|
|
Delaware
|
13-2614959
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
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)
|
|
|
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
Page
|
|
|
Part I - Financial Information
|
|
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk:
|
|
Key first quarter 2020 events
|
|
Impact of coronavirus pandemic on our business
|
|
|
|
Item 1. Financial Statements:
|
|
|
Page
|
Notes to Consolidated Financial Statements:
|
|
Note 3—Acquisitions and dispositions
|
|
|
|
|
|
Part II - Other Information
|
|
|
|
Index to Exhibits
|
|
Signature
|
|
Quarter ended
|
||||||||
(dollars in millions, except per share amounts and unless
otherwise noted)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Results applicable to common shareholders of The Bank of New York Mellon Corporation:
|
|
|
|
||||||
Net income
|
$
|
944
|
|
$
|
1,391
|
|
$
|
910
|
|
Basic earnings per share
|
$
|
1.05
|
|
$
|
1.52
|
|
$
|
0.94
|
|
Diluted earnings per share
|
$
|
1.05
|
|
$
|
1.52
|
|
$
|
0.94
|
|
|
|
|
|
||||||
Fee and other revenue
|
$
|
3,332
|
|
$
|
3,946
|
|
$
|
3,032
|
|
(Loss) income from consolidated investment management funds
|
(38
|
)
|
17
|
|
26
|
|
|||
Net interest revenue
|
814
|
|
815
|
|
841
|
|
|||
Total revenue
|
$
|
4,108
|
|
$
|
4,778
|
|
$
|
3,899
|
|
|
|
|
|
||||||
Return on common equity (annualized)
|
10.1
|
%
|
14.6
|
%
|
10.0
|
%
|
|||
Return on tangible common equity (annualized) – Non-GAAP (a)
|
20.4
|
%
|
29.3
|
%
|
20.7
|
%
|
|||
|
|
|
|
||||||
Return on average assets (annualized)
|
0.99
|
%
|
1.56
|
%
|
1.10
|
%
|
|||
|
|
|
|
||||||
Fee revenue as a percentage of total revenue
|
81
|
%
|
83
|
%
|
78
|
%
|
|||
|
|
|
|
||||||
Non-U.S. revenue as a percentage of total revenue
|
36
|
%
|
31
|
%
|
36
|
%
|
|||
|
|
|
|
||||||
Pre-tax operating margin
|
30
|
%
|
38
|
%
|
31
|
%
|
|||
|
|
|
|
||||||
Net interest margin
|
1.01
|
%
|
1.09
|
%
|
1.20
|
%
|
|||
Net interest margin on a fully taxable equivalent (“FTE”) basis – Non-GAAP (b)
|
1.01
|
%
|
1.09
|
%
|
1.20
|
%
|
|||
|
|
|
|
||||||
Assets under custody and/or administration (“AUC/A”) at period end (in trillions) (c)
|
$
|
35.2
|
|
$
|
37.1
|
|
$
|
34.5
|
|
Assets under management (“AUM”) at period end (in billions) (d)
|
$
|
1,796
|
|
$
|
1,910
|
|
$
|
1,841
|
|
Market value of securities on loan at period end (in billions) (e)
|
$
|
389
|
|
$
|
378
|
|
$
|
377
|
|
|
|
|
|
||||||
Average common shares and equivalents outstanding (in thousands):
|
|
|
|
||||||
Basic
|
894,122
|
|
911,324
|
|
962,397
|
|
|||
Diluted
|
896,689
|
|
914,739
|
|
965,960
|
|
|||
|
|
|
|
||||||
Selected average balances:
|
|
|
|
||||||
Interest-earning assets
|
$
|
323,936
|
|
$
|
297,987
|
|
$
|
282,185
|
|
Total assets
|
$
|
385,278
|
|
$
|
354,341
|
|
$
|
336,165
|
|
Interest-bearing deposits
|
$
|
197,632
|
|
$
|
182,424
|
|
$
|
159,879
|
|
Noninterest-bearing deposits
|
$
|
60,577
|
|
$
|
49,632
|
|
$
|
54,583
|
|
Long-term debt
|
$
|
27,231
|
|
$
|
28,117
|
|
$
|
28,254
|
|
Preferred stock
|
$
|
3,542
|
|
$
|
3,542
|
|
$
|
3,542
|
|
Total The Bank of New York Mellon Corporation common shareholders’ equity
|
$
|
37,664
|
|
$
|
37,842
|
|
$
|
37,086
|
|
|
|
|
|
||||||
Other information at period end:
|
|
|
|
||||||
Cash dividends per common share
|
$
|
0.31
|
|
$
|
0.31
|
|
$
|
0.28
|
|
Common dividend payout ratio
|
30
|
%
|
20
|
%
|
30
|
%
|
|||
Common dividend yield (annualized)
|
3.7
|
%
|
2.4
|
%
|
2.3
|
%
|
|||
Closing stock price per common share
|
$
|
33.68
|
|
$
|
50.33
|
|
$
|
50.43
|
|
Market capitalization
|
$
|
29,822
|
|
$
|
45,331
|
|
$
|
48,288
|
|
Book value per common share
|
$
|
42.47
|
|
$
|
42.12
|
|
$
|
39.36
|
|
Tangible book value per common share – Non-GAAP (a)
|
$
|
21.53
|
|
$
|
21.33
|
|
$
|
19.74
|
|
Full-time employees
|
47,900
|
|
48,400
|
|
49,800
|
|
|||
Common shares outstanding (in thousands)
|
885,443
|
|
900,683
|
|
957,517
|
|
Regulatory capital and other ratios
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
Average liquidity coverage ratio (“LCR”)
|
115
|
%
|
120
|
%
|
|
|
|
||
Regulatory capital ratios: (f)
|
|
|
||
Advanced:
|
|
|
||
Common Equity Tier 1 (“CET1”) ratio
|
11.4
|
%
|
11.5
|
%
|
Tier 1 capital ratio
|
13.5
|
|
13.7
|
|
Total capital ratio
|
14.3
|
|
14.4
|
|
Standardized:
|
|
|
||
CET1 ratio
|
11.3
|
%
|
12.5
|
%
|
Tier 1 capital ratio
|
13.5
|
|
14.8
|
|
Total capital ratio
|
14.4
|
|
15.8
|
|
|
|
|
||
Tier 1 leverage ratio
|
6.0
|
%
|
6.6
|
%
|
Supplementary leverage ratio (“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
|
|
(a)
|
Return on tangible common equity and tangible book value per common share, Non-GAAP measures, exclude goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 43 for the reconciliation of Non-GAAP measures.
|
(b)
|
See “Net interest revenue” on page 9 for a reconciliation of this Non-GAAP measure.
|
(c)
|
Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.3 trillion at March 31, 2019.
|
(d)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business.
|
(e)
|
Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled $59 billion at March 31, 2020, $60 billion at Dec. 31, 2019 and $62 billion at March 31, 2019.
|
(f)
|
For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches. For additional information on our capital ratios, see “Capital” beginning on page 35.
|
Part I - Financial Information
|
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk
|
•
|
Total revenue of $4.1 billion increased 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. (See “Fee and other revenue” beginning on page 7.)
|
•
|
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. (See “Net interest revenue” on page 9.)
|
•
|
Provision for credit losses was $169 million primarily reflecting the macroeconomic environment in conjunction with the application of the new current expected credit losses accounting standard. (See “Consolidated balance sheet review - Allowance for credit losses” beginning on page 26.)
|
•
|
Noninterest expense of $2.7 billion 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. (See “Noninterest expense” on page 11.)
|
•
|
Effective tax rate of 21.6%. (See “Income taxes” on page 11.)
|
•
|
CET1 ratio was 11.3% under the Standardized Approach at March 31, 2020, compared with 11.5% under the Advanced Approaches at Dec. 31, 2019. The decrease in the CET1 ratio primarily reflects an increase in risk-weighted assets (“RWAs”) driven by a larger balance sheet. (See “Capital” beginning on page 35.)
|
•
|
Repurchased 21.7 million common shares for $985 million, and paid dividends of $282 million to common shareholders in the first quarter of 2020. The share repurchases for the first quarter were completed prior to the temporary suspension announced jointly with the Financial Services Forum on March 15, 2020.
|
•
|
Total revenue increased 9%.
|
•
|
Income before income taxes increased 13%.
|
•
|
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.
|
•
|
Total revenue decreased 4%.
|
•
|
Income before income taxes decreased 27%.
|
•
|
AUM of $1.8 trillion decreased 2%, primarily reflecting the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).
|
Fee and other revenue
|
|
|
|
|
|
||||||||
|
|
|
|
1Q20 vs.
|
|||||||||
(dollars in millions, unless otherwise noted)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
4Q19
|
|
1Q19
|
|
|||
Investment services fees:
|
|
|
|
|
|
||||||||
Asset servicing fees (a)
|
$
|
1,159
|
|
$
|
1,148
|
|
$
|
1,122
|
|
1
|
%
|
3
|
%
|
Clearing services fees (b)
|
470
|
|
421
|
|
398
|
|
12
|
|
18
|
|
|||
Issuer services fees
|
263
|
|
264
|
|
251
|
|
—
|
|
5
|
|
|||
Treasury services fees
|
149
|
|
147
|
|
132
|
|
1
|
|
13
|
|
|||
Total investment services fees
|
2,041
|
|
1,980
|
|
1,903
|
|
3
|
|
7
|
|
|||
Investment management and performance fees
|
862
|
|
883
|
|
841
|
|
(2
|
)
|
2
|
|
|||
Foreign exchange and other trading revenue
|
319
|
|
168
|
|
170
|
|
90
|
|
88
|
|
|||
Financing-related fees
|
59
|
|
46
|
|
51
|
|
28
|
|
16
|
|
|||
Distribution and servicing
|
31
|
|
34
|
|
31
|
|
(9
|
)
|
—
|
|
|||
Investment and other income
|
11
|
|
860
|
|
35
|
|
N/M
|
N/M
|
|||||
Total 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
|
%
|
|
|
|
|
|
|
||||||||
Fee revenue as a percentage of total revenue
|
81
|
%
|
83
|
%
|
78
|
%
|
|
|
|||||
|
|
|
|
|
|
||||||||
AUC/A at period end (in trillions) (c)
|
$
|
35.2
|
|
$
|
37.1
|
|
$
|
34.5
|
|
(5
|
)%
|
2
|
%
|
AUM at period end (in billions) (d)
|
$
|
1,796
|
|
$
|
1,910
|
|
$
|
1,841
|
|
(6
|
)%
|
(2
|
)%
|
(a)
|
Asset servicing fees include the fees from the Clearance and Collateral Management business and also include securities lending revenue of $51 million in the first quarter of 2020, $44 million in the fourth quarter of 2019 and $48 million in the first quarter of 2019.
|
(b)
|
Clearing services fees are almost entirely earned by our Pershing business.
|
(c)
|
Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth Management businesses. Includes the AUC/A of CIBC Mellon of $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.3 trillion at March 31, 2019.
|
(d)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business.
|
•
|
Asset servicing fees increased 3% compared with the first quarter of 2019 and 1% compared with the fourth quarter of 2019. Both increases primarily reflect higher volumes from existing clients.
|
•
|
Clearing services fees increased 18% compared with the first quarter of 2019 and 12% compared with the fourth quarter of 2019. Both increases primarily reflect growth in clearing volumes. The increase compared with the first quarter of 2019 also reflects growth in client assets and accounts.
|
•
|
Issuer services fees increased 5% compared with the first quarter of 2019 and decreased slightly compared with the fourth quarter of 2019. The increase compared with the first quarter of 2019 primarily reflects higher Corporate Trust and Depositary Receipts fees.
|
•
|
Treasury services fees increased 13% compared with the first quarter of 2019 and 1% compared with the fourth quarter of 2019. Both increases primarily reflect higher payment fees.
|
Foreign exchange and other trading revenue
|
|||||||||
(in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
Foreign exchange
|
$
|
253
|
|
$
|
138
|
|
$
|
160
|
|
Other trading revenue
|
66
|
|
30
|
|
10
|
|
|||
Total foreign exchange and other trading revenue
|
$
|
319
|
|
$
|
168
|
|
$
|
170
|
|
Investment and other income
|
|||||||||
(in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
Corporate/bank-owned life insurance
|
$
|
36
|
|
$
|
43
|
|
$
|
30
|
|
Expense reimbursements from joint venture
|
21
|
|
20
|
|
19
|
|
|||
Asset-related gains
|
4
|
|
815
|
|
1
|
|
|||
Seed capital (losses) gains (a)
|
(31
|
)
|
4
|
|
2
|
|
|||
Other (loss)
|
(19
|
)
|
(22
|
)
|
(17
|
)
|
|||
Total investment and other income
|
$
|
11
|
|
$
|
860
|
|
$
|
35
|
|
(a)
|
Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds.
|
Net interest revenue
|
|
|
|
|
|
||||||||
|
|
|
|
1Q20 vs.
|
|||||||||
(dollars in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
4Q19
|
|
1Q19
|
|
|||
Net interest revenue – GAAP
|
$
|
814
|
|
$
|
815
|
|
$
|
841
|
|
—
|
|
(3
|
)%
|
Add: Tax equivalent adjustment
|
2
|
|
2
|
|
4
|
|
N/M
|
N/M
|
|||||
Net interest revenue (FTE) basis – Non-GAAP (a)
|
$
|
816
|
|
$
|
817
|
|
$
|
845
|
|
—
|
|
(3
|
)%
|
|
|
|
|
|
|
||||||||
Average interest-earning assets
|
$
|
323,936
|
|
$
|
297,987
|
|
$
|
282,185
|
|
9
|
%
|
15
|
%
|
|
|
|
|
|
|
||||||||
Net interest margin – GAAP
|
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 which allows for comparisons of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.
