|
|
Delaware
|
13-2614959
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
Class
|
Outstanding as of
|
|
|
|
|
Sept. 30, 2018
|
|
|
|
Common Stock, $0.01 par value
|
988,777,495
|
|
|
|
|
Page
|
|
|
Part I - Financial Information
|
|
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk:
|
|
Highlights of third quarter 2018 results
|
|
Business continuity and operational resiliency
|
|
|
|
Item 1. Financial Statements:
|
|
|
Page
|
Notes to Consolidated Financial Statements:
|
|
Note 3—Acquisitions
and dispositions
|
|
|
|
|
|
Part II - Other Information
|
|
|
|
Index to Exhibits
|
|
Signature
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(dollars in millions, except per share amounts and unless otherwise noted)
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
|
|||||
Results applicable to common shareholders of The Bank of New York Mellon Corporation:
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1,075
|
|
$
|
1,055
|
|
$
|
983
|
|
|
$
|
3,265
|
|
$
|
2,789
|
|
Basic earnings per share
|
$
|
1.07
|
|
$
|
1.04
|
|
$
|
0.94
|
|
|
$
|
3.21
|
|
$
|
2.66
|
|
Diluted earnings per share
|
$
|
1.06
|
|
$
|
1.03
|
|
$
|
0.94
|
|
|
$
|
3.20
|
|
$
|
2.64
|
|
|
|
|
|
|
|
|
||||||||||
Fee and other revenue
|
$
|
3,168
|
|
$
|
3,210
|
|
$
|
3,167
|
|
|
$
|
9,648
|
|
$
|
9,305
|
|
Income from consolidated investment management funds
|
10
|
|
12
|
|
10
|
|
|
11
|
|
53
|
|
|||||
Net interest revenue
|
891
|
|
916
|
|
839
|
|
|
2,726
|
|
2,457
|
|
|||||
Total revenue
|
$
|
4,069
|
|
$
|
4,138
|
|
$
|
4,016
|
|
|
$
|
12,385
|
|
$
|
11,815
|
|
|
|
|
|
|
|
|
||||||||||
Return on common equity
(annualized)
|
11.2
|
%
|
11.2
|
%
|
10.6
|
%
|
|
11.6
|
%
|
10.4
|
%
|
|||||
Return on tangible common equity
(annualized) –
Non-GAAP
(a)
|
23.1
|
%
|
23.5
|
%
|
21.9
|
%
|
|
24.1
|
%
|
22.0
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Return on average assets
(annualized)
|
1.28
|
%
|
1.22
|
%
|
1.13
|
%
|
|
1.26
|
%
|
1.09
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Fee revenue as a percentage of total revenue
|
78
|
%
|
78
|
%
|
78
|
%
|
|
78
|
%
|
79
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Percentage of non-U.S. total revenue
|
37
|
%
|
37
|
%
|
36
|
%
|
|
37
|
%
|
35
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Pre-tax operating margin
|
33
|
%
|
34
|
%
|
34
|
%
|
|
34
|
%
|
33
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Net interest margin
|
1.27
|
%
|
1.26
|
%
|
1.15
|
%
|
|
1.25
|
%
|
1.14
|
%
|
|||||
Net interest margin on a fully taxable equivalent (“FTE”) basis
– Non-GAAP
(b)
|
1.28
|
%
|
1.26
|
%
|
1.16
|
%
|
|
1.26
|
%
|
1.16
|
%
|
|||||
|
|
|
|
|
|
|
||||||||||
Assets under custody and/or administration (“AUC/A”) at period end
(in trillions) (c)
|
$
|
34.5
|
|
$
|
33.6
|
|
$
|
32.2
|
|
|
$
|
34.5
|
|
$
|
32.2
|
|
Assets under management (“AUM”) at period end
(in billions) (d)
|
$
|
1,828
|
|
$
|
1,805
|
|
$
|
1,824
|
|
|
$
|
1,828
|
|
$
|
1,824
|
|
Market value of securities on loan at period end
(in billions) (e)
|
$
|
415
|
|
$
|
432
|
|
$
|
382
|
|
|
$
|
415
|
|
$
|
382
|
|
|
|
|
|
|
|
|
||||||||||
Average common shares and equivalents outstanding
(in thousands)
:
|
|
|
|
|
|
|
||||||||||
Basic
|
999,808
|
|
1,010,179
|
|
1,035,337
|
|
|
1,008,967
|
|
1,037,431
|
|
|||||
Diluted
|
1,003,665
|
|
1,014,357
|
|
1,041,138
|
|
|
1,013,242
|
|
1,043,585
|
|
|||||
|
|
|
|
|
|
|
||||||||||
Selected average balances:
|
|
|
|
|
|
|
||||||||||
Interest-earning assets
|
$
|
279,218
|
|
$
|
292,086
|
|
$
|
291,841
|
|
|
$
|
291,040
|
|
$
|
288,283
|
|
Assets of operations
|
$
|
331,867
|
|
$
|
345,840
|
|
$
|
344,966
|
|
|
$
|
344,970
|
|
$
|
340,588
|
|
Total assets
|
$
|
332,341
|
|
$
|
346,328
|
|
$
|
345,709
|
|
|
$
|
345,520
|
|
$
|
341,510
|
|
Interest-bearing deposits
|
$
|
148,636
|
|
$
|
152,799
|
|
$
|
142,490
|
|
|
$
|
152,354
|
|
$
|
141,558
|
|
Long-term debt
|
$
|
28,074
|
|
$
|
28,349
|
|
$
|
28,138
|
|
|
$
|
28,275
|
|
$
|
27,148
|
|
Noninterest-bearing deposits
|
$
|
60,677
|
|
$
|
64,768
|
|
$
|
70,168
|
|
|
$
|
65,446
|
|
$
|
72,524
|
|
Preferred stock
|
$
|
3,542
|
|
$
|
3,542
|
|
$
|
3,542
|
|
|
$
|
3,542
|
|
$
|
3,542
|
|
Total The Bank of New York Mellon Corporation common shareholders’ equity
|
$
|
38,036
|
|
$
|
37,750
|
|
$
|
36,780
|
|
|
$
|
37,795
|
|
$
|
35,876
|
|
|
|
|
|
|
|
|
||||||||||
Other information at period end:
|
|
|
|
|
|
|
||||||||||
Cash dividends per common share
|
$
|
0.28
|
|
$
|
0.24
|
|
$
|
0.24
|
|
|
$
|
0.76
|
|
$
|
0.62
|
|
Common dividend payout ratio
|
26
|
%
|
23
|
%
|
26
|
%
|
|
24
|
%
|
23
|
%
|
|||||
Common dividend yield
(annualized)
|
2.2
|
%
|
1.8
|
%
|
1.8
|
%
|
|
2.0
|
%
|
1.6
|
%
|
|||||
Closing stock price per common share
|
$
|
50.99
|
|
$
|
53.93
|
|
$
|
53.02
|
|
|
$
|
50.99
|
|
$
|
53.02
|
|
Market capitalization
|
$
|
50,418
|
|
$
|
53,927
|
|
$
|
54,294
|
|
|
$
|
50,418
|
|
$
|
54,294
|
|
Book value per common share
|
$
|
38.45
|
|
$
|
37.97
|
|
$
|
36.11
|
|
|
$
|
38.45
|
|
$
|
36.11
|
|
Tangible book value per common share – Non-GAAP
(a)
|
$
|
19.35
|
|
$
|
19.00
|
|
$
|
18.19
|
|
|
$
|
19.35
|
|
$
|
18.19
|
|
Full-time employees
|
52,000
|
|
52,000
|
|
52,900
|
|
|
52,000
|
|
52,900
|
|
|||||
Common shares outstanding
(in thousands)
|
988,777
|
|
999,945
|
|
1,024,022
|
|
|
988,777
|
|
1,024,022
|
|
Regulatory capital and other ratios
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Dec. 31, 2017
|
|
Average liquidity coverage ratio (“LCR”)
|
121
|
%
|
118
|
%
|
118
|
%
|
|
|
|
|
|||
Regulatory capital ratios:
(f)
|
|
|
|
|||
Advanced:
|
|
|
|
|||
Common Equity Tier 1 (“CET1”) ratio
|
11.2
|
%
|
11.0
|
%
|
10.3
|
%
|
Tier 1 capital ratio
|
13.3
|
|
13.1
|
|
12.3
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
14.1
|
|
13.8
|
|
13.0
|
|
Standardized:
|
|
|
|
|||
CET1 ratio
|
12.4
|
%
|
11.9
|
%
|
11.5
|
%
|
Tier 1 capital ratio
|
14.7
|
|
14.1
|
|
13.7
|
|
Total (Tier 1 plus Tier 2) capital ratio
|
15.7
|
|
15.1
|
|
14.7
|
|
|
|
|
|
|||
Tier 1 leverage ratio
(f)
|
7.0
|
%
|
6.7
|
%
|
6.4
|
%
|
Supplementary leverage ratio (“SLR”)
(f)
|
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
|
|
(a)
|
Return on tangible common equity and tangible book value per common share, Non-GAAP measures, exclude goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
41
for the reconciliation of Non-GAAP measures.
|
(b)
|
See “Average balances and interest rates” on page
9
for a reconciliation of this Non-GAAP measure.
|
(c)
|
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
.
|
(d)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business.
|
(e)
|
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 an 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
.
|
(f)
|
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 risk-based regulatory capital ratios, Tier 1 leverage ratio and SLR are presented on a fully phased-in basis for Dec. 31, 2017. Beginning Jan. 1, 2018, regulatory ratios are fully phased-in. For additional information on our capital ratios, see “Capital” beginning on page
32
.
|
Part I - Financial Information
|
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk
|
•
|
Total revenue of
$4.1 billion
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. (See “Fee and other revenue” beginning on page
6
.)
|
•
|
Net interest revenue increased
6%
primarily driven by higher rates, partially offset by lower deposits and other borrowings. (See “Net interest revenue” on page
8
.)
|
•
|
Noninterest expense of
$2.7 billion
increased
3%
primarily reflecting investments in technology and higher litigation expense, partially offset by
|
•
|
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%. (See “Income taxes” on page
11
.)
|
•
|
CET1 ratio under the Advanced Approach was
11.2%
at
Sept. 30, 2018
and
11.0%
at
June 30, 2018
. The increase primarily reflects lower risk-weighted assets and capital generated through earnings, partially offset by capital deployed through common stock repurchases and dividend payments. (See “Capital” beginning on page
32
.)
|
•
|
Repurchased
12 million
common shares for
$602 million
and paid $283 million in dividends to common shareholders.
|
•
|
Total revenue increased
3%
.
|
•
|
Income before taxes decreased
6%
, driven by litigation expense.
|
•
|
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.
|
•
|
Total revenue increased
2%
.
|
•
|
Income before taxes increased
5%
.
|
•
|
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).
|
Fee and other revenue
|
|
|
|
|
|
|
|
|
YTD18
|
|
||||||||||||
|
|
|
|
3Q18 vs.
|
|
|
|
vs.
|
||||||||||||||
(dollars in millions, unless otherwise noted)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|
YTD18
|
|
YTD17
|
|
YTD17
|
|
|||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Asset servicing
(a)
|
$
|
1,157
|
|
$
|
1,157
|
|
$
|
1,105
|
|
—
|
%
|
5
|
%
|
|
$
|
3,482
|
|
$
|
3,253
|
|
7
|
%
|
Clearing services
|
383
|
|
392
|
|
383
|
|
(2
|
)
|
—
|
|
|
1,189
|
|
1,153
|
|
3
|
|
|||||
Issuer services
|
287
|
|
266
|
|
288
|
|
8
|
|
—
|
|
|
813
|
|
780
|
|
4
|
|
|||||
Treasury services
|
137
|
|
140
|
|
141
|
|
(2
|
)
|
(3
|
)
|
|
415
|
|
420
|
|
(1
|
)
|
|||||
Total investment services fees
|
1,964
|
|
1,955
|
|
1,917
|
|
—
|
|
2
|
|
|
5,899
|
|
5,606
|
|
5
|
|
|||||
Investment management and performance fees
|
922
|
|
910
|
|
901
|
|
1
|
|
2
|
|
|
2,792
|
|
2,622
|
|
6
|
|
|||||
Foreign exchange and other trading revenue
|
155
|
|
187
|
|
173
|
|
(17
|
)
|
(10
|
)
|
|
551
|
|
502
|
|
10
|
|
|||||
Financing-related fees
|
52
|
|
53
|
|
54
|
|
(2
|
)
|
(4
|
)
|
|
157
|
|
162
|
|
(3
|
)
|
|||||
Distribution and servicing
|
34
|
|
34
|
|
40
|
|
—
|
|
(15
|
)
|
|
104
|
|
122
|
|
(15
|
)
|
|||||
Investment and other income
|
41
|
|
70
|
|
63
|
|
N/M
|
N/M
|
|
193
|
|
262
|
|
N/M
|
||||||||
Total fee revenue
|
3,168
|
|
3,209
|
|
3,148
|
|
(1
|
)
|
1
|
|
|
9,696
|
|
9,276
|
|
5
|
|
|||||
Net securities gains (losses)
|
—
|
|
1
|
|
19
|
|
N/M
|
N/M
|
|
(48
|
)
|
29
|
|
N/M
|
||||||||
Total fee and other revenue
|
$
|
3,168
|
|
$
|
3,210
|
|
$
|
3,167
|
|
(1
|
)%
|
—
|
%
|
|
$
|
9,648
|
|
$
|
9,305
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fee revenue as a percentage of total revenue
|
78
|
%
|
78
|
%
|
78
|
%
|
|
|
|
78
|
%
|
79
|
%
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
AUM at period end
(in billions) (b)
|
$
|
1,828
|
|
$
|
1,805
|
|
$
|
1,824
|
|
1
|
%
|
—
|
%
|
|
$
|
1,828
|
|
$
|
1,824
|
|
—
|
%
|
AUC/A at period end
(in trillions) (c)
|
$
|
34.5
|
|
$
|
33.6
|
|
$
|
32.2
|
|
3
|
%
|
7
|
%
|
|
$
|
34.5
|
|
$
|
32.2
|
|
7
|
%
|
(a)
|
Asset servicing fees include securities lending revenue of
$58 million
in the
third quarter of 2018
,
$60 million
in the
second quarter of 2018
,
$47 million
in the
third quarter of 2017
,
$173 million
in the
first nine months of 2018
and
$144 million
in the
first nine months of 2017
.
|
(b)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business.
|
(c)
|
Includes the AUC/A of CIBC Mellon of
$1.4 trillion
at
Sept. 30, 2018
and
June 30, 2018
and
$1.3 trillion
at
Sept. 30, 2017
.
|
•
|
Asset servicing fees increased
5%
compared with the
third quarter of 2017
and were unchanged compared with the
second quarter of 2018
. The increase compared with the
third quarter of 2017
primarily reflects growth in collateral management and higher equity market values and securities lending volumes.
|
•
|
Clearing services fees were unchanged compared with the
third quarter of 2017
and decreased
2%
|
•
|
Issuer services fees decreased slightly compared with the
third quarter of 2017
and increased
8%
(unannualized) compared with the
second quarter of 2018
. The increase compared with the
second quarter of 2018
primarily reflects seasonally higher Depositary Receipts revenue.
|
•
|
Treasury services fees decreased
3%
compared with the
third quarter of 2017
and
2%
(unannualized) compared with the
second quarter of 2018
. The decrease compared with the
third quarter of 2017
primarily reflects higher compensating balance credits provided to clients, which reduce fee revenue and increase net interest revenue. The decrease compared with the
second quarter of 2018
primarily reflects lower payments revenue.
|
Foreign exchange and other trading revenue
|
|
||||||||||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|||||
Foreign exchange
|
$
|
150
|
|
$
|
171
|
|
$
|
158
|
|
$
|
504
|
|
$
|
463
|
|
Other trading revenue
|
5
|
|
16
|
|
15
|
|
47
|
|
39
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
155
|
|
$
|
187
|
|
$
|
173
|
|
$
|
551
|
|
$
|
502
|
|
Investment and other income
|
|
|
|
||||||||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|||||
Corporate/bank-owned life insurance
|
$
|
36
|
|
$
|
31
|
|
$
|
37
|
|
$
|
103
|
|
$
|
110
|
|
Asset-related gains (losses)
|
7
|
|
15
|
|
1
|
|
68
|
|
(1
|
)
|
|||||
Expense reimbursements from joint venture
|
17
|
|
19
|
|
18
|
|
52
|
|
49
|
|
|||||
Seed capital gains
(a)
|
8
|
|
3
|
|
6
|
|
11
|
|
25
|
|
|||||
Equity investment income
|
3
|
|
2
|
|
—
|
|
5
|
|
33
|
|
|||||
Lease-related gains
|
—
|
|
—
|
|
—
|
|
—
|
|
52
|
|
|||||
Other (loss) income
|
(30
|
)
|
—
|
|
1
|
|
(46
|
)
|
(6
|
)
|
|||||
Total investment and other income
|
$
|
41
|
|
$
|
70
|
|
$
|
63
|
|
$
|
193
|
|
$
|
262
|
|
(a)
|
Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds.
|
Net interest revenue
|
|
|
|
|
|
|
|
|
YTD18
|
|
||||||||||||
|
|
|
|
3Q18 vs.
|
|
|
|
vs.
|
||||||||||||||
(dollars in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|
YTD18
|
|
YTD17
|
|
YTD17
|
|
|||||
Net interest revenue
|
$
|
891
|
|
$
|
916
|
|
$
|
839
|
|
(3
|
)%
|
6
|
%
|
|
$
|
2,726
|
|
$
|
2,457
|
|
11
|
%
|
Add: Tax equivalent adjustment
|
5
|
|
5
|
|
12
|
|
N/M
|
N/M
|
|
16
|
|
36
|
|
N/M
|
||||||||
Net interest revenue (FTE) – Non-GAAP
(a)
|
$
|
896
|
|
$
|
921
|
|
$
|
851
|
|
(3
|
)%
|
5
|
%
|
|
$
|
2,742
|
|
$
|
2,493
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Average interest-earning assets
|
$
|
279,218
|
|
$
|
292,086
|
|
$
|
291,841
|
|
(4
|
)%
|
(4
|
)%
|
|
$
|
291,040
|
|
$
|
288,283
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net interest margin
|
1.27
|
%
|
1.26
|
%
|
1.15
|
%
|
1
|
bps
|
12
|
bps
|
|
1.25
|
%
|
1.14
|
%
|
11
|
bps
|
|||||
Net interest margin (FTE) – Non-GAAP
(a)
|
1.28
|
%
|
1.26
|
%
|
1.16
|
%
|
2
|
bps
|
12
|
bps
|
|
1.26
|
%
|
1.16
|
%
|
10
|
bps
|
(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.
|
Average balances and interest rates
|
Quarter ended
|
|||||||||||||||||||||||||
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|||||||||||||||||||||
(dollars in millions, presented on an FTE basis)
|
Average
balance
|
|
Interest
|
|
Average
rates
|
|
|
Average
balance
|
|
Interest
|
|
Average
rates
|
|
|
Average balance
|
|
Interest
|
|
Average rates
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
14,691
|
|
$
|
59
|
|
1.58
|
%
|
|
$
|
15,748
|
|
$
|
56
|
|
1.41
|
%
|
|
$
|
15,899
|
|
$
|
34
|
|
0.86
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
61,216
|
|
125
|
|
0.80
|
|
|
69,676
|
|
136
|
|
0.77
|
|
|
70,430
|
|
89
|
|
0.50
|
|
||||||
Federal funds sold and securities purchased under resale agreements
(a)
|
26,738
|
|
281
|
|
4.18
|
|
|
28,051
|
|
230
|
|
3.29
|
|
|
28,120
|
|
119
|
|
1.67
|
|
||||||
Margin loans
|
13,738
|
|
129
|
|
3.74
|
|
|
14,838
|
|
128
|
|
3.46
|
|
|
13,206
|
|
87
|
|
2.60
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Domestic offices
|
28,628
|
|
258
|
|
3.59
|
|
|
29,970
|
|
257
|
|
3.44
|
|
|
29,950
|
|
216
|
|
2.87
|
|
||||||
Foreign offices
|
11,441
|
|
86
|
|
2.98
|
|
|
12,258
|
|
88
|
|
2.87
|
|
|
12,788
|
|
67
|
|
2.09
|
|
||||||
Total non-margin loans
|
40,069
|
|
344
|
|
3.42
|
|
|
42,228
|
|
345
|
|
3.27
|
|
|
42,738
|
|
283
|
|
2.64
|
|
||||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Government obligations
|
24,423
|
|
129
|
|
2.09
|
|
|
23,199
|
|
116
|
|
2.02
|
|
|
25,349
|
|
106
|
|
1.67
|
|
||||||
U.S. Government agency obligations
|
64,612
|
|
384
|
|
2.40
|
|
|
63,022
|
|
374
|
|
2.37
|
|
|
61,710
|
|
309
|
|
2.00
|
|
||||||
State and political subdivisions – tax-exempt
(b)
|
2,453
|
|
18
|
|
2.77
|
|
|
2,677
|
|
18
|
|
2.75
|
|
|
3,226
|
|
25
|
|
3.06
|
|
||||||
Other securities
|
27,017
|
|
138
|
|
1.98
|
|
|
28,863
|
|
126
|
|
1.75
|
|
|
28,804
|
|
98
|
|
1.34
|
|
||||||
Trading securities
(b)
|
4,261
|
|
32
|
|
3.05
|
|
|
3,784
|
|
29
|
|
3.10
|
|
|
2,359
|
|
13
|
|
2.26
|
|
||||||
Total securities
|
122,766
|
|
701
|
|
2.28
|
|
|
121,545
|
|
663
|
|
2.19
|
|
|
121,448
|
|
551
|
|
1.81
|
|
||||||
Total interest-earning assets
(b)
|
$
|
279,218
|
|
$
|
1,639
|
|
2.33
|
%
|
|
$
|
292,086
|
|
$
|
1,558
|
|
2.14
|
%
|
|
$
|
291,841
|
|
$
|
1,163
|
|
1.59
|
%
|
Noninterest-earnings assets
|
53,123
|
|
|
|
|
54,242
|
|
|
|
|
53,868
|
|
|
|
||||||||||||
Total assets
|
$
|
332,341
|
|
|
|
|
$
|
346,328
|
|
|
|
|
$
|
345,709
|
|
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Domestic offices
|
$
|
57,942
|
|
$
|
142
|
|
0.97
|
%
|
|
$
|
54,200
|
|
$
|
105
|
|
0.78
|
%
|
|
$
|
44,212
|
|
$
|
31
|
|
0.28
|
%
|
Foreign offices
|
90,694
|
|
95
|
|
0.42
|
|
|
98,599
|
|
68
|
|
0.28
|
|
|
98,278
|
|
26
|
|
0.10
|
|
||||||
Total interest-bearing deposits
|
148,636
|
|
237
|
|
0.63
|
|
|
152,799
|
|
173
|
|
0.45
|
|
|
142,490
|
|
57
|
|
0.16
|
|
||||||
Federal funds purchased and securities sold under repurchase agreements
(a)
|
14,199
|
|
190
|
|
5.33
|
|
|
18,146
|
|
158
|
|
3.48
|
|
|
21,403
|
|
70
|
|
1.30
|
|
||||||
Trading liabilities
|
1,150
|
|
7
|
|
2.32
|
|
|
1,198
|
|
7
|
|
2.43
|
|
|
1,434
|
|
2
|
|
0.54
|
|
||||||
Other borrowed funds
|
2,747
|
|
16
|
|
2.33
|
|
|
2,399
|
|
14
|
|
2.40
|
|
|
2,197
|
|
7
|
|
1.38
|
|
||||||
Commercial paper
|
3,102
|
|
16
|
|
2.10
|
|
|
3,869
|
|
21
|
|
2.13
|
|
|
2,736
|
|
8
|
|
1.15
|
|
||||||
Payables to customers and broker-dealers
|
16,252
|
|
51
|
|
1.23
|
|
|
16,349
|
|
45
|
|
1.10
|
|
|
18,516
|
|
19
|
|
0.42
|
|
||||||
Long-term debt
|
28,074
|
|
226
|
|
3.17
|
|
|
28,349
|
|
219
|
|
3.06
|
|
|
28,138
|
|
149
|
|
2.07
|
|
||||||
Total interest-bearing liabilities
|
$
|
214,160
|
|
$
|
743
|
|
1.37
|
%
|
|
$
|
223,109
|
|
$
|
637
|
|
1.14
|
%
|
|
$
|
216,914
|
|
$
|
312
|
|
0.57
|
%
|
Total noninterest-bearing deposits
|
60,677
|
|
|
|
|
64,768
|
|
|
|
|
70,168
|
|
|
|
||||||||||||
Other noninterest-bearing liabilities
|
15,660
|
|
|
|
|
16,857
|
|
|
|
|
17,763
|
|
|
|
||||||||||||
Total liabilities
|
290,497
|
|
|
|
|
304,734
|
|
|
|
|
304,845
|
|
|
|
||||||||||||
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Redeemable noncontrolling interests
|
193
|
|
|
|
|
184
|
|
|
|
|
188
|
|
|
|
||||||||||||
Permanent equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
41,578
|
|
|
|
|
41,292
|
|
|
|
|
40,322
|
|
|
|
||||||||||||
Noncontrolling interests
|
73
|
|
|
|
|
118
|
|
|
|
|
354
|
|
|
|
||||||||||||
Total permanent equity
|
41,651
|
|
|
|
|
41,410
|
|
|
|
|
40,676
|
|
|
|
||||||||||||
Total liabilities, temporary equity and permanent equity
|
$
|
332,341
|
|
|
|
|
$
|
346,328
|
|
|
|
|
$
|
345,709
|
|
|
|
|||||||||
Net interest revenue (FTE) – Non-GAAP
|
|
$
|
896
|
|
|
|
|
$
|
921
|
|
|
|
|
$
|
851
|
|
|
|||||||||
Net interest margin (FTE) – Non-GAAP
|
|
|
1.28
|
%
|
|
|
|
1.26
|
%
|
|
|
|
1.16
|
%
|
||||||||||||
Less: Tax equivalent adjustment
(c)
|
|
5
|
|
|
|
|
5
|
|
|
|
|
12
|
|
|
||||||||||||
Net interest revenue – GAAP
|
|
$
|
891
|
|
|
|
|
$
|
916
|
|
|
|
|
$
|
839
|
|
|
|||||||||
Net interest margin – GAAP
|
|
|
1.27
|
%
|
|
|
|
1.26
|
%
|
|
|
|
1.15
|
%
|
(a)
|
Includes the impact of offsetting under enforceable netting agreements of approximately
$26 billion
for the
third quarter of 2018
,
$18 billion
for the
second quarter of 2018
and
$7 billion
for the
third quarter of 2017
.
|
(b)
|
Interest income and average yields are presented on an FTE basis (Non-GAAP).
