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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) – April 16, 2020
THE BANK OF NEW YORK MELLON CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
001-35651
13-2614959
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

240 Greenwich Street
New York, New York 10286
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code – (212) 495-1784

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading
symbol(s)
Name of each exchange
on which registered
Common Stock, $0.01 par value
BK
New York Stock Exchange
Depositary Shares, each representing 1/4,000th of a share of Series C Noncumulative Perpetual Preferred Stock
BK PrC
New York Stock Exchange
6.244% Fixed-to-Floating Rate Normal Preferred Capital Securities of Mellon Capital IV
BK/P
New York Stock Exchange
 (fully and unconditionally guaranteed by The Bank of New York Mellon Corporation)
 
 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


ITEM 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On April 16, 2020, The Bank of New York Mellon Corporation (“BNY Mellon”) released information on its financial results for the first quarter ended March 31, 2020. Copies of the Earnings Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.


ITEM 7.01.    REGULATION FD DISCLOSURE.

On April 16, 2020, BNY Mellon will hold a conference call and webcast to discuss its financial results for the first quarter ended March 31, 2020 and outlook. A copy of the Financial Highlights presentation for the conference call and webcast is attached hereto as Exhibit 99.3.


ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS.


(d)    EXHIBITS.
Exhibit
 
 
Number
 
Description
 
 
 
99.1

 
 
 
The quotation in Exhibit 99.1 (the “Excluded Section”) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. The information included in Exhibit 99.1, other than in the Excluded Section, shall be deemed “filed” for purposes of the Exchange Act.
 
 
 
99.2

 
 
 
The information included in Exhibit 99.2 shall be deemed “filed” for purposes of the Exchange Act.

 
 
 
99.3

 
 
 
The information included in Exhibit 99.3 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act.

 
 
 
104

 
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
The Bank of New York Mellon Corporation

Date: April 16, 2020
By: /s/ James J. Killerlane III    
 
Name: James J. Killerlane III
Title: Secretary




3
News Release
BNYLOGOA01B25.JPG

BNY MELLON REPORTS FIRST QUARTER 2020 EARNINGS OF
$944 MILLION OR $1.05 PER COMMON SHARE
Revenue up 5%
 
EPS up 12%
 
ROE 10%
ROTCE 20% (a)
 
CET1 11.3%
SLR 5.6%


NEW YORK, April 16, 2020 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
 
1Q20 vs.
 
1Q20

4Q19

1Q19

4Q19

1Q19

Net income applicable to common shareholders (in millions)
$
944

$
1,391

$
910

(32
)%
4
%
Diluted earnings per common share
$
1.05

$
1.52

$
0.94

(31
)%
12
%
First Quarter Results
Total revenue of $4.1 billion, increased 5%
•
Fee revenue increased 10%
•
Net interest revenue decreased 3%

Provision for credit losses of $169 million

Total noninterest expense of $2.7 billion, increased slightly
•
Continued investments in technology

Investment Services
•
Total revenue increased 9%
•
Income before taxes increased 13%
•
AUC/A of $35.2 trillion, increased 2%

Investment Management
•
Total revenue decreased 4%
•
Income before taxes decreased 27%
•
AUM of $1.8 trillion, decreased 2%

Capital
Repurchased 21.7 million common shares for $985 million, and paid dividends of $282 million to common shareholders.
•
1Q20 share repurchases completed prior to the temporary suspension announced jointly with the Financial Services Forum on March 15.
 
CEO Commentary
“Throughout the coronavirus crisis, we remain focused on the health and wellbeing of our people, providing continuity of service to our clients and maintaining our balance sheet so we are able to assist our clients. Despite the unprecedented global market disruption, we have stayed fully operational, demonstrating our resiliency and our commitment and capacity to support our clients when they need us most,” Todd Gibbons, Chief Executive Officer, said.

“Our fee revenue increased 10 percent as we experienced elevated transaction volumes and heightened volatility in March. Looking ahead, we and our clients face continued market and economic uncertainty. While it is too early to predict the impact, our business model is financially resilient. We plan to maintain our conservative risk profile, strong capital and high-quality, liquid balance sheet, which will position us to withstand severe stress and to support our clients,” Mr. Gibbons added.

“I am deeply honored to become CEO of this great company. While looking ahead to drive improved performance and capabilities and ensure BNY Mellon remains a great place to work, in the immediate term we are focused on being there for our clients. Our team’s efforts on this front have been exceptional. I have been incredibly gratified by the feedback from clients, who see our people going above and beyond to deliver great service. I want to thank our clients for their ongoing partnership and thank our employees around the globe for their exceptional dedication and professionalism. I am confident in our ability to weather this adversity and to carry forward that energy into advancing our growth agenda as the world recovers,” Mr. Gibbons concluded.

Media Relations: Jennifer Hendricks Sullivan (212) 635-1374
Investor Relations: Magda Palczynska (212) 635-8529
(a) For information on this Non-GAAP measure, see “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” on page 8.

Note: Above comparisons are 1Q20 vs. 1Q19.

BNY Mellon 1Q20 Earnings Release

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in millions, except per share amounts and unless otherwise noted; not
meaningful - N/M)
 
 
 
1Q20 vs.
1Q20
4Q19 (a)

1Q19
4Q19

1Q19
Fee revenue
$
3,323

$
3,971

$
3,031

(16
)%
10
 %
Net securities gains (losses)
9

(25
)
1

N/M
N/M
Total fee and other revenue
3,332

3,946

3,032

(16
)
10

(Loss) income from consolidated investment management funds
(38
)
17

26

N/M
N/M
Net interest revenue
814

815

841

—

(3
)
Total revenue
4,108

4,778

3,899

(14
)
5

Provision for credit losses
169

(8
)
7

N/M
N/M
Noninterest expense
2,712

2,964

2,699

(9
)
—

Income before income taxes
1,227

1,822

1,193

(33
)
3

Provision for income taxes
265

373

237

(29
)
12

Net income
$
962

$
1,449

$
956

(34
)%
1
 %
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
944

$
1,391

$
910

(32
)%
4
 %
Operating leverage (b)
 
 
 
(552
) bps
488
 bps
Diluted earnings per common share
$
1.05

$
1.52

$
0.94

(31
)%
12
 %
Average common shares and equivalents outstanding - diluted (in thousands)
896,689

914,739

965,960

 
 
Pre-tax operating margin
30
%
38
%
31
%
 
 
(a)
Includes a net benefit of $460 million, or $0.50 per diluted common share, related to a gain on sale of an equity investment, partially offset by severance, net securities losses and litigation expense.
(b)
Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps – basis points.


KEY DRIVERS (comparisons are 1Q20 vs. 1Q19, unless otherwise stated)
•
Total revenue increased 5% primarily reflecting:
•
Fee revenue increased 10% primarily reflecting higher foreign exchange and other trading revenue, higher transaction volumes across the investment services businesses and higher performance fees, partially offset by equity investment losses, including seed capital.
•
Net interest revenue decreased 3% primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in foreign exchange and other trading revenue). This was partially offset by the benefit of lower deposit and funding rates and higher deposits, securities and loans.
•
Provision for credit losses of $169 million primarily reflecting the macroeconomic environment in conjunction with the application of the new current expected credit losses accounting standard.
•
Noninterest expense increased slightly primarily reflecting the continued investments in technology and higher pension expense, partially offset by lower staff expense and the favorable impact of a stronger U.S. dollar.
•
Effective tax rate of 21.6%.

Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•
AUC/A of $35.2 trillion, increased 2%, primarily reflecting higher client inflows, partially offset by lower market values and the unfavorable impact of a stronger U.S. dollar.
•
AUM of $1.8 trillion, decreased 2%, primarily reflecting the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).

Capital and liquidity
•
Repurchased 21.7 million common shares for $985 million and paid $282 million in dividends to common shareholders.
•
Return on common equity (“ROE”) of 10%; Return on tangible common equity (“ROTCE”) of 20% (a).
•
Common Equity Tier 1 (“CET1”) ratio – 11.3%.
•
Supplementary leverage ratio (“SLR”) – 5.6%.
•
Average liquidity coverage ratio (“LCR”) – 115%.
•
Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
 
(a)
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for additional information.
Note: Throughout this document, sequential growth rates are unannualized.

Page - 2

BNY Mellon 1Q20 Earnings Release

INVESTMENT SERVICES BUSINESS HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)
 
 
 
1Q20 vs.
1Q20

4Q19 (a)

1Q19 (a)

4Q19

1Q19

Total revenue by line of business:

 
 
 
 
Asset Servicing
$
1,531

$
1,411

$
1,415

9
 %
8
%
Pershing
653

579

561

13

16

Issuer Services
419

415

396

1

6

Treasury Services
339

329

317

3

7

Clearance and Collateral Management
300

280

276

7

9

Total revenue by line of business
3,242

3,014

2,965

8

9

Provision for credit losses
149

(5
)
8

N/M
N/M
Noninterest expense
1,987

2,179

1,981

(9
)
—

Income before taxes
$
1,106

$
840

$
976

32
 %
13
%
 

 
 


Pre-tax operating margin
34
%
28
%
33
%


 
 
 
 
 
 
Foreign exchange and other trading revenue
$
261

$
151

$
157

73
 %
66
%
Securities lending revenue
$
46

$
40

$
44

15
 %
5
%
 
 
 
 




Metrics:
 
 
 




Average loans
$
41,789

$
38,721

$
37,235

8
 %
12
%
Average deposits
$
242,187

$
215,388

$
195,082

12
 %
24
%



 
 


AUC/A at period end (in trillions) (current period is preliminary) (b)
$
35.2

$
37.1

$
34.5

(5
)%
2
%
Market value of securities on loan at period end (in billions) (c)
$
389

$
378

$
377

3
 %
3
%
(a)
Prior periods have been restated. See “Segment Reporting Changes” on page 8 for additional information.
(b)
Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.3 trillion at March 31, 2019.
(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 $59 billion at March 31, 2020, $60 billion at Dec. 31, 2019 and $62 billion at March 31, 2019.


KEY DRIVERS

•
The drivers of the total revenue variances by line of business are indicated below.
•
Asset Servicing - Both increases primarily reflect higher foreign exchange and other trading revenue. The year-over-year increase also reflects higher volumes from existing clients, partially offset by lower net interest revenue. The decrease in net interest revenue primarily reflects lower rates, partially offset by higher deposits and loans.
•
Pershing - Both increases primarily reflect higher clearing volumes and a one-time fee. The year-over-year increase also reflects growth in client assets and accounts.
•
Issuer Services - The year-over-year increase reflects higher Corporate Trust and Depositary Receipts fees. The sequential increase primarily reflects higher Depositary Receipts fees.
•
Treasury Services - Both increases primarily reflect higher fees and net interest revenue. The increase in net interest revenue was driven by deposit growth.
•
Clearance and Collateral Management - Both increases primarily reflect growth in collateral management and clearance volumes and higher net interest revenue.

•
Noninterest expense increased slightly year-over-year primarily driven by continued investments in technology. The sequential decrease primarily reflects lower severance and litigation expenses, partially offset by higher other staff expense.

Page - 3

BNY Mellon 1Q20 Earnings Release

INVESTMENT MANAGEMENT BUSINESS HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)
 
 
 
1Q20 vs.
1Q20

4Q19 (a)

1Q19 (a)

4Q19

1Q19

Total revenue by line of business:

 
 
 
 
Asset Management
$
620

$
692

$
640

(10
)%
(3
)%
Wealth Management
278

279

296

—

(6
)
Total revenue by line of business
898

971

936

(8
)
(4
)
Provision for credit losses
9

—

1

N/M
N/M
Noninterest expense
695

731

669

(5
)
4

Income before taxes
$
194

$
240

$
266

(19
)%
(27
)%


 
 
 
 
Pre-tax operating margin
22
%
25
%
28
%
 
 
Adjusted pre-tax operating margin – Non-GAAP (b)
24
%
27
%
31
%
 
 
 
 
 
 
 
 
Metrics:
 
 
 
 
 
Average loans
$
12,124

$
12,022

$
12,339

1
 %
(2
)%
Average deposits
$
16,144

$
15,195

$
15,815

6
 %
2
 %
 

 
 


AUM (in billions) (current period is preliminary) (c)
$
1,796

$
1,910

$
1,841

(6
)%
(2
)%
Wealth Management client assets (in billions) (current period is preliminary) (d)
$
236

$
266

$
253

(11
)%
(7
)%
(a)
Prior periods have been restated. See “Segment Reporting Changes” on page 8 for additional information.
(b)
Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for information on this Non-GAAP measure.
(c)
Excludes securities lending cash management assets and assets managed in the Investment Services business.
(d)
Includes AUM and AUC/A in the Wealth Management business.


