|
|
Delaware
|
001-35651
|
13-2614959
|
||
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer Identification No.)
|
||
240 Greenwich Street
New York, New York 10286
|
||||
(Address of principal executive offices) (Zip code)
|
Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|
|
|
99.1
|
|
|
|
|
|
|
|
99.2
|
|
|
|
|
|
|
|
99.3
|
|
|
|
The Bank of New York Mellon Corporation
(Registrant)
|
Date: October 18, 2018
|
By:
/s/ Kathleen B. McCabe
|
|
Name: Kathleen B. McCabe
Title: Assistant Secretary
|
BNY Mellon 3Q18 Earnings Release
|
News Release
|
|
Revenue up 1%
|
|
EPS up 13%
|
|
ROE 11%
ROTCE 23%
(a)
|
|
CET1 11.2%
SLR 6.4%
|
|
|
|
|
3Q18 vs.
|
|||||||||
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|||
Net income applicable to common shareholders
(in millions)
|
$
|
1,075
|
|
$
|
1,055
|
|
$
|
983
|
|
2
|
%
|
9
|
%
|
Diluted earnings per common share
|
$
|
1.06
|
|
$
|
1.03
|
|
$
|
0.94
|
|
3
|
%
|
13
|
%
|
Third Quarter Results
|
•
|
Fee revenue increased
1%
|
•
|
Net interest revenue increased
6%
|
•
|
Continued investments in technology were partially offset by decreases in other expenses
|
•
|
Litigation increased expenses 2%; $(0.05) per common share
|
•
|
Lower tax rate due to adjusted estimates for U.S. tax legislation and other changes; $0.05 per common share
|
•
|
Total revenue increased
3%
|
•
|
Income before taxes decreased
6%
, driven by litigation expense
|
•
|
AUC/A of
$34.5 trillion
, up
7%
|
•
|
Total revenue increased
2%
|
•
|
Income before taxes increased
5%
|
•
|
AUM of
$1.8 trillion
|
•
|
Repurchased
12 million
common shares for
$602 million
|
•
|
Paid
$283 million
in dividends to common shareholders
|
CEO Commentary
|
Investor Relations:
Scott Freidenrich (212) 815-4008
|
Media Relations:
Jennifer Hendricks Sullivan (212) 635-1374
|
(a) For information on this Non-GAAP measure, see “Supplemental information - Explanation of GAAP and Non-GAAP financial measures” beginning on page 11.
|
|
Note: Above comparisons are 3Q18 vs. 3Q17.
|
BNY Mellon 3Q18 Earnings Release
|
(dollars in millions, except per share amounts; common shares in thousands)
|
|
|
|
3Q18 vs.
|
|||||||||
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
||||
Fee revenue
|
$
|
3,168
|
|
$
|
3,209
|
|
$
|
3,148
|
|
(1
|
)%
|
1
|
%
|
Net securities gains
|
—
|
|
1
|
|
19
|
|
N/M
|
N/M
|
|||||
Total fee and other revenue
|
3,168
|
|
3,210
|
|
3,167
|
|
(1
|
)
|
—
|
|
|||
Income from consolidated investment management funds
|
10
|
|
12
|
|
10
|
|
N/M
|
N/M
|
|||||
Net interest revenue
|
891
|
|
916
|
|
839
|
|
(3
|
)
|
6
|
|
|||
Total revenue
|
4,069
|
|
4,138
|
|
4,016
|
|
(2
|
)
|
1
|
|
|||
Provision for credit losses
|
(3
|
)
|
(3
|
)
|
(6
|
)
|
N/M
|
N/M
|
|||||
Noninterest expense
|
2,738
|
|
2,747
|
|
2,654
|
|
—
|
|
3
|
|
|||
Income before income taxes
|
1,334
|
|
1,394
|
|
1,368
|
|
(4
|
)
|
(2
|
)
|
|||
Provision for income taxes
|
220
|
|
286
|
|
348
|
|
(23
|
)
|
(37
|
)
|
|||
Net income
|
$
|
1,114
|
|
$
|
1,108
|
|
$
|
1,020
|
|
1
|
%
|
9
|
%
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
1,075
|
|
$
|
1,055
|
|
$
|
983
|
|
2
|
%
|
9
|
%
|
Operating leverage
(a)
|
|
|
|
(134
|
) bps
|
(185
|
) bps
|
||||||
Diluted earnings per common share
|
$
|
1.06
|
|
$
|
1.03
|
|
$
|
0.94
|
|
3
|
%
|
13
|
%
|
Average common shares and equivalents outstanding - diluted
|
1,003,665
|
|
1,014,357
|
|
1,041,138
|
|
|
|
|||||
Pre-tax operating margin
|
33
|
%
|
34
|
%
|
34
|
%
|
|
|
(a)
|
Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
|
•
|
Total revenue increased
1%
primarily reflecting:
|
•
|
Fee revenue increased
1%
primarily reflecting higher equity market values, growth in collateral management and clearance volumes and higher performance fees, partially offset by lower foreign currency hedging.
|
•
|
Net interest revenue increased
6%
primarily driven by higher rates, partially offset by lower deposits and other borrowings.
|
•
|
Noninterest expense increased
3%
primarily reflecting investments in technology and higher litigation expense, partially offset by lower staff and distribution and servicing expenses. Litigation increased noninterest expense by 2%.
|
•
|
Effective tax rate of
16.5%
. The impact of adjusting provisional estimates for U.S. tax legislation and other changes decreased the effective rate by approximately 4.5%.
|
•
|
AUC/A of
$34.5 trillion
, up
7%
, primarily reflecting net new business and higher equity market values, partially offset by the unfavorable impact of a stronger U.S. dollar.
|
•
|
AUM of
$1.8 trillion
increased slightly, primarily reflecting higher market values, partially offset by the divestiture of CenterSquare Investment Management (“CenterSquare”) and other changes and the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).
|
•
|
Repurchased
12 million
common shares for
$602 million
and paid
$283 million
in dividends to common shareholders.
|
•
|
Return on common equity (“ROE”) of
11%
; Return on tangible common equity (“ROTCE”) of
23%
(b)
.
|
•
|
Common Equity Tier 1 (“CET1”) ratio –
11.2%
.
|
•
|
Supplementary leverage ratio (“SLR”) –
6.4%
.
|
•
|
Average liquidity coverage ratio (“LCR”) –
121%
.
|
|
(b)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
11
for the reconciliation.
|
Page -
2
|
BNY Mellon 3Q18 Earnings Release
|
(dollars in millions, unless otherwise noted; not meaningful - N/M)
|
|
|
|
3Q18 vs.