|
(c)
|
The tax equivalent adjustment relates to tax-exempt securities, primarily state and political subdivisions, and is based on the federal statutory tax rate of 21% for the quarters in 2018 and 35% for the quarter in 2017, adjusted for applicable state income taxes, net of the related federal tax benefit.
|
Average balances and interest rates
|
Year-to-date
|
||||||||||||||||
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
||||||||||||||
(dollars in millions, presented on an FTE basis)
|
Average balance
|
|
Interest
|
|
Average rates
|
|
|
Average balance
|
|
Interest
|
|
Average rates
|
|
||||
Assets
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
14,766
|
|
$
|
157
|
|
1.42
|
%
|
|
$
|
15,153
|
|
$
|
83
|
|
0.73
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
69,921
|
|
387
|
|
0.73
|
|
|
68,613
|
|
217
|
|
0.42
|
|
||||
Federal funds sold and securities purchased under resale agreements
(a)
|
27,560
|
|
681
|
|
3.31
|
|
|
26,779
|
|
272
|
|
1.36
|
|
||||
Margin loans
|
14,743
|
|
372
|
|
3.38
|
|
|
14,663
|
|
249
|
|
2.27
|
|
||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||
Domestic offices
|
29,664
|
|
743
|
|
3.35
|
|
|
30,545
|
|
611
|
|
2.67
|
|
||||
Foreign offices
|
12,068
|
|
251
|
|
2.78
|
|
|
13,126
|
|
189
|
|
1.93
|
|
||||
Total non-margin loans
|
41,732
|
|
994
|
|
3.18
|
|
|
43,671
|
|
800
|
|
2.45
|
|
||||
Securities:
|
|
|
|
|
|
|
|
||||||||||
U.S. Government obligations
|
23,698
|
|
354
|
|
2.00
|
|
|
25,835
|
|
316
|
|
1.64
|
|
||||
U.S. Government agency obligations
|
63,702
|
|
1,108
|
|
2.32
|
|
|
59,384
|
|
870
|
|
1.95
|
|
||||
State and political subdivisions – tax-exempt
(b)
|
2,667
|
|
55
|
|
2.71
|
|
|
3,298
|
|
77
|
|
3.09
|
|
||||
Other securities
|
28,175
|
|
387
|
|
1.83
|
|
|
28,531
|
|
267
|
|
1.25
|
|
||||
Trading securities
(b)
|
4,076
|
|
89
|
|
2.92
|
|
|
2,356
|
|
48
|
|
2.74
|
|
||||
Total securities
|
122,318
|
|
1,993
|
|
2.17
|
|
|
119,404
|
|
1,578
|
|
1.76
|
|
||||
Total interest-earning assets
(b)
|
$
|
291,040
|
|
$
|
4,584
|
|
2.10
|
%
|
|
$
|
288,283
|
|
$
|
3,199
|
|
1.48
|
%
|
Noninterest-earnings assets
|
54,480
|
|
|
|
|
53,227
|
|
|
|
||||||||
Total assets
|
$
|
345,520
|
|
|
|
|
$
|
341,510
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
||||||||||
Domestic offices
|
$
|
54,608
|
|
$
|
318
|
|
0.78
|
%
|
|
$
|
47,456
|
|
$
|
66
|
|
0.19
|
%
|
Foreign offices
|
97,746
|
|
209
|
|
0.29
|
|
|
94,102
|
|
32
|
|
0.05
|
|
||||
Total interest-bearing deposits
|
152,354
|
|
527
|
|
0.46
|
|
|
141,558
|
|
98
|
|
0.09
|
|
||||
Federal funds purchased and securities sold under repurchase agreements
(a)
|
17,085
|
|
455
|
|
3.56
|
|
|
19,465
|
|
132
|
|
0.90
|
|
||||
Trading liabilities
|
1,304
|
|
23
|
|
2.33
|
|
|
1,188
|
|
6
|
|
0.65
|
|
||||
Other borrowed funds
|
2,424
|
|
39
|
|
2.16
|
|
|
1,409
|
|
13
|
|
1.26
|
|
||||
Commercial paper
|
3,367
|
|
49
|
|
1.96
|
|
|
2,374
|
|
18
|
|
1.01
|
|
||||
Payables to customers and broker-dealers
|
16,564
|
|
127
|
|
1.02
|
|
|
19,360
|
|
42
|
|
0.29
|
|
||||
Long-term debt
|
28,275
|
|
622
|
|
2.90
|
|
|
27,148
|
|
397
|
|
1.93
|
|
||||
Total interest-bearing liabilities
|
$
|
221,373
|
|
$
|
1,842
|
|
1.11
|
%
|
|
$
|
212,502
|
|
$
|
706
|
|
0.44
|
%
|
Total noninterest-bearing deposits
|
65,446
|
|
|
|
|
72,524
|
|
|
|
||||||||
Other noninterest-bearing liabilities
|
17,019
|
|
|
|
|
16,428
|
|
|
|
||||||||
Total liabilities
|
303,838
|
|
|
|
|
301,454
|
|
|
|
||||||||
Temporary equity
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
190
|
|
|
|
|
174
|
|
|
|
||||||||
Permanent equity
|
|
|
|
|
|
|
|
||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
41,337
|
|
|
|
|
39,418
|
|
|
|
||||||||
Noncontrolling interests
|
155
|
|
|
|
|
464
|
|
|
|
||||||||
Total permanent equity
|
41,492
|
|
|
|
|
39,882
|
|
|
|
||||||||
Total liabilities, temporary equity and permanent equity
|
$
|
345,520
|
|
|
|
|
$
|
341,510
|
|
|
|
||||||
Net interest revenue (FTE) – Non-GAAP
|
|
$
|
2,742
|
|
|
|
|
$
|
2,493
|
|
|
||||||
Net interest margin (FTE) – Non-GAAP
|
|
|
1.26
|
%
|
|
|
|
1.16
|
%
|
||||||||
Less: Tax equivalent adjustment
(c)
|
|
16
|
|
|
|
|
36
|
|
|
||||||||
Net interest revenue – GAAP
|
|
$
|
2,726
|
|
|
|
|
$
|
2,457
|
|
|
||||||
Net interest margin – GAAP
|
|
|
1.25
|
%
|
|
|
|
1.14
|
%
|
(a)
|
Includes the impact of offsetting under enforceable netting agreements of approximately
$19 billion
for the
first nine months of 2018
and
$3 billion
for the
first nine months of 2017
.
|
(b)
|
Interest income and average yields are presented on an FTE basis (Non-GAAP).
|
(c)
|
The tax equivalent adjustment relates to tax-exempt securities, primarily state and political subdivisions, and is based on the federal statutory tax rate of 21% for year-to-date 2018 and 35% for year-to-date 2017, adjusted for applicable state income taxes, net of the related federal tax benefit.
|
Noninterest expense
|
|
|
|
|
|
|
|
|
YTD18
|
|
||||||||||||
|
|
|
|
3Q18 vs.
|
|
|
|
vs.
|
||||||||||||||
(dollars in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|
YTD18
|
|
YTD17
|
|
YTD17
|
|
|||||
Staff
(a)
|
$
|
1,478
|
|
$
|
1,489
|
|
$
|
1,485
|
|
(1
|
)%
|
—
|
%
|
|
$
|
4,543
|
|
$
|
4,405
|
|
3
|
%
|
Professional, legal and other purchased services
|
332
|
|
328
|
|
305
|
|
1
|
|
9
|
|
|
951
|
|
937
|
|
1
|
|
|||||
Software
|
189
|
|
192
|
|
175
|
|
(2
|
)
|
8
|
|
|
554
|
|
514
|
|
8
|
|
|||||
Net occupancy
|
139
|
|
156
|
|
141
|
|
(11
|
)
|
(1
|
)
|
|
434
|
|
417
|
|
4
|
|
|||||
Sub-custodian and clearing
(b)
|
106
|
|
110
|
|
101
|
|
(4
|
)
|
5
|
|
|
335
|
|
312
|
|
7
|
|
|||||
Distribution and servicing
|
99
|
|
106
|
|
109
|
|
(7
|
)
|
(9
|
)
|
|
311
|
|
313
|
|
(1
|
)
|
|||||
Furniture and equipment
|
73
|
|
74
|
|
58
|
|
(1
|
)
|
26
|
|
|
208
|
|
174
|
|
20
|
|
|||||
Business development
|
51
|
|
62
|
|
49
|
|
(18
|
)
|
4
|
|
|
164
|
|
163
|
|
1
|
|
|||||
Bank assessment charges
|
49
|
|
47
|
|
51
|
|
4
|
|
(4
|
)
|
|
148
|
|
167
|
|
(11
|
)
|
|||||
Amortization of intangible assets
|
48
|
|
48
|
|
52
|
|
—
|
|
(8
|
)
|
|
145
|
|
157
|
|
(8
|
)
|
|||||
Other
(a)(b)(c)
|
174
|
|
135
|
|
128
|
|
29
|
|
36
|
|
|
431
|
|
392
|
|
10
|
|
|||||
Total noninterest expense
|
$
|
2,738
|
|
$
|
2,747
|
|
$
|
2,654
|
|
—
|
%
|
3
|
%
|
|
$
|
8,224
|
|
$
|
7,951
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Full-time employees at period end
|
52,000
|
|
52,000
|
|
52,900
|
|
—
|
%
|
(2
|
)%
|
|
|
|
|
|
(a)
|
In the first quarter of 2018, we adopted new accounting guidance included in Accounting Standards Update (“ASU”) 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. See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Beginning in the first quarter of 2018, clearing expense, which was previously included in other expense, was included with sub-custodian expense. Prior periods have been reclassified.
|
(c)
|
Beginning in the first quarter of 2018, merger and integration (“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.
|
|
|
|
|
|
|
|
|
|
|
|
YTD18
|
|
||||||||||||||||
(dollars in millions unless otherwise noted)
|
|
|
|
|
|
3Q18 vs.
|
|
|
|
vs.
|
||||||||||||||||||
3Q18
|
|
2Q18
|
|
1Q18
|
|
4Q17
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|
YTD18
|
|
YTD17
|
|
YTD17
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Asset servicing
|
$
|
1,136
|
|
$
|
1,135
|
|
$
|
1,143
|
|
$
|
1,106
|
|
$
|
1,081
|
|
—
|
%
|
5
|
%
|
|
$
|
3,414
|
|
$
|
3,180
|
|
7
|
%
|
Clearing services
|
383
|
|
391
|
|
414
|
|
400
|
|
381
|
|
(2
|
)
|
1
|
|
|
1,188
|
|
1,149
|
|
3
|
|
|||||||
Issuer services
|
288
|
|
265
|
|
260
|
|
196
|
|
288
|
|
9
|
|
—
|
|
|
813
|
|
779
|
|
4
|
|
|||||||
Treasury services
|
136
|
|
140
|
|
138
|
|
136
|
|
141
|
|
(3
|
)
|
(4
|
)
|
|
414
|
|
419
|
|
(1
|
)
|
|||||||
Total investment services fees
|
1,943
|
|
1,931
|
|
1,955
|
|
1,838
|
|
1,891
|
|
1
|
|
3
|
|
|
5,829
|
|
5,527
|
|
5
|
|
|||||||
Foreign exchange and other trading revenue
|
161
|
|
172
|
|
169
|
|
168
|
|
154
|
|
(6
|
)
|
5
|
|
|
502
|
|
452
|
|
11
|
|
|||||||
Other
(a)
|
126
|
|
130
|
|
126
|
|
135
|
|
142
|
|
(3
|
)
|
(11
|
)
|
|
382
|
|
407
|
|
(6
|
)
|
|||||||
Total fee and other revenue
|
2,230
|
|
2,233
|
|
2,250
|
|
2,141
|
|
2,187
|
|
—
|
|
2
|
|
|
6,713
|
|
6,386
|
|
5
|
|
|||||||
Net interest revenue
|
827
|
|
874
|
|
844
|
|
813
|
|
777
|
|
(5
|
)
|
6
|
|
|
2,545
|
|
2,245
|
|
13
|
|
|||||||
Total revenue
|
3,057
|
|
3,107
|
|
3,094
|
|
2,954
|
|
2,964
|
|
(2
|
)
|
3
|
|
|
9,258
|
|
8,631
|
|
7
|
|
|||||||
Provision for credit losses
|
1
|
|
1
|
|
(7
|
)
|
(2
|
)
|
(2
|
)
|
N/M
|
N/M
|
|
(5
|
)
|
(5
|
)
|
N/M
|
||||||||||
Noninterest expense (excluding amortization of intangible assets)
|
1,995
|
|
1,931
|
|
1,913
|
|
2,060
|
|
1,837
|
|
3
|
|
9
|
|
|
5,839
|
|
5,538
|
|
5
|
|
|||||||
Amortization of intangible assets
|
35
|
|
36
|
|
36
|
|
37
|
|
37
|
|
(3
|
)
|
(5
|
)
|
|
107
|
|
112
|
|
(4
|
)
|
|||||||
Total noninterest expense
|
2,030
|
|
1,967
|
|
1,949
|
|
2,097
|
|
1,874
|
|
3
|
|
8
|
|
|
5,946
|
|
5,650
|
|
5
|
|
|||||||
Income before taxes
|
$
|
1,026
|
|
$
|
1,139
|
|
$
|
1,152
|
|
$
|
859
|
|
$
|
1,092
|
|
(10
|
)%
|
(6
|
)%
|
|
$
|
3,317
|
|
$
|
2,986
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Pre-tax operating margin
|
34
|
%
|
37
|
%
|
37
|
%
|
29
|
%
|
37
|
%
|
|
|
|
|
36
|
%
|
35
|
%
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Securities lending revenue
|
$
|
52
|
|
$
|
55
|
|
$
|
48
|
|
$
|
45
|
|
$
|
41
|
|
(5
|
)%
|
27
|
%
|
|
$
|
155
|
|
$
|
123
|
|
26
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total revenue by line of business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Asset Servicing
|
$
|
1,458
|
|
$
|
1,520
|
|
$
|
1,519
|
|
$
|
1,459
|
|
$
|
1,420
|
|
(4
|
)%
|
3
|
%
|
|
$
|
4,497
|
|
$
|
4,144
|
|
9
|
%
|
Pershing
|
558
|
|
558
|
|
581
|
|
569
|
|
542
|
|
—
|
|
3
|
|
|
1,697
|
|
1,611
|
|
5
|
|
|||||||
Issuer Services
|
453
|
|
431
|
|
418
|
|
352
|
|
442
|
|
5
|
|
2
|
|
|
1,302
|
|
1,236
|
|
5
|
|
|||||||
Treasury Services
|
324
|
|
329
|
|
321
|
|
322
|
|
316
|
|
(2
|
)
|
3
|
|
|
974
|
|
929
|
|
5
|
|
|||||||
Clearance and Collateral Management
|
264
|
|
269
|
|
255
|
|
252
|
|
244
|
|
(2
|
)
|
8
|
|
|
788
|
|
711
|
|
11
|
|
|||||||
Total revenue by line of business
|
$
|
3,057
|
|
$
|
3,107
|
|
$
|
3,094
|
|
$
|
2,954
|
|
$
|
2,964
|
|
(2
|
)%
|
3
|
%
|
|
$
|
9,258
|
|
$
|
8,631
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average loans
|
$
|
35,044
|
|
$
|
38,002
|
|
$
|
39,200
|
|
$
|
38,845
|
|
$
|
38,038
|
|
(8
|
)%
|
(8
|
)%
|
|
$
|
37,400
|
|
$
|
40,578
|
|
(8
|
)%
|
Average deposits
|
$
|
192,741
|
|
$
|
203,064
|
|
$
|
214,130
|
|
$
|
204,680
|
|
$
|
198,299
|
|
(5
|
)%
|
(3
|
)%
|
|
$
|
203,233
|
|
$
|
198,796
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
AUC/A at period end
(in trillions) (b)
|
$
|
34.5
|
|
$
|
33.6
|
|
$
|
33.5
|
|
$
|
33.3
|
|
$
|
32.2
|
|
3
|
%
|
7
|
%
|
|
$
|
34.5
|
|
$
|
32.2
|
|
7
|
%
|
Market value of securities on loan at period end
(in billions) (c)
|
$
|
415
|
|
$
|
432
|
|
$
|
436
|
|
$
|
408
|
|
$
|
382
|
|
(4
|
)%
|
9
|
%
|
|
$
|
415
|
|
$
|
382
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Pershing:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average active clearing accounts (U.S. platform)
(in thousands)
|
6,108
|
|
6,080
|
|
6,075
|
|
6,126
|
|
6,203
|
|
—
|
%
|
(2
|
)%
|
|
|
|
|
||||||||||
Average long-term mutual fund assets (U.S. platform)
|
$
|
527,336
|
|
$
|
512,645
|
|
$
|
514,542
|
|
$
|
508,873
|
|
$
|
500,998
|
|
3
|
%
|
5
|
%
|
|
|
|
|
|||||
Average investor margin loans (U.S. platform)
|
$
|
10,696
|
|
$
|
10,772
|
|
$
|
10,930
|
|
$
|
9,822
|
|
$
|
8,886
|
|
(1
|
)%
|
20
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Clearance and Collateral Management:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average tri-party collateral management balances
(in billions)
|
$
|
2,995
|
|
$
|
2,801
|
|
$
|
2,698
|
|
$
|
2,606
|
|
$
|
2,534
|
|
7
|
%
|
18
|
%
|
|
|
|
|
(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
$1.4 trillion
at
Sept. 30, 2018
and
June 30, 2018
, and
$1.3 trillion
at
March 31, 2018
,
Dec. 31, 2017
and
Sept. 30, 2017
.
|
(c)
|
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
,
$73 billion
at
March 31, 2018
,
$71 billion
at
Dec. 31, 2017
and
$68 billion
at
Sept. 30, 2017
.
|
•
|
We are the primary provider of U.S. government securities clearance and a provider of non-U.S. government securities clearance.
|
•
|
We are a leading provider of tri-party collateral management services with an average of
$3.0 trillion
serviced globally including approximately $2.1 trillion of the U.S. tri-party repo market.
|
•
|
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 $3.7 trillion in 34 separate markets.
|
(a)
|
Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. Additionally, other revenue includes asset servicing, treasury services, foreign exchange and other trading revenue and investment and other income.
|
(b)
|
On a constant currency basis, investment management and performance fees increased
3%
(Non-GAAP) compared with the
third quarter of 2017
. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
41
for the reconciliation of this Non-GAAP measure.
|
(c)
|
Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
41
for the reconciliation of this Non-GAAP measure. In the first quarter of 2018, the adjusted pre-tax margin
–
Non-GAAP for prior periods was restated to include amortization of intangible assets and the provision for credit losses.
|
AUM trends
(a)
|
|
|
|
|
|
|
3Q18 vs.
|
|||||||||||||
(dollars in billions)
|
3Q18
|
|
2Q18
|
|
1Q18
|
|
|
4Q17
|
|
3Q17
|
|
2Q18
|
|
3Q17
|
|
|||||
AUM at period end, by product type:
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
$
|
167
|
|
$
|
160
|
|
$
|
161
|
|
|
$
|
161
|
|
$
|
158
|
|
4
|
%
|
6
|
%
|
Fixed income
|
202
|
|
197
|
|
206
|
|
|
206
|
|
206
|
|
3
|
|
(2
|
)
|
|||||
Index
|
352
|
|
334
|
|
333
|
|
|
350
|
|
333
|
|
5
|
|
6
|
|
|||||
Liability-driven investments
(b)
|
652
|
|
663
|
|
700
|
|
|
667
|
|
622
|
|
(2
|
)
|
5
|
|
|||||
Multi-asset and alternative investments
|
184
|
|
181
|
|
185
|
|
|
214
|
|
207
|
|
2
|
|
(11
|
)
|
|||||
Cash
|
271
|
|
270
|
|
283
|
|
|
295
|
|
298
|
|
—
|
|
(9
|
)
|
|||||
Total AUM by product type
|
$
|
1,828
|
|
$
|
1,805
|
|
$
|
1,868
|
|
|
$
|
1,893
|
|
$
|
1,824
|
|
1
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in AUM:
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance of AUM
|
$
|
1,805
|
|
$
|
1,868
|
|
$
|
1,893
|
|
|
$
|
1,824
|
|
$
|
1,771
|
|
|
|
||
Net inflows (outflows):
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term strategies:
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
(2
|
)
|
(3
|
)
|
—
|
|
|
(6
|
)
|
(2
|
)
|
|
|
|||||||
Fixed income
|
2
|
|
(4
|
)
|
7
|
|
|
(2
|
)
|
4
|
|
|
|
|||||||
Liability-driven investments
(b)
|
16
|
|
2
|
|
13
|
|
|
23
|
|
(2
|
)
|
|
|
|||||||
Multi-asset and alternative investments
|
2
|
|
(3
|
)
|
(3
|
)
|
|
2
|
|
3
|
|
|
|
|||||||
Total long-term active strategies inflows (outflows)
|
18
|
|
(8
|
)
|
17
|
|
|
17
|
|
3
|
|
|
|
|||||||
Index
|
(3
|
)
|
(7
|
)
|
(13
|
)
|
|
(1
|
)
|
(3
|
)
|
|
|
|||||||
Total long-term strategies inflows (outflows)
|
15
|
|
(15
|
)
|
4
|
|
|
16
|
|
—
|
|
|
|
|||||||
Short-term strategies:
|
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
—
|
|
(11
|
)
|
(14
|
)
|
|
(4
|
)
|
10
|
|
|
|
|||||||
Total net inflows (outflows)
|
15
|
|
(26
|
)
|
(10
|
)
|
|
12
|
|
10
|
|
|
|
|||||||
Net market impact
|
18
|
|
17
|
|
(14
|
)
|
|
47
|
|
17
|
|
|
|
|||||||
Net currency impact
|
(10
|
)
|
(53
|
)
|
29
|
|
|
10
|
|
26
|
|
|
|
|||||||
Divestitures/Other
|
—
|
|
(1
|
)
|
(30
|
)
|
(c)
|
—
|
|
—
|
|
|
|
|||||||
Ending balance of AUM
|
$
|
1,828
|
|
$
|
1,805
|
|
$
|
1,868
|
|
|
$
|
1,893
|
|
$
|
1,824
|
|
1
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wealth Management client assets
(d)
|
$
|
261
|
|
$
|
254
|
|
$
|
246
|
|
|
$
|
251
|
|
$
|
245
|
|
3
|
%
|
7
|
%
|
(a)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business.
|
(b)
|
Includes currency overlay AUM.
|
(c)
|
Primarily reflects a change in methodology beginning in the first quarter of 2018 to exclude AUM related to equity method investments as well as the CenterSquare divestiture.
|
(d)
|
Includes AUM and AUC/A in the Wealth Management business.
|
|
|
|
|
|
|
|
|
||||||||||||||
(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
|
|
Critical policy
|
Reference
|
Allowance for loan losses and allowance for lending-related commitments
|
2017 Annual Report, pages 29-30
|
Fair value of financial instruments and derivatives
|
2017 Annual Report, pages 30-32
|
OTTI
|
2017 Annual Report, pages 32-33
|
Goodwill and other intangibles
|
2017 Annual Report, pages 33-34
|
Pension accounting
|
2017 Annual Report, pages 34-35
|
Securities portfolio
|
June 30, 2018
|
|
|
3Q18
change in
unrealized
gain (loss)
|
|
Sept. 30, 2018
|
Fair value
as a % of amortized
cost
(a)
|
|
Unrealized
gain (loss)
|
|
|
Ratings
(b)
|
||||||||||||||||||
|
|
|
|
|
BB+
and
lower
|
|
||||||||||||||||||||||||
(dollars in millions)
|
Fair
value
|
|
|
Amortized
cost
|
|
Fair
value
|
|
|
|
AAA/
AA-
|
A+/
A-
|
BBB+/
BBB-
|
Not
rated
|
|||||||||||||||||
Agency RMBS
|
$
|
49,741
|
|
|
$
|
(214
|
)
|
$
|
50,934
|
|
$
|
49,555
|
|
|
97
|
%
|
$
|
(1,379
|
)
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S. Treasury
|
23,962
|
|
|
(61
|
)
|
24,827
|
|
24,622
|
|
|
99
|
|
(205
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Sovereign debt/sovereign guaranteed
(c)
|
13,069
|
|
|
(45
|
)
|
12,338
|
|
12,386
|
|
|
100
|
|
48
|
|
|
74
|
|
6
|
|
19
|
|
1
|
|
—
|
|
|||||
Agency commercial MBS
|
11,019
|
|
|
(2
|
)
|
11,129
|
|
11,050
|
|
|
99
|
|
(79
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
CLOs
|
3,177
|
|
|
(3
|
)
|
3,368
|
|
3,363
|
|
|
100
|
|
(5
|
)
|
|
98
|
|
—
|
|
—
|
|
1
|
|
1
|
|
|||||
U.S. government agencies
|
3,269
|
|
|
(1
|
)
|
3,143
|
|
3,127
|
|
|
99
|
|
(16
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Foreign covered bonds
(d)
|
2,976
|
|
|
(8
|
)
|
3,066
|
|
3,054
|
|
|
100
|
|
(12
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
State and political subdivisions
|
2,646
|
|
|
(13
|
)
|
2,372
|
|
2,352
|
|
|
99
|
|
(20
|
)
|
|
78
|
|
18
|
|
—
|
|
—
|
|
4
|
|
|||||
Non-agency RMBS
(e)
|
1,621
|
|
|
(17
|
)
|
1,265
|
|
1,529
|
|
|
121
|
|
264
|
|
|
7
|
|
9
|
|
10
|
|
64
|
|
10
|
|
|||||
Non-agency commercial MBS
|
1,391
|
|
|
1
|
|
1,484
|
|
1,473
|
|
|
99
|
|
(11
|
)
|
|
96
|
|
4
|
|
—
|
|
—
|
|
—
|
|
|||||
Corporate bonds
|
1,146
|
|
|
(1
|
)
|
1,140
|
|
1,118
|
|
|
98
|
|
(22
|
)
|
|
12
|
|
72
|
|
16
|
|
—
|
|
—
|
|
|||||
Other
(f)
|
4,484
|
|
|
(3
|
)
|
4,480
|
|
4,464
|
|
|
100
|
|
(16
|
)
|
|
98
|
|
—
|
|
—
|
|
—
|
|
2
|
|
|||||
Total securities
|
$
|
118,501
|
|
(g)
|
$
|
(367
|
)
|
$
|
119,546
|
|
$
|
118,093
|
|
(g)
|
99
|
%
|
$
|
(1,453
|
)
|
(g)(h)
|
94
|
%
|
2
|
%
|
3
|
%
|
1
|
%
|
—
|
%
|
(a)
|
Amortized cost reflects historical impairments.
|
(b)
|
Represents ratings by S&P or the equivalent.