KEY DRIVERS

•
The drivers of the total revenue variances by line of business are indicated below.
•
Asset Management - The year-over-year decrease primarily reflects equity investment losses, including seed capital, and an unfavorable change in the mix of AUM since 1Q19, partially offset by higher performance fees and market values. The sequential decrease primarily reflects equity investment losses, including seed capital, the impact of hedging activities and lower market values.
•
Wealth Management - The year-over-year decrease primarily reflects lower net interest revenue due to lower interest rates, partially offset by the impact of higher deposits.

•
Noninterest expense increased year-over-year primarily reflecting higher professional, legal and other purchased services expense. The sequential decrease primarily reflects lower severance expense.


Page - 4

BNY Mellon 1Q20 Earnings Release

OTHER SEGMENT primarily includes leasing operations, certain corporate treasury activities, derivatives, business exits and other corporate revenue and expense items.

 
 
 
 
(in millions)
1Q20

4Q19 (a)

1Q19 (a)

Fee revenue
$
21

$
817

$
17

Net securities gains (losses)
9

(23
)
1

Total fee and other revenue
30

794

18

Net interest (expense)
(44
)
(10
)
(30
)
Total (loss) revenue
(14
)
784

(12
)
Provision for credit losses
11

(3
)
(2
)
Noninterest expense
30

54

49

(Loss) income before taxes
$
(55
)
$
733

$
(59
)
(a)
Prior periods have been restated. See “Segment Reporting Changes” on page 8 for additional information.


KEY DRIVERS

•
Fee revenue, net securities losses and net interest expense include corporate treasury and other investment activity, including hedging activity which offsets between fee revenue and net interest expense. Total revenue decreased sequentially primarily reflecting the gain on the sale of an equity investment recorded in 4Q19. Net interest expense increased sequentially primarily reflecting corporate treasury activity.

•
Noninterest expense decreased year-over-year primarily reflecting lower staff expense. The sequential decrease primarily reflects lower severance, partially offset by higher other staff expense, including pension expense.




Page - 5

BNY Mellon 1Q20 Earnings Release

CAPITAL AND LIQUIDITY

Capital and liquidity ratios
March 31, 2020

Dec. 31, 2019

Consolidated regulatory capital ratios: (a)
 
 
CET1 ratio
11.3
%
11.5
%
Tier 1 capital ratio
13.5

13.7

Total capital ratio
14.3

14.4

Tier 1 leverage ratio
6.0

6.6

SLR
5.6

6.1

BNY Mellon shareholders’ equity to total assets ratio
8.8
%
10.9
%
BNY Mellon common shareholders’ equity to total assets ratio
8.0
%
9.9
%
 
 
 
Average LCR
115
%
120
%

 
 
Book value per common share
$
42.47

$
42.12

Tangible book value per common share – Non-GAAP (b)
$
21.53

$
21.33

Common shares outstanding (in thousands)
885,443

900,683

(a)
Regulatory capital ratios for March 31, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for Dec. 31, 2019, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approaches for the CET1 and Tier 1 capital ratios and the Advanced Approach for the Total capital ratio.
(b)
Tangible book value per common share – Non-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for information on this Non-GAAP measure.


CET1 capital totaled $18.5 billion at March 31, 2020, a decrease of $75 million compared with Dec. 31, 2019. The decrease primarily reflects capital deployed through common stock repurchases and dividend payments, partially offset by capital generated through earnings.



NET INTEREST REVENUE

Net interest revenue
 
 
 
1Q20 vs.
(dollars in millions; not meaningful - N/M)
1Q20

4Q19

1Q19

4Q19

1Q19

Net interest revenue
$
814

$
815

$
841

—

(3
)%
Add: Tax equivalent adjustment
2

2

4

N/M
N/M
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a)
$
816

$
817

$
845

—

(3
)%
 
 
 
 
 
 
Net interest margin
1.01
%
1.09
%
1.20
%
(8
) bps
(19
) bps
Net interest margin (FTE) – Non-GAAP (a)
1.01
%
1.09
%
1.20
%
(8
) bps
(19
) bps
(a)
Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for information on this Non-GAAP measure.
bps – basis points.


Net interest revenue decreased year-over-year, primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in foreign exchange and other trading revenue). This was partially offset by the benefit of lower deposit and funding rates and higher deposits, securities and loans.

Sequentially, the favorable impact of higher deposits, securities and loans was offset by the impact of hedging activities (primarily offset in foreign exchange and other trading revenue) and lower rates.

Page - 6

BNY Mellon 1Q20 Earnings Release

THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement

 
(in millions)
Quarter ended
 
March 31, 2020

Dec. 31, 2019

March 31, 2019

 
 
Fee and other revenue
 
 
 
 
Investment services fees:
 
 
 
 
Asset servicing fees
$
1,159

$
1,148

$
1,122

 
Clearing services fees
470

421

398

 
Issuer services fees
263

264

251

 
Treasury services fees
149

147

132

 
Total investment services fees
2,041

1,980

1,903

 
Investment management and performance fees
862

883

841

 
Foreign exchange and other trading revenue
319

168

170

 
Financing-related fees
59

46

51

 
Distribution and servicing
31

34

31

 
Investment and other income
11

860

35

 
Total fee revenue
3,323

3,971

3,031

 
Net securities gains (losses)
9

(25
)
1

 
Total fee and other revenue
3,332

3,946

3,032

 
Operations of consolidated investment management funds
 
 
 
 
Investment (loss) income
(38
)
17

26

 
Interest of investment management fund note holders
—

—

—

 
(Loss) income from consolidated investment management funds
(38
)
17

26

 
Net interest revenue
 
 
 
 
Interest revenue
1,570

1,721

1,920

 
Interest expense
756

906

1,079

 
Net interest revenue
814

815

841

 
Total revenue
4,108

4,778

3,899

 
Provision for credit losses (a)
169

(8
)
7

 
Noninterest expense
 
 
 
 
Staff
1,482

1,639

1,524

 
Professional, legal and other purchased services
330

367

325

 
Software and equipment
326

326

283

 
Net occupancy
135

151

137

 
Sub-custodian and clearing
105

119

105

 
Distribution and servicing
91

92

91

 
Business development
42

65

45

 
Bank assessment charges
35

32

31

 
Amortization of intangible assets
26

28

29

 
Other
140

145

129

 
Total noninterest expense
2,712

2,964

2,699

 
Income
 
 
 
 
Income before income taxes
1,227

1,822

1,193

 
Provision for income taxes
265

373

237

 
Net income
962

1,449

956

 
Net loss (income) attributable to noncontrolling interests (includes $18, $(9), and $(10) related to consolidated investment management funds, respectively)
18

(9
)
(10
)
 
Net income applicable to shareholders of The Bank of New York Mellon Corporation
980

1,440

946

 
Preferred stock dividends
(36
)
(49
)
(36
)
 
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
944

$
1,391

$
910

(a)
In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses On Financial Instruments, on a prospective basis.

Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
Quarter ended
March 31, 2020

Dec. 31, 2019

March 31, 2019

(in dollars)
Basic
$
1.05

$
1.52

$
0.94

Diluted
$
1.05

$
1.52

$
0.94


Page - 7

BNY Mellon 1Q20 Earnings Release

SEGMENT REPORTING CHANGES

In the first quarter of 2020, we reclassified the results of certain services provided between the segments from noninterest expense to fee and other revenue. This activity is offset in the Other segment and relates to services that are also provided to third-parties and provides consistency with the reporting of the revenues. This adjustment had no impact on income before taxes of the businesses. Prior periods have been restated.

In the first quarter of 2020, we reclassified the results related to certain lending activities from the Wealth Management business to the Pershing business. These loans were originated by the Wealth Management business as a service to Pershing clients. This resulted in an increase in total revenue, noninterest expense and income before taxes in the Pershing business and corresponding decrease in the Wealth Management business. Prior periods have been restated.

For additional information on the segment reporting changes, see “Segment Reporting Changes” in the Financial Supplement available at www.bnymellon.com.


SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

BNY Mellon has included in this Earnings Release certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. BNY Mellon believes that the return on tangible common equity is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.

Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison 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.

BNY Mellon has also included the operating margin for the Investment Management business net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. BNY Mellon believes that this measure is useful when evaluating the performance of the Investment Management business relative to industry competitors.

For the reconciliations of these Non-GAAP measures, see “Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures” in the Financial Supplement available at www.bnymellon.com.


Page - 8

BNY Mellon 1Q20 Earnings Release

CAUTIONARY STATEMENT

A number of statements (i) in this Earnings Release, (ii) in our Financial Supplement, (iii) in our presentations and (iv) in the responses to questions on our conference call discussing our quarterly results and other public events may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including statements about our capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, resiliency, capabilities, revenue, net interest revenue, fees, expenses, cost discipline, sustainable growth, company management, deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios and statements regarding our aspirations, as well as our overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities, focus and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “future” and words of similar meaning signify forward-looking statements. These statements and other forward-looking statements contained in other public disclosures of The Bank of New York Mellon Corporation which make reference to the cautionary factors described in this Earnings Release are based upon current beliefs and expectations and are subject to significant risks and uncertainties (some of which are beyond BNY Mellon’s control). Actual results may differ materially from those expressed or implied as a result of these risks and uncertainties, including, but not limited to, the risk factors and other uncertainties set forth in BNY Mellon’s Annual Report on Form 10-K for the year ended Dec. 31, 2019 and BNY Mellon’s other filings with the Securities and Exchange Commission. Statements about the effects of the current and near-term market and macroeconomic environment on BNY Mellon, including on its business, operations, financial performance and prospects, may constitute forward-looking statements, and are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond BNY Mellon’s control), including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on BNY Mellon, our clients, customers and third parties. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as BNY Mellon completes its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. All forward-looking statements in this Earnings Release speak only as of April 16, 2020, and BNY Mellon undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.

ABOUT BNY MELLON

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. As of March 31, 2020, BNY Mellon had $35.2 trillion in assets under custody and/or administration, and $1.8 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.


Page - 9

BNY Mellon 1Q20 Earnings Release

CONFERENCE CALL INFORMATION

Todd Gibbons, Chief Executive Officer, and Mike Santomassimo, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 8:00 a.m. EDT on April 16, 2020. This conference call and audio webcast will include forward-looking statements and may include other material information.

Investors and analysts wishing to access the conference call and audio webcast may do so by dialing (800) 390-5696 (U.S.) or (720) 452-9082 (International), and using the passcode: 807070, or by logging onto www.bnymellon.com/investorrelations. Earnings materials will be available at www.bnymellon.com/investorrelations beginning at approximately 6:30 a.m. EDT on April 16, 2020. Replays of the conference call and audio webcast will be available beginning April 16, 2020 at approximately 2:00 p.m. EDT through May 16, 2020 by dialing (888) 203-1112 (U.S.) or (719) 457-0820 (International), and using the passcode: 5375940. The archived version of the conference call and audio webcast will also be available at www.bnymellon.com/investorrelations for the same time period.