|
|||||||||
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
||||
Total revenue by line of business:
|
|
|
|
|
|
||||||||
Asset Servicing
|
$
|
1,458
|
|
$
|
1,520
|
|
$
|
1,420
|
|
(4
|
)%
|
3
|
%
|
Pershing
|
558
|
|
558
|
|
542
|
|
—
|
|
3
|
|
|||
Issuer Services
|
453
|
|
431
|
|
442
|
|
5
|
|
2
|
|
|||
Treasury Services
|
324
|
|
329
|
|
316
|
|
(2
|
)
|
3
|
|
|||
Clearance and Collateral Management
|
264
|
|
269
|
|
244
|
|
(2
|
)
|
8
|
|
|||
Total revenue by line of business
|
3,057
|
|
3,107
|
|
2,964
|
|
(2
|
)
|
3
|
|
|||
Provision for credit losses
|
1
|
|
1
|
|
(2
|
)
|
N/M
|
N/M
|
|||||
Noninterest expense
|
2,030
|
|
1,967
|
|
1,874
|
|
3
|
|
8
|
|
|||
Income before taxes
|
$
|
1,026
|
|
$
|
1,139
|
|
$
|
1,092
|
|
(10
|
)%
|
(6
|
)%
|
|
|
|
|
|
|
||||||||
Pre-tax operating margin
|
34
|
%
|
37
|
%
|
37
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
Foreign exchange and other trading revenue
|
$
|
161
|
|
$
|
172
|
|
$
|
154
|
|
(6
|
)%
|
5
|
%
|
Securities lending revenue
|
$
|
52
|
|
$
|
55
|
|
$
|
41
|
|
(5
|
)%
|
27
|
%
|
|
|
|
|
|
|
|
|
||||||
Metrics:
|
|
|
|
|
|
|
|
||||||
Average loans
|
$
|
35,044
|
|
$
|
38,002
|
|
$
|
38,038
|
|
(8
|
)%
|
(8
|
)%
|
Average deposits
|
$
|
192,741
|
|
$
|
203,064
|
|
$
|
198,299
|
|
(5
|
)%
|
(3
|
)%
|
|
|
|
|
|
|
|
|||||||
AUC/A at period end
(in trillions) (current period is preliminary) (a)
|
$
|
34.5
|
|
$
|
33.6
|
|
$
|
32.2
|
|
3
|
%
|
7
|
%
|
Market value of securities on loan at period end
(in billions) (b)
|
$
|
415
|
|
$
|
432
|
|
$
|
382
|
|
(4
|
)%
|
9
|
%
|
|
|
|
|
|
|
||||||||
Pershing
|
|
|
|
|
|
|
|||||||
Average active clearing accounts (U.S. platform)
(in thousands)
|
6,108
|
|
6,080
|
|
6,203
|
|
—
|
%
|
(2
|
)%
|
|||
Average long-term mutual fund assets (U.S. platform)
|
$
|
527,336
|
|
$
|
512,645
|
|
$
|
500,998
|
|
3
|
%
|
5
|
%
|
Average investor margin loans (U.S. platform)
|
$
|
10,696
|
|
$
|
10,772
|
|
$
|
8,886
|
|
(1
|
)%
|
20
|
%
|
|
|
|
|
|
|
|
|||||||
Clearance and Collateral Management
|
|
|
|
|
|
|
|||||||
Average tri-party collateral management balances
(in billions)
|
$
|
2,995
|
|
$
|
2,801
|
|
$
|
2,534
|
|
7
|
%
|
18
|
%
|
(a)
|
Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of
$1.4 trillion
at
Sept. 30, 2018
and
June 30, 2018
and
$1.3 trillion
at
Sept. 30, 2017
.
|
(b)
|
Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled
$69 billion
at
Sept. 30, 2018
,
$70 billion
at
June 30, 2018
and
$68 billion
at
Sept. 30, 2017
.
|
•
|
Total revenue increased year-over-year and decreased sequentially. Net interest revenue increased year-over-year in all businesses, primarily driven by higher interest rates. The drivers of fee revenue by line of business are indicated below.
|
•
|
Asset Servicing - The year-over-year increase primarily reflects higher equity market values, securities lending volumes, net interest revenue and foreign exchange volumes. The sequential decrease primarily reflects lower net interest revenue, primarily driven by lower deposit balances, and lower foreign exchange volumes.
|
•
|
Pershing - The year-over-year increase primarily reflects higher net interest revenue, equity market values and long-term mutual funds balances, partially offset by the previously disclosed lost business.
|
•
|
Issuer Services - The year-over-year increase primarily reflects higher net interest revenue in Corporate Trust. The sequential increase primarily reflects seasonality in Depositary Receipts.
|
•
|
Treasury Services - The year-over-year increase primarily reflects higher net interest revenue and transaction volumes. The sequential decrease primarily reflects lower net interest revenue.
|
•
|
Clearance and Collateral Management - The year-over-year increase reflects growth in collateral management, clearance volumes and net interest revenue. The sequential decrease primarily reflects lower net interest revenue.
|
•
|
Noninterest expense increased both year-over-year and sequentially primarily driven by investments in technology and higher litigation expense, partially offset by lower staff expense. Litigation increased noninterest expense by 3%.
|
Page -
3
|
BNY Mellon 3Q18 Earnings Release
|
(dollars in millions, unless otherwise noted; not meaningful - N/M)
|
|
|
|
3Q18 vs.
