|
Both fee and other revenue and total revenue include net income from consolidated investment management funds of
$79 million
, representing
$163 million
of income and noncontrolling interests of
$84 million
. Income before taxes is net of noncontrolling interests of
$84 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Income from international operations is determined after internal allocations for interest revenue, taxes, expenses and provision for credit losses.
|
•
|
Expense charges to international operations include those directly incurred in connection with such activities, as well as an allocable share of general support and overhead charges.
|
International operations
|
International
|
Total
International
|
|
|
Total
Domestic
|
|
|
|
||||||||||||||
(in millions)
|
EMEA
|
|
|
APAC
|
|
Other
|
|
|
|
Total
|
|
|||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total assets at period end
(a)
|
$
|
73,303
|
|
(b)
|
$
|
18,074
|
|
$
|
1,350
|
|
$
|
92,727
|
|
|
$
|
240,742
|
|
|
$
|
333,469
|
|
|
Total revenue
|
3,744
|
|
(b)
|
922
|
|
549
|
|
5,215
|
|
|
10,022
|
|
|
15,237
|
|
||||||
|
Income before income taxes
|
1,263
|
|
|
485
|
|
286
|
|
2,034
|
|
|
2,691
|
|
|
4,725
|
|
||||||
|
Net income
|
1,013
|
|
|
389
|
|
229
|
|
1,631
|
|
|
1,917
|
|
|
3,548
|
|
||||||
2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total assets at period end
(a)
|
$
|
76,679
|
|
(b)
|
$
|
17,829
|
|
$
|
1,176
|
|
$
|
95,684
|
|
|
$
|
298,096
|
|
|
$
|
393,780
|
|
|
Total revenue
|
3,932
|
|
(b)
|
904
|
|
577
|
|
5,413
|
|
|
9,781
|
|
|
15,194
|
|
||||||
|
Income before income taxes
|
1,436
|
|
|
451
|
|
269
|
|
2,156
|
|
|
2,079
|
|
|
4,235
|
|
||||||
|
Net income
|
1,163
|
|
|
365
|
|
218
|
|
1,746
|
|
|
1,476
|
|
|
3,222
|
|
||||||
2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total assets at period end
(a)
|
$
|
86,189
|
|
(b)
|
$
|
16,812
|
|
$
|
1,516
|
|
$
|
104,517
|
|
|
$
|
280,786
|
|
|
$
|
385,303
|
|
|
Total revenue
|
3,931
|
|
(b)
|
1,383
|
|
645
|
|
5,959
|
|
|
9,733
|
|
|
15,692
|
|
||||||
|
Income before income taxes
|
985
|
|
|
913
|
|
365
|
|
2,263
|
|
|
1,300
|
|
|
3,563
|
|
||||||
|
Net income
|
775
|
|
|
719
|
|
287
|
|
1,781
|
|
|
870
|
|
|
2,651
|
|
(a)
|
Total assets include long-lived assets, which are not considered by management to be significant in relation to total assets. Long-lived assets are primarily located in the United States.
|
(b)
|
Includes revenue of approximately
$2.2 billion
,
$2.3 billion
and
$2.3 billion
and assets of approximately
$29.6 billion
,
$33.2 billion
and
$46.2 billion
in 2016, 2015 and 2014, respectively, of international operations domiciled in the UK, which is
14%
,
15%
and
15%
of total revenue and
9%
,
8%
and
12%
of total assets, respectively.