Page - 10


BNYLOGOA01B25.JPG
    
The Bank of New York Mellon Corporation
 
Financial Supplement
 
First Quarter 2020
 
 



Table of Contents
BNYLOGO01A13.JPG
 
 
 
 
 
 
 
 
Consolidated Results
 
Page
Consolidated Financial Highlights
 
3
Condensed Consolidated Income Statement
 
4
Condensed Consolidated Balance Sheet
 
5
Fee and Other Revenue
 
6
Average Balances and Interest Rates
 
7
Capital and Liquidity
 
8
 
 
 
Business Segment Results
 
 
Investment Services Business
 
9
Investment Management Business
 
11
AUM by Product, AUM Flows and Wealth Management Client Assets
 
12
Other Segment
 
13
 
 
 
Other
 
 
Securities Portfolio
 
14
Allowance for Credit Losses and Nonperforming Assets
 
15
 
 
 
Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures
 
16
Segment Reporting Changes
 
19




THE BANK OF NEW YORK MELLON CORPORATION
BNYLOGO01A13.JPG
 
CONSOLIDATED FINANCIAL HIGHLIGHTS
 
 
 
(dollars in millions, except per common share amounts, or unless otherwise noted)
 
 
 
 
 
 
1Q20 vs.
1Q20

4Q19

3Q19

2Q19

1Q19

 
4Q19
1Q19
Selected income statement data
 
 
 
 
 
 
 
 
Fee revenue
$
3,323

$
3,971

$
3,129

$
3,105

$
3,031

 
(16
)%
10
 %
Net securities gains (losses)
9

(25
)
(1
)
7

1

 
N/M

N/M

Total fee and other revenue
3,332

3,946

3,128

3,112

3,032

 
(16
)
10

(Loss) income from consolidated investment management funds
(38
)
17

3

10

26

 
N/M

N/M

Net interest revenue
814

815

730

802

841

 
—

(3
)
Total revenue
4,108

4,778

3,861

3,924

3,899

 
(14
)
5

Provision for credit losses
169

(8
)
(16
)
(8
)
7

 
N/M

N/M

Noninterest expense
2,712

2,964

2,590

2,647

2,699

 
(9
)
—

Income before income taxes
1,227

1,822

1,287

1,285

1,193

 
(33
)
3

Provision for income taxes
265

373

246

264

237

 
(29
)
12

Net income
$
962

$
1,449

$
1,041

$
1,021

$
956

 
(34
)%
1
 %
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
944

$
1,391

$
1,002

$
969

$
910

 
(32
)%
4
 %
Diluted earnings per common share
$
1.05

$
1.52

$
1.07

$
1.01

$
0.94

 
(31
)%
12
 %
Average common shares and equivalents outstanding - diluted (in thousands)
896,689

914,739

935,677

953,928

965,960

 
(2
)%
(7
)%
 
 
 
 
 
 
 
 
 
Financial ratios (Quarterly returns are annualized)
 
 
 
 
 
 
 
 
Pre-tax operating margin
30
%
38
%
33
%
33
%
31
%
 
 
 
Return on common equity
10.1
%
14.6
%
10.6
%
10.4
%
10.0
%
 
 
 
Return on tangible common equity – Non-GAAP (a)
20.4
%
29.3
%
21.4
%
21.2
%
20.7
%
 
 
 
Non-U.S. revenue as a percentage of total revenue
36
%
31
%
37
%
36
%
36
%
 
 
 
 
 
 
 
 
 
 
 
 
Period end
 
 
 
 
 
 
 
 
Assets under custody and/or administration (“AUC/A”) (in trillions) (b)
$
35.2

$
37.1

$
35.8

$
35.5

$
34.5

 
(5
)%
2
 %
Assets under management (“AUM”) (in trillions)
$
1.80

$
1.91

$
1.88

$
1.84

$
1.84

 
(6
)%
(2
)%
Full-time employees
47,900

48,400

48,700

49,100

49,800

 
(1
)%
(4
)%
Book value per common share
$
42.47

$
42.12

$
40.75

$
40.30

$
39.36

 
 
 
Tangible book value per common share – Non-GAAP (a)
$
21.53

$
21.33

$
20.59

$
20.45

$
19.74

 
 
 
Cash dividends per common share
$
0.31

$
0.31

$
0.31

$
0.28

$
0.28

 
 
 
Common dividend payout ratio
30
%
20
%
29
%
28
%
30
%
 
 
 
Closing stock price per common share
$
33.68

$
50.33

$
45.21

$
44.15

$
50.43

 
 
 
Market capitalization
$
29,822

$
45,331

$
41,693

$
41,619

$
48,288

 
 
 
Common shares outstanding (in thousands)
885,443

900,683

922,199

942,662

957,517

 
 
 
 
 
 
 
 
 
 
 
 
Capital ratios at period end (c)
 
 
 
 
 
 
 
 
Common Equity Tier 1 ("CET1") ratio
11.3
%
11.5
%
11.1
%
11.1
%
11.1
%
 
 
 
Tier 1 capital ratio
13.5
%
13.7
%
13.2
%
13.2
%
13.2
%
 
 
 
Total capital ratio
14.3
%
14.4
%
14.0
%
14.0
%
14.0
%
 
 
 
Tier 1 leverage ratio
6.0
%
6.6
%
6.5
%
6.8
%
6.8
%
 
 
 
Supplementary leverage ratio ("SLR")
5.6
%
6.1
%
6.0
%
6.3
%
6.3
%
 
 
 
(a)    Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of Non-GAAP measures.
(b)    Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019, $1.4 trillion at Sept. 30, 2019 and June 30, 2019 and $1.3 trillion at March 31, 2019.
(c)    Regulatory capital ratios for March 31, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the prior periods, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approaches for the CET1 and Tier 1 capital ratios and the Advanced Approach for the Total capital ratio.
N/M - Not meaningful.

3



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
BNYLOGO01A13.JPG
 
CONDENSED CONSOLIDATED INCOME STATEMENT
 
 
 
(dollars in millions, except per share amounts; common shares in thousands)
 
 
 
 
 
 
1Q20 vs.
1Q20

4Q19

3Q19

2Q19

1Q19

 
4Q19
1Q19
Revenue
 
 
 
 
 
 
 
 
Investment services fees:
 
 
 
 
 
 
 
 
Asset servicing fees
$
1,159

$
1,148

$
1,152

$
1,141

$
1,122

 
1
 %
3
 %
Clearing services fees
470

421

419

410

398

 
12

18

Issuer services fees
263

264

324

291

251

 
—

5

Treasury services fees
149

147

140

140

132

 
1

13

Total investment services fees
2,041

1,980

2,035

1,982

1,903

 
3

7

Investment management and performance fees
862

883

832

833

841

 
(2
)
2

Foreign exchange and other trading revenue
319

168

150

166

170

 
90

88

Financing-related fees
59

46

49

50

51

 
28

16

Distribution and servicing
31

34

33

31

31

 
(9
)
—

Investment and other income
11

860

30

43

35

 
N/M

N/M

Total fee revenue
3,323

3,971

3,129

3,105

3,031

 
(16
)
10

Net securities gains (losses)
9

(25
)
(1
)
7

1

 
N/M

N/M

Total fee and other revenue
3,332

3,946

3,128

3,112

3,032

 
(16
)
10

(Loss) income from consolidated investment management funds
(38
)
17

3

10

26

 
N/M

N/M

Net interest revenue
814

815

730

802

841

 
—

(3
)
Total revenue
4,108

4,778

3,861

3,924

3,899

 
(14
)
5

Provision for credit losses
169

(8
)
(16
)
(8
)
7

 
N/M

N/M

Noninterest expense
 
 
 
 
 
 
 
 
Staff
1,482

1,639

1,479

1,421

1,524

 
(10
)
(3
)
Professional, legal and other purchased services
330

367

316

337

325

 
(10
)
2

Software and equipment
326

326

309

304

283

 
—

15

Net occupancy
135

151

138

138

137

 
(11
)
(1
)
Sub-custodian and clearing
105

119

111

115

105

 
(12
)
—

Distribution and servicing
91

92

97

94

91

 
(1
)
—

Business development
42

65

47

56

45

 
(35
)
(7
)
Bank assessment charges
35

32

31

31

31

 
9

13

Amortization of intangible assets
26

28

30

30

29

 
(7
)
(10
)
Other
140

145

32

121

129

 
(3
)
9

Total noninterest expense
2,712

2,964

2,590

2,647

2,699

 
(9
)
—

Income before income taxes
1,227

1,822

1,287

1,285

1,193

 
(33
)
3

Provision for income taxes
265

373

246

264

237

 
(29
)
12

Net income
962

1,449

1,041

1,021

956

 
(34
)
1

Net loss (income) attributable to noncontrolling interests
18

(9
)
(3
)
(4
)
(10
)
 
N/M

N/M

Preferred stock dividends
(36
)
(49
)
(36
)
(48
)
(36
)
 
N/M

N/M

Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
944

$
1,391

$
1,002

$
969

$
910

 
(32
)%
4
 %

 
 
 
 
 
 
 
 
Average common shares and equivalents outstanding: Basic
894,122

911,324

933,264

951,281

962,397

 
(2
)%
(7
)%
Diluted
896,689

914,739

935,677

953,928

965,960

 
(2
)%
(7
)%

 
 
 
 
 
 
 
 
Earnings per common share: Basic
$
1.05

$
1.52

$
1.07

$
1.01

$
0.94

 
(31
)%
12
 %
Diluted
$
1.05

$
1.52

$
1.07

$
1.01

$
0.94

 
(31
)%
12
 %
N/M - Not meaningful.

4



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
BNYLOGO01A13.JPG
 
CONDENSED CONSOLIDATED BALANCE SHEET
 
 
 
 
2020
 
2019
(in millions)
March 31

 
Dec. 31

Sept. 30

June 30

March 31

Assets
 
 
 
 
 
 
Cash and due from banks
$
5,091

 
$
4,830

$
6,718

$
5,556

$
5,980

Interest-bearing deposits with the Federal Reserve and other central banks
146,535

 
95,042

73,811

69,700

60,699

Interest-bearing deposits with banks
22,672

 
14,811

15,417

15,491

13,681

Federal funds sold and securities purchased under resale agreements
27,363

 
30,182

43,723

61,201

40,158

Securities
139,273

 
123,033

122,340

120,142

117,504

Trading assets
12,918

 
13,571

10,180

8,629

6,868

Loans
62,368

 
54,953

54,881

52,396

53,487

Allowance for loan losses
(140
)
 
(122
)
(127
)
(146
)
(146
)
Net loans
62,228

 
54,831

54,754

52,250

53,341

Premises and equipment
3,514

 
3,625

3,149

2,970

3,010

Accrued interest receivable
576

 
624

596

658

651

Goodwill
17,240

 
17,386

17,248

17,337

17,367

Intangible assets
3,070

 
3,107

3,124

3,160

3,193

Other assets 
27,446

 
20,221

21,727

23,737

23,228

Subtotal assets of operations 
467,926

 
381,263

372,787

380,831

345,680

Assets of consolidated investment management funds, at fair value
229

 
245

381

337

452

Total assets 
$
468,155

 
$
381,508

$
373,168

$
381,168

$
346,132

Liabilities
 
 
 
 
 
 
Deposits
$
336,717

 
$
259,466

$
249,660

$
252,877

$
222,382

Federal funds purchased and securities sold under repurchase agreements
13,128

 
11,401

11,796

11,757

11,761

Trading liabilities
6,625

 
4,841

4,756

3,768

3,892

Payables to customers and broker-dealers
24,016

 
18,758

18,364

18,946

19,310

Commercial paper
1,121

 
3,959

3,538

8,894

2,773

Other borrowed funds
1,544

 
599

820

1,921

3,932

Accrued taxes and other expenses
4,705

 
5,642

5,081

5,045

4,686

Other liabilities
11,425

 
7,612

9,796

7,916

8,050

Long-term debt
27,494

 
27,501

27,872

28,203

27,874

Subtotal liabilities of operations
426,775

 
339,779

331,683

339,327

304,660

Liabilities of consolidated investment management funds, at fair value
1

 
1

15

6

3

Total liabilities 
426,776

 
339,780

331,698

339,333

304,663

Temporary equity
 
 
 
 
 
 
Redeemable noncontrolling interests
140

 
143

147

136

122

Permanent equity
 
 
 
 
 
 
Preferred stock
3,542

 
3,542

3,542

3,542

3,542

Common stock
14

 
14

14

14

14

Additional paid-in capital
27,644

 
27,515

27,471

27,406

27,349

Retained earnings
32,601

 
31,894

30,789

30,081

29,382

Accumulated other comprehensive loss, net of tax
(2,827
)
 
(2,638
)
(2,893
)
(2,688
)
(2,990
)
Less: Treasury stock, at cost
(19,829
)
 
(18,844
)
(17,803
)
(16,822
)
(16,072
)
Total The Bank of New York Mellon Corporation shareholders’ equity
41,145

 
41,483

41,120

41,533

41,225

Nonredeemable noncontrolling interests of consolidated investment management funds 
94

 
102

203

166

122

Total permanent equity 
41,239

 
41,585

41,323

41,699

41,347

Total liabilities, temporary equity and permanent equity 
$
468,155

 
$
381,508

$
373,168

$
381,168

$
346,132


5



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
BNYLOGO01A13.JPG
 
FEE AND OTHER REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Q20 vs.
(dollars in millions)
1Q20

4Q19

3Q19

2Q19

1Q19

 
4Q19
1Q19
Investment services fees:
 
 
 
 
 
 
 