|
|||||||||
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
||||
Total revenue by line of business:
|
|
|
|
|
|
||||||||
Asset Management
|
$
|
704
|
|
$
|
702
|
|
$
|
693
|
|
—
|
%
|
2
|
%
|
Wealth Management
|
311
|
|
316
|
|
307
|
|
(2
|
)
|
1
|
|
|||
Total revenue by line of business
|
1,015
|
|
1,018
|
|
1,000
|
|
—
|
|
2
|
|
|||
Provision for credit losses
|
(2
|
)
|
2
|
|
(2
|
)
|
N/M
|
N/M
|
|||||
Noninterest expense
|
701
|
|
697
|
|
702
|
|
1
|
|
—
|
|
|||
Income before taxes
|
$
|
316
|
|
$
|
319
|
|
$
|
300
|
|
(1
|
)%
|
5
|
%
|
|
|
|
|
|
|
||||||||
Pre-tax operating margin
|
31
|
%
|
31
|
%
|
30
|
%
|
|
|
|||||
Adjusted pre-tax operating margin – Non-GAAP
(a)
|
35
|
%
|
35
|
%
|
34
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
Metrics:
|
|
|
|
|
|
||||||||
Average loans
|
$
|
16,763
|
|
$
|
16,974
|
|
$
|
16,724
|
|
(1
|
)%
|
—
|
%
|
Average deposits
|
$
|
14,634
|
|
$
|
14,252
|
|
$
|
12,374
|
|
3
|
%
|
18
|
%
|
|
|
|
|
|
|
||||||||
Wealth Management client assets
(in billions) (current period is preliminary) (b)
|
$
|
261
|
|
$
|
254
|
|
$
|
245
|
|
3
|
%
|
7
|
%
|
|
|
|
|
|
|
||||||||
Changes in AUM
(in billions) (current period is preliminary)
:
(c)
|
|
|
|
|
|
||||||||
Beginning balance of AUM
|
$
|
1,805
|
|
$
|
1,868
|
|
$
|
1,771
|
|
|
|
||
Net inflows (outflows):
|
|
|
|
|
|
||||||||
Long-term strategies:
|
|
|
|
|
|
|
|||||||
Equity
|
(2
|
)
|
(3
|
)
|
(2
|
)
|
|
|
|||||
Fixed income
|
2
|
|
(4
|
)
|
4
|
|
|
|
|||||
Liability-driven investments, including currency overlay
|
16
|
|
2
|
|
(2
|
)
|
|
|
|||||
Multi-asset and alternative investments
|
2
|
|
(3
|
)
|
3
|
|
|
|
|||||
Total long-term active strategies inflows (outflows)
|
18
|
|
(8
|
)
|
3
|
|
|
|
|||||
Index
|
(3
|
)
|
(7
|
)
|
(3
|
)
|
|
|
|||||
Total long-term strategies inflows (outflows)
|
15
|
|
(15
|
)
|
—
|
|
|
|
|||||
Short term strategies:
|
|
|
|
|
|
||||||||
Cash
|
—
|
|
(11
|
)
|
10
|
|
|
|
|||||
Total net inflows (outflows)
|
15
|
|
(26
|
)
|
10
|
|
|
|
|||||
Net market impact
|
18
|
|
17
|
|
17
|
|
|
|
|||||
Net currency impact
|
(10
|
)
|
(53
|
)
|
26
|
|
|
|
|||||
Divestiture/Other
|
—
|
|
(1
|
)
|
—
|
|
|
|
|||||
Ending balance of AUM
|
$
|
1,828
|
|
$
|
1,805
|
|
$
|
1,824
|
|
1
|
%
|
—
|
%
|
(a)
|
Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
11
for the reconciliation of this Non-GAAP measure. In 1Q18, the adjusted pre-tax operating margin
–
Non-GAAP for prior periods was restated to include amortization of intangible assets and the provision for credit losses.
|
(b)
|
Includes AUM and AUC/A in the Wealth Management business.
|
(c)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business.
|
•
|
Total revenue increased year-over-year and decreased sequentially.
|
•
|
Asset Management - The year-over-year increase reflects higher equity market values and performance fees, partially offset by the impact of net outflows and the divestiture of CenterSquare.
|
•
|
Wealth Management - The sequential decrease primarily reflects lower net interest revenue, partially offset by higher equity market values.
|
Page -
4
|
BNY Mellon 3Q18 Earnings Release
|
|
|
|
|
||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
|||
Fee revenue
|
$
|
7
|
|
$
|
40
|
|
$
|
50
|
|
Net securities gains
|
—
|
|
1
|
|
19
|
|
|||
Total fee and other revenue
|
7
|
|
41
|
|
69
|
|
|||
Net interest (expense)
|
(13
|
)
|
(35
|
)
|
(20
|
)
|
|||
Total (loss) revenue
|
(6
|
)
|
6
|
|
49
|
|
|||
Provision for credit losses
|
(2
|
)
|
(6
|
)
|
(2
|
)
|
|||
Noninterest expense
|
6
|
|
81
|
|
77
|
|
|||
(Loss) before taxes
|
$
|
(10
|
)
|
$
|
(69
|
)
|
$
|
(26
|
)
|
•
|
Fee revenue decreased year-over-year and sequentially primarily reflecting our investments in renewable energy, including the impact of adjusting the provisional tax estimates (offset in income tax and de minimis to net income), and foreign currency hedging.
|
•
|
Net interest expense decreased year-over-year and sequentially primarily resulting from corporate treasury activity.
|
•
|
Noninterest expense decreased year-over-year and sequentially primarily reflecting lower staff expense. The sequential decrease also reflects the expenses associated with the consolidation of our real estate recorded in 2Q18. We expect to record the remaining expense related to relocating our corporate headquarters in 4Q18.
|
Page -
5
|
BNY Mellon 3Q18 Earnings Release
|
Capital and liquidity ratios
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Dec. 31, 2017
|
|
|||
Consolidated regulatory capital ratios:
(a)(b)
|
|
|
|
||||||
CET1 ratio
|
11.2
|
%
|
11.0
|
%
|
10.3
|
%
|
|||
Tier 1 capital ratio
|
13.4
|
%
|
13.1
|
%
|
12.3
|
%
|
|||
Total capital ratio
|
14.1
|
%
|
13.8
|
%
|
13.0
|
%
|
|||
Tier 1 leverage ratio
|
7.0
|
%
|
6.7
|
%
|
6.4
|
%
|
|||
SLR
|
6.4
|
%
|
6.1
|
%
|
5.9
|
%
|
|||
BNY Mellon shareholders’ equity to total assets ratio
|
11.9
|
%
|
11.8
|
%
|
11.1
|
%
|
|||
BNY Mellon common shareholders’ equity to total assets ratio
|
10.9
|
%
|
10.8
|
%
|
10.1
|
%
|
|||
|
|
|
|
||||||
Average LCR
|
121
|
%
|
118
|
%
|
118
|
%
|
|||
|
|
|
|
||||||
Book value per common share
(c)
|
$
|
38.45
|
|
$
|
37.97
|
|
$
|
37.21
|
|
Tangible book value per common share – Non-GAAP
(c)
|
$
|
19.35
|
|
$
|
19.00
|
|
$
|
18.24
|
|
Cash dividends per common share
|
$
|
0.28
|
|
$
|
0.24
|
|
$
|
0.24
|
|
Common dividend payout ratio
|
26
|
%
|
23
|
%
|
22
|
%
|
|||
Closing stock price per common share
|
$
|
50.99
|
|
$
|
53.93
|
|
$
|
53.86
|
|
Market capitalization
(in millions)
|
$
|
50,418
|
|
$
|
53,927
|
|
$
|
54,584
|
|
Common shares outstanding
(in thousands)
|
988,777
|
|
999,945
|
|
1,013,442
|
|
(a)
|
Regulatory capital ratios for
Sept. 30, 2018
are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the periods noted above was the Advanced Approaches.
|
(b)
|
Regulatory capital ratios for Dec. 31, 2017 are presented on a fully phased-in basis. On a transitional basis at Dec. 31, 2017, the CET1 ratio was 10.7%, the Tier 1 capital ratio was 12.7%, the Total capital ratio was 13.4%, the Tier 1 leverage ratio was 6.6% and the SLR was 6.1%.
|
(c)
|
Tangible book value per common share
–
Non-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
11
for the reconciliation of this Non-GAAP measure.
|
•
|
CET1 capital totaled
$18.5 billion
at
Sept. 30, 2018
, an increase of $133 million compared with
June 30, 2018
. The increase primarily reflects capital generated through earnings, partially offset by capital deployed through common stock repurchases and dividend payments.