|
(c)
|
Primarily consists of exposure to UK, France, Germany, Spain, Italy, the Netherlands and Ireland.
|
(d)
|
Primarily consists of exposure to Canada, UK, Australia and Sweden.
|
(e)
|
Includes residential mortgage-backed securities (“RMBS”) that were included in the former Grantor Trust of
$943 million
at
June 30, 2018
and
$889 million
at
Sept. 30, 2018
.
|
(f)
|
Includes commercial paper with a fair value of
$699 million
at
June 30, 2018
. There was
no
commercial paper at
Sept. 30, 2018
.
|
(g)
|
Includes net unrealized gains on derivatives hedging securities available-for-sale of
$373 million
at
June 30, 2018
and
$593 million
at
Sept. 30, 2018
.
|
(h)
|
Unrealized losses of
$311 million
at
Sept. 30, 2018
related to available-for-sale securities, net of hedges.
|
Net premium amortization and discount accretion of securities
(a)
|
|
|
|
|
|
||||||||||
(dollars in millions)
|
3Q18
|
|
2Q18
|
|
1Q18
|
|
4Q17
|
|
3Q17
|
|
|||||
Amortizable purchase premium (net of discount) relating to securities:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
1,536
|
|
$
|
1,642
|
|
$
|
1,827
|
|
$
|
1,987
|
|
$
|
2,053
|
|
Estimated average life remaining at period end
(in years)
|
5.2
|
|
5.3
|
|
5.2
|
|
5.0
|
|
5.0
|
|
|||||
Amortization
|
$
|
108
|
|
$
|
115
|
|
$
|
122
|
|
$
|
135
|
|
$
|
140
|
|
Accretable discount related to the prior restructuring of the securities portfolio:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
224
|
|
$
|
239
|
|
$
|
250
|
|
$
|
274
|
|
$
|
302
|
|
Estimated average life remaining at period end
(in years)
|
6.3
|
|
6.3
|
|
6.3
|
|
6.3
|
|
6.5
|
|
|||||
Accretion
|
$
|
20
|
|
$
|
24
|
|
$
|
25
|
|
$
|
26
|
|
$
|
24
|
|
(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.
|
Total exposure – consolidated
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||
(in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||||
Financial institutions
|
$
|
10.4
|
|
$
|
34.0
|
|
$
|
44.4
|
|
|
$
|
13.1
|
|
$
|
32.5
|
|
$
|
45.6
|
|
Commercial
|
2.1
|
|
15.3
|
|
17.4
|
|
|
2.9
|
|
18.0
|
|
20.9
|
|
||||||
Subtotal institutional
|
12.5
|
|
49.3
|
|
61.8
|
|
|
16.0
|
|
50.5
|
|
66.5
|
|
||||||
Wealth management loans and mortgages
|
16.0
|
|
0.9
|
|
16.9
|
|
|
16.5
|
|
1.1
|
|
17.6
|
|
||||||
Commercial real estate
|
5.0
|
|
3.6
|
|
8.6
|
|
|
4.9
|
|
3.5
|
|
8.4
|
|
||||||
Lease financings
|
1.3
|
|
—
|
|
1.3
|
|
|
1.3
|
|
—
|
|
1.3
|
|
||||||
Other residential mortgages
|
0.6
|
|
—
|
|
0.6
|
|
|
0.7
|
|
—
|
|
0.7
|
|
||||||
Overdrafts
|
3.8
|
|
—
|
|
3.8
|
|
|
5.1
|
|
—
|
|
5.1
|
|
||||||
Other
|
1.3
|
|
—
|
|
1.3
|
|
|
1.2
|
|
—
|
|
1.2
|
|
||||||
Subtotal non-margin loans
|
40.5
|
|
53.8
|
|
94.3
|
|
|
45.7
|
|
55.1
|
|
100.8
|
|
||||||
Margin loans
|
13.5
|
|
—
|
|
13.5
|
|
|
15.8
|
|
—
|
|
15.8
|
|
||||||
Total
|
$
|
54.0
|
|
$
|
53.8
|
|
$
|
107.8
|
|
|
$
|
61.5
|
|
$
|
55.1
|
|
$
|
116.6
|
|
Financial institutions
portfolio exposure
(dollars in billions)
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
% Inv.
grade
|
|
% due
<1 yr.
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|||||||
Securities industry
|
$
|
2.3
|
|
$
|
21.4
|
|
$
|
23.7
|
|
99
|
%
|
99
|
%
|
|
$
|
3.6
|
|
$
|
19.2
|
|
$
|
22.8
|
|
Asset managers
|
1.3
|
|
6.3
|
|
7.6
|
|
98
|
|
85
|
|
|
1.4
|
|
6.4
|
|
7.8
|
|
||||||
Banks
|
5.9
|
|
1.3
|
|
7.2
|
|
69
|
|
93
|
|
|
7.0
|
|
1.2
|
|
8.2
|
|
||||||
Insurance
|
0.1
|
|
3.1
|
|
3.2
|
|
100
|
|
11
|
|
|
0.1
|
|
3.5
|
|
3.6
|
|
||||||
Government
|
0.1
|
|
0.5
|
|
0.6
|
|
100
|
|
48
|
|
|
0.1
|
|
0.9
|
|
1.0
|
|
||||||
Other
|
0.7
|
|
1.4
|
|
2.1
|
|
97
|
|
62
|
|
|
0.9
|
|
1.3
|
|
2.2
|
|
||||||
Total
|
$
|
10.4
|
|
$
|
34.0
|
|
$
|
44.4
|
|
94
|
%
|
87
|
%
|
|
$
|
13.1
|
|
$
|
32.5
|
|
$
|
45.6
|
|
Commercial portfolio exposure
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||||||
(dollars in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
% Inv.
grade
|
|
% due
<1 yr.
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Manufacturing
|
$
|
0.9
|
|
$
|
5.2
|
|
$
|
6.1
|
|
95
|
%
|
9
|
%
|
|
$
|
1.3
|
|
$
|
6.1
|
|
$
|
7.4
|
|
Services and other
|
0.6
|
|
4.7
|
|
5.3
|
|
97
|
|
27
|
|
|
0.9
|
|
6.0
|
|
6.9
|
|
||||||
Energy and utilities
|
0.5
|
|
4.2
|
|
4.7
|
|
95
|
|
12
|
|
|
0.7
|
|
4.4
|
|
5.1
|
|
||||||
Media and telecom
|
0.1
|
|
1.2
|
|
1.3
|
|
94
|
|
9
|
|
|
—
|
|
1.5
|
|
1.5
|
|
||||||
Total
|
$
|
2.1
|
|
$
|
15.3
|
|
$
|
17.4
|
|
95
|
%
|
15
|
%
|
|
$
|
2.9
|
|
$
|
18.0
|
|
$
|
20.9
|
|
Allowance for credit losses activity
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Dec. 31, 2017
|
|
Sept. 30, 2017
|
|
||||
(dollars in millions)
|
||||||||||||
Non-margin loans
|
$
|
40,519
|
|
$
|
42,719
|
|
$
|
45,755
|
|
$
|
45,196
|
|
Margin loans
|
13,468
|
|
15,057
|
|
15,785
|
|
13,872
|
|
||||
Total loans
|
$
|
53,987
|
|
$
|
57,776
|
|
$
|
61,540
|
|
$
|
59,068
|
|
Beginning balance of allowance for credit losses
|
$
|
254
|
|
$
|
256
|
|
$
|
265
|
|
$
|
270
|
|
Provision for credit losses
|
(3
|
)
|
(3
|
)
|
(6
|
)
|
(6
|
)
|
||||
Net recoveries:
|
|
|
|
|
||||||||
Other residential mortgages
|
—
|
|
1
|
|
2
|
|
1
|
|
||||
Net recoveries
|
—
|
|
1
|
|
2
|
|
1
|
|
||||
Ending balance of allowance for credit losses
|
$
|
251
|
|
$
|
254
|
|
$
|
261
|
|
$
|
265
|
|
Allowance for loan losses
|
$
|
140
|
|
$
|
145
|
|
$
|
159
|
|
$
|
161
|
|
Allowance for lending-related commitments
|
111
|
|
109
|
|
102
|
|
104
|
|
||||
Allowance for loan losses as a percentage of total loans
|
0.26
|
%
|
0.25
|
%
|
0.26
|
%
|
0.27
|
%
|
||||
Allowance for loan losses as a percentage of non-margin loans
|
0.35
|
|
0.34
|
|
0.35
|
|
0.36
|
|
||||
Total allowance for credit losses as a percentage of total loans
|
0.46
|
|
0.44
|
|
0.42
|
|
0.45
|
|
||||
Total allowance for credit losses as a percentage of non-margin loans
|
0.62
|
|
0.59
|
|
0.57
|
|
0.59
|
|
Allocation of allowance
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Dec. 31, 2017
|
|
Sept. 30, 2017
|
|
|
Commercial
|
30
|
%
|
30
|
%
|
30
|
%
|
31
|
%
|
|
Commercial real estate
|
29
|
|
29
|
|
29
|
|
28
|
|
|
Foreign
|
13
|
|
13
|
|
13
|
|
13
|
|
|
Financial institutions
|
10
|
|
10
|
|
9
|
|
9
|
|
|
Wealth management
(a)
|
9
|
|
9
|
|
8
|
|
8
|
|
|
Other residential mortgages
|
7
|
|
7
|
|
8
|
|
8
|
|
|
Lease financing
|
2
|
|
2
|
|
3
|
|
3
|
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Includes the allowance for wealth management mortgages.
|
(a)
|
Includes the impact of offsetting under enforceable netting agreements of
$25,922 million
for the
third quarter of 2018
,
$17,975 million
for the
second quarter of 2018
and
$6,518 million
for the
third quarter of 2017
.
|
(b)
|
Includes the impact of offsetting under enforceable netting agreements of $58,540 million at
Sept. 30, 2018
, $36,766 million at
June 30, 2018
and $19,171 million at
Sept. 30, 2017
.
|
(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
$16,252 million
in the
third quarter of 2018
,
$16,349 million
in the
second quarter of 2018
and
$18,516 million
in the
third quarter of 2017
.
|
Commercial paper
|
Quarter ended
|
||||||||
(dollars in millions)
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|||
Maximum month-end balance during the quarter
|
$
|
4,422
|
|
$
|
4,470
|
|
$
|
4,277
|
|
Average daily balance
|
$
|
3,102
|
|
$
|
3,869
|
|
$
|
2,736
|
|
Weighted-average rate during the quarter
|
2.10
|
%
|
2.13
|
%
|
1.15
|
%
|
|||
Ending balance
|
$
|
735
|
|
$
|
2,508
|
|
$
|
2,501
|
|
Weighted-average rate at period end
|
2.06
|
%
|
2.24
|
%
|
1.18
|
%
|
Other borrowed funds
|
Quarter ended
|
||||||||
(dollars in millions)
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|||
Maximum month-end balance during the quarter
|
$
|
3,269
|
|
$
|
3,053
|
|
$
|
3,353
|
|
Average daily balance
|
$
|
2,747
|
|
$
|
2,399
|
|
$
|
2,197
|
|
Weighted-average rate during the quarter
|
2.33
|
%
|
2.40
|
%
|
1.38
|
%
|
|||
Ending balance
|
$
|
2,934
|
|
$
|
3,053
|
|
$
|
3,353
|
|
Weighted-average rate at period end
|
2.48
|
%
|
2.53
|
%
|
1.56
|
%
|
Available and liquid funds
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
Average
|
||||||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
|||||||||
Available funds:
|
|
|
|
|
|
||||||||||
Liquid funds:
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with banks
|
$
|
14,519
|
|
$
|
11,979
|
|
$
|
14,691
|
|
$
|
15,748
|
|
$
|
15,899
|
|
Federal funds sold and securities purchased under resale agreements
|
28,722
|
|
28,135
|
|
26,738
|
|
28,051
|
|
28,120
|
|
|||||
Total liquid funds
|
43,241
|
|
40,114
|
|
41,429
|
|
43,799
|
|
44,019
|
|
|||||
Cash and due from banks
|
5,047
|
|
5,382
|
|
5,000
|
|
4,916
|
|
4,961
|
|
|||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
74,725
|
|
91,510
|
|
61,216
|
|
69,676
|
|
70,430
|
|
|||||
Total available funds
|
$
|
123,013
|
|
$
|
137,006
|
|
$
|
107,645
|
|
$
|
118,391
|
|
$
|
119,410
|
|
Total available funds as a percentage of total assets
|
35
|
%
|
37
|
%
|
32
|
%
|
34
|
%
|
35
|
%
|
Credit ratings at Sept. 30, 2018
|
|
|
|
|
|
|
|
|
Moody’s
|
|
S&P
|
|
Fitch
|
|
DBRS
|
Parent:
|
|
|
|
|
|
|
|
Long-term senior debt
|
A1
|
|
A
|
|
AA-
|
|
AA (low)
|
Subordinated debt
|
A2
|
|
A-
|
|
A+
|
|
A (high)
|
Preferred stock
|
Baa1
|
|
BBB
|
|
BBB
|
|
A (low)
|
Outlook - Parent:
|
Stable
|
|
Stable
|
|
Stable
|
|
Stable
|
|
|||||||
The Bank of New York Mellon:
|
|||||||
Long-term senior debt
|
Aa2
|
|
AA-
|
|
AA
|
|
AA
|
Subordinated debt
|
Aa3
|
|
A
|
|
A+
|
|
NR
|
Long-term deposits
|
Aa1
|
|
AA-
|
|
AA+
|
|
AA
|
Short-term deposits
|
P1
|
|
A-1+
|
|
F1+
|
|
R-1 (high)
|
Commercial paper
|
P1
|
|
A-1+
|
|
F1+
|
|
R-1 (high)
|
|
|
|
|
|
|
|
|
BNY Mellon, N.A.:
|
|
|
|
|
|
|
|
Long-term senior debt
|
Aa2
|
|
AA-
|
|
AA
|
(a)
|
AA
|
Long-term deposits
|
Aa1
|
|
AA-
|
|
AA+
|
|
AA
|
Short-term deposits
|
P1
|
|
A-1+
|
|
F1+
|
|
R-1 (high)
|
|
|
|
|
|
|
|
|
Outlook - Banks:
|
Stable
|
|
Stable
|
|
Stable
|
|
Stable
|
(a)
|
Represents senior debt issuer default rating.
|
Consolidated HQLA and LCR
|
Sept. 30, 2018
|
|
|
(dollars in billions)
|
|||
Securities
(a)
|
$
|
106
|
|
Cash
(b)
|
68
|
|
|
Total consolidated HQLA
(c)
|
$
|
174
|
|
|
|
||
Total consolidated HQLA - average
(c)
|
$
|
158
|
|
Average LCR
|
121
|
%
|
(a)
|
Primarily includes securities of U.S. government-sponsored enterprises, U.S. Treasury, sovereign securities, U.S. agency and investment-grade corporate debt.
|
(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
$130 billion
at
Sept. 30, 2018
and averaged
$117 billion
for the
third quarter of 2018
.
|
Capital data
(dollars in millions except per share amounts; common shares in thousands)
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Dec. 31, 2017
|
|
|||
Average common equity to average assets
|
11.4
|
%
|
10.9
|
%
|
10.5
|
%
|
|||
|
|
|
|
||||||
At period end:
|
|
|
|
||||||
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
|
%
|
|||
Total BNY Mellon shareholders’ equity
|
$
|
41,560
|
|
$
|
41,505
|
|
$
|
41,251
|
|
Total BNY Mellon common shareholders’ equity
(a)
|
$
|
38,018
|
|
$
|
37,963
|
|
$
|
37,709
|
|
BNY Mellon tangible common shareholders’ equity – Non-GAAP
(a)
|
$
|
19,135
|
|
$
|
19,000
|
|
$
|
18,486
|
|
Book value per common share
(a)
|
$
|
38.45
|
|
$
|
37.97
|
|
$
|
37.21
|
|
Tangible book value per common share – Non-GAAP
(a)
|
$
|
19.35
|
|
$
|
19.00
|
|
$
|
18.24
|
|
Closing stock price per common share
|
$
|
50.99
|
|
$
|
53.93
|
|
$
|
53.86
|
|
Market capitalization
|
$
|
50,418
|
|
$
|
53,927
|
|
$
|
54,584
|
|
Common shares outstanding
|
988,777
|
|
999,945
|
|
1,013,442
|
|
|||
|
|
|
|
||||||
Cash dividends per common share
|
$
|
0.28
|
|
$
|
0.24
|
|
$
|
0.24
|
|
Common dividend payout ratio
|
26
|
%
|
23
|
%
|
22
|
%
|
|||
Common dividend yield
(annualized)
|
2.2
|
%
|
1.8
|
%
|
1.8
|
%
|
(a)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
41
for a reconciliation of GAAP to Non-GAAP.
|
Consolidated and largest bank subsidiary regulatory capital ratios
|
Sept. 30, 2018
|
|
|
|
Dec. 31, 2017
|
|
|||||||||||
Well capitalized
|
|
|
Minimum
required |
|
|
Capital
ratios
|
|
|
June 30, 2018
|
|
|
Fully phased-in
|
|
Transitional
|
|
(b)
|
|
|
(a)
|
|
|
||||||||||||||
Consolidated regulatory capital ratios
:
(c)(d)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Advanced Approach:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CET1 ratio
|
N/A
|
|
(e)
|
7.5
|
%
|
|
11.2
|
%
|
|
11.0
|
%
|
|
10.3
|
%
|
10.7
|
%
|
|
Tier 1 capital ratio
|
6
|
%
|
|
9
|
|
|
13.3
|
|
|
13.1
|
|
|
12.3
|
|
12.7
|
|
|
Total capital ratio
|
10
|
%
|
|
11
|
|
|
14.1
|
|
|
13.8
|
|
|
13.0
|
|
13.4
|
|
|
Standardized Approach:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CET1 ratio
|
N/A
|
|
(e)
|
7.5
|
%
|
|
12.4
|
%
|
|
11.9
|
%
|
|
11.5
|
%
|
11.9
|
%
|
|
Tier 1 capital ratio
|
6
|
%
|
|
9
|
|
|
14.7
|
|
|
14.1
|
|
|
13.7
|
|
14.2
|
|
|
Total capital ratio
|
10
|
%
|
|
11
|
|
|
15.7
|
|
|
15.1
|
|
|
14.7
|
|
15.1
|
|
|
Tier 1 leverage ratio
|
N/A
|
|
(e)
|
4
|
|
|
7.0
|
|
|
6.7
|
|
|
6.4
|
|
6.6
|
|
|
SLR
(f)
|
N/A
|
|
(e)
|
5
|
|
|
6.4
|
|
|
6.1
|
|
|
5.9
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The Bank of New York Mellon regulatory
capital ratios
:
(c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Advanced Approach:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CET1 ratio
|
6.5
|
%
|
|
6.375
|
%
|
|
14.9
|
%
|
|
14.9
|
%
|
|
N/A
|
|
14.1
|
%
|
|
Tier 1 capital ratio
|
8
|
|
|
7.875
|
|
|
15.2
|
|
|
15.2
|
|
|
N/A
|
|
14.4
|
|
|
Total capital ratio
|
10
|
|
|
9.875
|
|
|
15.6
|
|
|
15.6
|
|
|
N/A
|
|
14.7
|
|
|
Tier 1 leverage ratio
|
5
|
|
|
4
|
|
|
8.2
|
|
|
7.9
|
|
|
N/A
|
|
7.6
|
|
|
SLR
(f)
|
6
|
|
|
3
|
|
|
7.4
|
|
|
7.1
|
|
|
6.7
|
|
6.9
|
|
|
(a)
|
Minimum requirements for Sept. 30, 2018 include minimum thresholds plus currently applicable buffers.
|
(b)
|
Reflects transitional adjustments to CET1, Tier 1 capital, Tier 2 capital required in 2017 under the U.S. capital rules.
|
(c)
|
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 Tier 1 leverage ratio is based on Tier 1 capital and quarterly average total assets.
|
(d)
|
See page
36
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.
|
(e)
|
The Federal Reserve’s regulations do not establish well capitalized thresholds for these measures for BHCs.
|
(f)
|
SLR became a binding measure on Jan. 1, 2018. The SLR is based on Tier 1 capital and total leverage exposure, which includes certain off-balance sheet exposures.
|
Capital components and risk-weighted assets
|
|
|
Dec. 31, 2017
|
|
|||||||||
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Fully phased-in
|
|
Transitional
Approach |
|
(a)
|
||||
(in millions)
|
|||||||||||||
CET1:
|
|
|
|
|
|
||||||||
Common shareholders’ equity
|
$
|
38,018
|
|
$
|
37,963
|
|
$
|
37,709
|
|
$
|
37,859
|
|
|
Adjustments for:
|
|
|
|
|
|
||||||||
Goodwill and intangible assets
(b)
|
(18,883
|
)
|
(18,963
|
)
|
(19,223
|
)
|
(18,684
|
)
|
|
||||
Net pension fund assets
|
(218
|
)
|
(216
|
)
|
(211
|
)
|
(169
|
)
|
|
||||
Equity method investments
|
(368
|
)
|
(363
|
)
|
(387
|
)
|
(372
|
)
|
|
||||
Deferred tax assets
|
(42
|
)
|
(41
|
)
|
(41
|
)
|
(33
|
)
|
|
||||
Other
|
10
|
|
6
|
|
(9
|
)
|
(8
|
)
|
|
||||
Total CET1
|
18,517
|
|
18,386
|
|
17,838
|
|
18,593
|
|
|
||||
Other Tier 1 capital:
|
|
|
|
|
|
||||||||
Preferred stock
|
3,542
|
|
3,542
|
|
3,542
|
|
3,542
|
|
|
||||
Deferred tax assets
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
|
||||
Net pension fund assets
|
—
|
|
—
|
|
—
|
|
(42
|
)
|
|
||||
Other
|
(57
|
)
|
(51
|
)
|
(41
|
)
|
(41
|
)
|
|
||||
Total Tier 1 capital
|
$
|
22,002
|
|
$
|
21,877
|
|
$
|
21,339
|
|
$
|
22,044
|
|
|
Tier 2 capital:
|
|
|
|
|
|
||||||||
Subordinated debt
|
$
|
1,250
|
|
$
|
1,250
|
|
$
|
1,250
|
|
$
|
1,250
|
|
|
Allowance for credit losses
|
251
|
|
254
|
|
261
|
|
261
|
|
|
||||
Other
|
(6
|
)
|
(6
|
)
|
(12
|
)
|
(12
|
)
|
|
||||
Total Tier 2 capital – Standardized Approach
|
1,495
|
|
1,498
|
|
1,499
|
|
1,499
|
|
|
||||
Excess of expected credit losses
|
53
|
|
53
|
|
31
|
|
31
|
|
|
||||
Less: Allowance for credit losses
|
251
|
|
254
|
|
261
|
|
261
|
|
|
||||
Total Tier 2 capital – Advanced Approach
|
$
|
1,297
|
|
$
|
1,297
|
|
$
|
1,269
|
|
$
|
1,269
|
|
|
Total capital:
|
|
|
|
|
|
||||||||
Standardized Approach
|
$
|
23,497
|
|
$
|
23,375
|
|
$
|
22,838
|
|
$
|
23,543
|
|
|
Advanced Approach
|
$
|
23,299
|
|
$
|
23,174
|
|
$
|
22,608
|
|
$
|
23,313
|
|
|
|
|
|
|
|
|
||||||||
Risk-weighted assets:
|
|
|
|
|
|
||||||||
Standardized Approach
|
$
|
149,348
|
|
$
|
154,612
|
|
$
|
155,324
|
|
$
|
155,621
|
|
|
Advanced Approach:
|
|
|
|
|
|
||||||||
Credit Risk
|
$
|
93,499
|
|
$
|
95,888
|
|
$
|
101,366
|
|
$
|
101,681
|
|
|
Market Risk
|
3,988
|
|
3,804
|
|
3,657
|
|
3,657
|
|
|
||||
Operational Risk
|
67,650
|
|
67,888
|
|
68,688
|
|
68,688
|
|
|
||||
Total Advanced Approach
|
$
|
165,137
|
|
$
|
167,580
|
|
$
|
173,711
|
|
$
|
174,026
|
|
|
|
|
|
|
|
|
||||||||
Average assets for Tier 1 leverage ratio
|
$
|
312,779
|
|
$
|
326,700
|
|
$
|
330,894
|
|
$
|
331,600
|
|
|
Total leverage exposure for SLR
|
$
|
341,566
|
|
$
|
355,773
|
|
$
|
360,543
|
|
$
|
361,249
|
|
|
(a)
|
Reflects transitional adjustments to CET1, Tier 1 capital, Tier 2 capital required in 2017 under the U.S. capital rules.
|
(b)
|
Reduced by deferred tax liabilities associated with intangible assets and tax deductible goodwill.
|
CET1 generation
|
Sept. 30, 2018
|
|
|
(in millions)
|
|||
CET1 – Beginning of period
|
$
|
18,386
|
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
1,075
|
|
|
Goodwill and intangible assets, net of related deferred tax liabilities
|
80
|
|
|
Gross CET1 generated
|
1,155
|
|
|
Capital deployed:
|
|
||
Common stock dividends
|
(283
|
)
|
|
Common stock repurchased
|
(602
|
)
|
|
Total capital deployed
|
(885
|
)
|
|
Other comprehensive income:
|
|
||
Foreign currency translation
|
(58
|
)
|
|
Unrealized loss on assets available-for-sale
|
(144
|
)
|
|
Defined benefit plans
|
18
|
|
|
Unrealized gain on cash flow hedges
|
(4
|
)
|
|
Total other comprehensive income
|
(188
|
)
|
|
Additional paid-in capital
(a)
|
53
|
|
|
Other (deductions) additions:
|
|
||
Net pension fund assets
|
(2
|
)
|
|
Deferred tax assets
|
(1
|
)
|
|
Embedded goodwill
|
(5
|
)
|
|
Other
|
4
|
|
|
Total other deductions
|
(4
|
)
|
|
Net CET1 generated
|
131
|
|
|
CET1 – End of period
|
$
|
18,517
|
|
(a)
|
Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.