 
Asset servicing fees (a)
$
1,108

$
1,104

$
1,109

$
1,097

$
1,074

 
—
 %
3
%
Securities lending revenue
51

44

43

44

48

 
16

6

Clearing services fees (b)
470

421

419

410

398

 
12

18

Issuer services fees
263

264

324

291

251

 
—

5

Treasury services fees
149

147

140

140

132

 
1

13

Total investment services fees
2,041

1,980

2,035

1,982

1,903

 
3

7

Investment management and performance fees (c)
 
 
 
 
 
 
 
 
Investment management fee
812

835

830

831

810

 
(3
)
—

Performance fees
50

48

2

2

31

 
N/M
N/M
Total investment management and performance fees (d)
862

883

832

833

841

 
(2
)
2

Foreign exchange and other trading revenue:
 
 
 
 
 
 
 
 
Foreign exchange
253

138

129

150

160

 
83

58

Other trading revenue
66

30

21

16

10

 
N/M

N/M

Total foreign exchange and other trading revenue
319

168

150

166

170

 
90

88

Financing-related fees
59

46

49

50

51

 
28

16

Distribution and servicing
31

34

33

31

31

 
(9
)
—

Investment and other income:
 
 
 
 
 
 
 
 
Corporate/bank-owned life insurance
36

43

33

32

30

 
N/M

N/M

Expense reimbursements from joint venture
21

20

21

19

19

 
N/M

N/M

Asset-related gains
4

815

2

1

1

 
N/M

N/M

Seed capital (losses) gains (c)
(31
)
4

—

8

2

 
N/M

N/M

Other (loss)
(19
)
(22
)
(26
)
(17
)
(17
)
 
N/M

N/M

Total investment and other income (c)
11

860

30

43

35

 
N/M

N/M

Total fee revenue
3,323

3,971

3,129

3,105

3,031

 
(16
)
10

Net securities gains (losses)
9

(25
)
(1
)
7

1

 
N/M

N/M

Total fee and other revenue
$
3,332

$
3,946

$
3,128

$
3,112

$
3,032

 
(16
)%
10
%
(a)    Asset servicing fees include the fees from the Clearance and Collateral Management business.
(b)    Clearing services fees are almost entirely earned by our Pershing business.
(c)    Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds.
(d)    On a constant currency basis (Non-GAAP), investment management and performance fees increased 3% compared with 1Q19. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.
N/M - Not meaningful.


6



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
 
 
 
 
 
 
BNYLOGO01A13.JPG
 
AVERAGE BALANCES AND INTEREST RATES
 
 
 
 
 
 
 
 
 
 
 
1Q20
 
4Q19
 
3Q19
 
 
2Q19
 
1Q19
 
Average balance

Average rate

 
Average balance

Average rate

 
Average balance

Average rate

 
 
Average balance

Average rate

 
Average balance

Average rate

(dollars in millions; average rates are annualized)
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits with the Federal Reserve and other central banks
$
80,403

0.39
%
 
$
61,627

0.60
%
 
$
60,030

0.67
%
 
 
$
61,756

0.72
%
 
$
63,583

0.87
%
Interest-bearing deposits with banks (primarily foreign banks)
17,081

1.37

 
15,788

1.63

 
15,324

1.89

 
 
13,666

1.87

 
13,857

1.85

Federal funds sold and securities purchased under resale agreements (a)
34,109

4.67

 
38,846

4.62

 
40,816

6.42

 
 
38,038

5.99

 
28,968

6.63

Margin loans
12,984

2.69

 
11,609

3.25

 
10,303

4.02

 
 
10,920

4.36

 
12,670

4.34

Non-margin loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic offices
31,720

3.02

 
29,690

3.36

 
29,285

2.75

(b)
 
29,492

3.86

 
28,177

3.85

Foreign offices
11,170

2.55

 
11,418

2.70

 
11,247

2.97

 
 
9,961

3.29

 
10,511

3.32

Total non-margin loans
42,890

2.89

 
41,108

3.18

 
40,532

2.81

(b)
 
39,453

3.71

 
38,688

3.70

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government obligations
23,175

1.87

 
18,444

2.08

 
19,315

2.11

 
 
18,870

2.19

 
23,597

2.22

U.S. government agency obligations
69,046

2.32

 
67,494

2.36

 
67,235

2.49

 
 
66,445

2.58

 
64,867

2.63

State and political subdivisions (c)
1,033

3.06

 
1,134

3.03

 
1,217

3.05

 
 
1,735

2.89

 
2,206

2.71

Other securities (c)
36,375

0.95

 
35,242

1.64

 
33,729

1.75

 
 
30,770

2.04

 
28,647

2.13

Trading securities (c)
6,840

2.36

 
6,695

2.41

 
5,653

2.80

 
 
5,764

2.72

 
5,102

2.91

Total securities (c)
136,469

1.88

 
129,009

2.13

 
127,149

2.25

 
 
123,584

2.40

 
124,419

2.45

Total interest-earning assets (c)
$
323,936

1.95
%
 
$
297,987

2.30
%
 
$
294,154

2.63
%
(b)
 
$
287,417

2.74
%
 
$
282,185

2.75
%
Noninterest-earning assets
61,342

 
 
56,354

 
 
56,525

 
 
 
54,967

 
 
53,980

 
Total assets
$
385,278

 
 
$
354,341

 
 
$
350,679

 
 
 
$
342,384

 
 
$
336,165

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic offices
$
99,915

0.69
%
 
$
87,162

0.98
%
 
$
82,663

1.28
%
 
 
$
74,180

1.36
%
 
$
70,562

1.29
%
Foreign offices
97,717

0.29

 
95,262

0.49

 
94,738

0.71

 
 
93,365

0.78

 
89,317

0.76

Total interest-bearing deposits
197,632

0.49

 
182,424

0.73

 
177,401

0.98

 
 
167,545

1.04

 
159,879

0.99

Federal funds purchased and securities sold under repurchase
agreements (a)
13,919

7.96

 
12,668

9.11

 
13,432

13.08

 
 
11,809

12.64

 
11,922

11.26

Trading liabilities
1,626

1.61

 
1,504

2.25

 
1,371

2.33

 
 
1,735

2.47

 
1,305

2.25

Other borrowed funds
719

2.27

 
709

2.83

 
1,148

3.24

 
 
2,455

3.36

 
3,305

2.87

Commercial paper
1,581

1.56

 
1,792

1.66

 
3,796

2.26

 
 
2,957

2.43

 
1,377

2.44

Payables to customers and broker-dealers
16,386

0.73

 
15,178

1.07

 
15,440

1.52

 
 
15,666

1.76

 
16,108

1.76

Long-term debt
27,231

2.83

 
28,117

3.09

 
28,386

3.24

 
 
27,681

3.45

 
28,254

3.52

Total interest-bearing liabilities
$
259,094

1.17
%
 
$
242,392

1.48
%
 
$
240,974

1.99
%
 
 
$
229,848

2.03
%
 
$
222,150

1.96
%
Total noninterest-bearing deposits
60,577

 
 
49,632

 
 
49,027

 
 
 
52,956

 
 
54,583

 
Other noninterest-bearing liabilities
24,229

 
 
20,681

 
 
19,280

 
 
 
18,362

 
 
18,628

 
Total The Bank of New York Mellon Corporation shareholders’ equity
41,206

 
 
41,384

 
 
41,139

 
 
 
41,029

 
 
40,628

 
Noncontrolling interests
172

 
 
252

 
 
259

 
 
 
189

 
 
176

 
Total liabilities and equity
$
385,278

 
 
$
354,341

 
 
$
350,679

 
 
 
$
342,384

 
 
$
336,165

 
Net interest margin
 
1.01
%
 
 
1.09
%
 
 
0.99
%
(b)
 
 
1.12
%
 
 
1.20
%
Net interest margin (FTE) – Non-GAAP (d)
 
1.01
%
 
 
1.09
%
 
 
1.00
%
(b)
 
 
1.12
%
 
 
1.20
%
(a)    Includes the average impact of offsetting under enforceable netting agreements of approximately $80 billion for 1Q20, $60 billion for 4Q19, $68 billion for 3Q19, $51 billion for 2Q19 and $44 billion for 1Q19. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 1.39% for 1Q20, 1.82% for 4Q19, 2.42% for 3Q19, 2.57% for 2Q19 and 2.63% for 1Q19.  On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under repurchase agreements would have been 1.18% for 1Q20, 1.59% for 4Q19, 2.17% for 3Q19, 2.39% for 2Q19 and 2.40% for 1Q19. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid.
(b)    Includes the impact of the lease-related impairment of $70 million in 3Q19. On a Non-GAAP basis, excluding the lease-related impairment, the yield on non-margin loans in domestic offices would have been 3.70%, the yield on total non-margin loans would have been 3.50%, the yield on total interest-earning assets would have been 2.72% and the net interest margin and the net interest margin (FTE) – Non-GAAP would have been 1.09% in 3Q19.
(c)    Average rates were calculated on an FTE basis, at tax rates of approximately 21%.
(d)    See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.

7



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
BNYLOGO01A13.JPG
 
CAPITAL AND LIQUIDITY
 
 
 
 
2020
 
2019
(dollars in millions)
March 31

 
Dec. 31

Sept. 30

June 30

March 31

Consolidated regulatory capital ratios (a)
 
 
 
 
 
 
Standardized Approach:
 
 
 
 
 
 
CET1 capital
$
18,465

 
$
18,540

$
18,196

$
18,534

$
18,156

Tier 1 capital
21,934

 
21,996

21,677

22,015

21,639

Total capital
23,491

 
23,449

23,145

23,500

23,136

Risk-weighted assets
162,872

 
148,695

148,399

149,226

151,101

 
 
 
 
 
 
 
CET1 ratio
11.3
%
 
12.5
%
12.3
%
12.4
%
12.0
%
Tier 1 capital ratio
13.5

 
14.8

14.6

14.8

14.3

Total capital ratio
14.4

 
15.8

15.6

15.7

15.3

 
 
 
 
 
 
 
Advanced Approaches:
 
 
 
 
 
 
CET1 capital
$
18,465

 
$
18,540

$
18,196

$
18,534

$
18,156

Tier 1 capital
21,934

 
21,996

21,677

22,015

21,639

Total capital
23,241

 
23,233

22,921

23,300

22,941

Risk-weighted assets
162,386

 
160,898

164,172

166,570

163,618

 
 
 
 
 
 
 
CET1 ratio
11.4
%
 
11.5
%
11.1
%
11.1
%
11.1
%
Tier 1 capital ratio
13.5

 
13.7

13.2

13.2

13.2

Total capital ratio
14.3

 
14.4

14.0

14.0

14.0

 
 
 
 
 
 
 
Tier 1 leverage ratio
6.0
%
 
6.6
%
6.5
%
6.8
%
6.8
%
 
 
 
 
 
 
 
SLR:
 
 
 
 
 
 
Leverage exposure
$
392,708

 
$
362,452

$
359,023

$
350,747

$
344,829

SLR
5.6
%
 
6.1
%
6.0
%
6.3
%
6.3
%
 
 
 
 
 
 
 
Average liquidity coverage ratio
115
%
 
120
%
117
%
117
%
118
%
(a)    Regulatory capital ratios for March 31, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the prior periods, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approaches for the CET1 and Tier 1 capital ratios and the Advanced Approach for the Total capital ratio.
.