|
Page -
6
|
BNY Mellon 3Q18 Earnings Release
|
Net interest revenue
|
|
|
|
3Q18 vs.
|
|||||||||
(dollars in millions
; not meaningful - N/M
)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|||
Net interest revenue
|
$
|
891
|
|
$
|
916
|
|
$
|
839
|
|
(3
|
)%
|
6
|
%
|
Add: Tax equivalent adjustment
|
5
|
|
5
|
|
12
|
|
N/M
|
N/M
|
|||||
Net interest revenue, on a fully taxable equivalent (“FTE”)
basis – Non-GAAP
(a)
|
$
|
896
|
|
$
|
921
|
|
$
|
851
|
|
(3
|
)%
|
5
|
%
|
|
|
|
|
|
|
||||||||
Net interest margin
|
1.27
|
%
|
1.26
|
%
|
1.15
|
%
|
1
|
bps
|
12
|
bps
|
|||
Net interest margin (FTE) – Non-GAAP
(a)
|
1.28
|
%
|
1.26
|
%
|
1.16
|
%
|
2
|
bps
|
12
|
bps
|
|||
|
|
|
|
|
|
||||||||
Selected average balances:
|
|
|
|
|
|
||||||||
Cash/interbank investments
(b)
|
$
|
102,645
|
|
$
|
113,475
|
|
$
|
114,449
|
|
(10
|
)%
|
(10
|
)%
|
Trading securities
|
4,261
|
|
3,784
|
|
2,359
|
|
13
|
|
81
|
|
|||
Securities
|
118,505
|
|
117,761
|
|
119,089
|
|
1
|
|
—
|
|
|||
Loans
|
53,807
|
|
57,066
|
|
55,944
|
|
(6
|
)
|
(4
|
)
|
|||
Interest-earning assets
|
$
|
279,218
|
|
$
|
292,086
|
|
$
|
291,841
|
|
(4
|
)%
|
(4
|
)%
|
|
|
|
|
|
|
||||||||
Interest-bearing deposits
|
$
|
148,636
|
|
$
|
152,799
|
|
$
|
142,490
|
|
(3
|
)%
|
4
|
%
|
Federal funds purchased and securities sold under repurchase agreements
(b)
|
14,199
|
|
18,146
|
|
21,403
|
|
(22
|
)
|
(34
|
)
|
|||
Long-term debt
|
28,074
|
|
28,349
|
|
28,138
|
|
(1
|
)
|
—
|
|
|||
Other interest-bearing liabilities
|
23,251
|
|
23,815
|
|
24,883
|
|
(2
|
)
|
(7
|
)
|
|||
Interest-bearing liabilities
|
$
|
214,160
|
|
$
|
223,109
|
|
$
|
216,914
|
|
(4
|
)%
|
(1
|
)%
|
Noninterest-bearing deposits
|
$
|
60,677
|
|
$
|
64,768
|
|
$
|
70,168
|
|
(6
|
)%
|
(14
|
)%
|
|
|
|
|
|
|
||||||||
Selected average yields/rates:
(c)
|
|
|
|
|
|
||||||||
Cash/interbank investments
|
1.79
|
%
|
1.48
|
%
|
0.84
|
%
|
|
|
|||||
Trading securities
|
3.05
|
|
3.10
|
|
2.26
|
|
|
|
|||||
Securities
|
2.25
|
|
2.16
|
|
1.80
|
|
|
|
|||||
Loans
|
3.50
|
|
3.32
|
|
2.63
|
|
|
|
|||||
Interest-earning assets
|
2.33
|
|
2.14
|
|
1.59
|
|
|
|
|||||
|
|
|
|
|
|
||||||||
Interest-bearing deposits
|
0.63
|
%
|
0.45
|
%
|
0.16
|
%
|
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
(b)
|
5.33
|
|
3.48
|
|
1.30
|
|
|
|
|||||
Long-term debt
|
3.17
|
|
3.06
|
|
2.07
|
|
|
|
|||||
Other interest-bearing liabilities
|
1.53
|
|
1.47
|
|
0.59
|
|
|
|
|||||
Interest-bearing liabilities
|
1.37
|
|
1.14
|
|
0.57
|
|
|
|
|||||
|
|
|
|
|
|
||||||||
Average cash/interbank investments as a percentage of average interest-earning assets
|
37
|
%
|
39
|
%
|
39
|
%
|
|
|
|||||
Average noninterest-bearing deposits as a percentage of average interest-earning assets
|
22
|
%
|
22
|
%
|
24
|
%
|
|
|
(a)
|
Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income which allows for comparisons of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.
|
(b)
|
Includes the impact of offsetting under enforceable netting agreements.
|
(c)
|
Yields/rates include the impact of interest rate hedging activities.
|
•
|
Net interest revenue increased year-over-year primarily reflecting higher interest rates, partially offset by lower deposits and other borrowings. The sequential decrease was primarily driven by lower deposits and other borrowings, partially offset by higher interest rates.
|
Page -
7
|
BNY Mellon 3Q18 Earnings Release
|
Noninterest expense
|
|
|
|
3Q18 vs.
|
|||||||||
(dollars in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|||
Staff
|
$
|
1,478
|
|
$
|
1,489
|
|
$
|
1,485
|
|
(1
|
)%
|
—
|
%
|
Professional, legal and other purchased services
|
332
|
|
328
|
|
305
|
|
1
|
|
9
|
|
|||
Software and equipment
|
262
|
|
266
|
|
233
|
|
(2
|
)
|
12
|
|
|||
Net occupancy
|
139
|
|
156
|
|
141
|
|
(11
|
)
|
(1
|
)
|
|||
Sub-custodian and clearing
|
106
|
|
110
|
|
101
|
|
(4
|
)
|
5
|
|
|||
Distribution and servicing
|
99
|
|
106
|
|
109
|
|
(7
|
)
|
(9
|
)
|
|||
Business development
|
51
|
|
62
|
|
49
|
|
(18
|
)
|
4
|
|
|||
Bank assessment charges
|
49
|
|
47
|
|
51
|
|
4
|
|
(4
|
)
|
|||
Amortization of intangible assets
|
48
|
|
48
|
|
52
|
|
—
|
|
(8
|
)
|
|||
Other
|
174
|
|
135
|
|
128
|
|
29
|
|
36
|
|
|||
Total noninterest expense
|
$
|
2,738
|
|
$
|
2,747
|
|
$
|
2,654
|
|
—
|
%
|
3
|
%
|
•
|
Total noninterest expense increased year-over-year primarily reflecting investments in technology and higher litigation expense, partially offset by lower staff and distribution and servicing expenses. The investments in technology are included in staff, professional, legal and other purchased services and software and equipment expenses.
|
•
|
The sequential decrease in total noninterest expense primarily reflects lower net occupancy, staff and business development expenses, partially offset by higher litigation expense. The decrease in net occupancy expense is primarily due to expenses associated with the continued consolidation of our real estate recorded in 2Q18.