|
Noncash investing and financing transactions
|
Year ended Dec. 31,
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Transfers from loans to other assets for other real estate owned (“OREO”)
|
$
|
4
|
|
$
|
7
|
|
$
|
4
|
|
Change in assets of consolidated VIEs
|
170
|
|
7,881
|
|
1,990
|
|
|||
Change in liabilities of consolidated VIEs
|
69
|
|
7,423
|
|
2,462
|
|
|||
Change in nonredeemable noncontrolling interests of consolidated investment management funds
|
120
|
|
295
|
|
250
|
|
|||
Securities purchased not settled
|
75
|
|
—
|
|
55
|
|
|||
Securities sales not settled
|
—
|
|
11
|
|
750
|
|
|||
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
|
13
|
|
49
|
|
31
|
|
Report of Independent Registered Public Accounting Firm
|
|
Directors, Executive Committee and Other Executive Officers
|
|
Directors
|
|
|
|
|
|
|
|
|
|
Linda Z. Cook
|
|
Edmund F. (Ted) Kelly
|
|
Michael Cole-Fontayn
|
Managing Director and Member of the
|
|
Retired Chairman
|
|
Chairman,
|
Executive Committee of EIG Global Energy
|
|
Liberty Mutual Group
|
|
Europe, Middle East and Africa
|
Partners, an investment firm, and Chief
|
|
Multi-line insurance company
|
|
|
Executive Officer of Harbour Energy, Ltd.,
|
|
|
|
J. David Cruikshank
|
an energy investment vehicle
|
|
John A. Luke, Jr.
|
|
Chairman,
|
|
|
Non-Executive Chairman
|
|
Asia Pacific
|
Nicholas M. Donofrio
|
|
WestRock Company
|
|
|
Retired Executive Vice President,
|
|
Global paper and packaging company
|
|
Thomas P. (Todd) Gibbons *
|
Innovation and Technology
|
|
|
|
Chief Financial Officer
|
IBM Corporation
|
|
Jennifer B. Morgan
|
|
|
Developer, manufacturer and provider of
|
|
President of SAP North America
|
|
Mitchell E. Harris *
|
advanced information technologies and services
|
|
Global software company
|
|
Chief Executive Officer,
|
|
|
|
|
Investment Management
|
Joseph J. Echevarria
|
|
Mark A. Nordenberg
|
|
|
Retired Chief Executive Officer
|
|
Chancellor Emeritus,
|
|
Monique R. Herena *
|
Deloitte LLP
|
|
Chair of the Institute of Politics and
|
|
Chief Human Resources Officer
|
Global provider of audit, consulting, financial
|
|
Distinguished Service Professor of Law
|
|
|
advisory, risk management, tax and related
|
|
University of Pittsburgh
|
|
Kurtis R. Kurimsky *
|
services
|
|
Major public research university
|
|
Corporate Controller
|
|
|
|
|
|
Edward P. Garden
|
|
Catherine A. Rein
|
|
Suresh Kumar
|
Chief Investment Officer and a founding partner,
|
|
Retired Senior Executive Vice President and
|
|
Chief Information Officer
|
Trian Fund Management, L.P.
|
|
Chief Administrative Officer
|
|
|
Alternative investment management firm
|
|
MetLife, Inc.
|
|
J. Kevin McCarthy *
|
|
|
Insurance and financial services company
|
|
General Counsel
|
Jeffrey A. Goldstein
|
|
|
|
|
Senior Advisor, Hellman & Friedman LLC
|
|
Elizabeth E. Robinson
|
|
Michelle M. Neal *
|
Private equity firm
|
|
Former Global Treasurer, Partner and Managing
|
|
President,
|
|
|
Director of The Goldman Sachs Group, Inc.
|
|
BNY Mellon Markets Group
|
Gerald L. Hassell
|
|
Global financial services company
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
Brian T. Shea *
|
The Bank of New York Mellon Corporation
|
|
Samuel C. Scott III
|
|
Chief Executive Officer,
|
|
|
Retired Chairman, President and
|
|
Investment Services
|
John M. Hinshaw
|
|
Chief Executive Officer
|
|
|
Former Executive Vice President and
|
|
Ingredion Incorporated (formerly Corn Products
|
|
Douglas H. Shulman
|
Chief Customer Officer at
|
|
International, Inc.)
|
|
Head of Client Service Delivery
|
Hewlett Packard Enterprise Company
|
|
Global ingredient solutions provider
|
|
|
Global provider of IT, technology and enterprise
|
|
|
|
James S. Wiener *
|
products and solutions
|
|
Executive Committee and Other Executive
|
|
Chief Risk Officer
|
|
|
Officers
|
|
|
|
|
|
|
|
|
|
Gerald L. Hassell *
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
|
|
*
|
Designated as an Executive Officer.