|
Capital ratio requirements
|
|
|
Minimum ratios with buffers, as phased-in
(a)
|
|
|||||||
|
Well capitalized
|
|
Minimum ratios
|
|
|
|
|||||
|
|
2018
|
|
|
2019
|
|
|
||||
Capital conservation buffer (CET1)
|
|
|
|
1.875
|
%
|
|
2.5
|
%
|
|
||
U.S. G-SIB surcharge (CET1)
(b)(c)
|
|
|
|
1.125
|
%
|
|
1.5
|
%
|
|
||
|
|
|
|
|
|
|
|
||||
Consolidated:
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
N/A
|
|
4.5
|
%
|
|
7.5
|
%
|
|
8.5
|
%
|
|
Tier 1 capital ratio
|
6.0
|
%
|
6.0
|
%
|
|
9.0
|
%
|
|
10.0
|
%
|
|
Total capital ratio
|
10.0
|
%
|
8.0
|
%
|
|
11.0
|
%
|
|
12.0
|
%
|
|
|
|
|
|
|
|
|
|
||||
Enhanced SLR buffer (Tier 1 capital)
|
N/A
|
|
|
|
2.0
|
%
|
|
2.0
|
%
|
|
|
SLR
|
N/A
|
|
3.0
|
%
|
|
5.0
|
%
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
||||
Bank subsidiaries:
(c)
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
6.5
|
%
|
4.5
|
%
|
|
6.375
|
%
|
|
7.0
|
%
|
|
Tier 1 capital ratio
|
8.0
|
%
|
6.0
|
%
|
|
7.875
|
%
|
|
8.5
|
%
|
|
Total capital ratio
|
10.0
|
%
|
8.0
|
%
|
|
9.875
|
%
|
|
10.5
|
%
|
|
|
|
|
|
|
|
|
|
||||
SLR
|
6.0
|
%
|
3.0
|
%
|
|
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.
|
Sensitivity of consolidated capital ratios at Sept. 30, 2018
|
||||
|
Increase or decrease of
|
|||
(in basis points)
|
$100 million
in common
equity
|
$1 billion in
RWA, quarterly
average assets or total leverage exposure
|
||
CET1:
|
|
|
|
|
Standardized Approach
|
7
|
bps
|
8
|
bps
|
Advanced Approach
|
6
|
|
7
|
|
|
|
|
|
|
Tier 1 capital:
|
|
|
|
|
Standardized Approach
|
7
|
|
10
|
|
Advanced Approach
|
6
|
|
8
|
|
|
|
|
|
|
Total capital:
|
|
|
|
|
Standardized Approach
|
7
|
|
11
|
|
Advanced Approach
|
6
|
|
9
|
|
|
|
|
|
|
Tier 1 leverage
|
3
|
|
2
|
|
|
|
|
|
|
SLR
|
3
|
|
2
|
|
•
|
VaR does not estimate potential losses over longer time horizons where moves may be extreme;
|
•
|
VaR does not take account of potential variability of market liquidity; and
|
•
|
Previous moves in market risk factors may not produce accurate predictions of all future market moves.
|
VaR
(a)
|
3Q18
|
Sept. 30, 2018
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
3.6
|
|
$
|
3.0
|
|
$
|
5.0
|
|
$
|
3.7
|
|
Foreign exchange
|
3.6
|
|
2.9
|
|
5.6
|
|
5.5
|
|
||||
Equity
|
0.5
|
|
—
|
|
0.8
|
|
0.1
|
|
||||
Credit
|
0.8
|
|
0.6
|
|
1.1
|
|
0.9
|
|
||||
Diversification
|
(3.8
|
)
|
N/M
|
|
N/M
|
|
(4.6
|
)
|
||||
Overall portfolio
|
4.7
|
|
3.6
|
|
6.3
|
|
5.6
|
|
VaR
(a)
|
2Q18
|
June 30, 2018
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
4.0
|
|
$
|
3.3
|
|
$
|
5.2
|
|
$
|
3.5
|
|
Foreign exchange
|
3.7
|
|
2.9
|
|
5.7
|
|
3.5
|
|
||||
Equity
|
0.7
|
|
0.5
|
|
1.0
|
|
0.5
|
|
||||
Credit
|
0.8
|
|
0.6
|
|
1.0
|
|
1.0
|
|
||||
Diversification
|
(3.9
|
)
|
N/M
|
|
N/M
|
|
(3.9
|
)
|
||||
Overall portfolio
|
5.3
|
|
4.3
|
|
7.0
|
|
4.6
|
|
VaR
(a)
|
3Q17
|
Sept. 30, 2017
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
3.3
|
|
$
|
2.8
|
|
$
|
4.2
|
|
$
|
2.7
|
|
Foreign exchange
|
3.7
|
|
3.1
|
|
5.6
|
|
4.8
|
|
||||
Equity
|
0.9
|
|
0.8
|
|
1.1
|
|
0.9
|
|
||||
Credit
|
1.0
|
|
0.6
|
|
1.4
|
|
1.0
|
|
||||
Diversification
|
(5.1
|
)
|
N/M
|
|
N/M
|
|
(5.3
|
)
|
||||
Overall portfolio
|
3.8
|
|
3.2
|
|
5.3
|
|
4.1
|
|
VaR
(a)
|
YTD18
|
||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
|||
Interest rate
|
$
|
4.0
|
|
$
|
3.0
|
|
$
|
5.5
|
|
Foreign exchange
|
4.2
|
|
2.9
|
|
8.3
|
|
|||
Equity
|
0.7
|
|
—
|
|
1.2
|
|
|||
Credit
|
1.0
|
|
0.6
|
|
2.6
|
|
|||
Diversification
|
(4.4
|
)
|
N/M
|
|
N/M
|
|
|||
Overall portfolio
|
5.5
|
|
3.6
|
|
10.4
|
|
VaR
(a)
|
YTD17
|
||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
|||
Interest rate
|
$
|
3.5
|
|
$
|
2.8
|
|
$
|
4.9
|
|
Foreign exchange
|
3.9
|
|
2.6
|
|
5.8
|
|
|||
Equity
|
0.4
|
|
0.1
|
|
1.1
|
|
|||
Credit
|
1.1
|
|
0.5
|
|
1.7
|
|
|||
Diversification
|
(4.9
|
)
|
N/M
|
|
N/M
|
|
|||
Overall portfolio
|
4.0
|
|
3.2
|
|
5.4
|
|
(a)
|
VaR exposure does not include the impact of the Company’s consolidated investment management funds and seed capital investments.
|
(a)
|
Trading revenue (loss) includes realized and unrealized gains and losses primarily related to spot and forward foreign exchange transactions, derivatives and securities trades for our customers and excludes any associated commissions, underwriting fees and net interest revenue.
|
(a)
|
Represents credit rating agency equivalent of internal credit ratings.
|
Estimated changes in net interest revenue
(in millions) |
Sept. 30, 2018
|
|
June 30,
2018 |
|
Sept. 30, 2017
|
|
|||
Up 200 bps parallel rate ramp vs. baseline
(a)
|
$
|
362
|
|
$
|
372
|
|
$
|
364
|
|
Up 100 bps parallel rate ramp vs. baseline
(a)
|
180
|
|
183
|
|
214
|
|
|||
Long-term up 50 bps, short-term unchanged
(b)
|
83
|
|
72
|
|
113
|
|
|||
Long-term down 50 bps, short-term unchanged
(b)
|
(96
|
)
|
(89
|
)
|
(129
|
)
|
(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.
|
Return on common equity and tangible common equity reconciliation
|
|
|
|
|
|
||||||||||
(dollars in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
1,075
|
|
$
|
1,055
|
|
$
|
983
|
|
$
|
3,265
|
|
$
|
2,789
|
|
Add: Amortization of intangible assets
|
48
|
|
48
|
|
52
|
|
145
|
|
157
|
|
|||||
Less: Tax impact of amortization of intangible assets
|
11
|
|
11
|
|
17
|
|
34
|
|
54
|
|
|||||
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
|
|
$
|
3,376
|
|
$
|
2,892
|
|
|
|
|
|
|
|
||||||||||
Average common shareholders’ equity
|
$
|
38,036
|
|
$
|
37,750
|
|
$
|
36,780
|
|
$
|
37,795
|
|
$
|
35,876
|
|
Less: Average goodwill
|
17,391
|
|
17,505
|
|
17,497
|
|
17,492
|
|
17,415
|
|
|||||
Average intangible assets
|
3,283
|
|
3,341
|
|
3,487
|
|
3,340
|
|
3,532
|
|
|||||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,066
|
|
1,054
|
|
1,561
|
|
1,066
|
|
1,561
|
|
|||||
Deferred tax liability – intangible assets
(a)
|
699
|
|
709
|
|
1,092
|
|
699
|
|
1,092
|
|
|||||
Average tangible common shareholders’ equity – Non-GAAP
|
$
|
19,127
|
|
$
|
18,667
|
|
$
|
18,449
|
|
$
|
18,728
|
|
$
|
17,582
|
|
|
|
|
|
|
|
||||||||||
Return on common equity
(annualized)
– GAAP
|
11.2
|
%
|
11.2
|
%
|
10.6
|
%
|
11.6
|
%
|
10.4
|
%
|
|||||
Return on tangible common equity
(annualized)
– Non-GAAP
|
23.1
|
%
|
23.5
|
%
|
21.9
|
%
|
24.1
|
%
|
22.0
|
%
|
(a)
|
Deferred tax liabilities for the periods in 2017 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
|
|
Sept. 30, 2017
|
|
||||
(dollars in millions except common shares)
|
||||||||||||
BNY Mellon shareholders’ equity at period end – GAAP
|
$
|
41,560
|
|
$
|
41,505
|
|
$
|
41,251
|
|
$
|
40,523
|
|
Less: Preferred stock
|
3,542
|
|
3,542
|
|
3,542
|
|
3,542
|
|
||||
BNY Mellon common shareholders’ equity at period end – GAAP
|
38,018
|
|
37,963
|
|
37,709
|
|
36,981
|
|
||||
Less: Goodwill
|
17,390
|
|
17,418
|
|
17,564
|
|
17,543
|
|
||||
Intangible assets
|
3,258
|
|
3,308
|
|
3,411
|
|
3,461
|
|
||||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,066
|
|
1,054
|
|
1,034
|
|
1,561
|
|
||||
Deferred tax liability – intangible assets
(a)
|
699
|
|
709
|
|
718
|
|
1,092
|
|
||||
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP
|
$
|
19,135
|
|
$
|
19,000
|
|
$
|
18,486
|
|
$
|
18,630
|
|
|
|
|
|
|
||||||||
Period-end common shares outstanding
(in thousands)
|
988,777
|
|
999,945
|
|
1,013,442
|
|
1,024,022
|
|
||||
|
|
|
|
|
||||||||
Book value per common share – GAAP
|
$
|
38.45
|
|
$
|
37.97
|
|
$
|
37.21
|
|
$
|
36.11
|
|
Tangible book value per common share – Non-GAAP
|
$
|
19.35
|
|
$
|
19.00
|
|
$
|
18.24
|
|
$
|
18.19
|
|
(a)
|
Deferred tax liabilities at Dec. 31, 2017 and Sept. 30, 2017 are based on fully phased-in U.S. capital rules.
|
Constant currency reconciliation – Consolidated
|
|
|
3Q18 vs.
|
|
||||
(dollars in millions)
|
3Q18
|
|
3Q17
|
|
3Q17
|
|
||
Investment management and performance fees
|
$
|
922
|
|
$
|
901
|
|
2
|
%
|
Impact of changes in foreign currency exchange rates
|
—
|
|
(4
|
)
|
|
|||
Adjusted investment management and performance fees – Non-GAAP
|
$
|
922
|
|
$
|
897
|
|
3
|
%
|
Constant currency reconciliation – Investment Management business
|
|
|
3Q18 vs.
|
|
||||
(dollars in millions)
|
3Q18
|
|
3Q17
|
|
3Q17
|
|
||
Investment management and performance fees
|
$
|
909
|
|
$
|
886
|
|
3
|
%
|
Impact of changes in foreign currency exchange rates
|
—
|
|
(4
|
)
|
|
|||
Adjusted investment management and performance fees – Non-GAAP
|
$
|
909
|
|
$
|
882
|
|
3
|
%
|
(a)
|
Income before taxes divided by total revenue.
|
•
|
All of our SEC filings, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, as well as proxy statements and SEC Forms 3, 4 and 5;
|
•
|
Financial statements and footnotes prepared using eXtensible Business Reporting Language (“XBRL”);
|
•
|
Our earnings materials and selected management conference calls and presentations;
|
•
|
Other regulatory disclosures, including: Pillar 3 Disclosures (and Market Risk Disclosure contained therein); Liquidity Coverage Ratio Disclosures; Federal Financial Institutions Examination Council - Consolidated Reports of Condition and Income for a Bank With Domestic and Foreign Offices; Consolidated Financial Statements for Bank Holding Companies; and the Dodd-Frank Act Stress Test Results for BNY Mellon and The Bank of New York Mellon; and
|
•
|
Our Corporate Governance Guidelines, Amended and Restated By-laws, Directors Code of Conduct and the Charters of the Audit, Finance, Corporate Governance, Nominating and Social Responsibility, Human Resources and Compensation, Risk and Technology Committees of our Board of Directors.
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
|
|||||
(in millions)
|
|
|||||||||||||||
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) — including other-than-temporary impairment
|
—
|
|
1
|
|
18
|
|
|
(48
|
)
|
28
|
|
|||||
Noncredit-related portion of other-than-temporary impairment (recognized in other comprehensive income)
|
—
|
|
—
|
|
(1
|
)
|
|
—
|
|
(1
|
)
|
|||||
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
|
189
|
|
192
|
|
175
|
|
|
554
|
|
514
|
|
|||||
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
|
|
|||||
Furniture and equipment
|
73
|
|
74
|
|
58
|
|
|
208
|
|
174
|
|
|||||
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 the first quarter of 2018, we adopted new accounting guidance included in ASU 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. See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Beginning in the first quarter of 2018, clearing expense, which was previously included in other expense, was included with sub-custodian expense. Prior periods have been reclassified.
|
(c)
|
Beginning in the first quarter of 2018, 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.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
Sept. 30, 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 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 common shareholders of The Bank of New York Mellon Corporation
(b)
|
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
|
|
(a)
|
Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive.
|
(b)
|
Basic and diluted earnings per share under the two-class method are determined on the net income applicable to common shareholders of The Bank of New York Mellon Corporation reported on the income statement less earnings allocated to participating securities.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
|
|||||
(in millions)
|
|
|||||||||||||||
Net income
|
$
|
1,114
|
|
$
|
1,108
|
|
$
|
1,020
|
|
|
$
|
3,384
|
|
$
|
2,933
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(60
|
)
|
(400
|
)
|
286
|
|
|
(216
|
)
|
741
|
|
|||||
Unrealized (loss) gain on assets available-for-sale:
|
|
|
|
|
|
|
||||||||||
Unrealized (loss) gain arising during the period
|
(144
|
)
|
(64
|
)
|
28
|
|
|
(483
|
)
|
213
|
|
|||||
Reclassification adjustment
|
—
|
|
—
|
|
(12
|
)
|
|
37
|
|
(19
|
)
|
|||||
Total unrealized (loss) gain on assets available-for-sale
|
(144
|
)
|
(64
|
)
|
16
|
|
|
(446
|
)
|
194
|
|
|||||
Defined benefit plans:
|
|
|
|
|
|
|
||||||||||
Net gain arising during the period
|
—
|
|
—
|
|
—
|
|
|
—
|
|
2
|
|
|||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
|
18
|
|
16
|
|
15
|
|
|
51
|
|
49
|
|
|||||
Total defined benefit plans
|
18
|
|
16
|
|
15
|
|
|
51
|
|
51
|
|
|||||
Net unrealized (loss) gain on cash flow hedges
|
(4
|
)
|
(14
|
)
|
—
|
|
|
(20
|
)
|
11
|
|
|||||
Total other comprehensive (loss) income, net of tax
(a)
|
(190
|
)
|
(462
|
)
|
317
|
|
|
(631
|
)
|
997
|
|
|||||
Total comprehensive income
|
924
|
|
646
|
|
1,337
|
|
|
2,753
|
|
3,930
|
|
|||||
Net (income) loss attributable to noncontrolling interests
|
(3
|
)
|
(5
|
)
|
(2
|
)
|
|
1
|
|
(18
|
)
|
|||||
Other comprehensive loss (income) attributable to noncontrolling interests
|
2
|
|
10
|
|
(5
|
)
|
|
7
|
|
(13
|
)
|
|||||
Comprehensive income applicable to shareholders of The Bank of New York Mellon Corporation
|
$
|
923
|
|
$
|
651
|
|
$
|
1,330
|
|
|
$
|
2,761
|
|
$
|
3,899
|
|
(a)
|
Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was
$(188) million
for the
quarter ended
Sept. 30, 2018
,
$(452) million
for the
quarter ended
June 30, 2018
,
$312 million
for the
quarter ended
Sept. 30, 2017
,
$(624) million
for the
nine months ended Sept. 30, 2018
and
$984 million
for the
nine months ended Sept. 30, 2017
.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
||
(dollars in millions, except per share amounts)
|
||||||
Assets
|
|
|
||||
Cash and due from:
|
|
|
||||
Banks
|
$
|
5,047
|
|
$
|
5,382
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
74,725
|
|
91,510
|
|
||
Interest-bearing deposits with banks ($1,302 and $1,751 is restricted)
|
14,519
|
|
11,979
|
|
||
Federal funds sold and securities purchased under resale agreements
|
28,722
|
|
28,135
|
|
||
Securities:
|
|
|
||||
Held-to-maturity (fair value of $33,345 and $40,512)
|
34,486
|
|
40,827
|
|
||
Available-for-sale
|
84,155
|
|
79,543
|
|
||
Total securities
|
118,641
|
|
120,370
|
|
||
Trading assets
|
7,804
|
|
6,022
|
|
||
Loans
|
53,987
|
|
61,540
|
|
||
Allowance for loan losses
|
(140
|
)
|
(159
|
)
|
||
Net loans
|
53,847
|
|
61,381
|
|
||
Premises and equipment
|
1,832
|
|
1,634
|
|
||
Accrued interest receivable
|
640
|
|
610
|
|
||
Goodwill
|
17,390
|
|
17,564
|
|
||
Intangible assets
|
3,258
|
|
3,411
|
|
||
Other assets (includes $832 and $791, at fair value)
|
22,846
|
|
23,029
|
|
||
Subtotal assets of operations
|
349,271
|
|
371,027
|
|
||
Assets of consolidated investment management funds, at fair value
|
499
|
|
731
|
|
||
Total assets
|
$
|
349,770
|
|
$
|
371,758
|
|
Liabilities
|
|
|
|
|||
Deposits:
|
|
|
|
|||
Noninterest-bearing (principally U.S. offices)
|
$
|
65,846
|
|
$
|
82,716
|
|
Interest-bearing deposits in U.S. offices
|
73,525
|
|
52,294
|
|
||
Interest-bearing deposits in non-U.S. offices
|
92,219
|
|
109,312
|
|
||
Total deposits
|
231,590
|
|
244,322
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
10,158
|
|
15,163
|
|
||
Trading liabilities
|
3,536
|
|
3,984
|
|
||
Payables to customers and broker-dealers
|
18,683
|
|
20,184
|
|
||
Commercial paper
|
735
|
|
3,075
|
|
||
Other borrowed funds
|
2,934
|
|
3,028
|
|
||
Accrued taxes and other expenses
|
5,601
|
|
6,225
|
|
||
Other liabilities (including allowance for lending-related commitments of $111 and $102, also includes $74 and $800, at fair value)
|
6,552
|
|
6,050
|
|
||
Long-term debt (includes $363 and $367, at fair value)
|
28,113
|
|
27,979
|
|
||
Subtotal liabilities of operations
|
307,902
|
|
330,010
|
|
||
Liabilities of consolidated investment management funds, at fair value
|
7
|
|
2
|
|
||
Total liabilities
|
307,909
|
|
330,012
|
|
||
Temporary equity
|
|
|
||||
Redeemable noncontrolling interests
|
211
|
|
179
|
|
||
Permanent equity
|
|
|
||||
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 35,826 and 35,826 shares
|
3,542
|
|
3,542
|
|
||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,364,286,053 and 1,354,163,581 shares
|
14
|
|
14
|
|
||
Additional paid-in capital
|
27,034
|
|
26,665
|
|
||
Retained earnings
|
28,098
|
|
25,635
|
|
||
Accumulated other comprehensive loss, net of tax
|
(2,983
|
)
|
(2,357
|
)
|
||
Less: Treasury stock of 375,508,558 and 340,721,136 common shares, at cost
|
(14,145
|
)
|
(12,248
|
)
|
||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
41,560
|
|
41,251
|
|
||
Nonredeemable noncontrolling interests of consolidated investment management funds
|
90
|
|
316
|
|
||
Total permanent equity
|
41,650
|
|
41,567
|
|
||
Total liabilities, temporary equity and permanent equity
|
$
|
349,770
|
|
$
|
371,758
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Nine months ended Sept. 30,
|
|||||
(in millions)
|
2018
|
|
2017
|
|
||
Operating activities
|
|
|
||||
Net income
|
$
|
3,384
|
|
2,933
|
|
|
Net loss (income) attributable to noncontrolling interests
|
1
|
|
(18
|
)
|
||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
3,385
|
|
2,915
|
|
||
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
||||
Provision for credit losses
|
(11
|
)
|
(18
|
)
|
||
Pension plan contributions
|
(47
|
)
|
(12
|
)
|
||
Depreciation and amortization
|
1,011
|
|
1,044
|
|
||
Deferred tax (benefit) expense
|
(401
|
)
|
272
|
|
||
Net securities losses (gains)
|
48
|
|
(29
|
)
|
||
Change in trading assets and liabilities
|
(1,282
|
)
|
(66
|
)
|
||
Change in accruals and other, net
(a)
|
109
|
|
(730
|
)
|
||
Net cash provided by operating activities
(a)
|
2,812
|
|
3,376
|
|
||
Investing activities
|
|
|
||||
Change in interest-bearing deposits with banks
(a)
|
(3,367
|
)
|
1,033
|
|
||
Change in interest-bearing deposits with the Federal Reserve and other central banks
|
15,570
|
|
(14,467
|
)
|
||
Purchases of securities held-to-maturity
|
(4,029
|
)
|
(5,878
|
)
|
||
Paydowns of securities held-to-maturity
|
3,289
|
|
3,332
|
|
||
Maturities of securities held-to-maturity
|
6,047
|
|
3,412
|
|
||
Purchases of securities available-for-sale
|
(22,898
|
)
|
(18,974
|
)
|
||
Sales of securities available-for-sale
|
5,538
|
|
3,531
|
|
||
Paydowns of securities available-for-sale
|
5,683
|
|
7,047
|
|
||
Maturities of securities available-for-sale
|
6,113
|
|
4,820
|
|
||
Net change in loans
|
7,227
|
|
5,283
|
|
||
Sales of loans and other real estate
|
257
|
|
369
|
|
||
Change in federal funds sold and securities purchased under resale agreements
(a)
|
(592
|
)
|
(2,082
|
)
|
||
Net change in seed capital investments
|
54
|
|
(52
|
)
|
||
Purchases of premises and equipment/capitalized software
|
(819
|
)
|
(933
|
)
|
||
Proceeds from the sale of premises and equipment
|
23
|
|
—
|
|
||
Dispositions, net of cash
|
84
|
|
—
|
|
||
Other, net
(a)
|
(163
|
)
|
58
|
|
||
Net cash provided by (used for) investing activities
(a)
|
18,017
|
|
(13,501
|
)
|
||
Financing activities
|
|
|
||||
Change in deposits
|
(10,680
|
)
|
4,459
|
|
||
Change in federal funds purchased and securities sold under repurchase agreements
|
(5,005
|
)
|
325
|
|
||
Change in payables to customers and broker-dealers
|
(1,487
|
)
|
177
|
|
||
Change in other borrowed funds
|
(133
|
)
|
2,187
|
|
||
Change in commercial paper
|
(2,340
|
)
|
2,501
|
|
||
Net proceeds from the issuance of long-term debt
|
4,144
|
|
4,739
|
|
||
Repayments of long-term debt
|
(3,400
|
)
|
(796
|
)
|
||
Proceeds from the exercise of stock options
|
74
|
|
383
|
|
||
Issuance of common stock
|
30
|
|
24
|
|
||
Treasury stock acquired
|
(1,897
|
)
|
(2,035
|
)
|
||
Common cash dividends paid
|
(774
|
)
|
(653
|
)
|
||
Preferred cash dividends paid
|
(120
|
)
|
(126
|
)
|
||
Other, net
|
32
|
|
44
|
|
||
Net cash (used for) provided by financing activities
|
(21,556
|
)
|
11,229
|
|
||
Effect of exchange rate changes on cash
|
(57
|
)
|
157
|
|
||
Change in cash and due from banks and restricted cash
(a)
|
|
|
||||
Change in cash and due from banks and restricted cash
|
(784
|
)
|
1,261
|
|
||
Cash and due from banks and restricted cash at beginning of period
|
7,133
|
|
8,204
|
|
||
Cash and due from banks and restricted cash at end of period
|
$
|
6,349
|
|
$
|
9,465
|
|
Cash and due from banks and restricted cash:
(a)
|
|
|
||||
Cash and due from banks at end of period (unrestricted cash)
|
$
|
5,047
|
|
$
|
5,557
|
|
Restricted cash at end of period
|
1,302
|
|
3,908
|
|
||
Cash and due from banks and restricted cash at end of period
|
$
|
6,349
|
|
$
|
9,465
|
|
Supplemental disclosures
|
|
|
||||
Interest paid
|
$
|
1,795
|
|
$
|
721
|
|
Income taxes paid
|
699
|
|
316
|
|
||
Income taxes refunded
|
155
|
|
19
|
|
(a)
|
Reflects the impact of adopting new accounting guidance included in ASU 2016-15 and ASU 2016-18. Prior periods have been restated. See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
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 amount) |
Preferred stock
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Accumulated other comprehensive (loss), net
of tax |
|
Treasury
stock |
|
||||||||||||||||
Balance at June 30, 2018
|
$
|
3,542
|
|
$
|
14
|
|
$
|
26,981
|
|
$
|
27,306
|
|
$
|
(2,795
|
)
|
$
|
(13,543
|
)
|
$
|
52
|
|
$
|
41,557
|
|
(a)
|
$
|
189
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
22
|
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
35
|
|
31
|
|
|
2
|
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
1,111
|
|
—
|
|
—
|
|
3
|
|
1,114
|
|
|
—
|
|
|||||||||
Other comprehensive (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(188
|
)
|
—
|
|
—
|
|
(188
|
)
|
|
(2
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.28 per
share |
—
|
|
—
|
|
—
|
|
(283
|
)
|
—
|
|
—
|
|
—
|
|
(283
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(602
|
)
|
—
|
|
(602
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
43
|
|
—
|
|
—
|
|
—
|
|
—
|
|
43
|
|
|
—
|
|
|||||||||
Balance at Sept. 30, 2018
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,034
|
|
$
|
28,098
|
|
$
|
(2,983
|
)
|
$
|
(14,145
|
)
|
$
|
90
|
|
$
|
41,650
|
|
(a)
|
$
|
211
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$37,963 million
at
June 30, 2018
and
$38,018 million
at
Sept. 30, 2018
.