|
•
|
The total cost of relocating our corporate headquarters is estimated to be $75 million, of which $12 million was recorded in 2Q18. We expect to record the remaining expense in 4Q18.
|
Page -
8
|
BNY Mellon 3Q18 Earnings Release
|
(in millions)
|
Quarter ended
|
|
Year-to-date
|
||||||||||||||
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
|
|||||||
Fee and other revenue
|
|
|
|
|
|
|
|||||||||||
Investment services fees:
|
|
|
|
|
|
|
|||||||||||
Asset servicing
|
$
|
1,157
|
|
$
|
1,157
|
|
$
|
1,105
|
|
|
$
|
3,482
|
|
$
|
3,253
|
|
|
Clearing services
|
383
|
|
392
|
|
383
|
|
|
1,189
|
|
1,153
|
|
||||||
Issuer services
|
287
|
|
266
|
|
288
|
|
|
813
|
|
780
|
|
||||||
Treasury services
|
137
|
|
140
|
|
141
|
|
|
415
|
|
420
|
|
||||||
Total investment services fees
|
1,964
|
|
1,955
|
|
1,917
|
|
|
5,899
|
|
5,606
|
|
||||||
Investment management and performance fees
|
922
|
|
910
|
|
901
|
|
|
2,792
|
|
2,622
|
|
||||||
Foreign exchange and other trading revenue
|
155
|
|
187
|
|
173
|
|
|
551
|
|
502
|
|
||||||
Financing-related fees
|
52
|
|
53
|
|
54
|
|
|
157
|
|
162
|
|
||||||
Distribution and servicing
|
34
|
|
34
|
|
40
|
|
|
104
|
|
122
|
|
||||||
Investment and other income
|
41
|
|
70
|
|
63
|
|
|
193
|
|
262
|
|
||||||
Total fee revenue
|
3,168
|
|
3,209
|
|
3,148
|
|
|
9,696
|
|
9,276
|
|
||||||
Net securities gains (losses)
|
—
|
|
1
|
|
19
|
|
|
(48
|
)
|
29
|
|
||||||
Total fee and other revenue
|
3,168
|
|
3,210
|
|
3,167
|
|
|
9,648
|
|
9,305
|
|
||||||
Operations of consolidated investment management funds
|
|
|
|
|
|
|
|||||||||||
Investment income
|
10
|
|
13
|
|
10
|
|
|
12
|
|
57
|
|
||||||
Interest of investment management fund note holders
|
—
|
|
1
|
|
—
|
|
|
1
|
|
4
|
|
||||||
Income from consolidated investment management funds
|
10
|
|
12
|
|
10
|
|
|
11
|
|
53
|
|
||||||
Net interest revenue
|
|
|
|
|
|
|
|||||||||||
Interest revenue
|
1,634
|
|
1,553
|
|
1,151
|
|
|
4,568
|
|
3,163
|
|
||||||
Interest expense
|
743
|
|
637
|
|
312
|
|
|
1,842
|
|
706
|
|
||||||
Net interest revenue
|
891
|
|
916
|
|
839
|
|
|
2,726
|
|
2,457
|
|
||||||
Total revenue
|
4,069
|
|
4,138
|
|
4,016
|
|
|
12,385
|
|
11,815
|
|
||||||
Provision for credit losses
|
(3
|
)
|
(3
|
)
|
(6
|
)
|
|
(11
|
)
|
(18
|
)
|
||||||
Noninterest expense
|
|
|
|
|
|
|
|||||||||||
Staff
(a)
|
1,478
|
|
1,489
|
|
1,485
|
|
|
4,543
|
|
4,405
|
|
||||||
Professional, legal and other purchased services
|
332
|
|
328
|
|
305
|
|
|
951
|
|
937
|
|
||||||
Software and equipment
|
262
|
|
266
|
|
233
|
|
|
762
|
|
688
|
|
||||||
Net occupancy
|
139
|
|
156
|
|
141
|
|
|
434
|
|
417
|
|
||||||
Sub-custodian and clearing
(b)
|
106
|
|
110
|
|
101
|
|
|
335
|
|
312
|
|
||||||
Distribution and servicing
|
99
|
|
106
|
|
109
|
|
|
311
|
|
313
|
|
||||||
Business development
|
51
|
|
62
|
|
49
|
|
|
164
|
|
163
|
|
||||||
Bank assessment charges
|
49
|
|
47
|
|
51
|
|
|
148
|
|
167
|
|
||||||
Amortization of intangible assets
|
48
|
|
48
|
|
52
|
|
|
145
|
|
157
|
|
||||||
Other
(a)(b)(c)
|
174
|
|
135
|
|
128
|
|
|
431
|
|
392
|
|
||||||
Total noninterest expense
|
2,738
|
|
2,747
|
|
2,654
|
|
|
8,224
|
|
7,951
|
|
||||||
Income
|
|
|
|
|
|
|
|||||||||||
Income before income taxes
|
1,334
|
|
1,394
|
|
1,368
|
|
|
4,172
|
|
3,882
|
|
||||||
Provision for income taxes
|
220
|
|
286
|
|
348
|
|
|
788
|
|
949
|
|
||||||
Net income
|
1,114
|
|
1,108
|
|
1,020
|
|
|
3,384
|
|
2,933
|
|
||||||
Net (income) loss attributable to noncontrolling interests (includes $(3), $(7), $(3), $1 and $(24) related to consolidated investment management funds, respectively)
|
(3
|
)
|
(5
|
)
|
(2
|
)
|
|
1
|
|
(18
|
)
|
||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
1,111
|
|
1,103
|
|
1,018
|
|
|
3,385
|
|
2,915
|
|
||||||
Preferred stock dividends
|
(36
|
)
|
(48
|
)
|
(35
|
)
|
|
(120
|
)
|
(126
|
)
|
||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
1,075
|
|
$
|
1,055
|
|
$
|
983
|
|
|
$
|
3,265
|
|
$
|
2,789
|
|
(a)
|
In 1Q18, we adopted new accounting guidance included in Accounting Standards Update 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which required the reclassification of the components of pension and other postretirement costs, other than the service cost component. As a result, staff expense increased and other expense decreased. Prior periods have been reclassified.
|
(b)
|
Beginning in 1Q18, clearing expense, which was previously included in other expense, was included with sub-custodian expense. Prior periods have been reclassified.
|
(c)
|
Beginning in 1Q18, M&I, litigation and restructuring charges are no longer separately disclosed. Expenses previously reported in this line have been reclassified to existing expense categories, primarily other expense.