|
Performance Graph
|
|
Cumulative shareholder returns
(a)
|
Dec. 31,
|
||||||||||||||||||||||
(in dollars)
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
||||||
The Bank of New York Mellon Corporation
|
$
|
100.0
|
|
|
$
|
132.1
|
|
|
$
|
183.2
|
|
|
$
|
216.7
|
|
|
$
|
223.9
|
|
|
$
|
262.0
|
|
S&P 500 Financial Index
|
100.0
|
|
|
128.8
|
|
|
174.7
|
|
|
201.3
|
|
|
198.2
|
|
|
243.4
|
|
||||||
S&P 500 Index
|
100.0
|
|
|
116.0
|
|
|
153.6
|
|
|
174.6
|
|
|
177.0
|
|
|
198.2
|
|
||||||
Peer Group
|
100.0
|
|
|
126.5
|
|
|
180.5
|
|
|
208.3
|
|
|
208.0
|
|
|
251.4
|
|
(a)
|
Returns are weighted by market capitalization at the beginning of the measurement period.
|
Peer Group
|
|
|
BlackRock, Inc.
The Charles Schwab Corporation Franklin Resources, Inc. JPMorgan Chase & Co. |
Morgan Stanley
Northern Trust Corporation
The PNC Financial Services Group, Inc. Prudential Financial, Inc. |
State Street Corporation
U.S. Bancorp Wells Fargo & Company |
The following are primary subsidiaries of The Bank of New York Mellon Corporation as of Dec. 31, 2016 and the states or jurisdictions in which they are organized. The names of particular subsidiaries have been omitted because, considered in the aggregate as a single subsidiary, they would not constitute, as of Dec. 31, 2016, a “significant subsidiary” as that term is defined in Rule 1-02(w) of Regulation S-X under the Securities Exchange Act of 1934, as amended.
|
•
|
BNY Capital Funding LLC – State of Organization: Delaware
|
•
|
BNY Capital Markets Holdings, Inc. – State of Incorporation: New York
|
•
|
BNY Capital Resources Corporation – State of Incorporation: New York
|
•
|
BNY International Financing Corporation – Incorporation: United States
|
•
|
BNY Mellon Capital Markets, LLC – State of Organization: Delaware
|
•
|
BNY Mellon Fund Managers Limited – Incorporation: England
|
•
|
BNY Mellon Global Management Limited – Incorporation: Ireland
|
•
|
BNY Mellon International Asset Management Group Limited – Incorporation: England
|
•
|
BNY Mellon International Asset Management (Holdings) Limited – Incorporation: England and Wales
|
•
|
BNY Mellon International Asset Management (Holdings) No. 1 Limited – Incorporation: England and Wales
|
•
|
BNY Mellon Investment Management Cayman Ltd. – Incorporation: Cayman Islands
|
•
|
BNY Mellon Investment Management EMEA Limited – Incorporation: England
|
•
|
BNY Mellon Investment Management Europe Holdings Limited – Incorporation: England
|
•
|
BNY Mellon Investment Management (Europe) Limited – Incorporation: England
|
•
|
BNY Mellon Investment Management (Jersey) Limited – Incorporation: Jersey
|
•
|
BNY Mellon Investment Servicing (US) Inc. – State of Incorporation: Massachusetts
|
•
|
BNY Mellon, National Association – Incorporation: United States
|
•
|
BNY Mellon Securities Services (Ireland) Limited – Incorporation: Ireland
|
•
|
BNY Mellon Trust Company (Ireland) Limited – Incorporation: Ireland
|
•
|
BNYM GIS Funding I LLC – State of Organization: Delaware
|
•
|
BNYM GIS Funding III LLC – State of Organization: Delaware
|
•
|
BNYM GIS (UK) Funding II LLC – State of Organization: Delaware
|