|
|
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 amount) |
Preferred stock
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Accumulated other comprehensive (loss), net
of tax |
|
Treasury
stock |
|
||||||||||||||||
Balance at March 31, 2018
|
$
|
3,542
|
|
$
|
14
|
|
$
|
26,911
|
|
$
|
26,496
|
|
$
|
(2,343
|
)
|
$
|
(12,892
|
)
|
$
|
212
|
|
$
|
41,940
|
|
(a)
|
$
|
184
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
17
|
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
(167
|
)
|
(169
|
)
|
|
—
|
|
|||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
1,103
|
|
—
|
|
—
|
|
7
|
|
1,110
|
|
|
(2
|
)
|
|||||||||
Other comprehensive (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(452
|
)
|
—
|
|
—
|
|
(452
|
)
|
|
(10
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.24 per
share |
—
|
|
—
|
|
—
|
|
(245
|
)
|
—
|
|
—
|
|
—
|
|
(245
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(48
|
)
|
—
|
|
—
|
|
—
|
|
(48
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(651
|
)
|
—
|
|
(651
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
58
|
|
—
|
|
—
|
|
—
|
|
—
|
|
58
|
|
|
—
|
|
|||||||||
Balance at June 30, 2018
|
$
|
3,542
|
|
$
|
14
|
|
$
|
26,981
|
|
$
|
27,306
|
|
$
|
(2,795
|
)
|
$
|
(13,543
|
)
|
$
|
52
|
|
$
|
41,557
|
|
(a)
|
$
|
189
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$38,186 million
at
March 31, 2018
and
$37,963 million
at
June 30, 2018
.
|
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 amount) |
Preferred stock
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Accumulated other comprehensive (loss) income, net of tax
|
|
Treasury
stock |
|
||||||||||||||||
Balance at June 30, 2017
|
$
|
3,542
|
|
$
|
13
|
|
$
|
26,432
|
|
$
|
24,027
|
|
$
|
(3,093
|
)
|
$
|
(10,947
|
)
|
$
|
343
|
|
$
|
40,317
|
|
(a)
|
$
|
181
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11
|
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
38
|
|
36
|
|
|
1
|
|
|||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
1,018
|
|
—
|
|
—
|
|
3
|
|
1,021
|
|
|
(1
|
)
|
|||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
312
|
|
—
|
|
—
|
|
312
|
|
|
5
|
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.24 per
share |
—
|
|
—
|
|
—
|
|
(253
|
)
|
—
|
|
—
|
|
—
|
|
(253
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(35
|
)
|
—
|
|
—
|
|
—
|
|
(35
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(650
|
)
|
—
|
|
(650
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
1
|
|
144
|
|
—
|
|
—
|
|
—
|
|
—
|
|
145
|
|
|
—
|
|
|||||||||
Balance at Sept. 30, 2017
|
$
|
3,542
|
|
$
|
14
|
|
$
|
26,588
|
|
$
|
24,757
|
|
$
|
(2,781
|
)
|
$
|
(11,597
|
)
|
$
|
384
|
|
$
|
40,907
|
|
(a)
|
$
|
197
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$36,432 million
at
June 30, 2017
and
$36,981 million
at
Sept. 30, 2017
.
|
|
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 amount) |
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated other comprehensive (loss), net
of tax |
|
Treasury
stock
|
|
||||||||||||||||
Balance at Dec. 31, 2017
|
$
|
3,542
|
|
$
|
14
|
|
$
|
26,665
|
|
$
|
25,635
|
|
$
|
(2,357
|
)
|
$
|
(12,248
|
)
|
$
|
316
|
|
$
|
41,567
|
|
(a)
|
$
|
179
|
|
Adjustment for the cumulative effect of applying ASU 2014-09 for contract revenue
|
—
|
|
—
|
|
—
|
|
(55
|
)
|
—
|
|
—
|
|
—
|
|
(55
|
)
|
|
—
|
|
|||||||||
Adjustment for the cumulative effect of applying ASU 2017-12 for derivatives and hedging
|
—
|
|
—
|
|
—
|
|
27
|
|
(2
|
)
|
—
|
|
—
|
|
25
|
|
|
—
|
|
|||||||||
Adjusted balance at Jan. 1, 2018
|
3,542
|
|
14
|
|
26,665
|
|
25,607
|
|
(2,359
|
)
|
(12,248
|
)
|
316
|
|
41,537
|
|
|
179
|
|
|||||||||
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
56
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(32
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(17
|
)
|
—
|
|
—
|
|
—
|
|
(225
|
)
|
(242
|
)
|
|
15
|
|
|||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
3,385
|
|
—
|
|
—
|
|
(1
|
)
|
3,384
|
|
|
—
|
|
|||||||||
Other comprehensive (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(624
|
)
|
—
|
|
—
|
|
(624
|
)
|
|
(7
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.76 per
share |
—
|
|
—
|
|
—
|
|
(774
|
)
|
—
|
|
—
|
|
—
|
|
(774
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(120
|
)
|
—
|
|
—
|
|
—
|
|
(120
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,897
|
)
|
—
|
|
(1,897
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
23
|
|
—
|
|
—
|
|
—
|
|
—
|
|
23
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
339
|
|
—
|
|
—
|
|
—
|
|
—
|
|
339
|
|
|
—
|
|
|||||||||
Balance at Sept. 30, 2018
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,034
|
|
$
|
28,098
|
|
$
|
(2,983
|
)
|
$
|
(14,145
|
)
|
$
|
90
|
|
$
|
41,650
|
|
(a)
|
$
|
211
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$37,709 million
at
Dec. 31, 2017
and
$38,018 million
at
Sept. 30, 2018
.
|
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 amount) |
Preferred stock
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Accumulated other comprehensive (loss) income, net of tax
|
|
Treasury
stock |
|
||||||||||||||||
Balance at Dec. 31, 2016
|
$
|
3,542
|
|
$
|
13
|
|
$
|
25,962
|
|
$
|
22,621
|
|
$
|
(3,765
|
)
|
$
|
(9,562
|
)
|
$
|
618
|
|
$
|
39,429
|
|
(a)
|
$
|
151
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
40
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(16
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(11
|
)
|
—
|
|
—
|
|
—
|
|
(258
|
)
|
(269
|
)
|
|
15
|
|
|||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
2,915
|
|
—
|
|
—
|
|
24
|
|
2,939
|
|
|
(6
|
)
|
|||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
984
|
|
—
|
|
—
|
|
984
|
|
|
13
|
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.62 per
share |
—
|
|
—
|
|
—
|
|
(653
|
)
|
—
|
|
—
|
|
—
|
|
(653
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(126
|
)
|
—
|
|
—
|
|
—
|
|
(126
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,035
|
)
|
—
|
|
(2,035
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
21
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
18
|
|
—
|
|
—
|
|
—
|
|
—
|
|
18
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
1
|
|
598
|
|
—
|
|
—
|
|
—
|
|
—
|
|
599
|
|
|
—
|
|
|||||||||
Balance at Sept. 30, 2017
|
$
|
3,542
|
|
$
|
14
|
|
$
|
26,588
|
|
$
|
24,757
|
|
$
|
(2,781
|
)
|
$
|
(11,597
|
)
|
$
|
384
|
|
$
|
40,907
|
|
(a)
|
$
|
197
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$35,269 million
at
Dec. 31, 2016
and
$36,981 million
at
Sept. 30, 2017
.
|
Notes to Consolidated Financial Statements
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Securities at Sept. 30, 2018
|
Gross
unrealized
|
|
||||||||||
|
Amortized cost
|
|
Fair
value
|
|
||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
19,904
|
|
$
|
18
|
|
$
|
410
|
|
$
|
19,512
|
|
U.S. government agencies
|
1,571
|
|
—
|
|
46
|
|
1,525
|
|
||||
State and political subdivisions
|
2,355
|
|
15
|
|
34
|
|
2,336
|
|
||||
Agency RMBS
|
25,283
|
|
79
|
|
495
|
|
24,867
|
|
||||
Non-agency RMBS
(a)
|
1,158
|
|
269
|
|
8
|
|
1,419
|
|
||||
Non-agency commercial MBS
|
1,484
|
|
1
|
|
26
|
|
1,459
|
|
||||
Agency commercial MBS
|
9,867
|
|
6
|
|
260
|
|
9,613
|
|
||||
CLOs
|
3,368
|
|
3
|
|
8
|
|
3,363
|
|
||||
Foreign covered bonds
|
2,985
|
|
7
|
|
20
|
|
2,972
|
|
||||
Corporate bonds
|
1,140
|
|
7
|
|
29
|
|
1,118
|
|
||||
Sovereign debt/sovereign guaranteed
|
11,491
|
|
100
|
|
49
|
|
11,542
|
|
||||
Other debt securities
|
4,454
|
|
3
|
|
28
|
|
4,429
|
|
||||
Total securities available-for-sale
(b)
|
$
|
85,060
|
|
$
|
508
|
|
$
|
1,413
|
|
$
|
84,155
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
4,923
|
|
$
|
1
|
|
$
|
133
|
|
$
|
4,791
|
|
U.S. government agencies
|
1,572
|
|
—
|
|
19
|
|
1,553
|
|
||||
State and political subdivisions
|
17
|
|
—
|
|
1
|
|
16
|
|
||||
Agency RMBS
|
25,651
|
|
3
|
|
966
|
|
24,688
|
|
||||
Non-agency RMBS
|
107
|
|
4
|
|
1
|
|
110
|
|
||||
Agency commercial MBS
|
1,262
|
|
—
|
|
52
|
|
1,210
|
|
||||
Foreign covered bonds
|
81
|
|
1
|
|
—
|
|
82
|
|
||||
Sovereign debt/sovereign guaranteed
|
847
|
|
22
|
|
—
|
|
869
|
|
||||
Other debt securities
|
26
|
|
—
|
|
—
|
|
26
|
|
||||
Total securities held-to-maturity
|
$
|
34,486
|
|
$
|
31
|
|
$
|
1,172
|
|
$
|
33,345
|
|
Total securities
|
$
|
119,546
|
|
$
|
539
|
|
$
|
2,585
|
|
$
|
117,500
|
|
(a)
|
Includes
$889 million
that was included in the former Grantor Trust.
|
(b)
|
Includes gross unrealized gains of
$42 million
and gross unrealized losses of
$93 million
recorded in accumulated other comprehensive income related to 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, 2017
|
Gross
unrealized
|
|
||||||||||
|
Amortized cost
|
|
Fair
value
|
|
||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
15,159
|
|
$
|
264
|
|
$
|
160
|
|
$
|
15,263
|
|
U.S. government agencies
|
917
|
|
1
|
|
10
|
|
908
|
|
||||
State and political subdivisions
|
2,949
|
|
31
|
|
23
|
|
2,957
|
|
||||
Agency RMBS
|
24,002
|
|
108
|
|
291
|
|
23,819
|
|
||||
Non-agency RMBS
(a)
|
1,265
|
|
317
|
|
4
|
|
1,578
|
|
||||
Other RMBS
|
152
|
|
3
|
|
6
|
|
149
|
|
||||
Non-agency commercial MBS
|
1,360
|
|
6
|
|
6
|
|
1,360
|
|
||||
Agency commercial MBS
|
8,793
|
|
36
|
|
67
|
|
8,762
|
|
||||
CLOs
|
2,898
|
|
12
|
|
1
|
|
2,909
|
|
||||
Other asset-backed securities
|
1,040
|
|
3
|
|
—
|
|
1,043
|
|
||||
Foreign covered bonds
|
2,520
|
|
18
|
|
9
|
|
2,529
|
|
||||
Corporate bonds
|
1,249
|
|
17
|
|
11
|
|
1,255
|
|
||||
Sovereign debt/sovereign guaranteed
|
12,405
|
|
175
|
|
23
|
|
12,557
|
|
||||
Other debt securities
|
3,494
|
|
9
|
|
12
|
|
3,491
|
|
||||
Money market funds
|
963
|
|
—
|
|
—
|
|
963
|
|
||||
Total securities available-for-sale
(b)
|
$
|
79,166
|
|
$
|
1,000
|
|
$
|
623
|
|
$
|
79,543
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
9,792
|
|
$
|
6
|
|
$
|
56
|
|
$
|
9,742
|
|
U.S. government agencies
|
1,653
|
|
—
|
|
12
|
|
1,641
|
|
||||
State and political subdivisions
|
17
|
|
—
|
|
1
|
|
16
|
|
||||
Agency RMBS
|
26,208
|
|
51
|
|
332
|
|
25,927
|
|
||||
Non-agency RMBS
|
57
|
|
5
|
|
—
|
|
62
|
|
||||
Other RMBS
|
65
|
|
—
|
|
1
|
|
64
|
|
||||
Non-agency commercial MBS
|
6
|
|
—
|
|
—
|
|
6
|
|
||||
Agency commercial MBS
|
1,324
|
|
2
|
|
9
|
|
1,317
|
|
||||
Foreign covered bonds
|
84
|
|
2
|
|
—
|
|
86
|
|
||||
Sovereign debt/sovereign guaranteed
|
1,593
|
|
30
|
|
—
|
|
1,623
|
|
||||
Other debt securities
|
28
|
|
—
|
|
—
|
|
28
|
|
||||
Total securities held-to-maturity
|
$
|
40,827
|
|
$
|
96
|
|
$
|
411
|
|
$
|
40,512
|
|
Total securities
|
$
|
119,993
|
|
$
|
1,096
|
|
$
|
1,034
|
|
$
|
120,055
|
|
(a)
|
Includes
$1,091 million
that was included in the former Grantor Trust.
|
(b)
|
Includes gross unrealized gains of
$50 million
and gross unrealized losses of
$144 million
recorded in accumulated other comprehensive income related to 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)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|||||
Realized gross gains
|
$
|
1
|
|
$
|
2
|
|
$
|
20
|
|
$
|
5
|
|
$
|
34
|
|
Realized gross losses
|
(1
|
)
|
(1
|
)
|
—
|
|
(53
|
)
|
(2
|
)
|
|||||
Recognized gross impairments
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(3
|
)
|
|||||
Total net securities gains (losses)
|
$
|
—
|
|
$
|
1
|
|
$
|
19
|
|
$
|
(48
|
)
|
$
|
29
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Temporarily impaired securities at Sept. 30, 2018
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|||||||
(in millions)
|
|
|
||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
12,651
|
|
$
|
171
|
|
|
$
|
4,996
|
|
$
|
239
|
|
|
$
|
17,647
|
|
$
|
410
|
|
U.S. government agencies
|
1,279
|
|
32
|
|
|
247
|
|
14
|
|
|
1,526
|
|
46
|
|
||||||
State and political subdivisions
|
733
|
|
5
|
|
|
560
|
|
29
|
|
|
1,293
|
|
34
|
|
||||||
Agency RMBS
|
8,668
|
|
149
|
|
|
7,105
|
|
346
|
|
|
15,773
|
|
495
|
|
||||||
Non-agency RMBS
(a)
|
39
|
|
—
|
|
|
188
|
|
8
|
|
|
227
|
|
8
|
|
||||||
Non-agency commercial MBS
|
795
|
|
21
|
|
|
135
|
|
5
|
|
|
930
|
|
26
|
|
||||||
Agency commercial MBS
|
5,238
|
|
124
|
|
|
2,329
|
|
136
|
|
|
7,567
|
|
260
|
|
||||||
CLOs
|
1,578
|
|
7
|
|
|
27
|
|
1
|
|
|
1,605
|
|
8
|
|
||||||
Foreign covered bonds
|
1,079
|
|
6
|
|
|
624
|
|
14
|
|
|
1,703
|
|
20
|
|
||||||
Corporate bonds
|
710
|
|
27
|
|
|
54
|
|
2
|
|
|
764
|
|
29
|
|
||||||
Sovereign debt/sovereign guaranteed
|
3,555
|
|
26
|
|
|
1,194
|
|
23
|
|
|
4,749
|
|
49
|
|
||||||
Other debt securities
|
2,300
|
|
16
|
|
|
686
|
|
12
|
|
|
2,986
|
|
28
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
38,625
|
|
$
|
584
|
|
|
$
|
18,145
|
|
$
|
829
|
|
|
$
|
56,770
|
|
$
|
1,413
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
2,268
|
|
$
|
62
|
|
|
$
|
2,372
|
|
$
|
71
|
|
|
$
|
4,640
|
|
$
|
133
|
|
U.S. government agencies
|
681
|
|
8
|
|
|
871
|
|
11
|
|
|
1,552
|
|
19
|
|
||||||
State and political subdivisions
|
—
|
|
—
|
|
|
4
|
|
1
|
|
|
4
|
|
1
|
|
||||||
Agency RMBS
|
11,018
|
|
299
|
|
|
13,396
|
|
667
|
|
|
24,414
|
|
966
|
|
||||||
Non-agency RMBS
|
20
|
|
—
|
|
|
37
|
|
1
|
|
|
57
|
|
1
|
|
||||||
Agency commercial MBS
|
747
|
|
28
|
|
|
464
|
|
24
|
|
|
1,211
|
|
52
|
|
||||||
Total securities held-to-maturity
|
$
|
14,734
|
|
$
|
397
|
|
|
$
|
17,144
|
|
$
|
775
|
|
|
$
|
31,878
|
|
$
|
1,172
|
|
Total temporarily impaired securities
|
$
|
53,359
|
|
$
|
981
|
|
|
$
|
35,289
|
|
$
|
1,604
|
|
|
$
|
88,648
|
|
$
|
2,585
|
|
(a)
|
Includes
$6 million
with an unrealized loss of less than
$1 million
for less than 12 months and
$6 million
with an unrealized loss of less than
$1 million
for 12 months or more that were included in the former Grantor Trust.
|
(b)
|
Includes gross unrealized losses of
$93 million
for 12 months or more recorded in accumulated other comprehensive income related to 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, 2017
|
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
|
$
|
7,429
|
|
$
|
131
|
|
|
$
|
2,175
|
|
$
|
29
|
|
|
$
|
9,604
|
|
$
|
160
|
|
U.S. government agencies
|
588
|
|
6
|
|
|
160
|
|
4
|
|
|
748
|
|
10
|
|
||||||
State and political subdivisions
|
732
|
|
3
|
|
|
518
|
|
20
|
|
|
1,250
|
|
23
|
|
||||||
Agency RMBS
|
8,567
|
|
66
|
|
|
5,834
|
|
225
|
|
|
14,401
|
|
291
|
|
||||||
Non-agency RMBS
(a)
|
20
|
|
—
|
|
|
149
|
|
4
|
|
|
169
|
|
4
|
|
||||||
Other RMBS
|
71
|
|
4
|
|
|
45
|
|
2
|
|
|
116
|
|
6
|
|
||||||
Non-agency commercial MBS
|
476
|
|
3
|
|
|
122
|
|
3
|
|
|
598
|
|
6
|
|
||||||
Agency commercial MBS
|
3,077
|
|
28
|
|
|
1,332
|
|
39
|
|
|
4,409
|
|
67
|
|
||||||
CLOs
|
260
|
|
1
|
|
|
—
|
|
—
|
|
|
260
|
|
1
|
|
||||||
Foreign covered bonds
|
953
|
|
7
|
|
|
116
|
|
2
|
|
|
1,069
|
|
9
|
|
||||||
Corporate bonds
|
274
|
|
2
|
|
|
288
|
|
9
|
|
|
562
|
|
11
|
|
||||||
Sovereign debt/sovereign guaranteed
|
1,880
|
|
12
|
|
|
559
|
|
11
|
|
|
2,439
|
|
23
|
|
||||||
Other debt securities
|
1,855
|
|
7
|
|
|
368
|
|
5
|
|
|
2,223
|
|
12
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
26,182
|
|
$
|
270
|
|
|
$
|
11,666
|
|
$
|
353
|
|
|
$
|
37,848
|
|
$
|
623
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
6,389
|
|
$
|
41
|
|
|
$
|
2,909
|
|
$
|
15
|
|
|
$
|
9,298
|
|
$
|
56
|
|
U.S. government agencies
|
791
|
|
4
|
|
|
850
|
|
8
|
|
|
1,641
|
|
12
|
|
||||||
State and political subdivisions
|
—
|
|
—
|
|
|
4
|
|
1
|
|
|
4
|
|
1
|
|
||||||
Agency RMBS
|
9,458
|
|
81
|
|
|
12,305
|
|
251
|
|
|
21,763
|
|
332
|
|
||||||
Other RMBS
|
—
|
|
—
|
|
|
50
|
|
1
|
|
|
50
|
|
1
|
|
||||||
Agency commercial MBS
|
737
|
|
7
|
|
|
60
|
|
2
|
|
|
797
|
|
9
|
|
||||||
Total securities held-to-maturity
|
$
|
17,375
|
|
$
|
133
|
|
|
$
|
16,178
|
|
$
|
278
|
|
|
$
|
33,553
|
|
$
|
411
|
|
Total temporarily impaired securities
|
$
|
43,557
|
|
$
|
403
|
|
|
$
|
27,844
|
|
$
|
631
|
|
|
$
|
71,401
|
|
$
|
1,034
|
|
(a)
|
Includes
$7 million
with an unrealized loss of less than
$1 million
for less than 12 months and
$12 million
with an unrealized loss of
$1 million
for 12 months or more
that were included in the former Grantor Trust.
|
(b)
|
Includes gross unrealized losses of
$144 million
for 12 months or more recorded in accumulated other comprehensive income related to 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.
|
Maturity distribution and yields on securities at Sept. 30, 2018
|
U.S. Treasury
|
|
U.S. government
agencies
|
|
State and political
subdivisions
|
|
Other bonds, notes and debentures
|
|
Mortgage/
asset-backed
|
|
|
||||||||||||||||||||||
(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
|
$
|
7,485
|
|
1.91
|
%
|
|
$
|
145
|
|
2.16
|
%
|
|
$
|
426
|
|
2.28
|
%
|
|
$
|
5,637
|
|
1.23
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
13,693
|
|
Over 1 through 5 years
|
6,380
|
|
2.02
|
|
|
357
|
|
2.20
|
|
|
1,128
|
|
2.92
|
|
|
11,214
|
|
1.20
|
|
|
—
|
|
—
|
|
|
19,079
|
|
||||||
Over 5 through 10 years
|
2,385
|
|
2.25
|
|
|
1,023
|
|
2.75
|
|
|
587
|
|
2.57
|
|
|
2,280
|
|
0.88
|
|
|
—
|
|
—
|
|
|
6,275
|
|
||||||
Over 10 years
|
3,262
|
|
3.11
|
|
|
—
|
|
—
|
|
|
195
|
|
2.92
|
|
|
183
|
|
1.68
|
|
|
—
|
|
—
|
|
|
3,640
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
37,358
|
|
3.13
|
|
|
37,358
|
|
||||||
Asset-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
4,110
|
|
3.30
|
|
|
4,110
|
|
||||||
Total
|
$
|
19,512
|
|
2.19
|
%
|
|
$
|
1,525
|
|
2.56
|
%
|
|
$
|
2,336
|
|
2.72
|
%
|
|
$
|
19,314
|
|
1.17
|
%
|
|
$
|
41,468
|
|
3.15
|
%
|
|
$
|
84,155
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
907
|
|
1.31
|
%
|
|
$
|
507
|
|
1.21
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
1,414
|
|
Over 1 through 5 years
|
3,705
|
|
1.81
|
|
|
1,065
|
|
2.34
|
|
|
2
|
|
5.63
|
|
|
437
|
|
0.46
|
|
|
—
|
|
—
|
|
|
5,209
|
|
||||||
Over 5 through 10 years
|
311
|
|
2.18
|
|
|
—
|
|
—
|
|
|
1
|
|
5.93
|
|
|
517
|
|
0.85
|
|
|
—
|
|
—
|
|
|
829
|
|
||||||
Over 10 years
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
14
|
|
4.76
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
14
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
27,020
|
|
2.88
|
|
|
27,020
|
|
||||||
Total
|
$
|
4,923
|
|
1.74
|
%
|
|
$
|
1,572
|
|
1.97
|
%
|
|
$
|
17
|
|
4.95
|
%
|
|
$
|
954
|
|
0.67
|
%
|
|
$
|
27,020
|
|
2.88
|
%
|
|
$
|
34,486
|
|
(a)
|
Yields are based upon the amortized cost of securities.
|
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 (losses)
|
|
|
|
|
|||||||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|||||
Agency RMBS
|
$
|
—
|
|
$
|
—
|
|
$
|
4
|
|
$
|
(42
|
)
|
$
|
5
|
|
U.S. Treasury
|
(1
|
)
|
—
|
|
1
|
|
(5
|
)
|
—
|
|
|||||
Non-agency RMBS
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(2
|
)
|
|||||
Other
|
1
|
|
1
|
|
15
|
|
(1
|
)
|
26
|
|
|||||
Total net securities gains (losses)
|
$
|
—
|
|
$
|
1
|
|
$
|
19
|
|
$
|
(48
|
)
|
$
|
29
|
|
Debt securities credit loss roll forward
|
|
|||||
(in millions)
|
3Q18
|
|
3Q17
|
|
||
Beginning balance as of June 30
|
$
|
79
|
|
$
|
85
|
|
Add: Initial OTTI credit losses
|
—
|
|
—
|
|
||
Subsequent OTTI credit losses
|
—
|
|
1
|
|
||
Less: Realized losses for securities sold
|
1
|
|
2
|
|
||
Ending balance as of Sept. 30
|
$
|
78
|
|
$
|
84
|
|
Debt securities credit loss roll forward
|
|
|
||||
(in millions)
|
YTD18
|
|
YTD17
|
|
||
Beginning balance as of Dec. 31
|
$
|
84
|
|
$
|
88
|
|
Add: Initial OTTI credit losses
|
—
|
|
—
|
|
||
Subsequent OTTI credit losses
|
—
|
|
3
|
|
||
Less: Realized losses for securities sold
|
6
|
|
7
|
|
||
Ending balance as of Sept. 30
|
$
|
78
|
|
$
|
84
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Loans
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
||
(in millions)
|
||||||
Domestic:
|
|
|
||||
Commercial
|
$
|
1,928
|
|
$
|
2,744
|
|
Commercial real estate
|
5,034
|
|
4,900
|
|
||
Financial institutions
|
4,237
|
|
5,568
|
|
||
Lease financings
|
738
|
|
772
|
|
||
Wealth management loans and mortgages
|
15,852
|
|
16,420
|
|
||
Other residential mortgages
|
623
|
|
708
|
|
||
Overdrafts
|
784
|
|
963
|
|
||
Other
|
1,196
|
|
1,131
|
|
||
Margin loans
|
13,326
|
|
15,689
|
|
||
Total domestic
|
43,718
|
|
48,895
|
|
||
Foreign:
|
|
|
||||
Commercial
|
223
|
|
167
|
|
||
Commercial real estate
|
2
|
|
—
|
|
||
Financial institutions
|
6,154
|
|
7,483
|
|
||
Lease financings
|
545
|
|
527
|
|
||
Wealth management loans and mortgages
|
104
|
|
108
|
|
||
Other (primarily overdrafts)
|
3,099
|
|
4,264
|
|
||
Margin loans
|
142
|
|
96
|
|
||
Total foreign
|
10,269
|
|
12,645
|
|
||
Total loans
(a)
|
$
|
53,987
|
|
$
|
61,540
|
|
(a)
|
Net of unearned income of
$367 million
at
Sept. 30, 2018
and
$394 million
at
Dec. 31, 2017
primarily related to domestic and foreign lease financings.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the quarter ended Sept. 30, 2018
|
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
|
|
|
|
|||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
76
|
|
$
|
74
|
|
$
|
24
|
|
$
|
6
|
|
$
|
23
|
|
$
|
18
|
|
$
|
—
|
|
|
$
|
33
|
|
$
|
254
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Provision
|
—
|
|
(1
|
)
|
1
|
|
—
|
|
(2
|
)
|
(1
|
)
|
—
|
|
|
—
|
|
(3
|
)
|
|||||||||
Ending balance
|
$
|
76
|
|
$
|
73
|
|
$
|
25
|
|
$
|
6
|
|
$
|
21
|
|
$
|
17
|
|
$
|
—
|
|
|
$
|
33
|
|
$
|
251
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
17
|
|
$
|
53
|
|
$
|
9
|
|
$
|
6
|
|
$
|
17
|
|
$
|
17
|
|
$
|
—
|
|
|
$
|
21
|
|
$
|
140
|
|
Lending-related commitments
|
59
|
|
20
|
|
16
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
12
|
|
111
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
4
|
|
Allowance for loan losses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,928
|
|
$
|
5,034
|
|
$
|
4,237
|
|
$
|
738
|
|
$
|
15,848
|
|
$
|
623
|
|
$
|
15,306
|
|
(a)
|
$
|
10,269
|
|
$
|
53,983
|
|
Allowance for loan losses
|
17
|
|
53
|
|
9
|
|
6
|
|
17
|
|
17
|
|
—
|
|
|
21
|
|
140
|
|
(a)
|
Includes
$784 million
of domestic overdrafts,
$13,326 million
of margin loans and
$1,196 million
of other loans at
Sept. 30, 2018
.