|
Page -
9
|
BNY Mellon 3Q18 Earnings Release
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
|
||||||
(in millions)
|
||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
1,075
|
|
$
|
1,055
|
|
$
|
983
|
|
|
$
|
3,265
|
|
$
|
2,789
|
|
Less: Earnings allocated to participating securities
|
7
|
|
7
|
|
8
|
|
|
22
|
|
35
|
|
|||||
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
|
$
|
1,068
|
|
$
|
1,048
|
|
$
|
975
|
|
|
$
|
3,243
|
|
$
|
2,754
|
|
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
|
||||||
(in dollars)
|
||||||||||||||||
Basic
|
$
|
1.07
|
|
$
|
1.04
|
|
$
|
0.94
|
|
|
$
|
3.21
|
|
$
|
2.66
|
|
Diluted
|
$
|
1.06
|
|
$
|
1.03
|
|
$
|
0.94
|
|
|
$
|
3.20
|
|
$
|
2.64
|
|
Page -
10
|
BNY Mellon 3Q18 Earnings Release
|
Return on common equity and tangible common equity reconciliation
|
|
|
|
||||||
(dollars in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
|||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
1,075
|
|
$
|
1,055
|
|
$
|
983
|
|
Add: Amortization of intangible assets
|
48
|
|
48
|
|
52
|
|
|||
Less: Tax impact of amortization of intangible assets
|
11
|
|
11
|
|
17
|
|
|||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP
|
$
|
1,112
|
|
$
|
1,092
|
|
$
|
1,018
|
|
|
|
|
|
||||||
Average common shareholders’ equity
|
$
|
38,036
|
|
$
|
37,750
|
|
$
|
36,780
|
|
Less: Average goodwill
|
17,391
|
|
17,505
|
|
17,497
|
|
|||
Average intangible assets
|
3,283
|
|
3,341
|
|
3,487
|
|
|||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,066
|
|
1,054
|
|
1,561
|
|
|||
Deferred tax liability – intangible assets
(a)
|
699
|
|
709
|
|
1,092
|
|
|||
Average tangible common shareholders’ equity – Non-GAAP
|
$
|
19,127
|
|
$
|
18,667
|
|
$
|
18,449
|
|
|
|
|
|
||||||
Return on common equity
(annualized)
– GAAP
|
11.2
|
%
|
11.2
|
%
|
10.6
|
%
|
|||
Return on tangible common equity
(annualized)
– Non-GAAP
|
23.1
|
%
|
23.5
|
%
|
21.9
|
%
|
(a)
|
Deferred tax liabilities for 3Q17 are based on fully phased-in U.S. capital rules.
|
Book value and tangible book value per common share reconciliation
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Dec. 31, 2017
|
|
|||
(dollars in millions except common shares)
|
|||||||||
BNY Mellon shareholders’ equity at period end – GAAP
|
$
|
41,560
|
|
$
|
41,505
|
|
$
|
41,251
|
|
Less: Preferred stock
|
3,542
|
|
3,542
|
|
3,542
|
|
|||
BNY Mellon common shareholders’ equity at period end – GAAP
|
38,018
|
|
37,963
|
|
37,709
|
|
|||
Less: Goodwill
|
17,390
|
|
17,418
|
|
17,564
|
|
|||
Intangible assets
|
3,258
|
|
3,308
|
|
3,411
|
|
|||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,066
|
|
1,054
|
|
1,034
|
|
|||
Deferred tax liability – intangible assets
(a)
|
699
|
|
709
|
|
718
|
|
|||
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP
|
$
|
19,135
|
|
$
|
19,000
|
|
$
|
18,486
|
|
|
|
|
|
|
|||||
Period-end common shares outstanding
(in thousands)
|
988,777
|
|
999,945
|
|
1,013,442
|
|
|||
|
|
|
|
|
|||||
Book value per common share – GAAP
|
$
|
38.45
|
|
$
|
37.97
|
|
$
|
37.21
|
|
Tangible book value per common share – Non-GAAP
|
$
|
19.35
|
|
$
|
19.00
|
|
$
|
18.24
|
|
(a)
|
Deferred tax liabilities at Dec. 31, 2017 are based on fully phased-in U.S. capital rules.
|
Page -
11
|
BNY Mellon 3Q18 Earnings Release
|
Pre-tax operating margin reconciliation - Investment Management business
|
|
|
|
||||||
(dollars in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
|||
Income before income taxes – GAAP
|
$
|
316
|
|
$
|
319
|
|
$
|
300
|
|
|
|
|
|
||||||
Total revenue – GAAP
|
$
|
1,015
|
|
$
|
1,018
|
|
$
|
1,000
|
|
Less: Distribution and servicing expense
|
99
|
|
103
|
|
110
|
|
|||
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP
|
$
|
916
|
|
$
|
915
|
|
$
|
890
|
|
|
|
|
|
||||||
Pre-tax operating margin – GAAP
(a)
|
31
|
%
|
31
|
%
|
30
|
%
|
|||
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP
(a)
|
35
|
%
|
35
|
%
|
34
|
%
|
Page -
12
|
BNY Mellon 3Q18 Earnings Release
|
Page -
13
|
The Bank of New York Mellon Corporation
|
|
Financial Supplement
|
|
Third Quarter 2018
|
|
|
Table of Contents
|
|
|
|
||
|
||
|
|
|
|
|
|
Consolidated Results
|
|
Page
|
Consolidated Financial Highlights
|
|
|
Condensed Consolidated Income Statement
|
|
|
Condensed Consolidated Balance Sheet
|
|
|
Fee and Other Revenue
|
|
|
Average Balances and Interest Rates
|
|
|
Noninterest Expense
|
|
|
Capital and Liquidity
|
|
|
|
|
|
Key Market Metrics
|
|
|
|
|
|
Business Segment Results
|
|
|
Investment Services Business
|
|
|
Investment Management Business
|
|
|
AUM by Product, AUM Flows and Wealth Management Client Assets