|
Average balances and interest rates
|
Quarter ended
|
|||||||||||||||||||||||||
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|||||||||||||||||||||
(dollars in millions; average rates annualized)
|
Average
balance
|
|
Interest
|
|
Average
rates
|
|
|
Average
balance
|
|
Interest
|
|
Average
rates
|
|
|
Average balance
|
|
Interest
|
|
Average rates
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
$
|
80,403
|
|
$
|
80
|
|
0.39
|
%
|
|
$
|
61,627
|
|
$
|
94
|
|
0.60
|
%
|
|
$
|
63,583
|
|
$
|
139
|
|
0.87
|
%
|
Interest-bearing deposits with banks (primarily foreign banks)
|
17,081
|
|
58
|
|
1.37
|
|
|
15,788
|
|
65
|
|
1.63
|
|
|
13,857
|
|
63
|
|
1.85
|
|
||||||
Federal funds sold and securities purchased under resale agreements (a)
|
34,109
|
|
396
|
|
4.67
|
|
|
38,846
|
|
452
|
|
4.62
|
|
|
28,968
|
|
474
|
|
6.63
|
|
||||||
Margin loans
|
12,984
|
|
87
|
|
2.69
|
|
|
11,609
|
|
96
|
|
3.25
|
|
|
12,670
|
|
135
|
|
4.34
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Domestic offices
|
31,720
|
|
238
|
|
3.02
|
|
|
29,690
|
|
250
|
|
3.36
|
|
|
28,177
|
|
269
|
|
3.85
|
|
||||||
Foreign offices
|
11,170
|
|
71
|
|
2.55
|
|
|
11,418
|
|
78
|
|
2.70
|
|
|
10,511
|
|
86
|
|
3.32
|
|
||||||
Total non-margin loans
|
42,890
|
|
309
|
|
2.89
|
|
|
41,108
|
|
328
|
|
3.18
|
|
|
38,688
|
|
355
|
|
3.70
|
|
||||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
23,175
|
|
108
|
|
1.87
|
|
|
18,444
|
|
96
|
|
2.08
|
|
|
23,597
|
|
129
|
|
2.22
|
|
||||||
U.S. government agency obligations
|
69,046
|
|
400
|
|
2.32
|
|
|
67,494
|
|
398
|
|
2.36
|
|
|
64,867
|
|
427
|
|
2.63
|
|
||||||
State and political subdivisions (b)
|
1,033
|
|
8
|
|
3.06
|
|
|
1,134
|
|
9
|
|
3.03
|
|
|
2,206
|
|
15
|
|
2.71
|
|
||||||
Other securities (b)
|
36,375
|
|
86
|
|
0.95
|
|
|
35,242
|
|
145
|
|
1.64
|
|
|
28,647
|
|
151
|
|
2.13
|
|
||||||
Trading securities (b)
|
6,840
|
|
40
|
|
2.36
|
|
|
6,695
|
|
40
|
|
2.41
|
|
|
5,102
|
|
36
|
|
2.91
|
|
||||||
Total securities (b)
|
136,469
|
|
642
|
|
1.88
|
|
|
129,009
|
|
688
|
|
2.13
|
|
|
124,419
|
|
758
|
|
2.45
|
|
||||||
Total interest-earning assets (b)
|
$
|
323,936
|
|
$
|
1,572
|
|
1.95
|
%
|
|
$
|
297,987
|
|
$
|
1,723
|
|
2.30
|
%
|
|
$
|
282,185
|
|
$
|
1,924
|
|
2.75
|
%
|
Noninterest-earnings assets
|
61,342
|
|
|
|
|
56,354
|
|
|
|
|
53,980
|
|
|
|
||||||||||||
Total assets
|
$
|
385,278
|
|
|
|
|
$
|
354,341
|
|
|
|
|
$
|
336,165
|
|
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Domestic offices
|
$
|
99,915
|
|
$
|
170
|
|
0.69
|
%
|
|
$
|
87,162
|
|
$
|
216
|
|
0.98
|
%
|
|
$
|
70,562
|
|
$
|
224
|
|
1.29
|
%
|
Foreign offices
|
97,717
|
|
70
|
|
0.29
|
|
|
95,262
|
|
118
|
|
0.49
|
|
|
89,317
|
|
167
|
|
0.76
|
|
||||||
Total interest-bearing deposits
|
197,632
|
|
240
|
|
0.49
|
|
|
182,424
|
|
334
|
|
0.73
|
|
|
159,879
|
|
391
|
|
0.99
|
|
||||||
Federal funds purchased and securities sold under repurchase agreements (a)
|
13,919
|
|
275
|
|
7.96
|
|
|
12,668
|
|
291
|
|
9.11
|
|
|
11,922
|
|
331
|
|
11.26
|
|
||||||
Trading liabilities
|
1,626
|
|
7
|
|
1.61
|
|
|
1,504
|
|
9
|
|
2.25
|
|
|
1,305
|
|
7
|
|
2.25
|
|
||||||
Other borrowed funds
|
719
|
|
4
|
|
2.27
|
|
|
709
|
|
5
|
|
2.83
|
|
|
3,305
|
|
24
|
|
2.87
|
|
||||||
Commercial paper
|
1,581
|
|
6
|
|
1.56
|
|
|
1,792
|
|
7
|
|
1.66
|
|
|
1,377
|
|
8
|
|
2.44
|
|
||||||
Payables to customers and broker-dealers
|
16,386
|
|
30
|
|
0.73
|
|
|
15,178
|
|
40
|
|
1.07
|
|
|
16,108
|
|
70
|
|
1.76
|
|
||||||
Long-term debt
|
27,231
|
|
194
|
|
2.83
|
|
|
28,117
|
|
220
|
|
3.09
|
|
|
28,254
|
|
248
|
|
3.52
|
|
||||||
Total interest-bearing liabilities
|
$
|
259,094
|
|
$
|
756
|
|
1.17
|
%
|
|
$
|
242,392
|
|
$
|
906
|
|
1.48
|
%
|
|
$
|
222,150
|
|
$
|
1,079
|
|
1.96
|
%
|
Total noninterest-bearing deposits
|
60,577
|
|
|
|
|
49,632
|
|
|
|
|
54,583
|
|
|
|
||||||||||||
Other noninterest-bearing liabilities
|
24,229
|
|
|
|
|
20,681
|
|
|
|
|
18,628
|
|
|
|
||||||||||||
Total liabilities
|
343,900
|
|
|
|
|
312,705
|
|
|
|
|
295,361
|
|
|
|
||||||||||||
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Redeemable noncontrolling interests
|
66
|
|
|
|
|
69
|
|
|
|
|
70
|
|
|
|
||||||||||||
Permanent equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
41,206
|
|
|
|
|
41,384
|
|
|
|
|
40,628
|
|
|
|
||||||||||||
Noncontrolling interests
|
106
|
|
|
|
|
183
|
|
|
|
|
106
|
|
|
|
||||||||||||
Total permanent equity
|
41,312
|
|
|
|
|
41,567
|
|
|
|
|
40,734
|
|
|
|
||||||||||||
Total liabilities, temporary equity and permanent equity
|
$
|
385,278
|
|
|
|
|
$
|
354,341
|
|
|
|
|
$
|
336,165
|
|
|
|
|||||||||
Net interest revenue (FTE) – Non-GAAP (c)
|
|
$
|
816
|
|
|
|
|
$
|
817
|
|
|
|
|
$
|
845
|
|
|
|||||||||
Net interest margin (FTE) – Non-GAAP (b)(c)
|
|
|
1.01
|
%
|
|
|
|
1.09
|
%
|
|
|
|
1.20
|
%
|
||||||||||||
Less: Tax equivalent adjustment (b)
|
|
2
|
|
|
|
|
2
|
|
|
|
|
4
|
|
|
||||||||||||
Net interest revenue – GAAP
|
|
$
|
814
|
|
|
|
|
$
|
815
|
|
|
|
|
$
|
841
|
|
|
|||||||||
Net interest margin – GAAP
|
|
|
1.01
|
%
|
|
|
|
1.09
|
%
|
|
|
|
1.20
|
%
|
(a)
|
Includes the average impact of offsetting under enforceable netting agreements of approximately $80 billion for the first quarter of 2020, $60 billion for the fourth quarter of 2019 and $44 billion for the first quarter of 2019. 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 the first quarter of 2020, 1.82% for the fourth quarter of 2019 and 2.63% for the first quarter of 2019. 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 the first quarter of 2020, 1.59% for the fourth quarter of 2019 and 2.40% for the first quarter of 2019. 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)
|
Average rates were calculated on an FTE basis, at tax rates of approximately 21%.
|
(c)
|
See “Net interest revenue” on page 9 for a reconciliation of this Non-GAAP measure.
|
Noninterest expense
|
|
|
|
|
|
||||||||
|
|
|
|
1Q20 vs.
|
|||||||||
(dollars in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
4Q19
|
|
1Q19
|
|
|||
Staff
|
$
|
1,482
|
|
$
|
1,639
|
|
$
|
1,524
|
|
(10
|
)%
|
(3
|
)%
|
Professional, legal and other purchased services
|
330
|
|
367
|
|
325
|
|
(10
|
)
|
2
|
|
|||
Software and equipment
|
326
|
|
326
|
|
283
|
|
—
|
|
15
|
|
|||
Net occupancy
|
135
|
|
151
|
|
137
|
|
(11
|
)
|
(1
|
)
|
|||
Sub-custodian and clearing
|
105
|
|
119
|
|
105
|
|
(12
|
)
|
—
|
|
|||
Distribution and servicing
|
91
|
|
92
|
|
91
|
|
(1
|
)
|
—
|
|
|||
Business development
|
42
|
|
65
|
|
45
|
|
(35
|
)
|
(7
|
)
|
|||
Bank assessment charges
|
35
|
|
32
|
|
31
|
|
9
|
|
13
|
|
|||
Amortization of intangible assets
|
26
|
|
28
|
|
29
|
|
(7
|
)
|
(10
|
)
|
|||
Other
|
140
|
|
145
|
|
129
|
|
(3
|
)
|
9
|
|
|||
Total noninterest expense
|
$
|
2,712
|
|
$
|
2,964
|
|
$
|
2,699
|
|
(9
|
)%
|
—
|
%
|
|
|
|
|
|
|
||||||||
Full-time employees at period end
|
47,900
|
|
48,400
|
|
49,800
|
|
(1
|
)%
|
(4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(dollars in millions, unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
1Q20 vs.
|
|||||||||||||
1Q20
|
|
4Q19
|
|
(a)
|
3Q19
|
|
(a)
|
2Q19
|
|
(a)
|
1Q19
|
|
(a)
|
4Q19
|
|
1Q19
|
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset servicing fees (b)
|
$
|
1,147
|
|
$
|
1,138
|
|
|
$
|
1,138
|
|
|
$
|
1,126
|
|
|
$
|
1,111
|
|
|
1
|
%
|
3
|
%
|
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 (excluding 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 income taxes
|
$
|
1,106
|
|
$
|
840
|
|
|
$
|
1,099
|
|
|
$
|
1,057
|
|
|
$
|
976
|
|
|
32
|
%
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pre-tax operating margin
|
34
|
%
|
28
|
%
|
|
36
|
%
|
|
35
|
%
|
|
33
|
%
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending revenue
|
$
|
46
|
|
$
|
40
|
|
|
$
|
39
|
|
|
$
|
40
|
|
|
$
|
44
|
|
|
15
|
%
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average loans
|
$
|
41,789
|
|
$
|
38,721
|
|
|
$
|
37,005
|
|
|
$
|
36,404
|
|
|
$
|
37,235
|
|
|
8
|
%
|
12
|
%
|
Average deposits
|
$
|
242,187
|
|
$
|
215,388
|
|
|
$
|
208,044
|
|
|
$
|
201,146
|
|
|
$
|
195,082
|
|
|
12
|
%
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AUC/A at period end (in trillions) (e)
|
$
|
35.2
|
|
$
|
37.1
|
|
|
$
|
35.8
|
|
|
$
|
35.5
|
|
|
$
|
34.5
|
|
|
(5
|
)%
|
2
|
%
|
Market value of securities on loan at period end (in billions) (f)
|
$
|
389
|
|
$
|
378
|
|
|
$
|
362
|
|
|
$
|
369
|
|
|
$
|
377
|
|
|
3
|
%
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pershing:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net new assets (U.S. platform) (in billions) (g)
|
$
|
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 to reflect the reclassifications.
|
(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 and performance fees, financing-related fees, distribution and servicing revenue, securities gains and losses and investment and other income.
|
(e)
|
Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services and Pershing businesses. 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.
|
(f)
|
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.
|
(g)
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
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
|
|
|
4
|
|
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 (excluding 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 income 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 balances:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average loans
|
$
|
12,124
|
|
$
|
12,022
|
|
|
$
|
12,013
|
|
|
$
|
12,205
|
|
|
$
|
12,339
|
|
|
1
|
%
|
(2
|
)%
|
Average deposits
|
$
|
16,144
|
|
$
|
15,195
|
|
|
$
|
14,083
|
|
|
$
|
14,615
|
|
|
$
|
15,815
|
|
|
6
|
%
|
2
|
%
|
(a)
|
Prior periods have been restated to reflect the reclassifications.
|
(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, investment management and performance fees increased 3% (Non-GAAP) compared with the first quarter of 2019. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 43 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 43 for the reconciliation of this Non-GAAP measure.
|
AUM trends
|
|
|
|
|
|
1Q20 vs.