|
Allowance for credit losses activity for the quarter ended June 30, 2018
|
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
|
|
|
|
|||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
75
|
|
$
|
75
|
|
$
|
22
|
|
$
|
7
|
|
$
|
23
|
|
$
|
19
|
|
$
|
—
|
|
|
$
|
35
|
|
$
|
256
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Provision
|
1
|
|
(1
|
)
|
2
|
|
(1
|
)
|
—
|
|
(2
|
)
|
—
|
|
|
(2
|
)
|
(3
|
)
|
|||||||||
Ending balance
|
$
|
76
|
|
$
|
74
|
|
$
|
24
|
|
$
|
6
|
|
$
|
23
|
|
$
|
18
|
|
$
|
—
|
|
|
$
|
33
|
|
$
|
254
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
17
|
|
$
|
55
|
|
$
|
8
|
|
$
|
6
|
|
$
|
19
|
|
$
|
18
|
|
$
|
—
|
|
|
$
|
22
|
|
$
|
145
|
|
Lending-related commitments
|
59
|
|
19
|
|
16
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
11
|
|
109
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
5
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
5
|
|
Allowance for loan losses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
2,117
|
|
$
|
4,974
|
|
$
|
5,526
|
|
$
|
758
|
|
$
|
16,186
|
|
$
|
653
|
|
$
|
17,173
|
|
(a)
|
$
|
10,384
|
|
$
|
57,771
|
|
Allowance for loan losses
|
17
|
|
55
|
|
8
|
|
6
|
|
19
|
|
18
|
|
—
|
|
|
22
|
|
145
|
|
(a)
|
Includes
$1,090 million
of domestic overdrafts,
$14,914 million
of margin loans and
$1,169 million
of other loans at
June 30, 2018
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the quarter ended Sept. 30, 2017
|
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
All
other
|
|
|
Foreign
|
|
Total
|
|
||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
80
|
|
$
|
75
|
|
$
|
23
|
|
$
|
10
|
|
$
|
25
|
|
$
|
23
|
|
$
|
—
|
|
|
$
|
34
|
|
$
|
270
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Provision
|
1
|
|
—
|
|
—
|
|
(1
|
)
|
(4
|
)
|
(3
|
)
|
—
|
|
|
1
|
|
(6
|
)
|
|||||||||
Ending balance
|
$
|
81
|
|
$
|
75
|
|
$
|
23
|
|
$
|
9
|
|
$
|
21
|
|
$
|
21
|
|
$
|
—
|
|
|
$
|
35
|
|
$
|
265
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
26
|
|
$
|
57
|
|
$
|
7
|
|
$
|
9
|
|
$
|
17
|
|
$
|
21
|
|
$
|
—
|
|
|
$
|
24
|
|
$
|
161
|
|
Lending-related commitments
|
55
|
|
18
|
|
16
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
11
|
|
104
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
2
|
|
$
|
—
|
|
$
|
5
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
7
|
|
Allowance for loan losses
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
2
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
2,698
|
|
$
|
4,921
|
|
$
|
5,153
|
|
$
|
823
|
|
$
|
16,156
|
|
$
|
741
|
|
$
|
16,366
|
|
(a)
|
$
|
12,203
|
|
$
|
59,061
|
|
Allowance for loan losses
|
26
|
|
57
|
|
5
|
|
9
|
|
17
|
|
21
|
|
—
|
|
|
24
|
|
159
|
|
(a)
|
Includes
$1,487 million
of domestic overdrafts,
$13,720 million
of margin loans and
$1,159 million
of other loans at
Sept. 30, 2017
.
|
Allowance for credit losses activity for the nine months ended Sept. 30, 2018
|
Wealth management loans and mortgages
|
|
Other
residential mortgages |
|
All
other |
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate |
|
Financial
institutions |
|
Lease
financings |
|
|||||||||||||||||||
Beginning balance
|
$
|
77
|
|
$
|
76
|
|
$
|
23
|
|
$
|
8
|
|
$
|
22
|
|
$
|
20
|
|
$
|
—
|
|
$
|
35
|
|
$
|
261
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
2
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||||||
Provision
|
(1
|
)
|
(3
|
)
|
2
|
|
(2
|
)
|
(1
|
)
|
(4
|
)
|
—
|
|
(2
|
)
|
(11
|
)
|
|||||||||
Ending balance
|
$
|
76
|
|
$
|
73
|
|
$
|
25
|
|
$
|
6
|
|
$
|
21
|
|
$
|
17
|
|
$
|
—
|
|
$
|
33
|
|
$
|
251
|
|
Allowance for credit losses activity for the nine months ended Sept. 30, 2017
|
Wealth management loans and mortgages
|
|
Other
residential mortgages |
|
All
other |
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate |
|
Financial
institutions |
|
Lease
financings |
|
|||||||||||||||||||
Beginning balance
|
$
|
82
|
|
$
|
73
|
|
$
|
26
|
|
$
|
13
|
|
$
|
23
|
|
$
|
28
|
|
$
|
—
|
|
$
|
36
|
|
$
|
281
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
3
|
|
|||||||||
Net recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
2
|
|
|||||||||
Provision
|
(1
|
)
|
2
|
|
(3
|
)
|
(4
|
)
|
(2
|
)
|
(9
|
)
|
—
|
|
(1
|
)
|
(18
|
)
|
|||||||||
Ending balance
|
$
|
81
|
|
$
|
75
|
|
$
|
23
|
|
$
|
9
|
|
$
|
21
|
|
$
|
21
|
|
$
|
—
|
|
$
|
35
|
|
$
|
265
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Nonperforming assets
(in millions)
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|||
Nonperforming loans:
|
|
|
|||||
Other residential mortgages
|
$
|
69
|
|
$
|
78
|
|
|
Wealth management loans and mortgages
|
9
|
|
7
|
|
|||
Commercial real estate
|
—
|
|
1
|
|
|||
Total nonperforming loans
|
78
|
|
86
|
|
|||
Other assets owned
|
3
|
|
4
|
|
|||
Total nonperforming assets
|
$
|
81
|
|
$
|
90
|
|
Past due loans and still accruing interest
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||||||||
|
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
|
$
|
42
|
|
$
|
—
|
|
$
|
—
|
|
$
|
42
|
|
|
$
|
44
|
|
$
|
—
|
|
$
|
—
|
|
$
|
44
|
|
Other residential mortgages
|
20
|
|
4
|
|
9
|
|
33
|
|
|
18
|
|
5
|
|
5
|
|
28
|
|
||||||||
Financial institutions
|
33
|
|
—
|
|
—
|
|
33
|
|
|
1
|
|
—
|
|
—
|
|
1
|
|
||||||||
Wealth management loans and mortgages
|
19
|
|
8
|
|
1
|
|
28
|
|
|
39
|
|
5
|
|
—
|
|
44
|
|
||||||||
Total past due loans
|
$
|
114
|
|
$
|
12
|
|
$
|
10
|
|
$
|
136
|
|
|
$
|
102
|
|
$
|
10
|
|
$
|
5
|
|
$
|
117
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Commercial loan portfolio – Credit risk profile
by creditworthiness category
|
Commercial
|
|
Commercial real estate
|
|
Financial institutions
|
|||||||||||||||
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|||||||
(in millions)
|
|
|
||||||||||||||||||
Investment grade
|
$
|
2,073
|
|
$
|
2,685
|
|
|
$
|
4,390
|
|
$
|
4,277
|
|
|
$
|
8,009
|
|
$
|
10,021
|
|
Non-investment grade
|
78
|
|
226
|
|
|
646
|
|
623
|
|
|
2,382
|
|
3,030
|
|
||||||
Total
|
$
|
2,151
|
|
$
|
2,911
|
|
|
$
|
5,036
|
|
$
|
4,900
|
|
|
$
|
10,391
|
|
$
|
13,051
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Goodwill by business
|
Investment
Services
|
|
Investment
Management
|
|
Other
|
|
Consolidated
|
|
||||
(in millions)
|
||||||||||||
Balance at Dec. 31, 2017
|
$
|
8,389
|
|
$
|
9,128
|
|
$
|
47
|
|
$
|
17,564
|
|
Dispositions
|
—
|
|
(65
|
)
|
—
|
|
(65
|
)
|
||||
Foreign currency translation
|
(39
|
)
|
(70
|
)
|
—
|
|
(109
|
)
|
||||
Balance at Sept. 30, 2018
|
$
|
8,350
|
|
$
|
8,993
|
|
$
|
47
|
|
$
|
17,390
|
|
Goodwill by business
|
Investment
Services
|
|
Investment
Management
|
|
Other
|
|
Consolidated
|
|
||||
(in millions)
|
||||||||||||
Balance at Dec. 31, 2016
|
$
|
8,269
|
|
$
|
9,000
|
|
$
|
47
|
|
$
|
17,316
|
|
Foreign currency translation
|
107
|
|
120
|
|
—
|
|
227
|
|
||||
Balance at Sept. 30, 2017
|
$
|
8,376
|
|
$
|
9,120
|
|
$
|
47
|
|
$
|
17,543
|
|
Intangible assets – net carrying amount by business
|
Investment
Services
|
|
Investment
Management
|
|
Other
|
|
Consolidated
|
|
||||
(in millions)
|
||||||||||||
Balance at Dec. 31, 2017
|
$
|
888
|
|
$
|
1,674
|
|
$
|
849
|
|
$
|
3,411
|
|
Amortization
|
(107
|
)
|
(38
|
)
|
—
|
|
(145
|
)
|
||||
Foreign currency translation
|
(1
|
)
|
(7
|
)
|
—
|
|
(8
|
)
|
||||
Balance at Sept. 30, 2018
|
$
|
780
|
|
$
|
1,629
|
|
$
|
849
|
|
$
|
3,258
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Intangible assets – net carrying amount by business
|
Investment
Services
|
|
Investment
Management
|
|
Other
|
|
Consolidated
|
|
||||
(in millions)
|
||||||||||||
Balance at Dec. 31, 2016
|
$
|
1,032
|
|
$
|
1,717
|
|
$
|
849
|
|
$
|
3,598
|
|
Amortization
|
(112
|
)
|
(45
|
)
|
—
|
|
(157
|
)
|
||||
Foreign currency translation
|
4
|
|
16
|
|
—
|
|
20
|
|
||||
Balance at Sept. 30, 2017
|
$
|
924
|
|
$
|
1,688
|
|
$
|
849
|
|
$
|
3,461
|
|
Intangible assets
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|||||||||||||||||
(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 contracts—Investment Services
|
$
|
1,591
|
|
$
|
(1,183
|
)
|
$
|
408
|
|
10 years
|
|
$
|
2,260
|
|
$
|
(1,744
|
)
|
$
|
516
|
|
Customer relationships—Investment Management
|
1,249
|
|
(1,037
|
)
|
212
|
|
11 years
|
|
1,262
|
|
(1,015
|
)
|
247
|
|
||||||
Other
|
31
|
|
(16
|
)
|
15
|
|
4 years
|
|
42
|
|
(23
|
)
|
19
|
|
||||||
Total subject to amortization
|
2,871
|
|
(2,236
|
)
|
635
|
|
10 years
|
|
3,564
|
|
(2,782
|
)
|
782
|
|
||||||
Not subject to amortization:
(b)
|
|
|
|
|
|
|
|
|
||||||||||||
Tradenames
|
1,332
|
|
N/A
|
|
1,332
|
|
N/A
|
|
1,334
|
|
N/A
|
|
1,334
|
|
||||||
Customer relationships
|
1,291
|
|
N/A
|
|
1,291
|
|
N/A
|
|
1,295
|
|
N/A
|
|
1,295
|
|
||||||
Total not subject to amortization
|
2,623
|
|
N/A
|
|
2,623
|
|
N/A
|
|
2,629
|
|
N/A
|
|
2,629
|
|
||||||
Total intangible assets
|
$
|
5,494
|
|
$
|
(2,236
|
)
|
$
|
3,258
|
|
N/A
|
|
$
|
6,193
|
|
$
|
(2,782
|
)
|
$
|
3,411
|
|
(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)
|
|
||
2018
|
|
$
|
180
|
|
2019
|
|
116
|
|
|
2020
|
|
102
|
|
|
2021
|
|
78
|
|
|
2022
|
|
60
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Other assets
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
||
(in millions)
|
||||||
Corporate/bank-owned life insurance
|
$
|
4,901
|
|
$
|
4,857
|
|
Fails to deliver
|
3,719
|
|
2,817
|
|
||
Accounts receivable
|
3,638
|
|
4,590
|
|
||
Software
|
1,579
|
|
1,499
|
|
||
Prepaid pension assets
|
1,558
|
|
1,416
|
|
||
Renewable energy investments
|
1,293
|
|
1,368
|
|
||
Equity in a joint venture and other investments
|
1,143
|
|
1,083
|
|
||
Income taxes receivable
|
1,087
|
|
1,533
|
|
||
Qualified affordable housing project investments
|
1,033
|
|
1,014
|
|
||
Federal Reserve Bank stock
|
483
|
|
477
|
|
||
Prepaid expense
|
477
|
|
395
|
|
||
Fair value of hedging derivatives
|
347
|
|
323
|
|
||
Seed capital
|
245
|
|
288
|
|
||
Other
(a)
|
1,343
|
|
1,369
|
|
||
Total other assets
|
$
|
22,846
|
|
$
|
23,029
|
|
(a)
|
At
Sept. 30, 2018
and
Dec. 31, 2017
, other assets include
$97 million
and
$82 million
, respectively, of Federal Home Loan Bank stock, at cost.
|
(a)
|
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, which have a life of 10 years, are liquidated.
|
(b)
|
Primarily relates to investments in funds that relate to deferred compensation arrangements with employees.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Disaggregation of contract revenue by business segment
(a)
|
|
|
|
|
|
||||||||||||||||||||
|
Quarter ended Sept. 30, 2018
|
|
Quarter ended June 30, 2018
|
||||||||||||||||||||||
(in millions)
|
Investment Services
|
|
Investment Management
|
|
Other
|
|
Total
|
|
|
Investment Services
|
|
Investment Management
|
|
Other
|
|
Total
|
|
||||||||
Fee revenue - contract revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset servicing
|
$
|
1,103
|
|
$
|
21
|
|
$
|
—
|
|
$
|
1,124
|
|
|
$
|
1,098
|
|
$
|
21
|
|
$
|
1
|
|
$
|
1,120
|
|
Clearing services
|
383
|
|
—
|
|
—
|
|
383
|
|
|
392
|
|
—
|
|
—
|
|
392
|
|
||||||||
Issuer services
|
288
|
|
—
|
|
—
|
|
288
|
|
|
265
|
|
—
|
|
—
|
|
265
|
|
||||||||
Treasury services
|
136
|
|
—
|
|
—
|
|
136
|
|
|
140
|
|
1
|
|
—
|
|
141
|
|
||||||||
Total investment services fees
|
1,910
|
|
21
|
|
—
|
|
1,931
|
|
|
1,895
|
|
22
|
|
1
|
|
1,918
|
|
||||||||
Investment management and performance fees
|
13
|
|
904
|
|
—
|
|
917
|
|
|
14
|
|
893
|
|
—
|
|
907
|
|
||||||||
Financing-related fees
|
13
|
|
—
|
|
1
|
|
14
|
|
|
15
|
|
—
|
|
—
|
|
15
|
|
||||||||
Distribution and servicing
|
(13
|
)
|
48
|
|
—
|
|
35
|
|
|
(14
|
)
|
48
|
|
—
|
|
34
|
|
||||||||
Investment and other income
|
71
|
|
(51
|
)
|
(1
|
)
|
19
|
|
|
69
|
|
(50
|
)
|
1
|
|
20
|
|
||||||||
Total fee revenue - contract revenue
|
1,994
|
|
922
|
|
—
|
|
2,916
|
|
|
1,979
|
|
913
|
|
2
|
|
2,894
|
|
||||||||
Fee and other revenue - not in scope of
ASC 606
(b)(c)
|
236
|
|
16
|
|
7
|
|
259
|
|
|
254
|
|
28
|
|
39
|
|
321
|
|
||||||||
Total fee and other revenue
|
$
|
2,230
|
|
$
|
938
|
|
$
|
7
|
|
$
|
3,175
|
|
|
$
|
2,233
|
|
$
|
941
|
|
$
|
41
|
|
$
|
3,215
|
|
(a)
|
Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting.
|
(b)
|
Primarily includes foreign exchange and other trading revenue, financing-related fees, investment and other income and net securities gains, all of which are accounted for using other accounting guidance.
|
(c)
|
The Investment Management business includes income from consolidated investment management funds, net of noncontrolling interests, of
$7 million
in the
third quarter of 2018
and
$5 million
in the second quarter of 2018.
|
(a)
|
Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting.
|
(b)
|
Primarily includes foreign exchange and other trading revenue, financing-related fees, investment and other income and net securities gains, all of which are accounted for using other accounting guidance.
|
(c)
|
The Investment Management business includes income from consolidated investment management funds, net of noncontrolling interests of
$12 million
in the first nine months of 2018.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net interest revenue
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
|
|||||
(in millions)
|
|
|||||||||||||||
Interest revenue
|
|
|
|
|
|
|
||||||||||
Deposits with banks
|
$
|
59
|
|
$
|
56
|
|
$
|
34
|
|
|
$
|
157
|
|
$
|
83
|
|
Deposits with the Federal Reserve and other central banks
|
125
|
|
136
|
|
89
|
|
|
387
|
|
217
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
281
|
|
230
|
|
119
|
|
|
681
|
|
272
|
|
|||||
Margin loans
|
129
|
|
128
|
|
87
|
|
|
372
|
|
249
|
|
|||||
Non-margin loans
|
344
|
|
345
|
|
283
|
|
|
994
|
|
800
|
|
|||||
Securities:
|
|
|
|
|
|
|
||||||||||
Taxable
|
650
|
|
615
|
|
510
|
|
|
1,846
|
|
1,447
|
|
|||||
Exempt from federal income taxes
|
14
|
|
14
|
|
16
|
|
|
43
|
|
49
|
|
|||||
Total securities
|
664
|
|
629
|
|
526
|
|
|
1,889
|
|
1,496
|
|
|||||
Trading securities
|
32
|
|
29
|
|
13
|
|
|
88
|
|
46
|
|
|||||
Total interest revenue
|
1,634
|
|
1,553
|
|
1,151
|
|
|
4,568
|
|
3,163
|
|
|||||
Interest expense
|
|
|
|
|
|
|
||||||||||
Deposits
|
237
|
|
173
|
|
57
|
|
|
527
|
|
98
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
190
|
|
158
|
|
70
|
|
|
455
|
|
132
|
|
|||||
Trading liabilities
|
7
|
|
7
|
|
2
|
|
|
23
|
|
6
|
|
|||||
Other borrowed funds
|
16
|
|
14
|
|
7
|
|
|
39
|
|
13
|
|
|||||
Commercial paper
|
16
|
|
21
|
|
8
|
|
|
49
|
|
18
|
|
|||||
Customer payables
|
51
|
|
45
|
|
19
|
|
|
127
|
|
42
|
|
|||||
Long-term debt
|
226
|
|
219
|
|
149
|
|
|
622
|
|
397
|
|
|||||
Total interest expense
|
743
|
|
637
|
|
312
|
|
|
1,842
|
|
706
|
|
|||||
Net interest revenue
|
891
|
|
916
|
|
839
|
|
|
2,726
|
|
2,457
|
|
|||||
Provision for credit losses
|
(3
|
)
|
(3
|
)
|
(6
|
)
|
|
(11
|
)
|
(18
|
)
|
|||||
Net interest revenue after provision for credit losses
|
$
|
894
|
|
$
|
919
|
|
$
|
845
|
|
|
$
|
2,737
|
|
$
|
2,475
|
|
Net periodic benefit (credit) cost
|
Quarter ended
|
||||||||||||||||||||||||||||
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|||||||||||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|||||||||
Service cost
|
$
|
—
|
|
$
|
7
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
7
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
7
|
|
$
|
—
|
|
Interest cost
|
42
|
|
8
|
|
1
|
|
|
42
|
|
8
|
|
2
|
|
|
45
|
|
8
|
|
2
|
|
|||||||||
Expected return on assets
|
(85
|
)
|
(14
|
)
|
(2
|
)
|
|
(85
|
)
|
(14
|
)
|
(2
|
)
|
|
(81
|
)
|
(12
|
)
|
(2
|
)
|
|||||||||
Other
|
19
|
|
5
|
|
(1
|
)
|
|
17
|
|
6
|
|
—
|
|
|
17
|
|
9
|
|
(1
|
)
|
|||||||||
Net periodic benefit (credit) cost
|
$
|
(24
|
)
|
$
|
6
|
|
$
|
(1
|
)
|
|
$
|
(26
|
)
|
$
|
7
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
$
|
12
|
|
$
|
(1
|
)
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net periodic benefit (credit) cost
|
Year-to-date
|
||||||||||||||||||
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
||||||
Service cost
|
$
|
—
|
|
$
|
21
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
21
|
|
$
|
—
|
|
Interest cost
|
127
|
|
24
|
|
5
|
|
|
135
|
|
24
|
|
6
|
|
||||||
Expected return on assets
|
(255
|
)
|
(43
|
)
|
(6
|
)
|
|
(243
|
)
|
(36
|
)
|
(6
|
)
|
||||||
Other
|
53
|
|
17
|
|
(2
|
)
|
|
51
|
|
27
|
|
(3
|
)
|
||||||
Net periodic benefit (credit) cost
|
$
|
(75
|
)
|
$
|
19
|
|
$
|
(2
|
)
|
|
$
|
(57
|
)
|
$
|
36
|
|
$
|
(3
|
)
|
Income tax (benefit) expense
|
|
||
(estimated in millions)
|
4Q17
|
|
|
Remeasurement of net deferred tax liabilities
|
$
|
(1,472
|
)
|
Repatriation tax
|
723
|
|
|
Other items
|
39
|
|
|
Net income tax (benefit)
|
$
|
(710
|
)
|
Notes to Consolidated Financial Statements
(continued)
|
|
Consolidated investments
|
|
|
|
|
|
||||||||||||||||
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||||
(in millions)
|
Investment
Management
funds
|
Securitization
|
|
Total
consolidated
investments
|
|
|
Investment
Management
funds
|
Securitization
|
|
Total
consolidated
investments
|
|
||||||||||
Securities - Available-for-sale
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400
|
|
$
|
400
|
|
Trading assets
|
243
|
|
|
400
|
|
643
|
|
|
516
|
|
|
—
|
|
516
|
|
||||||
Other assets
|
256
|
|
|
—
|
|
256
|
|
|
215
|
|
|
—
|
|
215
|
|
||||||
Total assets
|
$
|
499
|
|
(a)
|
$
|
400
|
|
$
|
899
|
|
|
$
|
731
|
|
(b)
|
$
|
400
|
|
$
|
1,131
|
|
Other liabilities
|
$
|
7
|
|
|
$
|
363
|
|
$
|
370
|
|
|
$
|
2
|
|
|
$
|
367
|
|
$
|
369
|
|
Total liabilities
|
$
|
7
|
|
(a)
|
$
|
363
|
|
$
|
370
|
|
|
$
|
2
|
|
(b)
|
$
|
367
|
|
$
|
369
|
|
Nonredeemable noncontrolling interests
|
$
|
90
|
|
(a)
|
$
|
—
|
|
$
|
90
|
|
|
$
|
316
|
|
(b)
|
$
|
—
|
|
$
|
316
|
|
(a)
|
Includes voting model entities (“VMEs”) with assets of
$283 million
, liabilities of
$1 million
and nonredeemable noncontrolling interests of less than
$1 million
.
|
(b)
|
Includes VMEs with assets of
$84 million
, liabilities of
$1 million
and nonredeemable noncontrolling interests of
$1 million
.
|
Non-consolidated VIEs
|
|
|
|
|
|||||||||||||||
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
||||||
Securities - Available-for-sale
(a)
|
$
|
219
|
|
$
|
—
|
|
$
|
219
|
|
|
$
|
203
|
|
$
|
—
|
|
$
|
203
|
|
Other
|
2,516
|
|
487
|
|
3,003
|
|
|
2,592
|
|
486
|
|
3,078
|
|
(a)
|
Includes investments in the Company’s sponsored CLOs.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Preferred stock summary
(a)
|
Total shares issued and outstanding
|
|
Carrying value
(b)
|
|||||||||
|
|
(in millions)
|
||||||||||
|
Per annum dividend rate
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|||
Series A
|
Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%
|
5,001
|
|
5,001
|
|
|
$
|
500
|
|
$
|
500
|
|
Series C
|
5.2%
|
5,825
|
|
5,825
|
|
|
568
|
|
568
|
|
||
Series D
|
4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%
|
5,000
|
|
5,000
|
|
|
494
|
|
494
|
|
||
Series E
|
4.95% to and including June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42%
|
10,000
|
|
10,000
|
|
|
990
|
|
990
|
|
||
Series F
|
4.625% to and including Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131%
|
10,000
|
|
10,000
|
|
|
990
|
|
990
|
|
||
Total
|
35,826
|
|
35,826
|
|
|
$
|
3,542
|
|
$
|
3,542
|
|
(a)
|
All outstanding preferred stock is noncumulative perpetual preferred stock with a liquidation preference of $100,000 per share.