|
|
|
Other Segment
|
|
|
|
|
|
Other
|
|
|
Investment Securities Portfolio
|
|
|
Allowance for Credit Losses and Nonperforming Assets
|
|
|
|
|
|
Supplemental Information
–
Explanation of GAAP and Non-GAAP Financial Measures
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
|
|
|
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
||||||||||||||
|
2018
|
|
2017
|
|||||||||||||
(in millions)
|
Sept. 30
|
|
June 30
|
|
March 31
|
|
|
Dec. 31
|
|
Sept. 30
|
|
|||||
Assets
|
|
|
|
|
|
|
||||||||||
Cash and due from:
|
|
|
|
|
|
|
||||||||||
Banks
|
$
|
5,047
|
|
$
|
5,361
|
|
$
|
4,636
|
|
|
$
|
5,382
|
|
$
|
5,557
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
74,725
|
|
75,116
|
|
91,431
|
|
|
91,510
|
|
75,808
|
|
|||||
Interest-bearing deposits with banks
|
14,519
|
|
16,134
|
|
15,186
|
|
|
11,979
|
|
15,256
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
28,722
|
|
26,494
|
|
28,784
|
|
|
28,135
|
|
27,883
|
|
|||||
Securities
|
118,641
|
|
119,081
|
|
118,789
|
|
|
120,370
|
|
120,049
|
|
|||||
Trading assets
|
7,804
|
|
7,035
|
|
8,596
|
|
|
6,022
|
|
4,666
|
|
|||||
Loans
|
53,987
|
|
57,776
|
|
60,809
|
|
|
61,540
|
|
59,068
|
|
|||||
Allowance for loan losses
|
(140
|
)
|
(145
|
)
|
(156
|
)
|
|
(159
|
)
|
(161
|
)
|
|||||
Net loans
|
53,847
|
|
57,631
|
|
60,653
|
|
|
61,381
|
|
58,907
|
|
|||||
Premises and equipment
|
1,832
|
|
1,752
|
|
1,702
|
|
|
1,634
|
|
1,631
|
|
|||||
Accrued interest receivable
|
640
|
|
663
|
|
610
|
|
|
610
|
|
547
|
|
|||||
Goodwill
|
17,390
|
|
17,418
|
|
17,596
|
|
|
17,564
|
|
17,543
|
|
|||||
Intangible assets
|
3,258
|
|
3,308
|
|
3,370
|
|
|
3,411
|
|
3,461
|
|
|||||
Other assets
|
22,846
|
|
22,507
|
|
21,638
|
|
|
23,029
|
|
22,287
|
|
|||||
Subtotal assets of operations
|
349,271
|
|
352,500
|
|
372,991
|
|
|
371,027
|
|
353,595
|
|
|||||
Assets of consolidated investment management funds, at fair value
|
499
|
|
428
|
|
606
|
|
|
731
|
|
802
|
|
|||||
Total assets
|
$
|
349,770
|
|
$
|
352,928
|
|
$
|
373,597
|
|
|
$
|
371,758
|
|
$
|
354,397
|
|
Liabilities
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
231,590
|
|
$
|
230,560
|
|
$
|
241,844
|
|
|
$
|
244,322
|
|
$
|
230,996
|
|
Federal funds purchased and securities sold under repurchase agreements
|
10,158
|
|
13,200
|
|
21,600
|
|
|
15,163
|
|
10,314
|
|
|||||
Trading liabilities
|
3,536
|
|
3,580
|
|
3,365
|
|
|
3,984
|
|
3,253
|
|
|||||
Payables to customers and broker-dealers
|
18,683
|
|
19,123
|
|
20,172
|
|
|
20,184
|
|
21,176
|
|
|||||
Commercial paper
|
735
|
|
2,508
|
|
3,936
|
|
|
3,075
|
|
2,501
|
|
|||||
Other borrowed funds
|
2,934
|
|
3,053
|
|
1,550
|
|
|
3,028
|
|
3,353
|
|
|||||
Accrued taxes and other expenses
|
5,601
|
|
5,452
|
|
5,349
|
|
|
6,225
|
|
6,070
|
|
|||||
Other liabilities
|
6,552
|
|
5,443
|
|
5,707
|
|
|
6,050
|
|
7,195
|
|
|||||
Long-term debt
|
28,113
|
|
28,260
|
|
27,939
|
|
|
27,979
|
|
28,408
|
|
|||||
Subtotal liabilities of operations
|
307,902
|
|
311,179
|
|
331,462
|
|
|
330,010
|
|
313,266
|
|
|||||
Liabilities of consolidated investment management funds, at fair value
|
7
|
|
3
|
|
11
|
|
|
2
|
|
27
|
|
|||||
Total liabilities
|
307,909
|
|
311,182
|
|
331,473
|
|
|
330,012
|
|
313,293
|
|
|||||
Temporary equity
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
211
|
|
189
|
|
184
|
|
|
179
|
|
197
|
|
|||||
Permanent equity
|
|
|
|
|
|
|
||||||||||
Preferred stock
|
3,542
|
|
3,542
|
|
3,542
|
|
|
3,542
|
|
3,542
|
|
|||||
Common stock
|
14
|
|
14
|
|
14
|
|
|
14
|
|
14
|
|
|||||
Additional paid-in capital
|
27,034
|
|
26,981
|
|
26,911
|
|
|
26,665
|
|
26,588
|
|
|||||
Retained earnings
|
28,098
|
|
27,306
|
|
26,496
|
|
|
25,635
|
|
24,757
|
|
|||||
Accumulated other comprehensive loss, net of tax
|
(2,983
|
)
|
(2,795
|
)
|
(2,343
|
)
|
|
(2,357
|
)
|
(2,781
|
)
|
|||||
Less: Treasury stock, at cost
|
(14,145
|
)
|
(13,543
|
)
|
(12,892
|
)
|
|
(12,248
|
)
|
(11,597
|
)
|
|||||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
41,560
|
|
41,505
|
|
41,728
|
|
|
41,251
|
|
40,523
|
|
|||||
Nonredeemable noncontrolling interests of consolidated investment management funds
|
90
|
|
52
|
|
212
|
|
|
316
|
|
384
|
|
|||||
Total permanent equity
|
41,650
|
|
41,557
|
|
41,940
|
|
|
41,567
|
|
40,907
|
|
|||||
Total liabilities, temporary equity and permanent equity
|
$
|
349,770
|
|
$
|
352,928
|
|
$
|
373,597
|
|
|
$
|
371,758
|
|
$
|
354,397
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
|
|
|
|
|||||||||||||||||||||||||
KEY MARKET METRICS
|
|
|
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
3Q18 vs.
|
|
|
|
|
YTD18 vs.