|
|||||||||||||
(dollars in billions)
|
1Q20
|
|
4Q19
|
|
3Q19
|
|
2Q19
|
|
1Q19
|
|
4Q19
|
|
1Q19
|
|
|||||
AUM at period end, by product type: (a)
|
|
|
|
|
|
|
|
||||||||||||
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)
|
|
|
|
|
|
|
|
||||||||||||
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 (b)
|
$
|
236
|
|
$
|
266
|
|
$
|
259
|
|
$
|
257
|
|
$
|
253
|
|
(11
|
)%
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
1Q20
|
|
4Q19
|
|
(a)
|
3Q19
|
|
(a)
|
2Q19
|
|
(a)
|
1Q19
|
|
(a)
|
|||||
Fee revenue
|
$
|
21
|
|
$
|
817
|
|
|
$
|
(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 income taxes
|
$
|
(55
|
)
|
$
|
733
|
|
|
$
|
(110
|
)
|
|
$
|
(36
|
)
|
|
$
|
(59
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average loans and leases
|
$
|
1,961
|
|
$
|
1,974
|
|
|
$
|
1,817
|
|
|
$
|
1,764
|
|
|
$
|
1,784
|
|
|
(a)
|
Prior periods have been restated to reflect the reclassifications.
|
Critical accounting estimates
|
Reference
|
Allowance for credit losses
|
See below.
|
Fair value of financial instruments and derivatives
|
2019 Annual Report, pages 23-24.
|
Goodwill and other intangibles
|
2019 Annual Report, pages 24-25. Also, see below.
|
Litigation and regulatory contingencies
|
“Legal proceedings” in Note 18 of the Notes to Consolidated Financial Statements.
|
Country risk exposure at March 31, 2020
|
Interest-bearing deposits
|
|
|
|
|
|
|
|
Total exposure
|
|
|
||||||||||||
(in billions)
|
Central banks
|
|
Banks
|
|
|
Lending (a)
|
|
|
Securities (b)
|
|
|
Other (c)
|
|
|
|
||||||||
Top 10 country exposure:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom (“UK”)
|
$
|
15.5
|
|
$
|
0.4
|
|
|
$
|
1.4
|
|
|
$
|
4.8
|
|
|
$
|
4.4
|
|
|
$
|
26.5
|
|
|
Germany
|
16.7
|
|
0.7
|
|
|
0.7
|
|
|
4.0
|
|
|
0.3
|
|
|
22.4
|
|
|
||||||
Japan
|
19.3
|
|
0.9
|
|
|
0.2
|
|
|
0.4
|
|
|
0.3
|
|
|
21.1
|
|
|
||||||
Belgium
|
7.9
|
|
1.2
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
9.4
|
|
|
||||||
Canada
|
—
|
|
2.5
|
|
|
0.2
|
|
|
4.1
|
|
|
2.5
|
|
|
9.3
|
|
|
||||||
China
|
—
|
|
2.6
|
|
|
1.3
|
|
|
—
|
|
|
0.3
|
|
|
4.2
|
|
|
||||||
France
|
0.1
|
|
0.9
|
|
|
—
|
|
|
2.3
|
|
|
0.6
|
|
|
3.9
|
|
|
||||||
Ireland
|
0.6
|
|
0.1
|
|
|
0.5
|
|
|
0.5
|
|
|
2.0
|
|
|
3.7
|
|
|
||||||
Singapore
|
—
|
|
1.7
|
|
|
0.2
|
|
|
0.9
|
|
|
0.6
|
|
|
3.4
|
|
|
||||||
South Korea
|
0.1
|
|
0.4
|
|
|
1.8
|
|
|
—
|
|
|
0.1
|
|
|
2.4
|
|
|
||||||
Total Top 10 country exposure
|
$
|
60.2
|
|
$
|
11.4
|
|
|
$
|
6.4
|
|
|
$
|
17.2
|
|
|
$
|
11.1
|
|
|
$
|
106.3
|
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Select country exposure:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Italy
|
$
|
0.1
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
Brazil
|
—
|
|
—
|
|
|
1.5
|
|
|
0.1
|
|
|
0.1
|
|
|
1.7
|
|
|
||||||
Total select country exposure
|
$
|
0.1
|
|
$
|
0.6
|
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
0.1
|
|
|
$
|
3.8
|
|
|
(a)
|
Lending includes loans, acceptances, issued letters of credit, net of participations, and lending-related commitments.
|
(b)
|
Securities include both the available-for-sale and held-to-maturity portfolios.
|
(c)
|
Other exposures include over-the-counter (“OTC”) derivative and securities financing transactions, net of collateral.
|
(d)
|
The top 10 country exposures comprise approximately 80% of our total non-U.S. exposure.
|
Securities portfolio
|
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)
|
|||||||||||||||||||
|
|
|
|
|
BBB+/
BBB-
|
BB+
and
lower
|
|
|
||||||||||||||||||||||||
(dollars in millions)
|
Fair
value
|
|
|
Amortized
cost
|
|
Fair
value
|
|
|
|
AAA/
AA-
|
A+/
A-
|
A1+/A1
|
Not
rated
|
|||||||||||||||||||
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 (c)
|
13,404
|
|
|
23
|
|
13,710
|
|
13,833
|
|
|
101
|
|
123
|
|
|
72
|
|
6
|
|
21
|
|
1
|
|
—
|
|
—
|
|
|||||
Agency commercial mortgage-backed securities (“MBS”)
|
10,613
|
|
|
295
|
|
11,183
|
|
11,534
|
|
|
103
|
|
351
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Foreign covered bonds (d)
|
4,276
|
|
|
(20
|
)
|
5,361
|
|
5,349
|
|
|
100
|
|
(12
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Supranational
|
3,734
|
|
|
13
|
|
4,316
|
|
4,339
|
|
|
101
|
|
23
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Collateralized loan obligations (“CLOs”)
|
4,063
|
|
|
(228
|
)
|
4,341
|
|
4,098
|
|
|
94
|
|
(243
|
)
|
|
99
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||
Commercial paper/CDs
|
—
|
|
|
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 (e)
|
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 (“ABS”)
|
2,143
|
|
|
(39
|
)
|
2,257
|
|
2,220
|
|
|
98
|
|
(37
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Non-agency
RMBS (f)
|
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
|
|
(g)
|
$
|
1,117
|
|
$
|
136,808
|
|
$
|
138,721
|
|
(g)
|
101
|
%
|
$
|
1,913
|
|
(g)(h)
|
94
|
%
|
1
|
%
|
2
|
%
|
—
|
%
|
3
|
%
|
—
|
%
|
(a)
|
Amortized cost reflects historical impairments.
|
(b)
|
Represents ratings by Standard & Poor’s (“S&P”) or the equivalent.
|
(c)
|
Primarily consists of exposure to UK, France, Germany, Spain, Italy and Singapore.
|
(d)
|
Primarily consists of exposure to Canada, UK, Australia and Norway.
|
(e)
|
Primarily consists of exposure to Germany, the Netherlands and Finland.
|
(f)
|
Includes RMBS that were included in the former Grantor Trust of $640 million at Dec. 31, 2019 and $535 million at March 31, 2020.
|
(g)
|
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.
|
Net premium amortization and discount accretion of securities (a)
|
|
|
|
|
|
||||||||||
(dollars in millions)
|
1Q20
|
|
4Q19
|
|
3Q19
|
|
2Q19
|
|
1Q19
|
|
|||||
Amortizable purchase premium (net of discount) relating to securities:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
1,555
|
|
$
|
1,319
|
|
$
|
1,308
|
|
$
|
1,315
|
|
$
|
1,388
|
|
Estimated average life remaining at period end (in years)
|
3.8
|
|
4.3
|
|
4.2
|
|
4.5
|
|
4.8
|
|
|||||
Amortization
|
$
|
101
|
|
$
|
100
|
|
$
|
95
|
|
$
|
91
|
|
$
|
78
|
|
Accretable discount related to the prior restructuring of the securities portfolio:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
159
|
|
$
|
163
|
|
$
|
171
|
|
$
|
181
|
|
$
|
193
|
|
Estimated average life remaining at period end (in years)
|
6.1
|
|
6.3
|
|
6.3
|
|
6.3
|
|
6.3
|
|
|||||
Accretion
|
$
|
11
|
|
$
|
12
|
|
$
|
13
|
|
$
|
13
|
|
$
|
16
|
|
(a)
|
Amortization of purchase premium decreases net interest revenue while accretion of discount increases net interest revenue. Both were recorded on a level yield basis.
|
Total exposure – consolidated
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||
(in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||||
Financial institutions
|
$
|
14.2
|
|
$
|
35.3
|
|
$
|
49.5
|
|
|
$
|
12.5
|
|
$
|
34.4
|
|
$
|
46.9
|
|
Commercial
|
3.4
|
|
11.0
|
|
14.4
|
|
|
1.8
|
|
12.6
|
|
14.4
|
|
||||||
Subtotal institutional
|
17.6
|
|
46.3
|
|
63.9
|
|
|
14.3
|
|
47.0
|
|
61.3
|
|
||||||
Wealth management loans and mortgages
|
16.3
|
|
0.8
|
|
17.1
|
|
|
16.2
|
|
0.8
|
|
17.0
|
|
||||||
Commercial real estate
|
6.5
|
|
3.0
|
|
9.5
|
|
|
5.6
|
|
3.6
|
|
9.2
|
|
||||||
Lease financings
|
1.1
|
|
—
|
|
1.1
|
|
|
1.1
|
|
—
|
|
1.1
|
|
||||||
Other residential mortgages
|
0.5
|
|
—
|
|
0.5
|
|
|
0.5
|
|
—
|
|
0.5
|
|
||||||
Overdrafts
|
6.1
|
|
—
|
|
6.1
|
|
|
2.7
|
|
—
|
|
2.7
|
|
||||||
Other
|
1.2
|
|
—
|
|
1.2
|
|
|
1.2
|
|
—
|
|
1.2
|
|
||||||
Subtotal non-margin loans
|
49.3
|
|
50.1
|
|
99.4
|
|
|
41.6
|
|
51.4
|
|
93.0
|
|
||||||
Margin loans
|
13.1
|
|
0.1
|
|
13.2
|
|
|
13.4
|
|
0.1
|
|
13.5
|
|
||||||
Total
|
$
|
62.4
|
|
$
|
50.2
|
|
$
|
112.6
|
|
|
$
|
55.0
|
|
$
|
51.5
|
|
$
|
106.5
|
|
Financial institutions
portfolio exposure
(dollars in billions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
% Inv.
grade
|
|
% due
<1 yr.
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|||||||
Securities industry
|
$
|
4.2
|
|
$
|
24.5
|
|
$
|
28.7
|
|
99
|
%
|
99
|
%
|
|
$
|
2.9
|
|
$
|
23.4
|
|
$
|
26.3
|
|
Banks
|
7.5
|
|
1.1
|
|
8.6
|
|
80
|
|
98
|
|
|
7.4
|
|
1.1
|
|
8.5
|
|
||||||
Asset managers
|
1.3
|
|
6.5
|
|
7.8
|
|
99
|
|
82
|
|
|
1.3
|
|
6.4
|
|
7.7
|
|
||||||
Insurance
|
0.3
|
|
2.4
|
|
2.7
|
|
100
|
|
8
|
|
|
—
|
|
2.7
|
|
2.7
|
|
||||||
Government
|
0.1
|
|
0.2
|
|
0.3
|
|
100
|
|
64
|
|
|
0.1
|
|
0.3
|
|
0.4
|
|
||||||
Other
|
0.8
|
|
0.6
|
|
1.4
|
|
96
|
|
57
|
|
|
0.8
|
|
0.5
|
|
1.3
|
|
||||||
Total
|
$
|
14.2
|
|
$
|
35.3
|
|
$
|
49.5
|
|
96
|
%
|
90
|
%
|
|
$
|
12.5
|
|
$
|
34.4
|
|
$
|
46.9
|
|
Commercial portfolio exposure
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||||||
(dollars in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
% Inv.
grade
|
|
% due
<1 yr.