|
(b)
|
The carrying value of the Series C, Series D, Series E and Series F preferred stock is recorded net of issuance costs.
|
(a)
|
Represents Normal Preferred Capital Securities.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Components of other comprehensive income (loss)
|
Quarter ended
|
||||||||||||||||||||||||||||
Sept. 30, 2018
|
|
June 30, 2018
|
|
Sept. 30, 2017
|
|||||||||||||||||||||||||
(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)
|
$
|
(21
|
)
|
$
|
(39
|
)
|
$
|
(60
|
)
|
|
$
|
(302
|
)
|
$
|
(98
|
)
|
$
|
(400
|
)
|
|
$
|
221
|
|
$
|
65
|
|
$
|
286
|
|
Total foreign currency translation
|
(21
|
)
|
(39
|
)
|
(60
|
)
|
|
(302
|
)
|
(98
|
)
|
(400
|
)
|
|
221
|
|
65
|
|
286
|
|
|||||||||
Unrealized (loss) gain on assets available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized (loss) gain arising during period
|
(190
|
)
|
46
|
|
(144
|
)
|
|
(103
|
)
|
39
|
|
(64
|
)
|
|
47
|
|
(19
|
)
|
28
|
|
|||||||||
Reclassification adjustment
(b)
|
—
|
|
—
|
|
—
|
|
|
(1
|
)
|
1
|
|
—
|
|
|
(19
|
)
|
7
|
|
(12
|
)
|
|||||||||
Net unrealized (loss) gain on assets available-for-sale
|
(190
|
)
|
46
|
|
(144
|
)
|
|
(104
|
)
|
40
|
|
(64
|
)
|
|
28
|
|
(12
|
)
|
16
|
|
|||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
(b)
|
23
|
|
(5
|
)
|
18
|
|
|
22
|
|
(6
|
)
|
16
|
|
|
25
|
|
(10
|
)
|
15
|
|
|||||||||
Total defined benefit plans
|
23
|
|
(5
|
)
|
18
|
|
|
22
|
|
(6
|
)
|
16
|
|
|
25
|
|
(10
|
)
|
15
|
|
|||||||||
Unrealized (loss) gain on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized hedge (loss) gain arising during period
|
(9
|
)
|
2
|
|
(7
|
)
|
|
(17
|
)
|
3
|
|
(14
|
)
|
|
(2
|
)
|
—
|
|
(2
|
)
|
|||||||||
Reclassification of net loss (gain) to net income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FX contracts - trading revenue
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
1
|
|
(1
|
)
|
—
|
|
|||||||||
FX contracts - other revenue
|
—
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
FX contracts - salary expense
|
4
|
|
(1
|
)
|
3
|
|
|
(2
|
)
|
1
|
|
(1
|
)
|
|
2
|
|
—
|
|
2
|
|
|||||||||
Total reclassifications to net income
(b)
|
4
|
|
(1
|
)
|
3
|
|
|
(1
|
)
|
1
|
|
—
|
|
|
3
|
|
(1
|
)
|
2
|
|
|||||||||
Net unrealized (loss) gain on cash flow hedges
|
(5
|
)
|
1
|
|
(4
|
)
|
|
(18
|
)
|
4
|
|
(14
|
)
|
|
1
|
|
(1
|
)
|
—
|
|
|||||||||
Total other comprehensive (loss) income
|
$
|
(193
|
)
|
$
|
3
|
|
$
|
(190
|
)
|
|
$
|
(402
|
)
|
$
|
(60
|
)
|
$
|
(462
|
)
|
|
$
|
275
|
|
$
|
42
|
|
$
|
317
|
|
Components of other comprehensive income (loss)
|
Year-to-date
|
||||||||||||||||||
|
Sept. 30, 2018
|
|
Sept. 30, 2017
|
||||||||||||||||
(in millions)
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
|
Pre-tax
amount
|
|
Tax
(expense)
benefit
|
|
After-tax
amount
|
|
||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments arising during the period
(a)
|
$
|
(122
|
)
|
$
|
(94
|
)
|
$
|
(216
|
)
|
|
$
|
566
|
|
$
|
175
|
|
$
|
741
|
|
Total foreign currency translation
|
(122
|
)
|
(94
|
)
|
(216
|
)
|
|
566
|
|
175
|
|
741
|
|
||||||
Unrealized (loss) gain on assets available-for-sale:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized (loss) gain arising during period
|
(635
|
)
|
152
|
|
(483
|
)
|
|
357
|
|
(144
|
)
|
213
|
|
||||||
Reclassification adjustment
(b)
|
48
|
|
(11
|
)
|
37
|
|
|
(29
|
)
|
10
|
|
(19
|
)
|
||||||
Net unrealized (loss) gain on assets available-for-sale
|
(587
|
)
|
141
|
|
(446
|
)
|
|
328
|
|
(134
|
)
|
194
|
|
||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
||||||||||||
Net gain (loss) arising during the period
|
—
|
|
—
|
|
—
|
|
|
3
|
|
(1
|
)
|
2
|
|
||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
(b)
|
67
|
|
(16
|
)
|
51
|
|
|
74
|
|
(25
|
)
|
49
|
|
||||||
Total defined benefit plans
|
67
|
|
(16
|
)
|
51
|
|
|
77
|
|
(26
|
)
|
51
|
|
||||||
Unrealized (loss) gain on cash flow hedges:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized hedge (loss) gain arising during period
|
(19
|
)
|
4
|
|
(15
|
)
|
|
4
|
|
(1
|
)
|
3
|
|
||||||
Reclassification of net (gain) loss to net income:
|
|
|
|
|
|
|
|
||||||||||||
FX contracts - trading revenue
|
—
|
|
—
|
|
—
|
|
|
(2
|
)
|
—
|
|
(2
|
)
|
||||||
FX contracts - other revenue
|
(3
|
)
|
1
|
|
(2
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
FX contracts - salary expense
|
(4
|
)
|
1
|
|
(3
|
)
|
|
15
|
|
(5
|
)
|
10
|
|
||||||
Total reclassifications to net income
(b)
|
(7
|
)
|
2
|
|
(5
|
)
|
|
13
|
|
(5
|
)
|
8
|
|
||||||
Net unrealized (loss) gain on cash flow hedges
|
(26
|
)
|
6
|
|
(20
|
)
|
|
17
|
|
(6
|
)
|
11
|
|
||||||
Total other comprehensive (loss) income
|
$
|
(668
|
)
|
$
|
37
|
|
$
|
(631
|
)
|
|
$
|
988
|
|
$
|
9
|
|
$
|
997
|
|
(a)
|
Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 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 17 for the location of the reclassification adjustment related to cash flow hedges on the Consolidated Income Statement.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a recurring basis at Sept. 30, 2018
|
Total carrying
value |
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
19,512
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
19,512
|
|
U.S. government agencies
|
—
|
|
1,525
|
|
—
|
|
—
|
|
1,525
|
|
|||||
Sovereign debt/sovereign guaranteed
|
9,180
|
|
2,362
|
|
—
|
|
—
|
|
11,542
|
|
|||||
State and political subdivisions
|
—
|
|
2,336
|
|
—
|
|
—
|
|
2,336
|
|
|||||
Agency RMBS
|
—
|
|
24,867
|
|
—
|
|
—
|
|
24,867
|
|
|||||
Non-agency RMBS
(b)
|
—
|
|
1,419
|
|
—
|
|
—
|
|
1,419
|
|
|||||
Non-agency commercial MBS
|
—
|
|
1,459
|
|
—
|
|
—
|
|
1,459
|
|
|||||
Agency commercial MBS
|
—
|
|
9,613
|
|
—
|
|
—
|
|
9,613
|
|
|||||
CLOs
|
—
|
|
3,363
|
|
—
|
|
—
|
|
3,363
|
|
|||||
Corporate bonds
|
—
|
|
1,118
|
|
—
|
|
—
|
|
1,118
|
|
|||||
Other debt securities
|
—
|
|
4,429
|
|
—
|
|
—
|
|
4,429
|
|
|||||
Foreign covered bonds
|
—
|
|
2,972
|
|
—
|
|
—
|
|
2,972
|
|
|||||
Total available-for-sale securities
|
28,692
|
|
55,463
|
|
—
|
|
—
|
|
84,155
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt instruments
|
1,648
|
|
2,791
|
|
—
|
|
—
|
|
4,439
|
|
|||||
Equity instruments
(c)
|
1,429
|
|
—
|
|
—
|
|
—
|
|
1,429
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
8
|
|
3,228
|
|
—
|
|
(2,121
|
)
|
1,115
|
|
|||||
Foreign exchange
|
—
|
|
3,611
|
|
—
|
|
(2,807
|
)
|
804
|
|
|||||
Equity and other contracts
|
—
|
|
40
|
|
—
|
|
(23
|
)
|
17
|
|
|||||
Total derivative assets not designated as hedging
|
8
|
|
6,879
|
|
—
|
|
(4,951
|
)
|
1,936
|
|
|||||
Total trading assets
|
3,085
|
|
9,670
|
|
—
|
|
(4,951
|
)
|
7,804
|
|
|||||
Other assets:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
151
|
|
—
|
|
—
|
|
151
|
|
|||||
Foreign exchange
|
—
|
|
196
|
|
—
|
|
—
|
|
196
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
347
|
|
—
|
|
—
|
|
347
|
|
|||||
Other assets
(d)
|
101
|
|
184
|
|
—
|
|
—
|
|
285
|
|
|||||
Other assets measured at NAV
(d)
|
|
|
|
|
200
|
|
|||||||||
Total other assets
|
101
|
|
531
|
|
—
|
|
—
|
|
832
|
|
|||||
Subtotal assets of operations at fair value
|
31,878
|
|
65,664
|
|
—
|
|
(4,951
|
)
|
92,791
|
|
|||||
Percentage of assets of operations prior to netting
|
33
|
%
|
67
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds
|
216
|
|
283
|
|
—
|
|
—
|
|
499
|
|
|||||
Total assets
|
$
|
32,094
|
|
$
|
65,947
|
|
$
|
—
|
|
$
|
(4,951
|
)
|
$
|
93,290
|
|
Percentage of total assets prior to netting
|
33
|
%
|
67
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Sept. 30, 2018
|
Total carrying
value |
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt instruments
|
$
|
1,186
|
|
$
|
216
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,402
|
|
Equity instruments
|
22
|
|
—
|
|
—
|
|
—
|
|
22
|
|
|||||
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
4
|
|
2,813
|
|
—
|
|
(2,262
|
)
|
555
|
|
|||||
Foreign exchange
|
—
|
|
3,937
|
|
—
|
|
(2,455
|
)
|
1,482
|
|
|||||
Equity and other contracts
|
2
|
|
108
|
|
—
|
|
(35
|
)
|
75
|
|
|||||
Total derivative liabilities not designated as hedging
|
6
|
|
6,858
|
|
—
|
|
(4,752
|
)
|
2,112
|
|
|||||
Total trading liabilities
|
1,214
|
|
7,074
|
|
—
|
|
(4,752
|
)
|
3,536
|
|
|||||
Long-term debt
(c)
|
—
|
|
363
|
|
—
|
|
—
|
|
363
|
|
|||||
Other liabilities – derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
36
|
|
—
|
|
—
|
|
36
|
|
|||||
Foreign exchange
|
—
|
|
38
|
|
—
|
|
—
|
|
38
|
|
|||||
Total other liabilities – derivative liabilities designated as hedging
|
—
|
|
74
|
|
—
|
|
—
|
|
74
|
|
|||||
Subtotal liabilities of operations at fair value
|
1,214
|
|
7,511
|
|
—
|
|
(4,752
|
)
|
3,973
|
|
|||||
Percentage of liabilities of operations prior to netting
|
14
|
%
|
86
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds
|
—
|
|
7
|
|
—
|
|
—
|
|
7
|
|
|||||
Total liabilities
|
$
|
1,214
|
|
$
|
7,518
|
|
$
|
—
|
|
$
|
(4,752
|
)
|
$
|
3,980
|
|
Percentage of total liabilities prior to netting
|
14
|
%
|
86
|
%
|
—
|
%
|
|
|
(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
$889 million
in Level 2 that was included in the former Grantor Trust.
|
(c)
|
Includes certain interests in securitizations.
|
(d)
|
Includes seed capital, private equity investments and other assets.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a recurring basis at Dec. 31, 2017
|
Total carrying
value
|
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
15,263
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15,263
|
|
U.S. government agencies
|
—
|
|
908
|
|
—
|
|
—
|
|
908
|
|
|||||
Sovereign debt/sovereign guaranteed
|
9,919
|
|
2,638
|
|
—
|
|
—
|
|
12,557
|
|
|||||
State and political subdivisions
|
—
|
|
2,957
|
|
—
|
|
—
|
|
2,957
|
|
|||||
Agency RMBS
|
—
|
|
23,819
|
|
—
|
|
—
|
|
23,819
|
|
|||||
Non-agency RMBS
(b)
|
—
|
|
1,578
|
|
—
|
|
—
|
|
1,578
|
|
|||||
Other RMBS
|
—
|
|
149
|
|
—
|
|
—
|
|
149
|
|
|||||
Non-agency commercial MBS
|
—
|
|
1,360
|
|
—
|
|
—
|
|
1,360
|
|
|||||
Agency commercial MBS
|
—
|
|
8,762
|
|
—
|
|
—
|
|
8,762
|
|
|||||
CLOs
|
—
|
|
2,909
|
|
—
|
|
—
|
|
2,909
|
|
|||||
Other asset-backed securities
|
—
|
|
1,043
|
|
—
|
|
—
|
|
1,043
|
|
|||||
Money market funds
(c)
|
963
|
|
—
|
|
—
|
|
—
|
|
963
|
|
|||||
Corporate bonds
|
—
|
|
1,255
|
|
—
|
|
—
|
|
1,255
|
|
|||||
Other debt securities
|
—
|
|
3,491
|
|
—
|
|
—
|
|
3,491
|
|
|||||
Foreign covered bonds
|
—
|
|
2,529
|
|
—
|
|
—
|
|
2,529
|
|
|||||
Total available-for-sale securities
|
26,145
|
|
53,398
|
|
—
|
|
—
|
|
79,543
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(c)
|
1,344
|
|
1,910
|
|
—
|
|
—
|
|
3,254
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
9
|
|
6,430
|
|
—
|
|
(5,075
|
)
|
1,364
|
|
|||||
Foreign exchange
|
—
|
|
5,104
|
|
—
|
|
(3,720
|
)
|
1,384
|
|
|||||
Equity and other contracts
|
—
|
|
70
|
|
—
|
|
(50
|
)
|
20
|
|
|||||
Total derivative assets not designated as hedging
|
9
|
|
11,604
|
|
—
|
|
(8,845
|
)
|
2,768
|
|
|||||
Total trading assets
|
1,353
|
|
13,514
|
|
—
|
|
(8,845
|
)
|
6,022
|
|
|||||
Other assets
:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
278
|
|
—
|
|
—
|
|
278
|
|
|||||
Foreign exchange
|
—
|
|
45
|
|
—
|
|
—
|
|
45
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
323
|
|
—
|
|
—
|
|
323
|
|
|||||
Other assets
(d)
|
144
|
|
170
|
|
—
|
|
—
|
|
314
|
|
|||||
Other assets measured at NAV
(d)
|
|
|
|
|
154
|
|
|||||||||
Total other assets
|
144
|
|
493
|
|
—
|
|
—
|
|
791
|
|
|||||
Subtotal assets of operations at fair value
|
27,642
|
|
67,405
|
|
—
|
|
(8,845
|
)
|
86,356
|
|
|||||
Percentage of assets of operations prior to netting
|
29
|
%
|
71
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds
|
322
|
|
409
|
|
—
|
|
—
|
|
731
|
|
|||||
Total assets
|
$
|
27,964
|
|
$
|
67,814
|
|
$
|
—
|
|
$
|
(8,845
|
)
|
$
|
87,087
|
|
Percentage of total assets prior to netting
|
29
|
%
|
71
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Dec. 31, 2017
|
Total carrying
value
|
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
|||||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
1,128
|
|
$
|
80
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,208
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
4
|
|
6,349
|
|
—
|
|
(5,495
|
)
|
858
|
|
|||||
Foreign exchange
|
—
|
|
5,067
|
|
—
|
|
(3,221
|
)
|
1,846
|
|
|||||
Equity and other contracts
|
—
|
|
153
|
|
—
|
|
(81
|
)
|
72
|
|
|||||
Total derivative liabilities not designated as hedging
|
4
|
|
11,569
|
|
—
|
|
(8,797
|
)
|
2,776
|
|
|||||
Total trading liabilities
|
1,132
|
|
11,649
|
|
—
|
|
(8,797
|
)
|
3,984
|
|
|||||
Long-term debt (
c
)
|
—
|
|
367
|
|
—
|
|
—
|
|
367
|
|
|||||
Other liabilities – derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
534
|
|
—
|
|
—
|
|
534
|
|
|||||
Foreign exchange
|
—
|
|
266
|
|
—
|
|
—
|
|
266
|
|
|||||
Total other liabilities – derivative liabilities designated as hedging
|
—
|
|
800
|
|
—
|
|
—
|
|
800
|
|
|||||
Subtotal liabilities of operations at fair value
|
1,132
|
|
12,816
|
|
—
|
|
(8,797
|
)
|
5,151
|
|
|||||
Percentage of liabilities of operations prior to netting
|
8
|
%
|
92
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds
|
1
|
|
1
|
|
—
|
|
—
|
|
2
|
|
|||||
Total liabilities
|
$
|
1,133
|
|
$
|
12,817
|
|
$
|
—
|
|
$
|
(8,797
|
)
|
$
|
5,153
|
|
Percentage of total liabilities prior to netting
|
8
|
%
|
92
|
%
|
—
|
%
|
|
|
(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
$1,091 million
in Level 2 that was included in the former Grantor Trust.
|
(c)
|
Includes certain interests in securitizations.
|
(d)
|
Includes private equity investments and seed capital.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Details of certain available-for-sale securities measured at fair value on a recurring basis
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||||||||
Total
carrying
value
(b)
|
|
|
Ratings
(a)
|
|
Total
carrying value
|
|
|
Ratings
(a)
|
|||||||||||||||||
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
|
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
|||||||||
(dollars in millions)
|
|
(b)
|
|||||||||||||||||||||||
Non-agency RMBS
(c)
, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007
|
$
|
337
|
|
|
15
|
%
|
2
|
%
|
4
|
%
|
79
|
%
|
|
$
|
419
|
|
|
13
|
%
|
3
|
%
|
—
|
%
|
84
|
%
|
2006
|
385
|
|
|
—
|
|
18
|
|
1
|
|
81
|
|
|
467
|
|
|
—
|
|
17
|
|
—
|
|
83
|
|
||
2005
|
426
|
|
|
5
|
|
1
|
|
10
|
|
84
|
|
|
509
|
|
|
6
|
|
2
|
|
6
|
|
86
|
|
||
2004 and earlier
|
271
|
|
|
3
|
|
5
|
|
30
|
|
62
|
|
|
332
|
|
|
3
|
|
2
|
|
31
|
|
64
|
|
||
Total non-agency RMBS
|
$
|
1,419
|
|
|
5
|
%
|
7
|
%
|
10
|
%
|
78
|
%
|
|
$
|
1,727
|
|
(d)
|
6
|
%
|
6
|
%
|
8
|
%
|
80
|
%
|
Non-agency commercial MBS, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2009-2017
|
$
|
1,412
|
|
|
96
|
%
|
4
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,309
|
|
|
94
|
%
|
6
|
%
|
—
|
%
|
—
|
%
|
2005
|
47
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
51
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total non-agency commercial MBS
|
$
|
1,459
|
|
|
96
|
%
|
4
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,360
|
|
|
94
|
%
|
6
|
%
|
—
|
%
|
—
|
%
|
Foreign covered bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada
|
$
|
1,583
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,659
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
United Kingdom
|
524
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
103
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Australia
|
363
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
265
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Sweden
|
191
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
136
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
|
311
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
366
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total foreign covered bonds
|
$
|
2,972
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,529
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
Sovereign debt/sovereign guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
2,627
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
3,052
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
Germany
|
1,853
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,586
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
France
|
1,837
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
2,046
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Spain
|
1,444
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,635
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Italy
|
972
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,292
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Netherlands
|
887
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,027
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
792
|
|
|
—
|
|
100
|
|
—
|
|
—
|
|
|
843
|
|
|
—
|
|
100
|
|
—
|
|
—
|
|
||
Canada
|
325
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Belgium
|
312
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
803
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
(e)
|
493
|
|
|
79
|
|
—
|
|
—
|
|
21
|
|
|
273
|
|
|
50
|
|
—
|
|
—
|
|
50
|
|
||
Total sovereign debt/sovereign guaranteed
|
$
|
11,542
|
|
|
71
|
%
|
7
|
%
|
21
|
%
|
1
|
%
|
|
$
|
12,557
|
|
|
69
|
%
|
7
|
%
|
23
|
%
|
1
|
%
|
(a)
|
Represents ratings by S&P or the equivalent.
|
(b)
|
At
Sept. 30, 2018
and
Dec. 31, 2017
, sovereign debt/sovereign guaranteed securities 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.
|
(c)
|
Includes
$889 million
at
Sept. 30, 2018
and
$1,091 million
at
Dec. 31, 2017
that were included in the former Grantor Trust.
|
(d)
|
Includes other RMBS.
|
(e)
|
Includes non-investment grade sovereign debt/sovereign guaranteed securities related to Brazil of
$102 million
at
Sept. 30, 2018
and
$136 million
at
Dec. 31, 2017
.
|
Assets measured at fair value on a nonrecurring basis
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||||||||
|
|
|
Total carrying
value
|
|
|
|
|
|
Total carrying
value
|
|
|||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||||||
Loans
(a)
|
$
|
—
|
|
$
|
65
|
|
$
|
4
|
|
$
|
69
|
|
|
$
|
—
|
|
$
|
73
|
|
$
|
6
|
|
$
|
79
|
|
Other assets
(b)
|
—
|
|
9
|
|
—
|
|
9
|
|
|
—
|
|
4
|
|
—
|
|
4
|
|
||||||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
$
|
74
|
|
$
|
4
|
|
$
|
78
|
|
|
$
|
—
|
|
$
|
77
|
|
$
|
6
|
|
$
|
83
|
|
(a)
|
During the quarters ended
Sept. 30, 2018
and
Dec. 31, 2017
, the fair value of these loans decreased less than
$1 million
and less than
$1 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)
|
|
Summary of financial instruments
|
Sept. 30, 2018
|
||||||||||||||
(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
|
$
|
—
|
|
$
|
74,725
|
|
$
|
—
|
|
$
|
74,725
|
|
$
|
74,725
|
|
Interest-bearing deposits with banks
|
—
|
|
14,538
|
|
—
|
|
14,538
|
|
14,519
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
28,722
|
|
—
|
|
28,722
|
|
28,722
|
|
|||||
Securities held-to-maturity
|
5,660
|
|
27,685
|
|
—
|
|
33,345
|
|
34,486
|
|
|||||
Loans
(a)
|
—
|
|
52,613
|
|
—
|
|
52,613
|
|
52,564
|
|
|||||
Other financial assets
|
5,047
|
|
1,337
|
|
—
|
|
6,384
|
|
6,384
|
|
|||||
Total
|
$
|
10,707
|
|
$
|
199,620
|
|
$
|
—
|
|
$
|
210,327
|
|
$
|
211,400
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
65,846
|
|
$
|
—
|
|
$
|
65,846
|
|
$
|
65,846
|
|
Interest-bearing deposits
|
—
|
|
163,990
|
|
—
|
|
163,990
|
|
165,744
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
10,158
|
|
—
|
|
10,158
|
|
10,158
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
18,683
|
|
—
|
|
18,683
|
|
18,683
|
|
|||||
Commercial paper
|
—
|
|
735
|
|
—
|
|
735
|
|
735
|
|
|||||
Borrowings
|
—
|
|
3,229
|
|
—
|
|
3,229
|
|
3,229
|
|
|||||
Long-term debt
|
—
|
|
27,217
|
|
—
|
|
27,217
|
|
27,750
|
|
|||||
Total
|
$
|
—
|
|
$
|
289,858
|
|
$
|
—
|
|
$
|
289,858
|
|
$
|
292,145
|
|
(a)
|
Does not include the leasing portfolio.
|
Summary of financial instruments
|
Dec. 31, 2017
|
||||||||||||||
(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
|
$
|
—
|
|
$
|
91,510
|
|
$
|
—
|
|
$
|
91,510
|
|
$
|
91,510
|
|
Interest-bearing deposits with banks
|
—
|
|
11,982
|
|
—
|
|
11,982
|
|
11,979
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
28,135
|
|
—
|
|
28,135
|
|
28,135
|
|
|||||
Securities held-to-maturity
|
11,365
|
|
29,147
|
|
—
|
|
40,512
|
|
40,827
|
|
|||||
Loans
(a)
|
—
|
|
60,219
|
|
—
|
|
60,219
|
|
60,082
|
|
|||||
Other financial assets
|
5,382
|
|
1,244
|
|
—
|
|
6,626
|
|
6,626
|
|
|||||
Total
|
$
|
16,747
|
|
$
|
222,237
|
|
$
|
—
|
|
$
|
238,984
|
|
$
|
239,159
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
82,716
|
|
$
|
—
|
|
$
|
82,716
|
|
$
|
82,716
|
|
Interest-bearing deposits
|
—
|
|
160,042
|
|
—
|
|
160,042
|
|
161,606
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
15,163
|
|
—
|
|
15,163
|
|
15,163
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
20,184
|
|
—
|
|
20,184
|
|
20,184
|
|
|||||
Commercial paper
|
—
|
|
3,075
|
|
—
|
|
3,075
|
|
3,075
|
|
|||||
Borrowings
|
—
|
|
2,931
|
|
—
|
|
2,931
|
|
2,931
|
|
|||||
Long-term debt
|
—
|
|
27,789
|
|
—
|
|
27,789
|
|
27,612
|
|
|||||
Total
|
$
|
—
|
|
$
|
311,900
|
|
$
|
—
|
|
$
|
311,900
|
|
$
|
313,287
|
|
(a)
|
Does not include the leasing portfolio.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Hedged financial instruments
|
Carrying
amount
|
|
Notional amount of hedge
|
|
|
|
||||||
|
Unrealized
(a)
|
|||||||||||
(in millions)
|
Gain
|
|
(Loss)
|
|
||||||||
Sept. 30, 2018
|
|
|
|
|
||||||||
Securities available-for-sale
|
$
|
17,602
|
|
$
|
18,009
|
|
$
|
151
|
|
$
|
(36
|
)
|
Long-term debt
|
19,904
|
|
20,650
|
|
—
|
|
—
|
|
||||
Dec. 31, 2017
|
|
|||||||||||
Securities available-for-sale
|
$
|
12,307
|
|
$
|
12,365
|
|
$
|
102
|
|
$
|
(301
|
)
|
Long-term debt
|
23,821
|
|
23,950
|
|
175
|
|
(233
|
)
|
(a)
|
Unrealized gain/loss amounts reflect the fact that certain of the derivatives are cleared and settled through central clearing counterparties where cash collateral received and paid is deemed a settlement of the derivative.