•
|
Insight Investment Funds Management Limited – Incorporation: England
|
•
|
Insight Investment Management (Global) Limited – Incorporation: England
|
•
|
Insight Investment Management Limited – Incorporation: England
|
•
|
MAM (MA) Holding Trust – State of Incorporation: Massachusetts
|
•
|
MBC Investments Corporation – State of Incorporation: Delaware
|
•
|
Mellon Canada Holding Company – Incorporation: Canada
|
•
|
Mellon Overseas Investment Corporation – Incorporation: United States
|
•
|
Pershing Group LLC – State of Organization: Delaware
|
•
|
Pershing Holdings (UK) Limited – Incorporation: England
|
•
|
Pershing Limited – Incorporation: England
|
•
|
Pershing LLC – State of Organization: Delaware
|
•
|
Pershing Securities Limited – Incorporation: England
|
•
|
Standish Mellon Asset Management Company LLC – State of Organization: Delaware
|
•
|
The Bank of New York Mellon – State of Organization: New York
|
•
|
The Bank of New York Mellon (International) Limited – Incorporation: England
|
•
|
The Bank of New York Mellon (Luxembourg) S.A. – Incorporation: Luxembourg
|
•
|
The Bank of New York Mellon SA/NV – Incorporation: Belgium
|
•
|
The Dreyfus Corporation – State of Incorporation: New York
|
•
|
Walter Scott & Partners Limited – Incorporation: Scotland
|
Form
|
Registration Statement
|
Filer
|
S-8
|
333-198152
|
The Bank of New York Mellon Corporation
|
S-8
|
333-174342
|
The Bank of New York Mellon Corporation
|
S-8
|
333-171258
|
The Bank of New York Mellon Corporation
|
S-8
|
333-150324
|
The Bank of New York Mellon Corporation
|
S-8
|
333-150323
|
The Bank of New York Mellon Corporation
|
S-8
|
333-149473
|
The Bank of New York Mellon Corporation
|
S-8
|
333-144216
|
The Bank of New York Mellon Corporation
|
S-3
|
333-209450
|
The Bank of New York Mellon Corporation
|
S-3
|
333-211248
|
The Bank of New York Mellon Corporation
|
/s/ Linda Z. Cook
|
|
/s/ John A. Luke, Jr.
|
|
Linda Z. Cook, Director
|
|
John A. Luke, Jr., Director
|
|
|
|
|
|
/s/ Nicholas M. Donofrio
|
|
/s/ Jennifer B. Morgan
|
|
Nicholas M. Donofrio, Director
|
|
Jennifer B. Morgan, Director
|
|
|
|
|
|
/s/ Joseph J. Echevarria
|
|
/s/ Mark A. Nordenberg
|
|
Joseph J. Echevarria, Director
|
|
Mark A. Nordenberg, Director
|
|
|
|
|
|
/s/ Edward P. Garden
|
|
/s/ Catherine A. Rein
|
|
Edward P. Garden, Director
|
|
Catherine A. Rein, Director
|
|
|
|
|
|
/s/ Jeffrey A. Goldstein
|
|
/s/ Elizabeth E. Robinson
|
|
Jeffrey A. Goldstein, Director
|
|
Elizabeth E. Robinson, Director
|
|
|
|
|
|
/s/ John M. Hinshaw
|
|
/s/ Samuel C. Scott III
|
|
John M. Hinshaw, Director
|
|
Samuel C. Scott III, Director
|
|
|
|
|
|
/s/ Edmund F. Kelly
|
|
|
|
Edmund F. Kelly, Director
|
|
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K 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 annual report on Form 10-K 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: February 28, 2017
|
|
/s/ Gerald L. Hassell
|
|
|
|
|
Name:
|
Gerald L. Hassell
|
|
|
|
Title:
|
Chief Executive Officer
|
|
Dated: February 28, 2017
|
|
/s/ Thomas P. Gibbons
|
|
|
|
|
Name:
|
Thomas P. Gibbons
|
|
|
|
Title:
|
Chief Financial Officer
|
|