8



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
 
BNYLOGO01A13.JPG
 
INVESTMENT SERVICES BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Q20 vs.
(dollars in millions)
1Q20

4Q19

(a)
3Q19

(a)
2Q19

(a)
1Q19

(a)
 
4Q19
1Q19
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Investment services fees:
 
 
 
 
 
 
 
 
 
 
 
 
Asset servicing fees (ex. securities lending revenue) (b)
$
1,101

$
1,098

 
$
1,099

 
$
1,086

 
$
1,067

 
 
—
 %
3
 %
Securities lending revenue
46

40

 
39

 
40

 
44

 
 
15

5

Clearing services fees (c)
470

421

 
419

 
411

 
398

 
 
12

18

Issuer services fees
263

264

 
324

 
291

 
251

 
 
—

5

Treasury services fees
149

147

 
139

 
140

 
132

 
 
1

13

Total investment services fees
2,029

1,970

 
2,020

 
1,968

 
1,892

 
 
3

7

Foreign exchange and other trading revenue
261

151

 
160

 
153

 
157

 
 
73

66

Other (d)
146

115

 
116

 
112

 
112

 
 
27

30

Total fee and other revenue
2,436

2,236

 
2,296

 
2,233

 
2,161

 
 
9

13

Net interest revenue
806

778

 
761

 
783

 
804

 
 
4

—

Total revenue
3,242

3,014

 
3,057

 
3,016

 
2,965

 
 
8

9

Provision for credit losses
149

(5
)
 
(15
)
 
(4
)
 
8

 
 
N/M

N/M

Noninterest expense (ex. amortization of intangible assets)
1,969

2,160

 
1,952

 
1,943

 
1,961

 
 
(9
)
—

Amortization of intangible assets
18

19

 
21

 
20

 
20

 
 
(5
)
(10
)
Total noninterest expense
1,987

2,179

 
1,973

 
1,963

 
1,981

 
 
(9
)
—

Income before taxes
$
1,106

$
840

 
$
1,099

 
$
1,057

 
$
976

 
 
32
 %
13
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating margin
34
%
28
%
 
36
%
 
35
%
 
33
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue by line of business:
 
 
 
 
 
 
 
 
 
 
 
 
Asset Servicing
$
1,531

$
1,411

 
$
1,411

 
$
1,397

 
$
1,415

 
 
9
 %
8
 %
Pershing
653

579

 
575

 
572

 
561

 
 
13

16

Issuer Services
419

415

 
466

 
446

 
396

 
 
1

6

Treasury Services
339

329

 
312

 
317

 
317

 
 
3

7

Clearance and Collateral Management
300

280

 
293

 
284

 
276

 
 
7

9

Total revenue by line of business
$
3,242

$
3,014

 
$
3,057

 
$
3,016

 
$
2,965

 
 
8
 %
9
 %
(a)    Prior periods have been restated. See “Segment Reporting Changes” on page 19 for additional information.
(b)    Asset servicing fees include the fees from the Clearance and Collateral Management business.
(c)    Clearing services fees are almost entirely earned by our Pershing business.
(d)    Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue, securities gains and losses and investment and other income.
N/M - Not meaningful.


9



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
BNYLOGO01A13.JPG
 
INVESTMENT SERVICES BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Q20 vs.
(dollars in millions, unless otherwise noted)
1Q20

4Q19

 
3Q19

 
2Q19

 
1Q19

 
 
4Q19
1Q19
Average loans
$
41,789

$
38,721

(a)
$
37,005

(a)
$
36,404

(a)
$
37,235

(a)
 
8
 %
12
 %
Average assets
$
304,089

$
278,098

(a)
$
269,926

(a)
$
264,781

(a)
$
256,034

(a)
 
9
 %
19
 %
Average deposits
$
242,187

$
215,388

(a)
$
208,044

(a)
$
201,146

(a)
$
195,082

(a)
 
12
 %
24
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
AUC/A at period end (in trillions) (b)(c)
$
35.2

$
37.1

 
$
35.8

 
$
35.5

 
$
34.5

 
 
(5
)%
2
 %
Market value of securities on loan at period end (in billions) (d)
$
389

$
378

 
$
362

 
$
369

 
$
377

 
 
3
 %
3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Pershing
 
 
 
 
 
 
 
 
 
 
 
 
Net new assets (U.S. platform) (in billions) (e)
$
31

$
33

 
$
19

 
$
21

 
$
—

 
 
(6
)%
N/M

Average active clearing accounts (U.S. platform) (in thousands)
6,437

6,340

 
6,283

 
6,254

 
6,169

 
 
2
 %
4
 %
Average long-term mutual fund assets (U.S. platform)
$
549,206

$
573,475

 
$
547,522

 
$
532,384

 
$
507,606

 
 
(4
)%
8
 %
Average investor margin loans (U.S. platform)
$
9,419

$
9,420

 
$
9,222

 
$
9,440

 
$
10,093

 
 
—

(7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Clearance and Collateral Management
 
 
 
 
 
 
 
 
 
 
 
 
Average tri-party collateral management balances (in billions)
$
3,724

$
3,562

 
$
3,550

 
$
3,400

 
$
3,266

 
 
5
 %
14
 %
(a)    Prior periods have been restated. See “Segment Reporting Changes” on page 19 for additional information.
(b)    March 31, 2020 information is preliminary.
(c)    Includes the AUC/A of CIBC Mellon of $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019, $1.4 trillion at Sept. 30, 2019 and June 30, 2019 and $1.3 trillion at March 31, 2019.
(d)    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 $59 billion at March 31, 2020, $60 billion at Dec. 31, 2019, $66 billion at Sept. 30, 2019, $64 billion at June 30, 2019 and $62 billion at March 31, 2019.
(e)    Net new assets represents net flows of assets (e.g., net cash deposits and net securities transfers) in customer accounts in Pershing LLC, a U.S. broker-dealer.
N/M - Not meaningful.
 
 
 
 
 
 
 
 
 
 
 
 


10



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
 
BNYLOGO01A13.JPG
 
INVESTMENT MANAGEMENT BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Q20 vs.
(dollars in millions)
1Q20

4Q19

(a)
3Q19

(a)
2Q19

(a)
1Q19

(a)
 
4Q19
1Q19
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Investment management fees (b)
$
812

$
836

 
$
830

 
$
831

 
$
810

 
 
(3
)%
—
 %
Performance fees
50

48

 
2

 
2

 
31

 
 
N/M

61

Investment management and performance fees (c)
862

884

 
832

 
833

 
841

 
 
(2
)
2

Distribution and servicing
43

44

 
45

 
44

 
45

 
 
(2
)
(4
)
Other (b)
(59
)
(4
)
 
(39
)
 
(23
)
 
(17
)
 
 
N/M

N/M

Total fee and other revenue (b)
846

924

 
838

 
854

 
869

 
 
(8
)
(3
)
Net interest revenue
52

47

 
49

 
59

 
67

 
 
11

(22
)
Total revenue
898

971

 
887

 
913

 
936

 
 
(8
)
(4
)
Provision for credit losses
9

—

 
—

 
(2
)
 
1

 
 
N/M

N/M

Noninterest expense (ex. amortization of intangible assets)
687

722

 
582

 
646

 
660

 
 
(5
)
4

Amortization of intangible assets
8

9

 
10

 
9

 
9

 
 
(11
)
(11
)
Total noninterest expense
695

731

 
592

 
655

 
669

 
 
(5
)
4

Income before taxes
$
194

$
240

 
$
295

 
$
260

 
$
266

 
 
(19
)%
(27
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating margin
22
%
25
%
 
33
%
 
29
%
 
28
%
 
 
 
 
Adjusted pre-tax operating margin – Non-GAAP (d)
24
%
27
%
 
37
%
 
32
%
 
31
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue by line of business:
 
 
 
 
 
 
 
 
 
 
 
 
Asset Management
$
620

$
692

 
$
608

 
$
622

 
$
640

 
 
(10
)%
(3
)%
Wealth Management
278

279

 
279

 
291

 
296

 
 
—

(6
)
Total revenue by line of business
$
898

$
971

 
$
887

 
$
913

 
$
936

 
 
(8
)%
(4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Average loans
$
12,124

$
12,022

 
$
12,013

 
$
12,205

 
$
12,339

 
 
1
 %
(2
)%
Average assets
$
30,543

$
28,481

 
$
27,840

 
$
29,793

 
$
31,857

 
 
7
 %
(4
)%
Average deposits
$
16,144

$
15,195

 
$
14,083

 
$
14,615

 
$
15,815

 
 
6
 %
2
 %
(a)    Prior periods have been restated. See “Segment Reporting Changes” on page 19 for additional information.
(b)    Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. Additionally, other revenue includes asset servicing fees, treasury services fees, foreign exchange and other trading revenue and investment and other income.
(c)    On a constant currency basis (Non-GAAP), investment management and performance fees increased 3% compared with 1Q19. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.
(d)    Net of distribution and servicing expense. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.
N/M - Not meaningful.

11



THE BANK OF NEW YORK MELLON CORPORATION
 
 
BNYLOGO01A13.JPG
 
AUM BY PRODUCT, AUM FLOWS AND WEALTH MANAGEMENT CLIENT ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Q20 vs.
(dollars in billions)
1Q20

4Q19

3Q19

2Q19

1Q19

 
4Q19
1Q19
AUM by product type (a)(b)
 
 
 
 
 
 
 
 
Equity
$
120

$
154

$
147

$
152

$
149

 
(22
)%
(19
)%
Fixed income
211

224

211

209

208

 
(6
)
1

Index
274

339

321

322

333

 
(19
)
(18
)
Liability-driven investments
705

728

742

709

709

 
(3
)
(1
)
Multi-asset and alternative investments
171

192

182

184

178

 
(11
)
(4
)
Cash
315

273

278

267

264

 
15

19

Total AUM by product type
$
1,796

$
1,910

$
1,881

$
1,843

$
1,841

 
(6
)%
(2
)%
 
 
 
 
 
 
 
 
 
Changes in AUM (a)(b)
 
 
 
 
 
 
 
 
Beginning balance of AUM
$
1,910

$
1,881

$
1,843

$
1,841

$
1,722

 
 
 
Net (outflows) inflows:
 
 
 
 
 
 
 
 
Long-term strategies:
 
 
 
 
 
 
 
 
Equity
(2
)
(6
)
(4
)
(2
)
(4
)
 
 
 
Fixed income
—

5

2

(4
)
3

 
 
 
Liability-driven investments
(5
)
(3
)
(4
)
1

5

 
 
 
Multi-asset and alternative investments
(1
)
3

(1
)
1

(4
)
 
 
 
Total long-term active strategies (outflows)
(8
)
(1
)
(7
)
(4
)
—

 
 
 
Index
3

(5
)
(3
)
(22
)
(2
)
 
 
 
Total long-term strategies (outflows)
(5
)
(6
)
(10
)
(26
)
(2
)
 
 
 
Short-term strategies:
 
 
 
 
 
 
 
 
Cash
43

(7
)
11

2

2

 
 
 
Total net inflows (outflows)
38

(13
)
1

(24
)
—

 
 
 
Net market impact
(91
)
(20
)
66

42

103

 
 
 
Net currency impact
(61
)
62

(29
)
(16
)
16

 
 
 
Ending balance of AUM
$
1,796

$
1,910

$
1,881

$
1,843

$
1,841

 
(6
)%
(2
)%
 
 
 
 
 
 
 
 
 
Wealth Management client assets (a)(c)
$
236

$
266

$
259

$
257

$
253

 
(11
)%
(7
)%
(a)    March 31, 2020 information is preliminary.
(b)    Excludes securities lending cash management assets and assets managed in the Investment Services business.
(c)    Includes AUM and AUC/A in the Wealth Management business.



12



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
BNYLOGO01A13.JPG
OTHER SEGMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
1Q20

4Q19

(a)
3Q19

(a)
2Q19

(a)
1Q19

(a)
Fee revenue
$
21

$
817

(b)
$
(5
)
 
$
24

 
$
17

 
Net securities gains (losses)
9

(23
)
 
(1
)
 
7

 
1

 
Total fee and other revenue
30

794

 
(6
)
 
31

 
18

 
Net interest (expense)
(44
)
(10
)
 
(80
)
 
(40
)
 
(30
)
 
Total (loss) revenue
(14
)
784

 
(86
)
 
(9
)
 
(12
)
 
Provision for credit losses
11

(3
)
 
(1
)
 
(2
)
 
(2
)
 
Noninterest expense
30

54

 
25

 
29

 
49

 
(Loss) income before taxes
$
(55
)
$
733

 
$
(110
)
 
$
(36
)
 
$
(59
)
 
 
 
 
 
 
 
 
 
 
 
Average loans and leases
$
1,961

$
1,974

 
$
1,817

 
$
1,764

 
$
1,784

 
Average assets
$
50,646

$
47,762

 
$
52,913

 
$
47,810

 
$
48,274

 
(a)    Prior periods have been restated. See “Segment Reporting Changes” on page 19 for additional information.
(b)    Includes a gain on sale of an equity investment.