|
Assets and liabilities of consolidated investment management funds, at fair value
|
|
|
||||
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|||
(in millions)
|
||||||
Assets of consolidated investment management funds:
|
|
|
||||
Trading assets
|
$
|
243
|
|
$
|
516
|
|
Other assets
|
256
|
|
215
|
|
||
Total assets of consolidated investment management funds
|
$
|
499
|
|
$
|
731
|
|
Liabilities of consolidated investment management funds:
|
|
|
||||
Other liabilities
|
$
|
7
|
|
$
|
2
|
|
Total liabilities of consolidated investment management funds
|
$
|
7
|
|
$
|
2
|
|
Foreign exchange and other trading revenue
(a)
|
|
||||||||||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|||||
Long-term debt
|
$
|
—
|
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
4
|
|
$
|
(6
|
)
|
(a)
|
The change in fair value is approximately offset by an economic hedge included in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Income statement impact of fair value and cash flow hedges
|
|
|
|
|
|
|
|
|||||||||||
(in millions)
|
Location of
gains (losses)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
|
YTD18
|
|
YTD17
|
|
||||||
Fair value hedges of available-for-sale securities
|
|
|
|
|
|
|
|
|||||||||||
|
Derivative
|
Interest income
|
$
|
214
|
|
$
|
136
|
|
$
|
12
|
|
|
$
|
747
|
|
$
|
(9
|
)
|
|
Hedged item
|
Interest income
|
(209
|
)
|
(133
|
)
|
(12
|
)
|
|
(725
|
)
|
(4
|
)
|
|||||
Fair value hedges of long-term debt
|
|
|
|
|
|
|
|
|||||||||||
|
Derivative
|
Interest expense
|
(101
|
)
|
(131
|
)
|
(45
|
)
|
|
(610
|
)
|
(12
|
)
|
|||||
|
Hedged item
|
Interest expense
|
103
|
|
129
|
|
43
|
|
|
609
|
|
12
|
|
|||||
Cash flow hedges of forecasted FX exposures
|
|
|
|
|
|
|
|
|||||||||||
|
(Loss) gain reclassified from OCI into income
|
Trading revenue
|
—
|
|
—
|
|
(1
|
)
|
|
—
|
|
2
|
|
|||||
|
(Loss) gain reclassified from OCI into income
|
Other revenue
|
—
|
|
(1
|
)
|
—
|
|
|
3
|
|
—
|
|
|||||
|
(Loss) gain reclassified from OCI into income
|
Salary expense
|
(4
|
)
|
2
|
|
(2
|
)
|
|
4
|
|
(15
|
)
|
|||||
|
Gains (losses) recognized in the consolidated income statement due to fair value and cash flow hedging relationships
|
|
$
|
3
|
|
$
|
2
|
|
$
|
(5
|
)
|
|
$
|
28
|
|
$
|
(26
|
)
|
Hedged items in fair value hedging relationships at Sept. 30, 2018
|
Carrying amount of hedged asset or liability
|
|
Hedge accounting basis adjustment (decrease)
|
|
|
||||
(in millions)
|
|
||||||||
Available-for-sale securities
|
|
$
|
17,602
|
|
|
$
|
(584
|
)
|
|
Long-term debt
|
|
19,904
|
|
|
(747
|
)
|
(a)
|
(a)
|
Includes
$111 million
of basis adjustment on long-term debt associated with terminated hedges.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Impact of derivative instruments on the balance sheet
|
Notional value
|
|
Asset derivatives
fair value
|
|
Liability derivatives
fair value
|
|||||||||||||||
(in millions)
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
||||||
Derivatives designated as hedging instruments:
(a)(b)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
38,659
|
|
$
|
36,315
|
|
|
$
|
151
|
|
$
|
278
|
|
|
$
|
36
|
|
$
|
534
|
|
Foreign exchange contracts
|
7,487
|
|
8,923
|
|
|
196
|
|
45
|
|
|
38
|
|
266
|
|
||||||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
347
|
|
$
|
323
|
|
|
$
|
74
|
|
$
|
800
|
|
||||
Derivatives not designated as hedging instruments:
(b)(c)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
272,429
|
|
$
|
267,485
|
|
|
$
|
3,236
|
|
$
|
6,439
|
|
|
$
|
2,817
|
|
$
|
6,353
|
|
Foreign exchange contracts
|
685,871
|
|
767,999
|
|
|
3,611
|
|
5,104
|
|
|
3,937
|
|
5,067
|
|
||||||
Equity contracts
|
961
|
|
1,698
|
|
|
40
|
|
70
|
|
|
106
|
|
149
|
|
||||||
Credit contracts
|
180
|
|
180
|
|
|
—
|
|
—
|
|
|
4
|
|
4
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
6,887
|
|
$
|
11,613
|
|
|
$
|
6,864
|
|
$
|
11,573
|
|
||||
Total derivatives fair value
(d)
|
|
|
|
$
|
7,234
|
|
$
|
11,936
|
|
|
$
|
6,938
|
|
$
|
12,373
|
|
||||
Effect of master netting agreements
(e)
|
|
|
|
(4,951
|
)
|
(8,845
|
)
|
|
(4,752
|
)
|
(8,797
|
)
|
||||||||
Fair value after effect of master netting agreements
|
|
|
|
$
|
2,283
|
|
$
|
3,091
|
|
|
$
|
2,186
|
|
$
|
3,576
|
|
(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 consolidated balance sheet.
|
(b)
|
Pursuant to a rule change at a clearing organization in 2018, cash collateral exchanged is deemed a settlement of the derivative each day. The impact of the change reduced the gross fair value of derivative assets and liabilities and a corresponding decrease in effect of master netting agreements, with no impact to the consolidated balance sheet.
|
(c)
|
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 consolidated balance sheet.
|
(d)
|
Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815, Derivatives and Hedging.
|
(e)
|
Effect of master netting agreements includes cash collateral received and paid of
$607 million
and
$408 million
, respectively, at
Sept. 30, 2018
, and
$925 million
and
$877 million
, respectively, at
Dec. 31, 2017
.
|
Foreign exchange and other trading revenue
|
|
|
|||||||||||||
(in millions)
|
3Q18
|
|
2Q18
|
|
3Q17
|
|
YTD18
|
|
YTD17
|
|
|||||
Foreign exchange
|
$
|
150
|
|
$
|
171
|
|
$
|
158
|
|
$
|
504
|
|
$
|
463
|
|
Other trading revenue
|
5
|
|
16
|
|
15
|
|
47
|
|
39
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
155
|
|
$
|
187
|
|
$
|
173
|
|
$
|
551
|
|
$
|
502
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
(in millions)
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
||
Aggregate fair value of OTC derivatives in net liability positions
(a)
|
$
|
1,811
|
|
$
|
2,393
|
|
Collateral posted
|
$
|
1,690
|
|
$
|
2,115
|
|
(a)
|
Before consideration of cash collateral.
|
Potential close-out exposures (fair value)
(a)
|
|
|||||
(in millions)
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
||
If The Bank of New York Mellon’s rating changed to:
(b)
|
|
|
||||
A3/A-
|
$
|
29
|
|
$
|
92
|
|
Baa2/BBB
|
$
|
190
|
|
$
|
748
|
|
Ba1/BB+
|
$
|
644
|
|
$
|
2,007
|
|
(a)
|
The amounts represent potential total close-out values if The Bank of New York Mellon’s long-term issuer rating were to immediately drop to the indicated levels, and do not reflect collateral posted.
|
(b)
|
Represents rating by Moody’s/S&P.
|
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.
|
Offsetting of derivative liabilities and financial liabilities at Sept. 30, 2018
|
Net liabilities recognized in the balance sheet
|
|
|
|
|
||||||||||||||
|
Gross liabilities recognized
|
|
Gross amounts offset in 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
|
$
|
2,795
|
|
$
|
2,262
|
|
|
$
|
533
|
|
$
|
414
|
|
$
|
—
|
|
$
|
119
|
|
Foreign exchange contracts
|
3,433
|
|
2,455
|
|
|
978
|
|
116
|
|
—
|
|
862
|
|
||||||
Equity and other contracts
|
106
|
|
35
|
|
|
71
|
|
67
|
|
—
|
|
4
|
|
||||||
Total derivatives subject to netting arrangements
|
6,334
|
|
4,752
|
|
|
1,582
|
|
597
|
|
—
|
|
985
|
|
||||||
Total derivatives not subject to netting arrangements
|
604
|
|
—
|
|
|
604
|
|
—
|
|
—
|
|
604
|
|
||||||
Total derivatives
|
6,938
|
|
4,752
|
|
|
2,186
|
|
597
|
|
—
|
|
1,589
|
|
||||||
Repurchase agreements
|
67,165
|
|
58,540
|
|
(b)
|
8,625
|
|
8,625
|
|
—
|
|
—
|
|
||||||
Securities lending
|
1,436
|
|
—
|
|
|
1,436
|
|
1,357
|
|
—
|
|
79
|
|
||||||
Total
|
$
|
75,539
|
|
$
|
63,292
|
|
|
$
|
12,247
|
|
$
|
10,579
|
|
$
|
—
|
|
$
|
1,668
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2017
|
Net liabilities recognized
in the
balance sheet
|
|
|
|
|
||||||||||||||
|
Gross liabilities recognized
|
|
Gross amounts offset in 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
|
$
|
6,810
|
|
$
|
5,495
|
|
|
$
|
1,315
|
|
$
|
1,222
|
|
$
|
—
|
|
$
|
93
|
|
Foreign exchange contracts
|
4,765
|
|
3,221
|
|
|
1,544
|
|
177
|
|
—
|
|
1,367
|
|
||||||
Equity and other contracts
|
143
|
|
81
|
|
|
62
|
|
58
|
|
—
|
|
4
|
|
||||||
Total derivatives subject to netting arrangements
|
11,718
|
|
8,797
|
|
|
2,921
|
|
1,457
|
|
—
|
|
1,464
|
|
||||||
Total derivatives not subject to netting arrangements
|
655
|
|
—
|
|
|
655
|
|
—
|
|
—
|
|
655
|
|
||||||
Total derivatives
|
12,373
|
|
8,797
|
|
|
3,576
|
|
1,457
|
|
—
|
|
2,119
|
|
||||||
Repurchase agreements
|
33,908
|
|
25,848
|
|
(b)
|
8,060
|
|
8,059
|
|
—
|
|
1
|
|
||||||
Securities lending
|
2,186
|
|
—
|
|
|
2,186
|
|
2,091
|
|
—
|
|
95
|
|
||||||
Total
|
$
|
48,467
|
|
$
|
34,645
|
|
|
$
|
13,822
|
|
$
|
11,607
|
|
$
|
—
|
|
$
|
2,215
|
|
(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)
|
|
Off-balance sheet credit risks
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
||
(in millions)
|
||||||
Lending commitments
|
$
|
50,858
|
|
$
|
51,467
|
|
Standby letters of credit
(a)
|
2,779
|
|
3,531
|
|
||
Commercial letters of credit
|
159
|
|
122
|
|
||
Securities lending indemnifications
(b)(c)
|
452,261
|
|
432,084
|
|
(a)
|
Net of participations totaling
$163 million
at
Sept. 30, 2018
and
$672 million
at
Dec. 31, 2017
.
|
(b)
|
Excludes the
indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients,
which totaled
$67 billion
at
Sept. 30, 2018
and
$69 billion
at
Dec. 31, 2017
.
|
(c)
|
Includes cash collateral, invested in indemnified repurchase agreements, held by us as securities lending agent of
$45 billion
at
Sept. 30, 2018
and
$33 billion
at
Dec. 31, 2017
.
|
Standby letters of credit
|
Sept. 30, 2018
|
|
Dec. 31, 2017
|
|
|
||||
Investment grade
|
89
|
%
|
84
|
%
|
Non-investment grade
|
11
|
%
|
16
|
%
|
Notes to Consolidated Financial Statements
(continued)
|
|
Financial institutions
portfolio exposure
(in billions)
|
Sept. 30, 2018
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Securities industry
|
$
|
2.3
|
|
$
|
21.4
|
|
$
|
23.7
|
|
Asset managers
|
1.3
|
|
6.3
|
|
7.6
|
|
|||
Banks
|
5.9
|
|
1.3
|
|
7.2
|
|
|||
Insurance
|
0.1
|
|
3.1
|
|
3.2
|
|
|||
Government
|
0.1
|
|
0.5
|
|
0.6
|
|
|||
Other
|
0.7
|
|
1.4
|
|
2.1
|
|
|||
Total
|
$
|
10.4
|
|
$
|
34.0
|
|
$
|
44.4
|
|
Commercial portfolio
exposure
(in billions)
|
Sept. 30, 2018
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Manufacturing
|
$
|
0.9
|
|
$
|
5.2
|
|
$
|
6.1
|
|
Services and other
|
0.6
|
|
4.7
|
|
5.3
|
|
|||
Energy and utilities
|
0.5
|
|
4.2
|
|
4.7
|
|
|||
Media and telecom
|
0.1
|
|
1.2
|
|
1.3
|
|
|||
Total
|
$
|
2.1
|
|
$
|
15.3
|
|
$
|
17.4
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Revenue amounts reflect fee and other revenue generated by each business. Fee and other revenue transferred between businesses under revenue transfer agreements is included within other revenue in each business.
|
•
|
Revenues and expenses associated with specific client bases are included in those businesses. For example, foreign exchange activity associated with clients using custody products is 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.
|
•
|
Incentives 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 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 securities portfolio. We typically allocate all interest revenue to the businesses generating the deposits. Accordingly, accretion related to the portion of the securities portfolio restructured in 2009 has been included in the results of the businesses.
|
•
|
Balance sheet assets and liabilities and their related income or expense are specifically assigned to each business. Businesses with a net liability position have been allocated assets.
|
•
|
Goodwill and intangible assets are reflected within individual businesses.
|
For the quarter ended Sept. 30, 2018
|
Investment
Services |
|
|
Investment
Management |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
2,230
|
|
|
$
|
938
|
|
(a)
|
$
|
7
|
|
|
$
|
3,175
|
|
(a)
|
Net interest revenue (expense)
|
827
|
|
|
77
|
|
|
(13
|
)
|
|
891
|
|
|
||||
Total revenue (loss)
|
3,057
|
|
|
1,015
|
|
(a)
|
(6
|
)
|
|
4,066
|
|
(a)
|
||||
Provision for credit losses
|
1
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
||||
Noninterest expense
|
2,030
|
|
|
701
|
|
|
6
|
|
|
2,737
|
|
(b)
|
||||
Income (loss) before taxes
|
$
|
1,026
|
|
|
$
|
316
|
|
(a)
|
$
|
(10
|
)
|
|
$
|
1,332
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
34
|
%
|
|
31
|
%
|
|
N/M
|
|
|
33
|
%
|
|
||||
Average assets
|
$
|
246,276
|
|
|
$
|
31,283
|
|
|
$
|
54,782
|
|
|
$
|
332,341
|
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$7 million
, representing
$10 million
of income and noncontrolling interests of
$3 million
. Income before taxes is net of noncontrolling interests of
$3 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interests of
$1 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
For the quarter ended June 30, 2018
|
Investment
Services |
|
|
Investment
Management |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
2,233
|
|
|
$
|
941
|
|
(a)
|
$
|
41
|
|
|
$
|
3,215
|
|
(a)
|
Net interest revenue (expense)
|
874
|
|
|
77
|
|
|
(35
|
)
|
|
916
|
|
|
||||
Total revenue
|
3,107
|
|
|
1,018
|
|
(a)
|
6
|
|
|
4,131
|
|
(a)
|
||||
Provision for credit losses
|
1
|
|
|
2
|
|
|
(6
|
)
|
|
(3
|
)
|
|
||||
Noninterest expense
|
1,967
|
|
|
697
|
|
|
81
|
|
|
2,745
|
|
(b)
|
||||
Income (loss) before taxes
|
$
|
1,139
|
|
|
$
|
319
|
|
(a)
|
$
|
(69
|
)
|
|
$
|
1,389
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
37
|
%
|
|
31
|
%
|
|
N/M
|
|
|
34
|
%
|
|
||||
Average assets
|
$
|
264,387
|
|
|
$
|
31,504
|
|
|
$
|
50,437
|
|
|
$
|
346,328
|
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$5 million
, representing
$12 million
of income and noncontrolling interests of
$7 million
. Income before taxes is net of noncontrolling interests of
$7 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interests of
$2 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the quarter ended Sept. 30, 2017
|
Investment
Services |
|
|
Investment
Management |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
2,187
|
|
|
$
|
918
|
|
(a)
|
$
|
69
|
|
|
$
|
3,174
|
|
(a)
|
Net interest revenue (expense)
|
777
|
|
|
82
|
|
|
(20
|
)
|
|
839
|
|
|
||||
Total revenue
|
2,964
|
|
|
1,000
|
|
(a)
|
49
|
|
|
4,013
|
|
(a)
|
||||
Provision for credit losses
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
||||
Noninterest expense
|
1,874
|
|
|
702
|
|
|
77
|
|
|
2,653
|
|
(b)
|
||||
Income (loss) before taxes
|
$
|
1,092
|
|
|
$
|
300
|
|
(a)
|
$
|
(26
|
)
|
|
$
|
1,366
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
37
|
%
|
|
30
|
%
|
|
N/M
|
|
|
34
|
%
|
|
||||
Average assets
|
$
|
252,461
|
|
|
$
|
31,689
|
|
|
$
|
61,559
|
|
|
$
|
345,709
|
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$7 million
, representing
$10 million
of income and noncontrolling interests of
$3 million
. Income before taxes is net of noncontrolling interests of
$3 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interests of
$1 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
For the nine months ended Sept. 30, 2018
|
Investment
Services |
|
|
Investment
Management |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
6,713
|
|
|
$
|
2,891
|
|
(a)
|
$
|
56
|
|
|
$
|
9,660
|
|
(a)
|
Net interest revenue (expense)
|
2,545
|
|
|
230
|
|
|
(49
|
)
|
|
2,726
|
|
|
||||
Total revenue
|
9,258
|
|
|
3,121
|
|
(a)
|
7
|
|
|
12,386
|
|
(a)
|
||||
Provision for credit losses
|
(5
|
)
|
|
2
|
|
|
(8
|
)
|
|
(11
|
)
|
|
||||
Noninterest expense
|
5,946
|
|
|
2,103
|
|
|
174
|
|
|
8,223
|
|
(b)
|
||||
Income (loss) before taxes
|
$
|
3,317
|
|
|
$
|
1,016
|
|
(a)
|
$
|
(159
|
)
|
|
$
|
4,174
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
36
|
%
|
|
33
|
%
|
|
N/M
|
|
|
34
|
%
|
|
||||
Average assets
|
$
|
262,804
|
|
|
$
|
31,577
|
|
|
$
|
51,139
|
|
|
$
|
345,520
|
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$12 million
, representing
$11 million
of income and a loss attributable to noncontrolling interests of
$1 million
. Income before taxes is net of a loss attributable to noncontrolling interests of
$1 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interests of
$1 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
For the nine months ended Sept. 30, 2017
|
Investment
Services |
|
|
Investment
Management |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
6,386
|
|
|
$
|
2,694
|
|
(a)
|
$
|
254
|
|
|
$
|
9,334
|
|
(a)
|
Net interest revenue (expense)
|
2,245
|
|
|
255
|
|
|
(43
|
)
|
|
2,457
|
|
|
||||
Total revenue
|
8,631
|
|
|
2,949
|
|
(a)
|
211
|
|
|
11,791
|
|
(a)
|
||||
Provision for credit losses
|
(5
|
)
|
|
1
|
|
|
(14
|
)
|
|
(18
|
)
|
|
||||
Noninterest expense
|
5,650
|
|
|
2,083
|
|
|
212
|
|
|
7,945
|
|
(b)
|
||||
Income before taxes
|
$
|
2,986
|
|
|
$
|
865
|
|
(a)
|
$
|
13
|
|
|
$
|
3,864
|
|
(a)(b)
|
Pre-tax operating margin
(c)
|
35
|
%
|
|
29
|
%
|
|
N/M
|
|
|
33
|
%
|
|
||||
Average assets
|
$
|
252,675
|
|
|
$
|
31,372
|
|
|
$
|
57,463
|
|
|
$
|
341,510
|
|
|
(a)
|
Both total fee and other revenue and total revenue include net income from consolidated investment management funds of
$29 million
, representing
$53 million
of income and noncontrolling interests of
$24 million
. Income before taxes is net of noncontrolling interests of
$24 million
.
|
(b)
|
Noninterest expense includes a loss attributable to noncontrolling interest of
$6 million
related to other consolidated subsidiaries.
|
(c)
|
Income before taxes divided by total revenue.
|
Non-cash investing and financing transactions
|
Nine months ended Sept. 30,
|
||||||
(in millions)
|
2018
|
|
|
2017
|
|
||
Transfers from loans to other assets for other real estate owned
|
$
|
2
|
|
|
$
|
3
|
|
Change in assets of consolidated VIEs
|
232
|
|
|
429
|
|
||
Change in liabilities of consolidated VIEs
|
5
|
|
|
288
|
|
||
Change in nonredeemable noncontrolling interests of consolidated investment management funds
|
226
|
|
|
234
|
|
||
Securities purchased not settled
|
885
|
|
|
1,277
|
|
||
Securities sold not settled
|
249
|
|
|
—
|
|
||
Securities matured not settled
|
—
|
|
|
350
|
|
||
Available-for-sale securities transferred to trading assets
|
963
|
|
|
—
|
|
||
Held-to-maturity securities transferred to available-for-sale
|
1,087
|
|
|
74
|
|
||
Premises and equipment/capitalized software funded by capital lease obligations
|
25
|
|
|
347
|
|
Item 4. Controls and Procedures
|
|
Forward-looking Statements
|
|
Forward-looking Statements
(continued)
|
|
Part II - Other Information
|
|
(c)
|
The following table discloses repurchases of our common stock made in the
third quarter of 2018
. All of the Company’s preferred stock outstanding has preference over the Company’s common stock with respect to the payment of dividends.
|
Share repurchases - third quarter of 2018
|
|
|
|
|
Total shares
repurchased as
part of a publicly
announced plan
or program
|
|
Maximum approximate dollar value of shares that may yet be purchased under the publicly announced plans or programs at Sept. 30, 2018
|
|
|
|||||
(dollars in millions, except per share information; common shares in thousands)
|
Total shares
repurchased |
|
|
Average price
per share |
|
|
|
|||||||
July 2018
|
5
|
|
|
$
|
53.74
|
|
|
5
|
|
|
$
|
2,400
|
|
|
August 2018
|
8,364
|
|
|
51.35
|
|
|
8,364
|
|
|
1,970
|
|
|
||
September 2018
|
3,307
|
|
|
51.88
|
|
|
3,307
|
|
|
1,798
|
|
|
||
Third quarter of 2018
(a)
|
11,676
|
|
|
$
|
51.50
|
|
|
11,676
|
|
|
$
|
1,798
|
|
(b)
|
(a)
|
Includes
25 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
$51.50
.
|
(b)
|
Represents the maximum value of the shares authorized to be repurchased through the second quarter of 2019, including employee benefit plan repurchases, in connection with the Federal Reserve’s non-objection to our 2018 capital plan.
|
Index to Exhibits
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
3.1
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference.
|
|
3.2
|
|
|
Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 5, 2007, and incorporated herein by reference.
|
|
3.3
|
|
|
Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 8A12B (File No. 001-35651) as filed with the Commission on Sept. 14, 2012, and incorporated herein by reference.
|
|
3.4
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on May 16, 2013, and incorporated herein by reference.
|
|
3.5
|
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 28, 2015, and incorporated herein by reference.
|
3.6
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Aug. 1, 2016, and incorporated herein by reference.
|
|
3.7
|
|
|
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 Feb. 13, 2018, and incorporated herein by reference.
|
|
4.1
|
|
None of the instruments defining the rights of holders of long-term debt of the Parent or any of its subsidiaries represented long-term debt in excess of 10% of the total assets of the Company as of Sept. 30, 2018. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument.
|
|
N/A
|
Index to Exhibits
(continued)
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
10.1
|
*
|
|
Filed herewith.
|
|
31.1
|
|
|
Filed herewith.
|
|
31.2
|
|
|
Filed herewith.
|
|
32.1
|
|
|
Furnished herewith.
|
|
32.2
|
|
|
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.
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
(Registrant)
|
|
|
|
|
Date: November 6, 2018
|
By:
|
|
/s/ Kurtis R. Kurimsky
|
|
|
|
Kurtis R. Kurimsky
|
|
|
|
Corporate Controller
|
|
|
|
(Duly Authorized Officer and
|
|
|
|
Principal Accounting Officer of
|
|
|
|
the Registrant)
|
1.
|
The last paragraph of Section 3 is amended to add the following clause to the end thereof to read as follows:
|
2.
|
The last paragraph of Section 11is amended to add the following clause to the end thereof to read as follows:
|
3.
|
Capitalized terms that are not defined in this Amendment shall have the meanings ascribed thereto in the Plan.
|
4.
|
Except as modified by this Amendment, the existing provisions of the Plan shall remain in full force and effect.
|
WITNESS:
By:
/s/ Bennett E. Josselsohn
Bennett E. Josselsohn
Senior Managing Counsel
|
THE BANK OF NEW YORK MELLON CORPORATION
By:
/s/ Monique R. Herena
Monique R. Herena, Chair
The Bank of New York Mellon Corporation Benefits Administration Committee
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Charles W. Scharf
|
|
Name: Charles W. Scharf
|
|
Title: Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael P. Santomassimo
|
|
Name: Michael P. Santomassimo
|
|
Title: Chief Financial Officer
|
|
Dated: November 6, 2018
|
|
/s/ Charles W. Scharf
|
|
|
|
|
Name:
|
Charles W. Scharf
|
|
|
|
Title:
|
Chief Executive Officer
|
|
Dated: November 6, 2018
|
|
/s/ Michael P. Santomassimo
|
|
|
|
|
Name:
|
Michael P. Santomassimo
|
|
|
|
Title:
|
Chief Financial Officer
|
|