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Manufacturing
|
$
|
1.4
|
|
$
|
3.7
|
|
$
|
5.1
|
|
94
|
%
|
14
|
%
|
|
$
|
0.9
|
|
$
|
4.2
|
|
$
|
5.1
|
|
Services and other
|
1.3
|
|
2.9
|
|
4.2
|
|
95
|
|
24
|
|
|
0.6
|
|
3.7
|
|
4.3
|
|
||||||
Energy and utilities
|
0.7
|
|
3.5
|
|
4.2
|
|
93
|
|
5
|
|
|
0.3
|
|
3.7
|
|
4.0
|
|
||||||
Media and telecom
|
—
|
|
0.9
|
|
0.9
|
|
93
|
|
—
|
|
|
—
|
|
1.0
|
|
1.0
|
|
||||||
Total
|
$
|
3.4
|
|
$
|
11.0
|
|
$
|
14.4
|
|
94
|
%
|
13
|
%
|
|
$
|
1.8
|
|
$
|
12.6
|
|
$
|
14.4
|
|
Composition of commercial real estate portfolio by asset class
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||
|
Total
exposure
|
|
Percentage
secured
|
|
|
Total
exposure
|
|
Percentage
secured
|
|
||
(in billions)
|
|
||||||||||
Office
|
$
|
3.2
|
|
41
|
%
|
|
$
|
3.1
|
|
40
|
%
|
Residential
|
3.2
|
|
43
|
|
|
3.1
|
|
44
|
|
||
Retail
|
1.0
|
|
8
|
|
|
1.0
|
|
8
|
|
||
Hotels
|
0.6
|
|
—
|
|
|
0.6
|
|
—
|
|
||
Mixed-use
|
0.7
|
|
—
|
|
|
0.6
|
|
—
|
|
||
Healthcare
|
0.3
|
|
—
|
|
|
0.3
|
|
—
|
|
||
Other
|
0.5
|
|
8
|
|
|
0.5
|
|
8
|
|
||
Total commercial real estate
|
$
|
9.5
|
|
66
|
%
|
|
$
|
9.2
|
|
65
|
%
|
Allowance for credit losses activity
|
March 31, 2020
|
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
(dollars in millions)
|
||||||||||
Beginning balance of allowance for credit losses
|
$
|
216
|
|
|
$
|
224
|
|
$
|
252
|
|
Impact of adopting ASU 2016-13
|
(55
|
)
|
(a)
|
N/A
|
|
N/A
|
|
|||
Provision for credit losses
|
169
|
|
(a)
|
(8
|
)
|
7
|
|
|||
Net (charge-offs):
|
|
|
|
|
||||||
Loans:
|
|
|
|
|
||||||
Commercial
|
—
|
|
|
—
|
|
(11
|
)
|
|||
Other financial instruments
|
(1
|
)
|
|
N/A
|
|
N/A
|
|
|||
Net (charge-offs)
|
(1
|
)
|
|
—
|
|
(11
|
)
|
|||
Ending balance of allowance for credit losses
|
$
|
329
|
|
|
$
|
216
|
|
$
|
248
|
|
|
|
|
|
|
||||||
Allowance for loan losses
|
$
|
140
|
|
|
$
|
122
|
|
$
|
146
|
|
Allowance for lending-related commitments
|
148
|
|
|
94
|
|
102
|
|
|||
Allowance for financial instruments
|
41
|
|
(b)
|
N/A
|
|
N/A
|
|
|||
Total allowance for credit losses
|
$
|
329
|
|
|
$
|
216
|
|
$
|
248
|
|
|
|
|
|
|
||||||
Non-margin loans
|
$
|
49,253
|
|
|
$
|
41,567
|
|
$
|
41,176
|
|
Margin loans
|
13,115
|
|
|
13,386
|
|
12,311
|
|
|||
Total loans
|
$
|
62,368
|
|
|
$
|
54,953
|
|
$
|
53,487
|
|
Allowance for loan losses as a percentage of total loans
|
0.22
|
%
|
|
0.22
|
%
|
0.27
|
%
|
|||
Allowance for loan losses as a percentage of non-margin loans
|
0.28
|
|
|
0.29
|
|
0.35
|
|
|||
Allowance for loan losses and lending-related commitments as a percentage of total loans
|
0.46
|
|
|
0.39
|
|
0.46
|
|
|||
Allowance for loan losses and lending-related commitments as a percentage of non-margin loans
|
0.58
|
|
|
0.52
|
|
0.60
|
|
(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. See Note 2 of the Notes to Consolidated Financial Statement for additional information. Includes the reclassification of credit-related reserves on accounts receivable of $4 million.
|
(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.
|
(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. See Note 2 of the Notes to Consolidated Financial Statement for additional information.
|
(b)
|
The allowance related to the foreign exposure has been reclassified to the respective classes of financing receivables.
|
(c)
|
Includes the allowance for credit losses on wealth management mortgages.
|
Nonperforming assets
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
(dollars in millions)
|
||||||
Nonperforming loans:
|
|
|
||||
Other residential mortgages
|
$
|
60
|
|
$
|
62
|
|
Wealth management loans and mortgages
|
27
|
|
24
|
|
||
Total nonperforming loans
|
87
|
|
86
|
|
||
Other assets owned
|
1
|
|
3
|
|
||
Total nonperforming assets
|
$
|
88
|
|
$
|
89
|
|
Nonperforming assets ratio
|
0.14
|
%
|
0.16
|
%
|
||
Nonperforming assets ratio,
excluding margin loans
|
0.18
|
|
0.21
|
|
||
Allowance for loan losses/nonperforming loans (a)
|
160.9
|
|
141.9
|
|
||
Allowance for loan losses/nonperforming assets (a)
|
159.1
|
|
137.1
|
|
||
Allowance for loan losses and lending-related commitments/nonperforming loans (a)(b)
|
331.0
|
|
251.2
|
|
||
Allowance for loan losses and lending-related commitments/nonperforming assets (a)(b)
|
327.3
|
|
242.7
|
|
(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. See Note 2 of the Notes to Consolidated Financial Statement for additional information.
|
(b)
|
Total allowance for credit losses includes both the allowance for credit losses on loans and lending-related commitments.
|
|
Quarter ended
|
||||||||
(dollars in millions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Maximum month-end balance during the quarter
|
$
|
16,644
|
|
$
|
16,171
|
|
$
|
12,113
|
|
Average daily balance (a)
|
$
|
13,919
|
|
$
|
12,668
|
|
$
|
11,922
|
|
Weighted-average rate during the quarter (a)
|
7.96
|
%
|
9.11
|
%
|
11.26
|
%
|
|||
Ending balance (b)
|
$
|
13,128
|
|
$
|
11,401
|
|
$
|
11,761
|
|
Weighted-average rate at period end (b)
|
3.93
|
%
|
9.47
|
%
|
9.82
|
%
|
(a)
|
Includes the average impact of offsetting under enforceable netting agreements of $80,216 million in the first quarter of 2020, $59,756 million in the fourth quarter of 2019 and $44,091 million in the first quarter of 2019. On a Non-GAAP basis, excluding the impact of offsetting, the weighted-average rates would have been 1.18% for the first quarter of 2020, 1.59% for the fourth quarter of 2019 and 2.40% for the first quarter of 2019. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates paid.
|
(b)
|
Includes the impact of offsetting under enforceable netting agreements of $80,203 million at March 31, 2020, $93,794 million at Dec. 31, 2019 and $47,461 million at March 31, 2019.
|
Payables to customers and broker-dealers
|
|||||||||
|
Quarter ended
|
||||||||
(dollars in millions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Maximum month-end balance during the quarter
|
$
|
24,016
|
|
$
|
19,166
|
|
$
|
20,343
|
|
Average daily balance (a)
|
$
|
20,629
|
|
$
|
18,532
|
|
$
|
19,291
|
|
Weighted-average rate during the quarter (a)
|
0.73
|
%
|
1.07
|
%
|
1.76
|
%
|
|||
Ending balance
|
$
|
24,016
|
|
$
|
18,758
|
|
$
|
19,310
|
|
Weighted-average rate at period end
|
0.28
|
%
|
1.01
|
%
|
1.75
|
%
|
(a)
|
The weighted-average rate is calculated based on, and is applied to, the average interest-bearing payables to customers and broker-dealers, which were $16,386 million in the first quarter of 2020, $15,178 million in the fourth quarter of 2019 and $16,108 million in the first quarter of 2019.
|
Commercial paper
|
|
|
|
||||||
|
Quarter ended
|
||||||||
(dollars in millions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Maximum month-end balance during the quarter
|
$
|
3,379
|
|
$
|
3,959
|
|
$
|
4,601
|
|
Average daily balance
|
$
|
1,581
|
|
$
|
1,792
|
|
$
|
1,377
|
|
Weighted-average rate during the quarter
|
1.56
|
%
|
1.66
|
%
|
2.44
|
%
|
|||
Ending balance
|
$
|
1,121
|
|
$
|
3,959
|
|
$
|
2,773
|
|
Weighted-average rate at period end
|
1.57
|
%
|
1.60
|
%
|
2.40
|
%
|
Other borrowed funds
|
|
|
|
||||||
|
Quarter ended
|
||||||||
(dollars in millions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Maximum month-end balance during the quarter
|
$
|
1,544
|
|
$
|
599
|
|
$
|
3,969
|
|
Average daily balance
|
$
|
719
|
|
$
|
709
|
|
$
|
3,305
|
|
Weighted-average rate during the quarter
|
2.27
|
%
|
2.83
|
%
|
2.87
|
%
|
|||
Ending balance
|
$
|
1,544
|
|
$
|
599
|
|
$
|
3,932
|
|
Weighted-average rate at period end
|
2.01
|
%
|
2.65
|
%
|
3.31
|
%
|
Available funds
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
Average
|
||||||||||
(dollars in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||||||||
Cash and due from banks
|
$
|
5,091
|
|
$
|
4,830
|
|
$
|
4,595
|
|
$
|
5,144
|
|
$
|
4,853
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
146,535
|
|
95,042
|
|
80,403
|
|
61,627
|
|
63,583
|
|
|||||
Interest-bearing deposits with banks
|
22,672
|
|
14,811
|
|
17,081
|
|
15,788
|
|
13,857
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
27,363
|
|
30,182
|
|
34,109
|
|
38,846
|
|
28,968
|
|
|||||
Total available funds
|
$
|
201,661
|
|
$
|
144,865
|
|
$
|
136,188
|
|
$
|
121,405
|
|
$
|
111,261
|
|
Total available funds as a percentage of total assets
|
43
|
%
|
38
|
%
|
35
|
%
|
34
|
%
|
33
|
%
|
(a)
|
Represents senior debt issuer default rating.
|
Consolidated HQLA and LCR
|
March 31, 2020
|
|
|
(dollars in billions)
|
|||
Securities (a)
|
$
|
108
|
|
Cash (b)
|
146
|
|
|
Total consolidated HQLA (c)
|
$
|
254
|
|
|
|
||
Total consolidated HQLA – average (c)
|
$
|
184
|
|
Average LCR
|
115
|
%
|
(a)
|
Primarily includes securities of U.S. government-sponsored enterprises, sovereign securities, U.S. Treasury, U.S. agency and investment-grade corporate debt.
|
(b)
|
Primarily includes cash on deposit with central banks.
|
(c)
|
Consolidated HQLA presented before adjustments. After haircuts and the impact of trapped liquidity, consolidated HQLA totaled $202 billion at March 31, 2020 and averaged $142 billion for the first quarter of 2020.
|
Capital data
(dollars in millions, except per share amounts; common shares in thousands)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
Average common equity to average assets
|
9.8
|
%
|
10.7
|
%
|
||
|
|
|
||||
At period end:
|
|
|
||||
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
|
%
|
||
Total BNY Mellon shareholders’ equity
|
$
|
41,145
|
|
$
|
41,483
|
|
Total BNY Mellon common shareholders’ equity
|
$
|
37,603
|
|
$
|
37,941
|
|
BNY Mellon tangible common shareholders’ equity – Non-GAAP (a)
|
$
|
19,068
|
|
$
|
19,216
|
|
Book value per common share (a)
|
$
|
42.47
|
|
$
|
42.12
|
|
Tangible book value per common share – Non-GAAP (a)
|
$
|
21.53
|
|
$
|
21.33
|
|
Closing stock price per common share
|
$
|
33.68
|
|
$
|
50.33
|
|
Market capitalization
|
$
|
29,822
|
|
$
|
45,331
|
|
Common shares outstanding
|
885,443
|
|
900,683
|
|
||
|
|
|
||||
Cash dividends per common share
|
$
|
0.31
|
|
$
|
0.31
|
|
Common dividend payout ratio
|
30
|
%
|
20
|
%
|
||
Common dividend yield
|
3.7
|
%
|
2.4
|
%
|
(a)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 43 for a reconciliation of GAAP to Non-GAAP.
|
Consolidated and largest bank subsidiary regulatory capital ratios
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
|||||||
Well capitalized
|
|
|
Minimum required
|
|
|
Capital
ratios
|
|
|
Capital
ratios
|
|
|
|
(a)
|
||||||||||
Consolidated regulatory capital ratios: (b)
|
|
|
|
|
|
|
|
||||
Advanced Approaches:
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
N/A
|
|
(c)
|
8.5
|
%
|
|
11.4
|
%
|
|
11.5
|
%
|
Tier 1 capital ratio
|
6
|
%
|
|
10
|
|
|
13.5
|
|
|
13.7
|
|
Total capital ratio
|
10
|
%
|
|
12
|
|
|
14.3
|
|
|
14.4
|
|
Standardized Approach:
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
N/A
|
|
(c)
|
8.5
|
%
|
|
11.3
|
%
|
|
12.5
|
%
|
Tier 1 capital ratio
|
6
|
%
|
|
10
|
|
|
13.5
|
|
|
14.8
|
|
Total capital ratio
|
10
|
%
|
|
12
|
|
|
14.4
|
|
|
15.8
|
|
Tier 1 leverage ratio
|
N/A
|
|
(c)
|
4
|
|
|
6.0
|
|
|
6.6
|
|
SLR (d)
|
N/A
|
|
(c)
|
5
|
|
|
5.6
|
|
|
6.1
|
|
|
|
|
|
|
|
|
|
||||
The Bank of New York Mellon regulatory capital ratios: (b)
|
|
|
|
|
|
|
|
||||
Advanced Approaches:
|
|
|
|
|
|
|
|
||||
CET1 ratio
|
6.5
|
%
|
|
7
|
%
|
|
15.5
|
%
|
|
15.1
|
%
|
Tier 1 capital ratio
|
8
|
|
|
8.5
|
|
|
15.5
|
|
|
15.1
|
|
Total capital ratio
|
10
|
|
|
10.5
|
|
|
15.6
|
|
|
15.2
|
|
Tier 1 leverage ratio
|
5
|
|
|
4
|
|
|
6.7
|
|
|
6.9
|
|
SLR (d)
|
6
|
|
|
3
|
|
|
6.2
|
|
|
6.4
|
|
(a)
|
Minimum requirements for March 31, 2020 include minimum thresholds plus currently applicable buffers.
|
(b)
|
For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches. The Tier 1 leverage ratio is based on Tier 1 capital and quarterly average total assets. The U.S. global systemically important banks (“G-SIB”) surcharge of 1.5% is subject to change. The countercyclical capital buffer is currently set to 0%.
|
(c)
|
The Federal Reserve’s regulations do not establish well capitalized thresholds for these measures for BHCs.
|
(d)
|
The SLR is based on Tier 1 capital and total leverage exposure, which includes certain off-balance sheet exposures.