13



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
BNYLOGO01A13.JPG
 
SECURITIES PORTFOLIO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions)
Dec. 31, 2019

 
1Q20
change in
unrealized
gain (loss)

March 31, 2020
 
Fair value
as a % of amortized
cost (a)

Unrealized
gain (loss)

 
Ratings (b)
Amortized
cost

Fair value

 
 
AAA/
AA-
A+/
A-
BBB+/
BBB-
BB+ and
lower
A1+/
A1
Not
rated
 Fair value

 
 
Agency RMBS
$
54,646

 
$
809

$
56,002

$
57,078

 
102
%
$
1,076

 
100
%
—
%
—
%
—
%
—
%
—
%
U.S. Treasury
18,865

 
368

24,367

24,803

 
102

436

 
100

—

—

—

—

—

Sovereign debt/sovereign guaranteed
13,404

 
23

13,710

13,833

 
101

123

 
72

6

21

1

—

—

Agency commercial MBS
10,613

 
295

11,183

11,534

 
103

351

 
100

—

—

—

—

—

Foreign covered bonds
4,276

 
(20
)
5,361

5,349

 
100

(12
)
 
100

—

—

—

—

—

Supranational
3,734

 
13

4,316

4,339

 
101

23

 
100

—

—

—

—

—

CLOs
4,063

 
(228
)
4,341

4,098

 
94

(243
)
 
99

—

—

—

—

1

Commercial paper and certificates of deposits (c)(d)
—

 
1

3,464

3,465

 
100

1

 
—

—

—

—

100

—

U.S. government agencies
2,933

 
98

3,303

3,421

 
104

118

 
100

—

—

—

—

—

Foreign government agencies
2,641

 
22

2,736

2,761

 
101

25

 
95

5

—

—

—

—

Non-agency commercial MBS
2,165

 
(80
)
2,501

2,452

 
98

(49
)
 
100

—

—

—

—

—

Other asset-backed securities
2,143

 
(39
)
2,257

2,220

 
98

(37
)
 
100

—

—

—

—

—

Non-agency RMBS (e)
1,316

 
(129
)
1,479

1,548

 
105

69

 
47

8

2

26

—

17

State and political subdivisions
1,061

 
(9
)
983

1,001

 
102

18

 
76

23

—

—

—

1

Corporate bonds
853

 
(7
)
804

818

 
102

14

 
18

69

13

—

—

—

Other
1

 
—

1

1

 
100

—

 
—

—

—

—

—

100

Total securities
$
122,714

(f)
$
1,117

$
136,808

$
138,721

(f)(g)
101
%
$
1,913

(f)(h)
94
%
1
%
2
%
—
%
3
%
—
%
(a)    Amortized cost reflects historical impairments.
(b)    Represents ratings by S&P, or the equivalent.
(c)    Includes $2,145 million purchased from affiliated money market funds at March 31, 2020.
(d)    Includes $651 million funded by borrowings from the Federal Reserve Bank under its Money Market Mutual Fund Liquidity Facility (“MMLF”) program at March 31, 2020.
(e)    Includes RMBS that were included in the former Grantor Trust of $640 million at Dec. 31, 2019 and $535 million at March 31, 2020.
(f)    Includes net unrealized losses on derivatives hedging securities available-for-sale of $641 million at Dec. 31, 2019 and $1,665 million at March 31, 2020.
(h)    Includes unrealized gains of $800 million at March 31, 2020 related to available-for-sale securities, net of hedges.
(g)    At March 31, 2020, the securities portfolio, including the impact of interest rate swap hedges, is 69% fixed rate and 31% floating rate.


14



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
BNYLOGO01A13.JPG
ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS
 
 
 
 
 
 
 
 
 
2020
 
 
2019
(dollars in millions)
March 31

 
 
Dec. 31

Sept. 30

June 30

 
March 31

 
Allowance for credit losses - beginning of period:
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
122

 
 
$
127

$
146

$
146

 
$
146

 
Allowance for lending-related commitments
94

 
 
97

95

102

 
106

 
Allowance for credit losses - beginning of period
$
216

 
 
$
224

$
241

$
248

 
$
252

 
 
 
 
 
 
 
 
 
 
 
Impact of adopting ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, effective Jan. 1, 2020
(55
)
(a)
 
N/A

N/A

N/A

 
N/A

 
 
 
 
 
 
 
 
 
 
 
Net (charge-offs) recoveries:
 
 
 
 
 
 
 
 
 
Charge-offs
(1
)
 
 
(1
)
(1
)
(1
)
 
(11
)
 
Recoveries
—

 
 
1

—

2

 
—

 
Total net (charge-offs) recoveries
(1
)
 
 
—

(1
)
1

 
(11
)
 
Provision for credit losses
169

(a)
 
(8
)
(16
)
(8
)
 
7

 
Allowance for credit losses - end of period
$
329

 
 
$
216

$
224

$
241

 
$
248

 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses - end of period:
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
140

 
 
$
122

$
127

$
146

 
$
146

 
Allowance for lending-related commitments
148

 
 
94

97

95

 
102

 
Allowance for other financial instruments
41

(b)
 
N/A

N/A

N/A

 
N/A

 
Allowance for credit losses - end of period
$
329

 
 
$
216

$
224

$
241

 
$
248

 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses as a percentage of total loans
0.22
%
 
 
0.22
%
0.23
%
0.28
%
 
0.27
%
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
$
88

 
 
$
89

$
88

$
186

(c)
$
174

(c)
(a)    Includes all instruments within the scope of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.
(b)    Includes allowance for credit losses on federal funds sold and securities purchased under resale agreements, available-for-sale securities, accounts receivable, cash and due from banks and interest-bearing deposits with banks.
(c)    Includes nonperforming loans to a California utility company that filed for bankruptcy that were sold in 3Q19.
N/A - Not applicable.


15



THE BANK OF NEW YORK MELLON CORPORATION
 
 
BNYLOGO01A13.JPG
 
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
 
 
 
BNY Mellon has included in this Financial Supplement certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. BNY Mellon believes that the return on tangible common equity is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.
 
 
 
Net interest revenue, on a fully taxable equivalent ("FTE") basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison 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.
 
 
 
BNY Mellon has also included the operating margin for the Investment Management business net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. BNY Mellon believes that this measure is useful when evaluating the performance of the Investment Management business relative to industry competitors.
 
 
 
The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. BNY Mellon believes that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates.
 
 
 
Notes:
 
 
Certain immaterial reclassifications/revisions have been made to prior periods to place them on a basis comparable with the current period's presentation.
 
 
 
In businesses where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference.
 
 
 
Quarterly return on common and tangible common equity ratios are annualized.
 
 
 
 
 
 
 
 
 
 
 
 
Return on common equity and tangible common equity reconciliation
 
 
 
 
 
(dollars in millions)
1Q20

4Q19

3Q19

2Q19

1Q19

Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
$
944

$
1,391

$
1,002

$
969

$
910

Add: Amortization of intangible assets
26

28

30

30

29

Less: Tax impact of amortization of intangible assets
6

7

7

7

7

Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP
$
964

$
1,412

$
1,025

$
992

$
932

 
 
 
 
 
 
Average common shareholders’ equity
$
37,664

$
37,842

$
37,597

$
37,487

$
37,086

Less: Average goodwill
17,311

17,332

17,267

17,343

17,376

 Average intangible assets
3,089

3,119

3,141

3,178

3,209

Add: Deferred tax liability – tax deductible goodwill
1,109

1,098

1,103

1,094

1,083

 Deferred tax liability – intangible assets
666

670

679

687

690

Average tangible common shareholders’ equity – Non-GAAP
$
19,039

$
19,159

$
18,971

$
18,747

$
18,274

 
 
 
 
 
 
Return on common equity – GAAP
10.1
%
14.6
%
10.6
%
10.4
%
10.0
%
Return on tangible common equity – Non-GAAP
20.4
%
29.3
%
21.4
%
21.2
%
20.7
%


16



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
BNYLOGO01A13.JPG
 
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

 
 
Book value and tangible book value per common share reconciliation
2020
 
2019
(dollars in millions, except common shares)
March 31

 
Dec. 31

Sept. 30

June 30

March 31

BNY Mellon shareholders’ equity at period end – GAAP
$
41,145

 
$
41,483

$
41,120

$
41,533

$
41,225

Less: Preferred stock
3,542

 
3,542

3,542

3,542

3,542

BNY Mellon common shareholders’ equity at period end – GAAP
37,603

 
37,941

37,578

37,991

37,683

Less: Goodwill
17,240

 
17,386

17,248

17,337

17,367

Intangible assets
3,070

 
3,107

3,124

3,160

3,193

Add: Deferred tax liability – tax deductible goodwill
1,109

 
1,098

1,103

1,094

1,083

Deferred tax liability – intangible assets
666

 
670

679

687

690

BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP
$
19,068

 
$
19,216

$
18,988

$
19,275

$
18,896

 
 
 
 
 
 
 
Period-end common shares outstanding (in thousands)
885,443

 
900,683

922,199

942,662

957,517

 
 
 
 
 
 
 
Book value per common share – GAAP
$
42.47

 
$
42.12

$
40.75

$
40.30

$
39.36

Tangible book value per common share – Non-GAAP
$
21.53

 
$
21.33

$
20.59

$
20.45

$
19.74

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin reconciliation
 
 
 
 
 
 
(dollars in millions)
1Q20

 
4Q19

3Q19

2Q19

1Q19

Net interest revenue – GAAP
$
814

 
$
815

$
730

$
802

$
841

Add: Tax equivalent adjustment
2

 
2

3

4

4

Net interest revenue (FTE) – Non-GAAP
$
816

 
$
817

$
733

$
806

$
845

 
 
 
 
 
 
 
Average interest-earning assets
$
323,936

 
$
297,987

$
294,154

$
287,417

$
282,185

 
 
 
 
 
 
 
Net interest margin – GAAP (a)
1.01
%
 
1.09
%
0.99
%
1.12
%
1.20
%
Net interest margin (FTE) – Non-GAAP (a)
1.01
%
 
1.09
%
1.00
%
1.12
%
1.20
%
(a)    Net interest margin is annualized.


17



THE BANK OF NEW YORK MELLON CORPORATION
 
 
BNYLOGO01A13.JPG
 
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
Pre-tax operating margin reconciliation - Investment Management business
 
 
 
 
 
(dollars in millions)
1Q20

4Q19

3Q19

2Q19

1Q19

Income before income taxes – GAAP
$
194

$
240

$
295

$
260

$
266

 
 
 
 
 
 
Total revenue – GAAP
$
898

$
971

$
887

$
913

$
936

Less: Distribution and servicing expense
91

93

98

94

91

Adjusted total revenue, net of distribution and servicing expense – Non-GAAP
$
807

$
878

$
789

$
819

$
845

 
 
 
 
 
 
Pre-tax operating margin – GAAP (a)
22
%
25
%
33
%
29
%
28
%
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a)
24
%
27
%
37
%
32
%
31
%
(a)    Income before income taxes divided by total revenue.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Constant currency reconciliations
 
 
1Q20 vs.