|
||||||||||||||||||
|
3Q18
|
|
2Q18
|
|
1Q18
|
|
4Q17
|
|
3Q17
|
|
|
2Q18
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|
YTD17
|
|
|||||||||
Key market metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
S&P 500 Index
(a)
|
2914
|
|
2718
|
|
2641
|
|
2674
|
|
2519
|
|
|
7
|
%
|
16
|
%
|
|
2914
|
|
2519
|
|
|
16
|
%
|
|||||||
S&P 500 Index - daily average
|
2850
|
|
2703
|
|
2733
|
|
2603
|
|
2467
|
|
|
5
|
|
16
|
|
|
2762
|
|
2397
|
|
|
15
|
|
|||||||
FTSE 100 Index
(a)
|
7510
|
|
7637
|
|
7057
|
|
7688
|
|
7373
|
|
|
(2
|
)
|
2
|
|
|
7510
|
|
7373
|
|
|
2
|
|
|||||||
FTSE 100 Index - daily average
|
7553
|
|
7549
|
|
7354
|
|
7477
|
|
7380
|
|
|
—
|
|
2
|
|
|
7485
|
|
7348
|
|
|
2
|
|
|||||||
MSCI EAFE
(a)
|
1974
|
|
1959
|
|
2006
|
|
2051
|
|
1974
|
|
|
1
|
|
—
|
|
|
1974
|
|
1974
|
|
|
—
|
|
|||||||
MSCI EAFE - daily average
|
1964
|
|
2018
|
|
2073
|
|
2005
|
|
1934
|
|
|
(3
|
)
|
2
|
|
|
2018
|
|
1847
|
|
|
9
|
|
|||||||
Bloomberg Barclays Global-Aggregate Total Return Index
(a)(b)
|
473
|
|
478
|
|
491
|
|
485
|
|
480
|
|
|
(1
|
)
|
(1
|
)
|
|
473
|
|
480
|
|
|
(1
|
)
|
|||||||
NYSE and NASDAQ share volume
(in billions)
|
190
|
|
208
|
|
210
|
|
188
|
|
179
|
|
|
(9
|
)
|
6
|
|
|
608
|
|
565
|
|
|
8
|
|
|||||||
Average interest on excess reserves paid by the Federal Reserve
|
1.96
|
%
|
1.79
|
%
|
1.53
|
%
|
1.30
|
%
|
1.25
|
%
|
|
17
|
bps
|
71
|
bps
|
|
1.76
|
%
|
1.03
|
%
|
|
73
|
bps
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Foreign exchange rates vs. U.S. dollar:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
British pound
(a)
|
$
|
1.30
|
|
$
|
1.32
|
|
$
|
1.41
|
|
$
|
1.35
|
|
$
|
1.34
|
|
|
(2
|
)%
|
(3
|
)%
|
|
$
|
1.30
|
|
$
|
1.34
|
|
|
(3
|
)%
|
British pound - average rate
|
1.30
|
|
1.36
|
|
1.39
|
|
1.33
|
|
1.31
|
|
|
(4
|
)
|
(1
|
)
|
|
1.35
|
|
1.28
|
|
|
5
|
|
|||||||
Euro
(a)
|
1.16
|
|
1.17
|
|
1.23
|
|
1.20
|
|
1.18
|
|
|
(1
|
)
|
(2
|
)
|
|
1.16
|
|
1.18
|
|
|
(2
|
)
|
|||||||
Euro - average rate
|
1.16
|
|
1.19
|
|
1.23
|
|
1.18
|
|
1.17
|
|
|
(3
|
)
|
(1
|
)
|
|
1.19
|
|
1.13
|
|
|
5
|
|
|||||||
(a) Period end.
|
||||||||||||||||||||||||||||||
(b) Unhedged in U.S. dollar terms.
|
||||||||||||||||||||||||||||||
bps - basis points.
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
|
|
|
||||||||||||||||||
OTHER SEGMENT
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
1Q18
|
|
4Q17
|
|
3Q17
|
|
|
YTD18
|
|
YTD17
|
|
|||||||
Fee revenue (loss)
|
$
|
7
|
|
$
|
40
|
|
$
|
57
|
|
$
|
(221
|
)
|
$
|
50
|
|
|
$
|
104
|
|
$
|
225
|
|
Net securities gains (losses)
|
—
|
|
1
|
|
(49
|
)
|
(26
|
)
|
19
|
|
|
(48
|
)
|
29
|
|
|||||||
Total fee and other revenue (loss)
|
7
|
|
41
|
|
8
|
|
(247
|
)
|
69
|
|
|
56
|
|
254
|
|
|||||||
Net interest (expense)
|
(13
|
)
|
(35
|
)
|
(1
|
)
|
(36
|
)
|
(20
|
)
|
|
(49
|
)
|
(43
|
)
|
|||||||
Total (loss) revenue
|
(6
|
)
|
6
|
|
7
|
|
(283
|
)
|
49
|
|
|
7
|
|
211
|
|
|||||||
Provision for credit losses
|
(2
|
)
|
(6
|
)
|
—
|
|
(5
|
)
|
(2
|
)
|
|
(8
|
)
|
(14
|
)
|
|||||||
Noninterest expense
|
6
|
|
81
|
|
87
|
|
135
|
|
77
|
|
|
174
|
|
212
|
|
|||||||
(Loss) income before taxes
|
$
|
(10
|
)
|
$
|
(69
|
)
|
$
|
(80
|
)
|
$
|
(413
|
)
|
$
|
(26
|
)
|
|
$
|
(159
|
)
|
$
|
13
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average loans and leases
|
$
|
2,000
|
|
$
|
2,090
|
|
$
|
2,530
|
|
$
|
1,114
|
|
$
|
1,182
|
|
|
$
|
2,204
|
|
$
|
1,275
|
|
Average assets
|
$
|
54,782
|
|
$
|
50,437
|
|
$
|
48,117
|
|
$
|
58,611
|
|
$
|
61,559
|
|
|
$
|
51,139
|
|
$
|
57,463
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
|
|
|
||||||||||||
ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS
|
|
|
||||||||||||||
|
|
|
||||||||||||||
|
2018
|
|
2017
|
|||||||||||||
(dollars in millions)
|
Sept. 30
|
|
June 30
|
|
March 31
|
|
|
Dec. 31
|
|
Sept. 30
|
|
|||||
Allowance for credit losses - beginning of period:
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses
|
$
|
145
|
|
$
|
156
|
|
$
|
159
|
|
|
$
|
161
|
|
$
|
165
|
|
Allowance for lending-related commitments
|
109
|
|
100
|
|
102
|
|
|
104
|
|
105
|
|
|||||
Allowance for credit losses - beginning of period
|
$
|
254
|
|
$
|
256
|
|
$
|
261
|
|
|
$
|
265
|
|
$
|
270
|
|
|
|
|
|
|
|
|
||||||||||
Net recoveries (charge-offs):
|
|
|
|
|
|
|
||||||||||
Charge-offs
|
(1
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||
Recoveries
|
1
|
|
1
|
|
—
|
|
|
2
|
|
1
|
|
|||||
Total net recoveries (charge-offs)
|
—
|
|
1
|
|
—
|
|
|
2
|
|
1
|
|
|||||
Provision for credit losses
|
(3
|
)
|
(3
|
)
|
(5
|
)
|
|
(6
|
)
|
(6
|
)
|
|||||
Allowance for credit losses - end of period
|
$
|
251
|
|
$
|
254
|
|
$
|
256
|
|
|
$
|
261
|
|
$
|
265
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for credit losses - end of period:
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses
|
$
|
140
|
|
$
|
145
|
|
$
|
156
|
|
|
$
|
159
|
|
$
|
161
|
|
Allowance for lending-related commitments
|
111
|
|
109
|
|
100
|
|
|
102
|
|
104
|
|
|||||
Allowance for credit losses - end of period
|
$
|
251
|
|
$
|
254
|
|
$
|
256
|
|
|
$
|
261
|
|
$
|
265
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses as a percentage of total loans
|
0.26
|
%
|
0.25
|
%
|
0.26
|
%
|
|
0.26
|
%
|
0.27
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Nonperforming assets
|
$
|
81
|
|
$
|
82
|
|
$
|
85
|
|
|
$
|
90
|
|
$
|
94
|
|