|
Capital components and risk-weighted assets
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
(in millions)
|
||||||
CET1:
|
|
|
||||
Common shareholders’ equity
|
$
|
37,603
|
|
$
|
37,941
|
|
Adjustments for:
|
|
|
||||
Goodwill and intangible assets (a)
|
(18,535
|
)
|
(18,725
|
)
|
||
Net pension fund assets
|
(269
|
)
|
(272
|
)
|
||
Equity method investments
|
(290
|
)
|
(311
|
)
|
||
Deferred tax assets
|
(46
|
)
|
(46
|
)
|
||
Other
|
2
|
|
(47
|
)
|
||
Total CET1
|
18,465
|
|
18,540
|
|
||
Other Tier 1 capital:
|
|
|
||||
Preferred stock
|
3,542
|
|
3,542
|
|
||
Other
|
(74
|
)
|
(86
|
)
|
||
Total Tier 1 capital
|
$
|
21,933
|
|
$
|
21,996
|
|
Tier 2 capital:
|
|
|
||||
Subordinated debt
|
$
|
1,248
|
|
$
|
1,248
|
|
Allowance for credit losses
|
314
|
|
216
|
|
||
Other
|
(1
|
)
|
(11
|
)
|
||
Total Tier 2 capital – Standardized Approach
|
1,561
|
|
1,453
|
|
||
Excess of expected credit losses
|
101
|
|
—
|
|
||
Less: Allowance for credit losses
|
314
|
|
216
|
|
||
Total Tier 2 capital – Advanced Approaches
|
$
|
1,348
|
|
$
|
1,237
|
|
Total capital:
|
|
|
||||
Standardized Approach
|
$
|
23,494
|
|
$
|
23,449
|
|
Advanced Approaches
|
$
|
23,281
|
|
$
|
23,233
|
|
|
|
|
||||
Risk-weighted assets:
|
|
|
||||
Standardized Approach
|
$
|
163,006
|
|
$
|
148,695
|
|
Advanced Approaches:
|
|
|
||||
Credit Risk
|
$
|
97,093
|
|
$
|
95,490
|
|
Market Risk
|
3,630
|
|
4,020
|
|
||
Operational Risk
|
61,838
|
|
61,388
|
|
||
Total Advanced Approaches
|
$
|
162,561
|
|
$
|
160,898
|
|
|
|
|
||||
Average assets for Tier 1 leverage ratio
|
$
|
366,058
|
|
$
|
334,869
|
|
Total leverage exposure for SLR
|
$
|
392,807
|
|
$
|
362,452
|
|
(a)
|
Reduced by deferred tax liabilities associated with intangible assets and tax deductible goodwill.
|
CET1 generation
|
1Q20
|
|
|
(in millions)
|
|||
CET1 – Beginning of period
|
$
|
18,540
|
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
944
|
|
|
Goodwill and intangible assets, net of related deferred tax liabilities
|
190
|
|
|
Gross CET1 generated
|
1,134
|
|
|
Capital deployed:
|
|
||
Common stock repurchases
|
(985
|
)
|
|
Common stock dividend payments
|
(282
|
)
|
|
Total capital deployed
|
(1,267
|
)
|
|
Other comprehensive income:
|
|
||
Foreign currency translation
|
(367
|
)
|
|
Unrealized gain on assets available-for-sale
|
176
|
|
|
Defined benefit plans
|
18
|
|
|
Unrealized gain on cash flow hedges
|
(11
|
)
|
|
Other
|
(5
|
)
|
|
Total other comprehensive income
|
(189
|
)
|
|
Additional paid-in capital (a)
|
129
|
|
|
Other additions:
|
|
||
Embedded goodwill
|
21
|
|
|
Net pension fund assets
|
3
|
|
|
Deferred tax assets
|
—
|
|
|
Other
|
94
|
|
|
Total other additions
|
118
|
|
|
Net CET1 deployed
|
(75
|
)
|
|
CET1 – End of period
|
$
|
18,465
|
|
(a)
|
Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.
|
|
As a % of RWAs (a)
|
As a % of total leverage exposure
|
Eligible external TLAC ratios
|
Regulatory minimum of 18% plus a buffer (b) equal to the sum of 2.5%, the method 1 G-SIB surcharge (currently 1%), and the countercyclical capital buffer, if any
|
Regulatory minimum of 7.5% plus a buffer (c) equal to 2%
|
Eligible external LTD ratios
|
Regulatory minimum of 6% plus the greater of the method 1 or method 2 G-SIB surcharge (currently 1.5%)
|
4.5%
|
(c)
|
Buffer to be met using only Tier 1 capital.
|
TLAC and LTD ratios
|
March 31, 2020
|
|||||
|
Minimum
required |
|
Minimum ratios
with buffers |
|
|
|
|
Ratios
|
|
||||
Eligible external TLAC:
|
|
|
|
|||
As a percentage of RWA
|
18.0
|
%
|
21.5
|
%
|
27.1
|
%
|
As a percentage of total leverage exposure
|
7.5
|
%
|
9.5
|
%
|
11.3
|
%
|
|
|
|
|
|||
Eligible external LTD:
|
|
|
|
|||
As a percentage of RWA
|
7.5
|
%
|
N/A
|
12.1
|
%
|
|
As a percentage of total leverage exposure
|
4.5
|
%
|
N/A
|
5.0
|
%
|
•
|
VaR does not estimate potential losses over longer time horizons where moves may be extreme;
|
•
|
VaR does not take account of potential variability of market liquidity; and
|
•
|
Previous moves in market risk factors may not produce accurate predictions of all future market moves.
|
VaR (a)
|
1Q20
|
March 31, 2020
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
4.9
|
|
$
|
3.2
|
|
$
|
11.3
|
|
$
|
5.1
|
|
Foreign exchange
|
3.1
|
|
1.7
|
|
6.3
|
|
4.5
|
|
||||
Equity
|
1.4
|
|
0.8
|
|
2.3
|
|
0.9
|
|
||||
Credit
|
3.4
|
|
1.2
|
|
12.1
|
|
9.8
|
|
||||
Diversification
|
(6.4
|
)
|
N/M
|
|
N/M
|
|
(9.9
|
)
|
||||
Overall portfolio
|
6.4
|
|
3.5
|
|
14.3
|
|
10.4
|
|
VaR (a)
|
4Q19
|
Dec. 31, 2019
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
4.4
|
|
$
|
3.3
|
|
$
|
6.6
|
|
$
|
4.8
|
|
Foreign exchange
|
2.7
|
|
1.5
|
|
5.3
|
|
2.7
|
|
||||
Equity
|
0.8
|
|
0.3
|
|
1.1
|
|
1.0
|
|
||||
Credit
|
1.4
|
|
1.0
|
|
2.0
|
|
1.3
|
|
||||
Diversification
|
(3.6
|
)
|
N/M
|
|
N/M
|
|
(4.0
|
)
|
||||
Overall portfolio
|
5.7
|
|
3.9
|
|
9.2
|
|
5.8
|
|
VaR (a)
|
1Q19
|
March 31, 2019
|
|
|||||||||
(in millions)
|
Average
|
|
Minimum
|
|
Maximum
|
|
||||||
Interest rate
|
$
|
4.0
|
|
$
|
3.2
|
|
$
|
5.3
|
|
$
|
4.2
|
|
Foreign exchange
|
3.8
|
|
2.8
|
|
6.4
|
|
3.9
|
|
||||
Equity
|
0.7
|
|
0.6
|
|
1.1
|
|
0.9
|
|
||||
Credit
|
0.6
|
|
0.4
|
|
1.0
|
|
0.7
|
|
||||
Diversification
|
(2.9
|
)
|
N/M
|
|
N/M
|
|
(3.5
|
)
|
||||
Overall portfolio
|
6.2
|
|
4.6
|
|
9.5
|
|
6.2
|
|
(a)
|
VaR exposure does not include the impact of the Company’s consolidated investment management funds and seed capital investments.
|
(a)
|
Trading revenue (loss) includes realized and unrealized gains and losses primarily related to spot and forward foreign exchange transactions, derivatives and securities trades for our customers and excludes any associated commissions, underwriting fees and net interest revenue.
|
(a)
|
Represents credit rating agency equivalent of internal credit ratings.
|
(b)
|
Non-investment grade.
|
Estimated changes in net interest revenue
(in millions) |
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31,
2019 |
|
|||
Up 200 bps parallel rate ramp vs. baseline (a)
|
$
|
557
|
|
$
|
195
|
|
$
|
410
|
|
Up 100 bps parallel rate ramp vs. baseline (a)
|
334
|
|
79
|
|
208
|
|
|||
Down 100 bps parallel rate ramp vs. baseline (a)
|
100
|
|
(40
|
)
|
(91
|
)
|
|||
Long-term up 50 bps, short-term unchanged (b)
|
166
|
|
110
|
|
149
|
|
|||
Long-term down 50 bps, short-term unchanged (b)
|
(158
|
)
|
(105
|
)
|
(178
|
)
|
(a)
|
In the parallel rate ramp, both short-term and long-term rates move in four equal quarterly increments.
|
(b)
|
Long-term is equal to or greater than one year.
|
Return on common equity and tangible common equity reconciliation
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
(dollars in millions)
|
|||||||||
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 intangible assets – Non-GAAP
|
$
|
964
|
|
$
|
1,412
|
|
$
|
932
|
|
|
|
|
|
||||||
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 (a)
|
1,109
|
|
1,098
|
|
1,083
|
|
|||
Deferred tax liability – intangible assets (a)
|
666
|
|
670
|
|
690
|
|
|||
Average tangible common shareholders’ equity – Non-GAAP
|
$
|
19,039
|
|
$
|
19,159
|
|
$
|
18,274
|
|
|
|
|
|
||||||
Return on common shareholders’ equity – GAAP
|
10.1
|
%
|
14.6
|
%
|
10.0
|
%
|
|||
Return on tangible common shareholders’ equity – Non-GAAP
|
20.4
|
%
|
29.3
|
%
|
20.7
|
%
|
(a)
|
Deferred tax liabilities are based on fully phased-in U.S. capital rules.
|
Book value and tangible book value per common share reconciliation
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31,
2019 |
|
|||
(dollars in millions, except per share amounts and unless otherwise noted)
|
|||||||||
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 (a)
|
1,109
|
|
1,098
|
|
1,083
|
|
|||
Deferred tax liability – intangible assets (a)
|
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
|
|
(a)
|
Deferred tax liabilities are based on fully phased-in U.S. capital rules.
|
Constant currency reconciliation – Consolidated
|
1Q20
|
|
1Q19
|
|
1Q20 vs.
|
|
||
(dollars in millions)
|
1Q19
|
|
||||||
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
|
%
|
Constant currency reconciliation – Investment Management business
|
|
|
1Q20 vs.
|
|
||||
(dollars in millions)
|
1Q20
|
|
1Q19
|
|
1Q19
|
|
||
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
|
%
|
(a)
|
Income before taxes divided by total revenue.
|
•
|
All of our SEC filings, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, as well as proxy statements and SEC Forms 3, 4 and 5;
|
•
|
Financial statements and footnotes prepared using eXtensible Business Reporting Language (“XBRL”);
|
•
|
Our earnings materials and selected management conference calls and presentations;
|
•
|
Other regulatory disclosures, including: Pillar 3 Disclosures (and Market Risk Disclosure contained therein); Liquidity Coverage Ratio Disclosures; Federal Financial Institutions Examination Council - Consolidated Reports of Condition and Income for a Bank With Domestic and Foreign Offices; Consolidated Financial Statements for Bank Holding Companies; and the Dodd-Frank Act Stress Test Results for BNY Mellon and The Bank of New York Mellon; and
|
•
|
Our Corporate Governance Guidelines, Amended and Restated By-laws, Directors’ Code of Conduct and the Charters of the Audit, Finance, Corporate Governance, Nominating and Social Responsibility, Human Resources and Compensation, Risk and Technology Committees of our Board of Directors.
|
|
Quarter ended
|
||||||||
(in millions)
|
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)
|
The provision for credit losses for the quarter ended March 31, 2020 relates to the financial instruments within the scope of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses On Financial Instruments. See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation
(in millions)
|
Quarter ended
|
||||||||
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
|
$
|
944
|
|
$
|
1,391
|
|
$
|
910
|
|
Less: Earnings allocated to participating securities
|
3
|
|
6
|
|
5
|
|
|||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation after required adjustment for the calculation of basic and diluted earnings per common share
|
$
|
941
|
|
$
|
1,385
|
|
$
|
905
|
|
Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation
|
Quarter ended
|
|||||
(in thousands)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
Basic
|
894,122
|
|
911,324
|
|
962,397
|
|
Common stock equivalents
|
3,941
|
|
5,191
|
|
6,071
|
|
Less: Participating securities
|
(1,374
|
)
|
(1,776
|
)
|
(2,508
|
)
|
Diluted
|
896,689
|
|
914,739
|
|
965,960
|
|
|
|
|
|
|||
Anti-dilutive securities (a)
|
2,584
|
|
3,515
|
|
5,550
|
|
(a)
|
Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive.