 
 
(dollars in millions)
1Q20

1Q19

1Q19

 
 
Consolidated:
 
 
 
 
 
Investment management and performance fees – GAAP
$
862

$
841

2
%
 
 
Impact of changes in foreign currency exchange rates
—

(5
)
 
 
 
Adjusted investment management and performance fees – Non-GAAP
$
862

$
836

3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Management business:
 
 
 
 
 
Investment management and performance fees – GAAP
$
862

$
841

2
%
 
 
Impact of changes in foreign currency exchange rates
—

(5
)
 
 
 
Adjusted investment management and performance fees – Non-GAAP
$
862

$
836

3
%
 
 


18



THE BANK OF NEW YORK MELLON CORPORATION
BNYLOGO01A13.JPG
 
SEGMENT REPORTING CHANGES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In the first quarter of 2020, we reclassified the results of certain services provided between the segments from noninterest expense to fee and other revenue. This activity is offset in the Other segment and relates to services that are also provided to third-parties and provides consistency with the reporting of the revenues. This adjustment had no impact on income before taxes of the businesses. Prior periods have been restated.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In the first quarter of 2020, we reclassified the results related to certain lending activities from the Wealth Management business to the Pershing business. These loans were originated by the Wealth Management business as a service to Pershing clients. This resulted in an increase in total revenue, noninterest expense and income before taxes in the Pershing business and corresponding decrease in the Wealth Management business. Prior periods have been restated.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT SERVICES BUSINESS
 
INVESTMENT MANAGEMENT BUSINESS
 
OTHER SEGMENT
(dollars in millions)
4Q19

3Q19

2Q19

1Q19

 
4Q19

3Q19

2Q19

1Q19

 
4Q19

3Q19

2Q19

1Q19

Before restatement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee and other revenue
$
2,222

$
2,291

$
2,227

$
2,154

 
$
919

$
833

$
850

$
864

 
$
813

$
4

$
41

$
30

Net interest revenue
769

753

775

796

 
56

57

67

75

 
(10
)
(80
)
(40
)
(30
)
Total revenue
2,991

3,044

3,002

2,950

 
975

890

917

939

 
803

(76
)
1

—

Provision for credit losses
(5
)
(15
)
(4
)
8

 
—

—

(2
)
1

 
(3
)
(1
)
(2
)
(2
)
Total noninterest expense
2,161

1,965

1,954

1,969

 
730

590

654

669

 
73

35

39

61

Income before taxes
$
835

$
1,094

$
1,052

$
973

 
$
245

$
300

$
265

$
269

 
$
733

$
(110
)
$
(36
)
$
(59
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restatements: (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee and other revenue
$
14

$
5

$
6

$
7

 
$
5

$
5

$
4

$
5

 
$
(19
)
$
(10
)
$
(10
)
$
(12
)
Net interest revenue
9

8

8

8

 
(9
)
(8
)
(8
)
(8
)
 
—

—

—

—

Total revenue
23

13

14

15

 
(4
)
(3
)
(4
)
(3
)
 
(19
)
(10
)
(10
)
(12
)
Provision for credit losses
—

—

—

—

 
—

—

—

—

 
—

—

—

—

Total noninterest expense
18

8

9

12

 
1

2

1

—

 
(19
)
(10
)
(10
)
(12
)
Income before taxes
$
5

$
5

$
5

$
3

 
$
(5
)
$
(5
)
$
(5
)
$
(3
)
 
$
—

$
—

$
—

$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After restatement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee and other revenue
$
2,236

$
2,296

$
2,233

$
2,161

 
$
924

$
838

$
854

$
869

 
$
794

$
(6
)
$
31

$
18

Net interest revenue
778

761

783

804

 
47

49

59

67

 
(10
)
(80
)
(40
)
(30
)
Total revenue
3,014

3,057

3,016

2,965

 
971

887

913

936

 
784

(86
)
(9
)
(12
)
Provision for credit losses
(5
)
(15
)
(4
)
8

 
—

—

(2
)
1

 
(3
)
(1
)
(2
)
(2
)
Total noninterest expense
2,179

1,973

1,963

1,981

 
731

592

655

669

 
54

25

29

49

Income before taxes
$
840

$
1,099

$
1,057

$
976

 
$
240

$
295

$
260

$
266

 
$
733

$
(110
)
$
(36
)
$
(59
)
(a)    The impact to fee and other revenue is primarily due to the change in reporting of inter-segment activity and primarily impacted the Asset Servicing and Asset Management lines of business. The impact to net interest revenue is primarily related to the Wealth Management to Pershing reclassification. The impact to noninterest expense reflects the impact of both changes, which had a mostly offsetting impact in Investment Management.
 


19

First Quarter 2020 Financial Highlights April 16, 2020

 
Management Priorities in Response to Coronavirus Impact » Support well-being of employees and communities during challenging time Employees » Early and successful initiation of our business continuity plans » Significant majority of global workforce working remotely » Operationally resilient Clients » Laser focused on helping clients manage through disruption and uncertainty » Digital capabilities enabling clients to continue operations » Maintaining strong, liquid and lower risk balance sheet Balance Sheet » Supporting our clients and markets 2 First Quarter 2020 – Financial Highlights

 
Resilient During Volatile Markets » Performs relatively well under stress Attractive » Client base of leading institutional clients, governments, endowments and pension funds business model » Diversified and stable business mix with high percentage of recurring revenue » Lower credit and market risk Lower » High quality loan portfolio supporting broad relationships risk profile » Predominantly AAA/AA and government securities » Controlling expenses during uncertain times Disciplined » Prior investments strengthened technology infrastructure and operations execution » Executing on comprehensive business continuity plans » Continuing to focus on long-term strategic priorities » Capital and liquidity ratios remain comfortably above internal targets and regulatory minimums Strong and liquid » Using our substantial resources to support client activities balance sheet » Consistent returns and proven capital generation 3 First Quarter 2020 – Financial Highlights

 
1Q20 Financial Results PROFITS RETURNS BALANCE SHEET › Net Income: $944 million › ROE: 10.1% › CET1: 11.3% › Diluted EPS: $1.05 › ROTCE: 20.4% (a) › Tier 1 Leverage: 6.0% › Returned $1.3 billion to shareholders › SLR: 5.6% › LCR: 115% PRE - T A X I N C O M E TOTAL REVENUE ($ millions) ($ millions) › Investment Services revenue primarily +3% 2,965 driven by higher foreign exchange and transaction revenues 1,822 75 3,014 +9% 6570 60 › Investment Management revenue 1,193 1,227 55 Services 3,242 50 Investment 4045 impacted by equity investment losses, 35 including seed capital; investment 38% 2530 31% 30% 20 management and performance fees 15 936 510 were up 2% 1Q19 4Q19 1Q20 971 (4)% Pre-tax operating margin › Expenses flat 898 Investment Investment Ex notable items(a) 4Q19 Management › Provision for credit losses of $169 PTI ($m) 1,218 1Q19 4Q19 1Q20 million; net charge-offs of $1 million Op Margin 31% › Strong capital returns (a) Represents a non-GAAP measure. See page 17 in the Appendix for corresponding reconciliation of notable items and page 18 for corresponding reconciliation of ROTCE. 4 First Quarter 2020 – Financial Highlights

 
1Q20 Financial Highlights ($ millions, except per share data) 1 Q 2 0 4 Q 1 9 1 Q 1 9 TOTAL REVENUE $4,108 (14)% 5% Fee revenue 3,323 (16) 10 Net interest revenue 814 - (3) Provision for credit losses 169 N/M N/M Noninterest expense 2,712 (9) - Income before income taxes 1,227 (33) 3 Net income applicable to common shareholders $944 (32)% 4% EARNINGS PER COMMON SHARE $1.05 (31)% 12% Operating leverage (a) (552) bps 488 bps Pre-tax operating margin 30% (829) bps (72) bps Return on common equity (annualized) 10.1% (451) bps 13 bps Return on tangible common equity (annualized) (b) 20.4% (891) bps (32) bps NOTABLE ITEMS (C) Increase / (decrease) Revenue Expense EPS 4Q19 includes gain from the sale of an equity investment, partially 4Q19 790 186 $0.50 offset by severance, net securities losses and litigation Note: See page 16 in the Appendix for corresponding footnotes. N/M - not meaningful; bps - basis points 5 First Quarter 2020 – Financial Highlights

 
Capital and Liquidity 1 Q 20 4 Q 1 9 1 Q19 Consolidated regulatory capital ratios: (a) Common Equity Tier 1 (“CET1”) ratio 11.3% 11.5% 11.1% Tier 1 capital ratio 13.5 13.7 13.2 Total capital ratio 14.3 14.4 14.0 Tier 1 leverage ratio 6.0 6.6 6.8 Supplementary leverage ratio (“SLR”) 5.6 6.1 6.3 Average liquidity coverage ratio (“LCR”) 115% 120% 118% Book value per common share $42.47 $42.12 $39.36 Tangible book value per common share – non-GAAP (b) $21.53 $21.33 $19.74 Cash dividends per common share $0.31 $0.31 $0.28 Common shares outstanding (thousands) 885,443 900,683 957,517 Note: See page 16 in the Appendix for corresponding footnotes. 6 First Quarter 2020 – Financial Highlights

 
Net Interest Revenue DRIVERS OF SEQUENTIAL NIR CHANGE ($ millions) › Higher deposit balances due to ongoing deposit initiatives and surge in March 815 814 › Increased investment securities and loans › Lower yields on asset portfolios were partially offset by lower deposit rates › Wider spreads between LIBOR and Fed Funds positively impacted 1Q20 4Q19 + Average + Higher – Rate impact − Hedging 1Q20 deposit securities (i.e., interest- (largely balances and loan earning asset offset in FX up ~$26bn balances yield declines and other partially offset trading) by lower deposit and funding cost) 7 First Quarter 2020 – Financial Highlights

 
Deposit Balances ($ billions) AV E R A G E 1Q20 AVERAGE DEPOSITS DEPOSITS BY MONTH +20% +31% +11% 258 308 232 › March balances increased significantly 214 235 230 › Majority of client deposit balances linked to 198 Investment Services businesses 160 182 0.99% › Deposit pricing adjusted for rate declines 0.73% 0.49% 55 50 61 1Q19 4Q19 1Q20 Jan Feb Mar Interest-bearing deposits rate Interest-bearing deposits Noninterest-bearing deposits Note: May not foot due to rounding. 8 First Quarter 2020 – Financial Highlights

 
Credit Risk Profile ($ billions) AVERAGE INTEREST - (a) (a) LOANS SECURITIES EARNING ASSETS +15% +9% Corporates, CLOs, ABS, 324 Munis, CP Overdrafts Non-agency and CDs 298 56 and other Wealth RMBS & CMBS 282 4% 53 14% management 7% 51 26% Commercial 6% U.S. 136 U.S. Agency, 129 Treasuries 18% Agency 124 CRE 10% 52% RMBS and CMBS 132 21% 23% 19% 106 116 Financial Sovereign Margin institutions loans debt/guaranteed, Foreign gov’t agency, 1Q19 4Q19 1Q20 Supranational & Covered bonds Loans Securities Cash/Reverse repo Note: May not foot due to rounding. (a) Data end of period as of 3/31/20. Loan percentages are preliminary. Securities portfolio excludes trading securities. 9 First Quarter 2020 – Financial Highlights

 
Noninterest Expense ($ millions) 1 Q 2 0 4 Q 1 9 1 Q19 › Noninterest expense increased slightly year-over-year $1,482 Staff (10)% (3)% › Increase primarily reflects continued investments in Professional, legal and other purchased services 330 (10) 2 technology and higher pension expense, partially Software and equipment 326 - 15 offset by lower staff expense and the favorable impact of a stronger U.S. dollar Net occupancy 135 (11) (1) Sub-custodian and clearing 105 (12) - › Technology expenses are included in staff, professional, Distribution and servicing 91 (1) - .legal and other purchased services and software and .equipment Business development 42 (35) (7) Bank assessment charges 35 9 13 › Sequential growth rates are impacted by notable items .in 4Q19. See appendix Amortization of intangible assets 26 (7) (10) Other 140 (3) 9 Total noninterest expense $2,712 (9)% - % 10 First Quarter 2020 – Financial Highlights

 
Investment Services FINANCIAL HIGHLIGHTS 1 Q 2 0 ($ millions unless otherwise noted) 4 Q 1 9 1 Q 1 9 › Asset Servicing up year-over-year on higher foreign Total revenue by line of business: exchange and other trading revenue and volumes from Asset Servicing $1,531 9% 8% existing clients, partially offset by lower net interest Pershing 653 13 16 revenue. The decrease in net interest revenue primarily Issuer Services 419 1 6 reflects lower rates, partially offset by higher deposits Treasury Services 339 3 7 and loans Clearance and Collateral Management 300 7 9 Total revenue 3,242 8 9 › Pershing up on higher clearing volumes, a one-time fee Provision for credit losses 149 N/M N/M Noninterest expense 1,987 (9) - and growth in client assets and accounts Income before taxes $1,106 32% 13% Pre-tax operating margin 34% 626 bps 120 bps › Issuer Services up due to higher Corporate Trust and Depositary Receipts fees KEY METRICS › Treasury Services up on higher fees and net interest Foreign exchange and other trading revenue $261 73% 66% revenue. The increase in net interest revenue was Securities lending revenue 46 15 5 driven by deposit growth Average loans 41,789 8 12 Average deposits 242,187 12 24 › Clearance and Collateral Management up primarily AUC/A at period end (tr) (a) 35.2 (5) 2 driven by growth in collateral management and clearance Market value of securities on loan at period end (bn) (b) $389 3% 3% volumes and higher net interest revenue Pershing Net new assets (U.S. platform) (bn) (c) $31 (6) N/M › AUC/A of $35.2 trillion up primarily reflecting higher client Average active clearing accounts (U.S. platform) (thousands) 6,437 2 4 inflows, partially offset by lower market values and the Clearance and Collateral Management unfavorable impact of a stronger U.S. dollar Average tri-party collateral mgmt. balances (tr) $3.7 5% 14% Note: See page 16 in the Appendix for corresponding footnotes. N/M - not meaningful; bps - basis points 11 First Quarter 2020 – Financial Highlights