|
Earnings per share applicable to common shareholders of The Bank of New York Mellon Corporation
|
Quarter ended
|
||||||||
(in dollars)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Basic
|
$
|
1.05
|
|
$
|
1.52
|
|
$
|
0.94
|
|
Diluted
|
$
|
1.05
|
|
$
|
1.52
|
|
$
|
0.94
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Quarter ended
|
||||||||
(in millions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Net income
|
$
|
962
|
|
$
|
1,449
|
|
$
|
956
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||||
Foreign currency translation adjustments
|
(369
|
)
|
388
|
|
29
|
|
|||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
||||||
Unrealized gain (loss) arising during the period
|
183
|
|
(77
|
)
|
239
|
|
|||
Reclassification adjustment
|
(7
|
)
|
19
|
|
(1
|
)
|
|||
Total unrealized gain (loss) on assets available-for-sale
|
176
|
|
(58
|
)
|
238
|
|
|||
Defined benefit plans:
|
|
|
|
||||||
Prior service cost arising during the period
|
—
|
|
(1
|
)
|
—
|
|
|||
Net (loss) gain arising during the period
|
—
|
|
(78
|
)
|
(9
|
)
|
|||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
|
18
|
|
4
|
|
10
|
|
|||
Total defined benefit plans
|
18
|
|
(75
|
)
|
1
|
|
|||
Net unrealized (loss) gain on cash flow hedges
|
(11
|
)
|
4
|
|
5
|
|
|||
Total other comprehensive (loss) income, net of tax (a)
|
(186
|
)
|
259
|
|
273
|
|
|||
Total comprehensive income
|
776
|
|
1,708
|
|
1,229
|
|
|||
Net loss (income) attributable to noncontrolling interests
|
18
|
|
(9
|
)
|
(10
|
)
|
|||
Other comprehensive loss (income) attributable to noncontrolling interests
|
2
|
|
(4
|
)
|
(2
|
)
|
|||
Comprehensive income applicable to shareholders of The Bank of New York Mellon Corporation
|
$
|
796
|
|
$
|
1,695
|
|
$
|
1,217
|
|
(a)
|
Other comprehensive (loss) income attributable to The Bank of New York Mellon Corporation shareholders was $(184) million for the quarter ended March 31, 2020, $255 million for the quarter ended Dec. 31, 2019 and $271 million for the quarter ended March 31, 2019.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
(dollars in millions, except per share amounts)
|
||||||
Assets
|
|
|
||||
Cash and due from banks (including allowance for credit losses of $3 at March 31, 2020) (a)
|
$
|
5,091
|
|
$
|
4,830
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
146,535
|
|
95,042
|
|
||
Interest-bearing deposits with banks (including allowance for credit losses of $1 at March 31, 2020; $4,714 and $2,437 is restricted) (a)
|
22,672
|
|
14,811
|
|
||
Federal funds sold and securities purchased under resale agreements (including allowance for credit losses of $18 at March 31, 2020) (a)
|
27,363
|
|
30,182
|
|
||
Securities:
|
|
|
||||
Held-to-maturity (including allowance for credit losses of less than $1 at March 31, 2020; fair value of $38,418 and
$34,805) (a)
|
37,305
|
|
34,483
|
|
||
Available-for-sale (including allowance for credit losses of $15 at March 31, 2020; amortized cost of $99,503 and
$87,435) (a)
|
101,968
|
|
88,550
|
|
||
Total securities
|
139,273
|
|
123,033
|
|
||
Trading assets
|
12,918
|
|
13,571
|
|
||
Loans
|
62,368
|
|
54,953
|
|
||
Allowance for credit losses (a)
|
(140
|
)
|
(122
|
)
|
||
Net loans
|
62,228
|
|
54,831
|
|
||
Premises and equipment
|
3,514
|
|
3,625
|
|
||
Accrued interest receivable
|
576
|
|
624
|
|
||
Goodwill
|
17,240
|
|
17,386
|
|
||
Intangible assets
|
3,070
|
|
3,107
|
|
||
Other assets (including allowance for credit losses on accounts receivable of $4 at March 31, 2020, also includes $527
and $419, at fair value) (a)
|
27,446
|
|
20,221
|
|
||
Subtotal assets of operations
|
467,926
|
|
381,263
|
|
||
Assets of consolidated investment management funds, at fair value
|
229
|
|
245
|
|
||
Total assets
|
$
|
468,155
|
|
$
|
381,508
|
|
Liabilities
|
|
|
||||
Deposits:
|
|
|
||||
Noninterest-bearing (principally U.S. offices)
|
$
|
96,600
|
|
$
|
57,630
|
|
Interest-bearing deposits in U.S. offices
|
118,466
|
|
101,542
|
|
||
Interest-bearing deposits in non-U.S. offices
|
121,651
|
|
100,294
|
|
||
Total deposits
|
336,717
|
|
259,466
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
13,128
|
|
11,401
|
|
||
Trading liabilities
|
6,625
|
|
4,841
|
|
||
Payables to customers and broker-dealers
|
24,016
|
|
18,758
|
|
||
Commercial paper
|
1,121
|
|
3,959
|
|
||
Other borrowed funds
|
1,544
|
|
599
|
|
||
Accrued taxes and other expenses
|
4,705
|
|
5,642
|
|
||
Other liabilities (including allowance for credit losses on lending-related commitments of $148 and $94, also includes $973
and $607, at fair value) (a)
|
11,425
|
|
7,612
|
|
||
Long-term debt (includes $397 and $387, at fair value)
|
27,494
|
|
27,501
|
|
||
Subtotal liabilities of operations
|
426,775
|
|
339,779
|
|
||
Liabilities of consolidated investment management funds, at fair value
|
1
|
|
1
|
|
||
Total liabilities
|
426,776
|
|
339,780
|
|
||
Temporary equity
|
|
|
||||
Redeemable noncontrolling interests
|
140
|
|
143
|
|
||
Permanent equity
|
|
|
||||
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 35,826 and 35,826 shares
|
3,542
|
|
3,542
|
|
||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,380,881,570 and 1,374,443,376 shares
|
14
|
|
14
|
|
||
Additional paid-in capital
|
27,644
|
|
27,515
|
|
||
Retained earnings
|
32,601
|
|
31,894
|
|
||
Accumulated other comprehensive loss, net of tax
|
(2,827
|
)
|
(2,638
|
)
|
||
Less: Treasury stock of 495,438,749 and 473,760,338 common shares, at cost
|
(19,829
|
)
|
(18,844
|
)
|
||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
41,145
|
|
41,483
|
|
||
Nonredeemable noncontrolling interests of consolidated investment management funds
|
94
|
|
102
|
|
||
Total permanent equity
|
41,239
|
|
41,585
|
|
||
Total liabilities, temporary equity and permanent equity
|
$
|
468,155
|
|
$
|
381,508
|
|
(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. See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Three months ended March 31,
|
|||||
(in millions)
|
2020
|
|
2019
|
|
||
Operating activities
|
|
|
||||
Net income
|
$
|
962
|
|
$
|
956
|
|
Net (income) loss attributable to noncontrolling interests
|
18
|
|
(10
|
)
|
||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
|
980
|
|
946
|
|
||
Adjustments to reconcile net income to net cash (used for) operating activities:
|
|
|
||||
Provision for credit losses (a)
|
169
|
|
7
|
|
||
Pension plan contributions
|
(6
|
)
|
(17
|
)
|
||
Depreciation and amortization
|
354
|
|
302
|
|
||
Deferred tax (benefit)
|
(300
|
)
|
(28
|
)
|
||
Net securities (gains)
|
(9
|
)
|
(1
|
)
|
||
Change in trading assets and liabilities
|
2,419
|
|
(57
|
)
|
||
Change in accruals and other, net
|
(5,292
|
)
|
(2,101
|
)
|
||
Net cash (used for) operating activities
|
(1,685
|
)
|
(949
|
)
|
||
Investing activities
|
|
|
||||
Change in interest-bearing deposits with banks
|
(6,066
|
)
|
413
|
|
||
Change in interest-bearing deposits with the Federal Reserve and other central banks
|
(52,370
|
)
|
7,096
|
|
||
Purchases of securities held-to-maturity
|
(5,151
|
)
|
(1,403
|
)
|
||
Paydowns of securities held-to-maturity
|
1,503
|
|
914
|
|
||
Maturities of securities held-to-maturity
|
1,310
|
|
500
|
|
||
Purchases of securities available-for-sale
|
(22,222
|
)
|
(8,894
|
)
|
||
Sales of securities available-for-sale
|
3,107
|
|
3,692
|
|
||
Paydowns of securities available-for-sale
|
2,042
|
|
1,400
|
|
||
Maturities of securities available-for-sale
|
4,727
|
|
7,223
|
|
||
Net change in loans
|
(7,626
|
)
|
3,010
|
|
||
Sales of loans and other real estate
|
1
|
|
51
|
|
||
Change in federal funds sold and securities purchased under resale agreements
|
2,739
|
|
6,640
|
|
||
Net change in seed capital investments
|
18
|
|
3
|
|
||
Purchases of premises and equipment/capitalized software
|
(264
|
)
|
(264
|
)
|
||
Other, net
|
(349
|
)
|
429
|
|
||
Net cash (used for) provided by investing activities
|
(78,601
|
)
|
20,810
|
|
||
Financing activities
|
|
|
||||
Change in deposits
|
79,678
|
|
(16,146
|
)
|
||
Change in federal funds purchased and securities sold under repurchase agreements
|
1,775
|
|
(2,482
|
)
|
||
Change in payables to customers and broker-dealers
|
5,329
|
|
(414
|
)
|
||
Change in other borrowed funds
|
961
|
|
695
|
|
||
Change in commercial paper
|
(2,838
|
)
|
834
|
|
||
Net proceeds from the issuance of long-term debt
|
998
|
|
—
|
|
||
Repayments of long-term debt
|
(1,750
|
)
|
(1,500
|
)
|
||
Proceeds from the exercise of stock options
|
30
|
|
31
|
|
||
Issuance of common stock
|
3
|
|
13
|
|
||
Treasury stock acquired
|
(985
|
)
|
(555
|
)
|
||
Common cash dividends paid
|
(282
|
)
|
(270
|
)
|
||
Preferred cash dividends paid
|
(36
|
)
|
(36
|
)
|
||
Other, net
|
(3
|
)
|
(7
|
)
|
||
Net cash provided by (used for) financing activities
|
82,880
|
|
(19,837
|
)
|
||
Effect of exchange rate changes on cash
|
(56
|
)
|
11
|
|
||
Change in cash and due from banks and restricted cash
|
|
|
||||
Change in cash and due from banks and restricted cash
|
2,538
|
|
35
|
|
||
Cash and due from banks and restricted cash at beginning of period
|
7,267
|
|
8,258
|
|
||
Cash and due from banks and restricted cash at end of period
|
$
|
9,805
|
|
$
|
8,293
|
|
Cash and due from banks and restricted cash:
|
|
|
||||
Cash and due from banks at end of period (unrestricted cash)
|
$
|
5,091
|
|
$
|
5,980
|
|
Restricted cash at end of period
|
4,714
|
|
2,313
|
|
||
Cash and due from banks and restricted cash at end of period
|
$
|
9,805
|
|
$
|
8,293
|
|
Supplemental disclosures
|
|
|
||||
Interest paid
|
$
|
851
|
|
$
|
1,122
|
|
Income taxes paid
|
185
|
|
100
|
|
||
Income taxes refunded
|
10
|
|
3
|
|
(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. See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
The Bank of New York Mellon Corporation shareholders
|
Nonredeemable
noncontrolling interests of consolidated investment management funds |
|
Total
permanent equity |
|
|
Redeemable
non- controlling interests/ temporary equity |
|
||||||||||||||||||||
(in millions, except per
share amount) |
Preferred stock
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Accumulated other comprehensive (loss), net
of tax |
|
Treasury
stock |
|
||||||||||||||||
Balance at Dec. 31, 2019
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,515
|
|
$
|
31,894
|
|
$
|
(2,638
|
)
|
$
|
(18,844
|
)
|
$
|
102
|
|
$
|
41,585
|
|
(a)
|
$
|
143
|
|
Impact of adopting ASU 2016-13, Financial Instruments - Credit Losses
|
—
|
|
—
|
|
—
|
|
45
|
|
(5
|
)
|
—
|
|
—
|
|
40
|
|
|
—
|
|
|||||||||
Adjusted balance at Jan. 1, 2020
|
3,542
|
|
14
|
|
27,515
|
|
31,939
|
|
(2,643
|
)
|
(18,844
|
)
|
102
|
|
41,625
|
|
|
143
|
|
|||||||||
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
17
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(16
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
—
|
|
10
|
|
5
|
|
|
(2
|
)
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
980
|
|
—
|
|
—
|
|
(18
|
)
|
962
|
|
|
—
|
|
|||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
(184
|
)
|
—
|
|
—
|
|
(184
|
)
|
|
(2
|
)
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.31 per
share |
—
|
|
—
|
|
—
|
|
(282
|
)
|
—
|
|
—
|
|
—
|
|
(282
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(985
|
)
|
—
|
|
(985
|
)
|
|
—
|
|
|||||||||
Common stock issued under employee benefit plans
|
—
|
|
—
|
|
9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
125
|
|
—
|
|
—
|
|
—
|
|
—
|
|
125
|
|
|
—
|
|
|||||||||
Balance at March 31, 2020
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,644
|
|
$
|
32,601
|
|
$
|
(2,827
|
)
|
$
|
(19,829
|
)
|
$
|
94
|
|
$
|
41,239
|
|
(a)
|
$
|
140
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $37,603 million at March 31, 2020.
|
|
The Bank of New York Mellon Corporation shareholders
|
Nonredeemable
noncontrolling interests of consolidated investment management funds |
|
Total
permanent equity |
|
|
Redeemable
non- controlling interests/ temporary equity |
|
||||||||||||||||||||
(in millions, except per
share amount) |
Preferred stock
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Accumulated other comprehensive (loss), net
of tax |
|
Treasury
stock |
|
||||||||||||||||
Balance at Sept. 30, 2019
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,471
|
|
$
|
30,789
|
|
$
|
(2,893
|
)
|
$
|
(17,803
|
)
|
$
|
203
|
|
$
|
41,323
|
|
(a)
|
$
|
147
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
25
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(41
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
(17
|
)
|
—
|
|
—
|
|
—
|
|
(110
|
)
|
(127
|
)
|
|
8
|
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
1,440
|
|
—
|
|
—
|
|
9
|
|
1,449
|
|
|
—
|
|
|||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
255
|
|
—
|
|
—
|
|
255
|
|
|
4
|
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.31 per
share |
—
|
|
—
|
|
—
|
|
(286
|
)
|
—
|
|
—
|
|
—
|
|
(286
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(49
|
)
|
—
|
|
—
|
|
—
|
|
(49
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,041
|
)
|
—
|
|
(1,041
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
55
|
|
—
|
|
—
|
|
—
|
|
—
|
|
55
|
|
|
—
|
|
|||||||||
Balance at Dec. 31, 2019
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,515
|
|
$
|
31,894
|
|
$
|
(2,638
|
)
|
$
|
(18,844
|
)
|
$
|
102
|
|
$
|
41,585
|
|
(a)
|
$
|
143
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,578 million at Sept. 30, 2019 and $37,941 million at Dec. 31, 2019.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
The Bank of New York Mellon Corporation shareholders
|
Nonredeemable
noncontrolling interests of consolidated investment management funds |
|
Total
permanent equity |
|
|
Redeemable
non- controlling interests/ temporary equity |
|
||||||||||||||||||||
(in millions, except per
share amount) |
Preferred stock
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Accumulated other comprehensive (loss), net
of tax |
|
Treasury
stock |
|
||||||||||||||||
Balance at Dec. 31, 2018
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,118
|
|
$
|
28,652
|
|
$
|
(3,171
|
)
|
$
|
(15,517
|
)
|
$
|
101
|
|
$
|
40,739
|
|
(a)
|
$
|
129
|
|
Reclassification of certain tax effects related to adopting ASU 2018-02
|
—
|
|
—
|
|
—
|
|
90
|
|
(90
|
)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|||||||||
Adjusted balance at Jan. 1, 2019
|
3,542
|
|
14
|
|
27,118
|
|
28,742
|
|
(3,261
|
)
|
(15,517
|
)
|
101
|
|
40,739
|
|
|
129
|
|
|||||||||
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
20
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(7
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
19
|
|
—
|
|
—
|
|
—
|
|
11
|
|
30
|
|
|
(22
|
)
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
946
|
|
—
|
|
—
|
|
10
|
|
956
|
|
|
—
|
|
|||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
271
|
|
—
|
|
—
|
|
271
|
|
|
2
|
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.28 per
share |
—
|
|
—
|
|
—
|
|
(270
|
)
|
—
|
|
—
|
|
—
|
|
(270
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(555
|
)
|
—
|
|
(555
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
11
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
191
|
|
—
|
|
—
|
|
—
|
|
—
|
|
191
|
|
|
—
|
|
|||||||||
Balance at March 31, 2019
|
$
|
3,542
|
|
$
|
14
|
|
$
|
27,349
|
|
$
|
29,382
|
|
$
|
(2,990
|
)
|
$
|
(16,072
|
)
|
$
|
122
|
|
$
|
41,347
|
|
(a)
|
$
|
122
|
|
(a)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,096 million at Dec. 31, 2018 and $37,683 million at March 31, 2019.
|
Notes to Consolidated Financial Statements
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Allowance for credit losses
|
|
||
(in millions)
|
|
||
Allowance for credit losses – Dec. 31, 2019
|
$
|
216
|
|
Impact of adopting ASU 2016-13:
|
|
||
Securities
|
7
|
|
|
Loans (a)
|
(69
|
)
|
|
Other
|
3
|
|
|
Total impact of adoption of ASU 2016-13
|
(59
|
)
|
|
Reclassification of credit-related reserves on accounts receivable
|
4
|
|
|
Allowance for credit losses – Jan. 1, 2020
|
$
|
161
|
|
(a)
|
Includes $48 million related to loans and $21 million for lending-related commitments.
|
Notes to Consolidated Financial Statements (continued)
|
|
•
|
a pooled allowance component for higher risk-rated and pass-rated commercial and institutional credits;
|
•
|
a pooled allowance component for residential mortgage loans; and
|
•
|
an asset-specific allowance component involving individually evaluated credits of $1 million or greater.
|
Notes to Consolidated Financial Statements (continued)
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Securities at March 31, 2020
|
Gross
unrealized
|
Fair
value
|
|
|||||||||
|
Amortized cost
|
|
||||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
Agency RMBS
|
$
|
26,484
|
|
$
|
426
|
|
$
|
219
|
|
$
|
26,691
|
|
U.S. Treasury
|
21,430
|
|
1,651
|
|
—
|
|
23,081
|
|
||||
Sovereign debt/sovereign guaranteed
|
12,791
|
|
128
|
|
9
|
|
12,910
|
|
||||
Agency commercial mortgage-backed securities (“MBS”)
|
9,315
|
|
510
|
|
20
|
|
9,805
|
|
||||
Foreign covered bonds
|
5,284
|
|
24
|
|
36
|
|
5,272
|
|
||||
Supranational
|
4,316
|
|
38
|
|
6
|
|
4,348
|
|
||||
Collateralized loan obligations (“CLOs”)
|
4,341
|
|
1
|
|
244
|
|
4,098
|
|
||||
Commercial paper/certificates of deposit (“CDs”)
|
2,813
|
|
3
|
|
2
|
|
2,814
|
|
||||
Foreign government agencies
|
2,736
|
|
31
|
|
3
|
|
2,764
|
|
||||
Non-agency commercial MBS
|
2,501
|
|
35
|
|
63
|
|
2,473
|
|
||||
Other asset-backed securities (“ABS”)
|
2,257
|
|
6
|
|
43
|
|
2,220
|
|
||||
U.S. government agencies
|
2,059
|
|
156
|
|
2
|
|
2,213
|
|
||||
Non-agency RMBS (a)
|
1,404
|
|
114
|
|
43
|
|
1,475
|
|
||||
State and political subdivisions
|
967
|
|
20
|
|
2
|
|
985
|
|
||||
Corporate bonds
|
804
|
|
16
|
|
2
|
|
818
|
|
||||
Other debt securities
|
1
|
|
—
|
|
—
|
|
1
|
|
||||
Total securities available-for-sale (b)(c)
|
$
|
99,503
|
|
$
|
3,159
|
|
$
|
694
|
|
$
|
101,968
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
Agency RMBS
|
$
|
29,518
|
|
$
|
874
|
|
$
|
5
|
|
$
|
30,387
|
|
U.S. Treasury
|
2,937
|
|
121
|
|
—
|
|
3,058
|
|
||||
Agency commercial MBS
|
1,868
|
|
84
|
|
—
|
|
1,952
|
|
||||
U.S. government agencies
|
1,244
|
|
7
|
|
3
|
|
1,248
|
|
||||
Sovereign debt/sovereign guaranteed
|
919
|
|
37
|
|
—
|
|
956
|
|
||||
Commercial paper/CDs
|
651
|
|
—
|
|
—
|
|
651
|
|
||||
Foreign covered bonds
|
77
|
|
—
|
|
—
|
|
77
|
|
||||
Non-agency RMBS
|
75
|
|
3
|
|
5
|
|
73
|
|
||||
State and political subdivisions
|
16
|
|
—
|
|
—
|
|
16
|
|
||||
Total securities held-to-maturity
|
$
|
37,305
|
|
$
|
1,126
|
|
$
|
13
|
|
$
|
38,418
|
|
Total securities
|
$
|
136,808
|
|
$
|
4,285
|
|
$
|
707
|
|
$
|
140,386
|
|
(a)
|
Includes $535 million that was included in the former Grantor Trust.
|
(b)
|
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. The allowance for credit loss on available-for-sale securities of $15 million primarily relates to CLOs and Non-Agency RMBS. See Note 2 for additional information.
|
(c)
|
Includes gross unrealized gains of $29 million and gross unrealized losses of $59 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.
|
Securities at Dec. 31, 2019
|
Gross
unrealized
|
|
||||||||||
|
Amortized cost
|
|
Fair
value
|
|
||||||||
(in millions)
|
Gains
|
|
Losses
|
|
||||||||
Available-for-sale:
|
|
|
|
|
||||||||
Agency RMBS
|
$
|
27,022
|
|
$
|
164
|
|
$
|
143
|
|
$
|
27,043
|
|
U.S. Treasury
|
14,979
|
|
472
|
|
20
|
|
15,431
|
|
||||
Sovereign debt/sovereign guaranteed
|
12,548
|
|
109
|
|
11
|
|
12,646
|
|
||||
Agency commercial MBS
|
9,231
|
|
203
|
|
17
|
|
9,417
|
|
||||
Foreign covered bonds
|
4,189
|
|
15
|
|
7
|
|
4,197
|
|
||||
CLOs
|
4,078
|
|
1
|
|
16
|
|
4,063
|
|
||||
Supranational
|
3,697
|
|
18
|
|
6
|
|
3,709
|
|
||||
Foreign government agencies
|
2,638
|
|
7
|
|
2
|
|
2,643
|
|
||||
Non-agency commercial MBS
|
2,134
|
|
46
|
|
2
|
|
2,178
|
|
||||
Other ABS
|
2,141
|
|
7
|
|
5
|
|
2,143
|
|
||||
U.S. government agencies
|
1,890
|
|
61
|
|
2
|
|
1,949
|
|
||||
Non-agency RMBS (a)
|
1,038
|
|
202
|
|
7
|
|
1,233
|
|
||||
State and political subdivisions
|
1,017
|
|
27
|
|
—
|
|
1,044
|
|
||||
Corporate bonds
|
832
|
|
21
|
|
—
|
|
853
|
|
||||
Other debt securities
|
1
|
|
—
|
|
—
|
|
1
|
|
||||
Total securities available-for-sale (b)
|
$
|
87,435
|
|
$
|
1,353
|
|
$
|
238
|
|
$
|
88,550
|
|
Held-to-maturity:
|
|
|
|
|
||||||||
Agency RMBS
|
$
|
27,357
|
|
$
|
292
|
|
$
|
46
|
|
$
|
27,603
|
|
U.S. Treasury
|
3,818
|
|
28
|
|
3
|
|
3,843
|
|
||||
Agency commercial MBS
|
1,326
|
|
21
|
|
3
|
|
1,344
|
|
||||
U.S. government agencies
|
1,023
|
|
1
|
|
2
|
|
1,022
|
|
||||
Sovereign debt/sovereign guaranteed
|
756
|
|
31
|
|
—
|
|
787
|
|
||||
Non-agency RMBS
|
80
|
|
4
|
|
1
|
|
83
|
|
||||
Foreign covered bonds
|
79
|
|
—
|
|
—
|
|
79
|
|
||||
Supranational
|
27
|
|
—
|
|
—
|
|
27
|
|
||||
State and political subdivisions
|
17
|
|
—
|
|
—
|
|
17
|
|
||||
Total securities held-to-maturity
|
$
|
34,483
|
|
$
|
377
|
|
$
|
55
|
|
$
|
34,805
|
|
Total securities
|
$
|
121,918
|
|
$
|
1,730
|
|
$
|
293
|
|
$
|
123,355
|
|
(a)
|
Includes $640 million that was included in the former Grantor Trust.
|
(b)
|
Includes gross unrealized gains of $32 million and gross unrealized losses of $65 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.
|
Net securities gains (losses)
|
|
|
|||||||
(in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
Realized gross gains
|
$
|
12
|
|
$
|
5
|
|
$
|
5
|
|
Realized gross losses
|
(3
|
)
|
(29
|
)
|
(4
|
)
|
|||
Recognized gross impairments
|
—
|
|
(1
|
)
|
—
|
|
|||
Total net securities gains (losses)
|
$
|
9
|
|
$
|
(25
|
)
|
$
|
1
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Net securities gains (losses)
|
|
||||||||
(in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
U.S. Treasury
|
$
|
5
|
|
$
|
(17
|
)
|
$
|
1
|
|
Other
|
4
|
|
(8
|
)
|
—
|
|
|||
Total net securities gains (losses)
|
$
|
9
|
|
$
|
(25
|
)
|
$
|
1
|
|
Available-for-sale securities in an unrealized loss position at March 31, 2020 (a)
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|||||||
(in millions)
|
|
|
||||||||||||||||||
Agency RMBS
|
$
|
5,200
|
|
$
|
53
|
|
|
$
|
6,969
|
|
$
|
166
|
|
|
$
|
12,169
|
|
$
|
219
|
|
Sovereign debt/sovereign guaranteed
|
2,801
|
|
9
|
|
|
104
|
|
—
|
|
|
2,905
|
|
9
|
|
||||||
Agency commercial MBS
|
1,440
|
|
14
|
|
|
522
|
|
6
|
|
|
1,962
|
|
20
|
|
||||||
Foreign covered bonds
|
2,934
|
|
33
|
|
|
255
|
|
3
|
|
|
3,189
|
|
36
|
|
||||||
Supranational
|
1,663
|
|
6
|
|
|
203
|
|
—
|
|
|
1,866
|
|
6
|
|
||||||
CLOs
|
3,456
|
|
189
|
|
|
554
|
|
41
|
|
|
4,010
|
|
230
|
|
||||||
Commercial paper/CDs
|
1,225
|
|
2
|
|
|
—
|
|
—
|
|
|
1,225
|
|
2
|
|
||||||
Foreign government agencies
|
942
|
|
3
|
|
|
50
|
|
—
|
|
|
992
|
|
3
|
|
||||||
Non-agency commercial MBS
|
1,050
|
|
60
|
|
|
37
|
|
3
|
|
|
1,087
|
|
63
|
|
||||||
Other ABS
|
1,283
|
|
38
|
|
|
193
|
|
5
|
|
|
1,476
|
|
43
|
|
||||||
U.S. government agencies
|
73
|
|
2
|
|
|
—
|
|
—
|
|
|
73
|
|
2
|
|
||||||
Non-agency RMBS (b)
|
737
|
|
27
|
|
|
96
|
|
12
|
|
|
833
|
|
39
|
|
||||||
State and political subdivisions
|
37
|
|
2
|
|
|
15
|
|
—
|
|
|
52
|
|
2
|
|
||||||
Corporate bonds
|
232
|
|
2
|
|
|
—
|
|
—
|
|
|
232
|
|
2
|
|
||||||
Total securities available-for-sale (c)
|
$
|
23,073
|
|
$
|
440
|
|
|
$
|
8,998
|
|
$
|
236
|
|
|
$
|
32,071
|
|
$
|
676
|
|
(a)
|
Includes $3.9 billion of securities with an unrealized loss of greater than $1 million.