 
Investment Services - Revenue Drivers ($ millions) +8% +16% +6% +7% +9% 1,531 653 419 339 300 1,415 396 317 276 561 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 A S S E T I S S U E R T R E A S U R Y CLEARANCE AND SERVICING PERSHING SERVICES SERVICES COLLATERAL + FX and other trading + Clearing volumes + Corporate Trust new + IB deposit levels + New business from new and revenue + One-time fee business and FX + Payment volumes existing clients + Higher client volumes + Client assets and + Depositary Receipts + Net new business + Average Tri-party balances - Net interest revenue accounts cross border volumes + U.S. and Global clearance - Depositary Receipts volumes corporate actions + Noninterest-bearing deposits - Loan volumes 12 First Quarter 2020 – Financial Highlights

 
Investment Management FINANCIAL HIGHLIGHTS 1 Q 2 0 ($ millions unless otherwise noted) 4 Q 1 9 1 Q 1 9 › Asset Management down year-over-year on equity investment losses, including seed capital, and an Total revenue by line of business: Asset Management $620 (10)% (3)% unfavorable change in the mix of AUM since 1Q19, Wealth Management 278 - (6) partially offset by higher performance fees and market Total revenue 898 (8) (4) Provision for credit losses 9 N/M N/M values Noninterest expense 695 (5) 4 Income before taxes $194 (19)% (27)% › Wealth Management down primarily reflecting lower Pre-tax operating margin 22% (313) bps (666) bps net interest revenue due to lower interest rates, Adjusted pre-tax operating margin – non-GAAP (a) 24% (330) bps (726) bps partially offset by the impact of higher deposits KEY METRICS › Noninterest expense up primarily reflecting higher Average loans $12,124 1% (2)% professional, legal and other purchased services Average deposits 16,144 6 2 Wealth Management client assets (bn) (b) $236 (11)% (7)% › AUM of $1.8 trillion down primarily reflecting the CHANGES IN AUM (bn)(C) 1 Q 2 0 4 Q 1 9 1 Q 1 9 unfavorable impact of a stronger U.S. dollar Beginning balance $1,910 $1,881 $1,722 Equity (2) (6) (4) Fixed income - 5 3 Liability-driven investments (5) (3) 5 Multi-asset and alternatives (1) 3 (4) Index 3 (5) (2) Cash 43 (7) 2 Total net inflows (outflows) 38 (13) - Net market impact (91) (20) 103 Net currency impact (61) 62 16 Ending balance $1,796 $1,910 $1,841 Note: See page 16 in the Appendix for corresponding footnotes. N/M - not meaningful; bps - basis points 13 First Quarter 2020 – Financial Highlights

 
Other Segment FINANCIAL HIGHLIGHTS 1 Q 2 0 › Total revenue decreased sequentially primarily reflecting ($ millions unless otherwise noted) 4 Q 1 9 1 Q 1 9 the gain on sale of an equity investment recorded in Fee revenue $21 $817 $17 Net securities gains (losses) 9 (23) 1 4Q19 Total fee and other revenue 30 794 18 Net interest (expense) (44) (10) (30) › Net interest expense increased sequentially primarily Total (loss) revenue (14) 784 (12) reflecting corporate treasury activity Provision for credit losses 11 (3) (2) Noninterest expense 30 54 49 › Noninterest expense decreased year-over-year primarily (Loss) income before taxes $(55) $733 $(59) due to lower staff expense Note: Prior periods have been restated. See “Segment Reporting Changes” on page 19 for additional information. 14 First Quarter 2020 – Financial Highlights

 
Appendix

 
Footnotes 1Q20 Financial Highlights, Page 5 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (b) See page 18 for corresponding reconciliation of this non-GAAP measure. (c) Represents a non-GAAP measure. See page 17 in the Appendix for corresponding reconciliation. Capital and Liquidity, Page 6 (a) Regulatory capital ratios for Mar. 31, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for Dec. 31, 2019 and Mar. 31, 2019 was the Advanced Approaches, and for Mar. 31, 2020 was the Standardized Approaches for the CET1 and Tier 1 capital ratios and the Advanced Approach for the Total capital ratio. (b) Tangible book value per common share – non-GAAP – excludes goodwill and intangible assets, net of deferred tax liabilities. See page 18 for corresponding reconciliation of this non-GAAP measure. Investment Services, Page 11 Prior periods have been restated. See “Segment Reporting Changes” on page 19 for additional detail. (a) Current period is preliminary. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.2 trillion at Mar. 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.3 trillion at Mar. 31, 2019. (b) Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $59 billion at Mar. 31, 2020, $60 billion at Dec. 31, 2019 and $62 billion at Mar. 31, 2019. (c) Net new assets represents net flows of assets (e.g., net cash deposits and net securities transfers) in customer accounts in Pershing LLC, a U.S. broker-dealer. Investment Management, Page 13 Prior periods have been restated. See “Segment Reporting Changes” on page 19 for additional detail. (a) Net of distribution and servicing expense. See page 19 for corresponding reconciliation of this non-GAAP measure. (b) Current period is preliminary. Includes AUM and AUC/A in the Wealth Management business. (c) Current period is preliminary. Excludes securities lending cash management assets and assets managed in the Investment Services business. 16 First Quarter 2020 – Financial Highlights

 
First Quarter Results – Impact of Sequential Notable Items ($ in millions, except per share data unless otherwise noted) 1 Q 20 4 Q 1 9 1 Q 20 vs 4 Q 1 9 Results – Notable Results – Results – Notable Results – GAAP non- GAAP items non-GAAP GAAP items(a) non-GAAP GAAP Fee revenue $3,323 $ — $3,323 $3,971 $815 $3,156 (16)% 5% Net securities gains (losses) 9 — 9 (25) (25) — N/M N/M Total fee and other revenue 3,332 — 3,332 3,946 790 3,156 (16) 6 (Loss) income from consolidated investment (38) — (38) 17 — 17 N/M N/M management funds Net interest revenue 814 — 814 815 — 815 — — Total revenue 4,108 — 4,108 4,778 790 3,988 (14) 3 Provision for credit losses 169 — 169 (8) — (8) N/M N/M Noninterest expense 2,712 — 2,712 2,964 186 2,778 (9) (2) Income (loss) before income taxes 1,227 — 1,227 1,822 604 1,218 (33) 1 Provision for income taxes 265 — 265 373 144 229 (29) 16 Net income $962 — $962 $1,449 $460 $989 (34)% (3)% Net income applicable to common shareholders $944 — $944 $1,391 $460 $931 (32)% 1% Operating leverage(b) (552) bps 538 bps Diluted earnings per common share(c) $1.05 — $1.05 $1.52 $0.50 $1.01 (31)% 3% Average common shares and equivalents outstanding – diluted (in thousands) 896,689 914,739 Pre-tax operating margin 30% 30% 38% 31% NOTABLE ITEMS BY BUSINESS SEGMENT 4Q19 IS IM Other Total Fee and other revenue $ — $ — $790 $790 Net interest revenue $ — $ — — — Total revenue $ — $ — 790 790 Total noninterest expense 119 16 51 186 Income (loss) before taxes $(119) $(16) $739 $604 (a) Includes a gain on sale of an equity investment, severance, net securities losses and litigation expense. (b) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (c) Does not foot due to rounding. IS – Investment Services; IM – Investment Management; N/M - not meaningful; bps - basis points 17 First Quarter 2020 – Financial Highlights

 
Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 1 Q 20 4 Q 1 9 1 Q19 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $944 $1,391 $910 Add: Amortization of intangible assets 26 28 29 Less: Tax impact of amortization of intangible assets 6 7 7 Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of $964 $1,412 $932 intangible assets – non-GAAP Average common shareholders’ equity $37,664 $37,842 $37,086 Less: Average goodwill 17,311 17,332 17,376 Average intangible assets 3,089 3,119 3,209 Add: Deferred tax liability – tax deductible goodwill 1,109 1,098 1,083 Deferred tax liability – intangible assets 666 670 690 Average tangible common shareholders’ equity – non-GAAP $19,039 $19,159 $18,274 Return on common equity (annualized) – GAAP 10.1% 14.6% 10.0% Return on tangible common equity (annualized) – non-GAAP 20.4% 29.3% 20.7% Book Value and Tangible Book Value Per Common Share Reconciliation ($ millions, except common shares) Mar. 31, 2020 Dec. 31, 2019 Mar. 31, 2019 BNY Mellon shareholders’ equity at period end – GAAP $41,145 $41,483 $41,225 Less: Preferred stock 3,542 3,542 3,542 BNY Mellon common shareholders’ equity at period end – GAAP 37,603 37,941 37,683 Less: Goodwill 17,240 17,386 17,367 Intangible assets 3,070 3,107 3,193 Add: Deferred tax liability – tax deductible goodwill 1,109 1,098 1,083 Deferred tax liability – intangible assets 666 670 690 BNY Mellon tangible common shareholders’ equity at period end – non-GAAP $19,068 $19,216 $18,896 Period-end common shares outstanding (in thousands) 885,443 900,683 957,517 Book value per common share – GAAP $42.47 $42.12 $39.36 Tangible book value per common share – non-GAAP $21.53 $21.33 $19.74 18 First Quarter 2020 – Financial Highlights

 
Pre-tax Operating Margin Reconciliation – Investment Management Business ($ millions) 1 Q 20 4 Q 1 9 1 Q19 Income before income taxes – GAAP $194 $240 $266 Total revenue – GAAP $898 $971 $936 Less: Distribution and servicing expense 91 93 91 Adjusted total revenue, net of distribution and servicing expense – non-GAAP $807 $878 $845 Pre-tax operating margin – GAAP (a) 22% 25% 28% Adjusted pre-tax operating margin, net of distribution and servicing expense – non-GAAP (a) 24% 27% 31% Segment Reporting Changes In the first quarter of 2020, we reclassified the results of certain services provided between the segments from noninterest expense to fee and other revenue. This activity is offset in the Other segment and relates to services that are also provided to third-parties and provides consistency with the reporting of the revenues. This adjustment had no impact on income before taxes of the businesses. Prior periods have been restated. In the first quarter of 2020, we reclassified the results related to certain lending activities from the Wealth Management business to the Pershing business. These loans were originated by the Wealth Management business as a service to Pershing clients. This resulted in an increase in total revenue, noninterest expense and income before taxes in the Pershing business and corresponding decrease in the Wealth Management business. Prior periods have been restated. For additional information on the segment reporting changes, see “Segment Reporting Changes” in the Financial Supplement available at www.bnymellon.com. (a) Income before income taxes divided by total revenue. 19 First Quarter 2020 – Financial Highlights

 
Cautionary Statement A number of statements in our presentations, the accompanying slides and the responses to your questions are “forward-looking statements.” Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “future” and words of similar meaning signify forward-looking statements. These statements relate to, among other things, The Bank of New York Mellon Corporation’s (the “Corporation”) expectations regarding: capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, capabilities, resiliency, revenue, net interest revenue, fees, expenses, cost discipline, sustainable growth, company management, deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios; and statements regarding the Corporation's aspirations, as well as the Corporation’s overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These forward-looking statements are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond the Corporation’s control). Actual outcomes may differ materially from those expressed or implied as a result of the factors described under “Forward Looking Statements” and “Risk Factors” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”) and in other filings of the Corporation with the Securities and Exchange Commission (the “SEC”). Statements about the effects of the current and near-term market and macroeconomic environment on the Corporation, including on its business, operations, financial performance and prospects, may constitute forward-looking statements, and are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond the Corporation's control), including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on the Corporation, our clients and customers and third parties Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as the Corporation completes its Form 10-Q for the first quarter of 2020. All forward-looking statements speak only as of April 16, 2020, and the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events. For additional information regarding the Corporation, please refer to the Corporation's SEC filings available at www.bnymellon.com/investorrelations. Non-GAAP Measures: In this presentation we discuss some non-GAAP measures in detailing the Corporation’s performance, which exclude certain items or otherwise include components that differ from GAAP. We believe these measures are useful to the investment community in analyzing the financial results and trends of ongoing operations. We believe they facilitate comparisons with prior periods and reflect the principal basis on which our management monitors financial performance. Additional disclosures relating to non-GAAP measures are contained in the Corporation’s reports filed with the SEC, including the 2019 Annual Report, and are available at www.bnymellon.com/investorrelations. 20 First Quarter 2020 – Financial Highlights