|
(b)
|
Includes $97 million of securities with an unrealized loss of $7 million for less than 12 months and $1 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.
|
(c)
|
Includes gross unrealized losses of $59 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.
|
Notes to Consolidated Financial Statements (continued)
|
|
Temporarily impaired securities at Dec. 31, 2019
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||
(in millions)
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||||||
Agency RMBS
|
$
|
8,373
|
|
$
|
33
|
|
|
$
|
5,912
|
|
$
|
110
|
|
|
$
|
14,285
|
|
$
|
143
|
|
U.S. Treasury
|
1,976
|
|
16
|
|
|
766
|
|
4
|
|
|
2,742
|
|
20
|
|
||||||
Sovereign debt/sovereign guaranteed
|
4,045
|
|
10
|
|
|
225
|
|
1
|
|
|
4,270
|
|
11
|
|
||||||
Agency commercial MBS
|
1,960
|
|
12
|
|
|
775
|
|
5
|
|
|
2,735
|
|
17
|
|
||||||
Foreign covered bonds
|
1,009
|
|
4
|
|
|
690
|
|
3
|
|
|
1,699
|
|
7
|
|
||||||
CLOs
|
1,066
|
|
2
|
|
|
1,499
|
|
14
|
|
|
2,565
|
|
16
|
|
||||||
Supranational
|
1,336
|
|
6
|
|
|
360
|
|
—
|
|
|
1,696
|
|
6
|
|
||||||
Foreign government agencies
|
1,706
|
|
2
|
|
|
47
|
|
—
|
|
|
1,753
|
|
2
|
|
||||||
Non-agency commercial MBS
|
525
|
|
2
|
|
|
45
|
|
—
|
|
|
570
|
|
2
|
|
||||||
Other ABS
|
456
|
|
3
|
|
|
305
|
|
2
|
|
|
761
|
|
5
|
|
||||||
U.S. government agencies
|
377
|
|
2
|
|
|
—
|
|
—
|
|
|
377
|
|
2
|
|
||||||
Non-agency RMBS (a)
|
101
|
|
—
|
|
|
113
|
|
7
|
|
|
214
|
|
7
|
|
||||||
State and political subdivisions
|
—
|
|
—
|
|
|
16
|
|
—
|
|
|
16
|
|
—
|
|
||||||
Corporate bonds
|
82
|
|
—
|
|
|
21
|
|
—
|
|
|
103
|
|
—
|
|
||||||
Total securities available-for-sale (b)
|
$
|
23,012
|
|
$
|
92
|
|
|
$
|
10,774
|
|
$
|
146
|
|
|
$
|
33,786
|
|
$
|
238
|
|
(a)
|
Includes $2 million of securities with an unrealized loss of less than $1 million for less than 12 months and $2 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.
|
(b)
|
Includes gross unrealized losses of $65 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.
|
Held-to-maturity securities portfolio at March 31, 2020 (a)
|
|
|
|
Ratings (b)
|
||||||||||||||||
|
|
|
|
|
|
|
|
BB+
and lower |
|
|
||||||||||
(dollars in millions)
|
Amortized
cost |
|
|
Unrealized gain (loss)
|
|
|
AAA/
AA- |
A+/
A- |
BBB+/
BBB- |
A1+/A1
|
Not
rated |
|||||||||
Agency RMBS
|
$
|
29,518
|
|
|
$
|
869
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S. Treasury
|
2,937
|
|
|
121
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Agency commercial MBS
|
1,868
|
|
|
84
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
U.S. government agencies
|
1,244
|
|
|
4
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Sovereign debt/sovereign guaranteed (c)
|
919
|
|
|
37
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Commercial paper/CDs
|
651
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Foreign covered bonds (d)
|
77
|
|
|
—
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Non-agency RMBS
|
75
|
|
|
(2
|
)
|
|
42
|
|
43
|
|
3
|
|
12
|
|
—
|
|
—
|
|
||
State and political subdivisions
|
16
|
|
|
—
|
|
|
7
|
|
2
|
|
6
|
|
—
|
|
—
|
|
85
|
|
||
Total held-to-maturity securities
|
$
|
37,305
|
|
|
$
|
1,113
|
|
|
98
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
2
|
%
|
—
|
%
|
(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. See Note 2 for additional information.
|
(b)
|
Represents ratings by Standard & Poor’s (“S&P”) or the equivalent.
|
(c)
|
Primarily consists of exposure to France, UK and Germany.
|
(d)
|
Primarily consists of exposure to Canada.
|
Notes to Consolidated Financial Statements (continued)
|
|
Maturity distribution and yields on securities at March 31, 2020
|
U.S. Treasury
|
|
U.S. government
agencies
|
|
State and political
subdivisions
|
|
Other bonds, notes and debentures
|
|
Mortgage/
asset-backed
|
|
|
||||||||||||||||||||||
(dollars in millions)
|
Amount
|
|
Yield (a)
|
|
|
Amount
|
|
Yield (a)
|
|
|
Amount
|
|
Yield (a)
|
|
|
Amount
|
|
Yield (a)
|
|
|
Amount
|
|
Yield (a)
|
|
|
Total
|
|
||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
1,353
|
|
2.58
|
%
|
|
$
|
26
|
|
2.46
|
%
|
|
$
|
165
|
|
2.93
|
%
|
|
$
|
11,377
|
|
1.20
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
12,921
|
|
Over 1 through 5 years
|
12,422
|
|
1.53
|
|
|
474
|
|
1.73
|
|
|
719
|
|
3.29
|
|
|
14,763
|
|
0.76
|
|
|
—
|
|
—
|
|
|
28,378
|
|
||||||
Over 5 through 10 years
|
6,009
|
|
1.69
|
|
|
1,594
|
|
2.70
|
|
|
88
|
|
2.58
|
|
|
2,601
|
|
0.65
|
|
|
—
|
|
—
|
|
|
10,292
|
|
||||||
Over 10 years
|
3,297
|
|
3.11
|
|
|
119
|
|
2.06
|
|
|
13
|
|
2.32
|
|
|
186
|
|
1.67
|
|
|
—
|
|
—
|
|
|
3,615
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
40,444
|
|
2.50
|
|
|
40,444
|
|
||||||
Asset-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
6,318
|
|
2.70
|
|
|
6,318
|
|
||||||
Total
|
$
|
23,081
|
|
1.86
|
%
|
|
$
|
2,213
|
|
2.46
|
%
|
|
$
|
985
|
|
3.15
|
%
|
|
$
|
28,927
|
|
0.93
|
%
|
|
$
|
46,762
|
|
2.53
|
%
|
|
$
|
101,968
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
758
|
|
1.53
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
758
|
|
Over 1 through 5 years
|
2,937
|
|
1.98
|
|
|
603
|
|
1.86
|
|
|
3
|
|
5.68
|
|
|
703
|
|
0.68
|
|
|
—
|
|
—
|
|
|
4,246
|
|
||||||
Over 5 through 10 years
|
—
|
|
—
|
|
|
259
|
|
2.30
|
|
|
—
|
|
—
|
|
|
186
|
|
0.69
|
|
|
—
|
|
—
|
|
|
445
|
|
||||||
Over 10 years
|
—
|
|
—
|
|
|
382
|
|
2.43
|
|
|
13
|
|
4.76
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
395
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
31,461
|
|
2.88
|
|
|
31,461
|
|
||||||
Total
|
$
|
2,937
|
|
1.98
|
%
|
|
$
|
1,244
|
|
2.12
|
%
|
|
$
|
16
|
|
4.92
|
%
|
|
$
|
1,647
|
|
1.06
|
%
|
|
$
|
31,461
|
|
2.88
|
%
|
|
$
|
37,305
|
|
(a)
|
Yields are based upon the amortized cost of securities.
|
Notes to Consolidated Financial Statements (continued)
|
|
Loans
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
(in millions)
|
||||||
Domestic:
|
|
|
||||
Commercial
|
$
|
3,010
|
|
$
|
1,442
|
|
Commercial real estate
|
6,429
|
|
5,575
|
|
||
Financial institutions
|
6,231
|
|
4,852
|
|
||
Lease financings
|
472
|
|
537
|
|
||
Wealth management loans and mortgages
|
16,128
|
|
16,050
|
|
||
Other residential mortgages
|
472
|
|
494
|
|
||
Overdrafts
|
1,851
|
|
524
|
|
||
Other
|
1,168
|
|
1,167
|
|
||
Margin loans
|
11,733
|
|
11,907
|
|
||
Total domestic
|
47,494
|
|
42,548
|
|
||
Foreign:
|
|
|
||||
Commercial
|
425
|
|
347
|
|
||
Commercial real estate
|
22
|
|
7
|
|
||
Financial institutions
|
7,985
|
|
7,626
|
|
||
Lease financings
|
582
|
|
576
|
|
||
Wealth management loans and mortgages
|
131
|
|
140
|
|
||
Other (primarily overdrafts)
|
4,347
|
|
2,230
|
|
||
Margin loans
|
1,382
|
|
1,479
|
|
||
Total foreign
|
14,874
|
|
12,405
|
|
||
Total loans (a)
|
$
|
62,368
|
|
$
|
54,953
|
|
(a)
|
Net of unearned income of $301 million at March 31, 2020 and $313 million at Dec. 31, 2019 primarily related to domestic and foreign lease financings.
|
Notes to Consolidated Financial Statements (continued)
|
|
Allowance for credit losses activity for the quarter ended March 31, 2020
|
Wealth management loans and mortgages
|
|
|
Other
residential
mortgages
|
|
|
|
|
||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
Foreign
|
|
(a)
|
Total
|
|
|||||||||||||
Balance at Dec. 31, 2019
|
$
|
60
|
|
$
|
76
|
|
$
|
20
|
|
$
|
3
|
|
$
|
20
|
|
|
$
|
13
|
|
$
|
24
|
|
|
$
|
216
|
|
Impact of adopting ASU 2016-13
|
(43
|
)
|
14
|
|
(6
|
)
|
—
|
|
(12
|
)
|
|
2
|
|
(24
|
)
|
|
(69
|
)
|
||||||||
Balance at Jan. 1, 2020
|
17
|
|
90
|
|
14
|
|
3
|
|
8
|
|
|
15
|
|
—
|
|
|
147
|
|
||||||||
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
Net (charge-offs) recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
Provision
|
9
|
|
118
|
|
4
|
|
10
|
|
1
|
|
|
(1
|
)
|
—
|
|
|
141
|
|
||||||||
Ending balance (b)
|
$
|
26
|
|
$
|
208
|
|
$
|
18
|
|
$
|
13
|
|
$
|
9
|
|
|
$
|
14
|
|
$
|
—
|
|
|
$
|
288
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loan losses
|
$
|
13
|
|
$
|
83
|
|
$
|
10
|
|
$
|
13
|
|
$
|
7
|
|
|
$
|
14
|
|
$
|
—
|
|
|
$
|
140
|
|
Lending-related commitments
|
13
|
|
125
|
|
8
|
|
—
|
|
2
|
|
|
—
|
|
—
|
|
|
148
|
|
||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
18
|
|
(c)
|
$
|
—
|
|
$
|
—
|
|
|
$
|
18
|
|
Allowance for loan losses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
(a)
|
The allowance related to the foreign exposure has been reclassified to financial institutions ($10 million), commercial ($10 million) and lease financings ($4 million).
|
(b)
|
Includes $12 million of allowance for credit losses related to foreign loans, primarily financial institutions.
|
(c)
|
Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.
|
Allowance for credit losses activity for the quarter ended Dec. 31, 2019
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
61
|
|
$
|
77
|
|
$
|
21
|
|
$
|
3
|
|
$
|
20
|
|
$
|
14
|
|
$
|
—
|
|
|
$
|
28
|
|
$
|
224
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net (charge-offs) recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Provision
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
(4
|
)
|
(8
|
)
|
|||||||||
Ending balance
|
$
|
60
|
|
$
|
76
|
|
$
|
20
|
|
$
|
3
|
|
$
|
20
|
|
$
|
13
|
|
$
|
—
|
|
|
$
|
24
|
|
$
|
216
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
11
|
|
$
|
57
|
|
$
|
5
|
|
$
|
3
|
|
$
|
18
|
|
$
|
13
|
|
$
|
—
|
|
|
$
|
15
|
|
$
|
122
|
|
Lending-related commitments
|
49
|
|
19
|
|
15
|
|
—
|
|
2
|
|
—
|
|
—
|
|
|
9
|
|
94
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
15
|
|
Allowance for loan losses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,442
|
|
$
|
5,575
|
|
$
|
4,852
|
|
$
|
537
|
|
$
|
16,035
|
|
$
|
494
|
|
$
|
13,598
|
|
(a)
|
$
|
12,405
|
|
$
|
54,938
|
|
Allowance for loan losses
|
11
|
|
57
|
|
5
|
|
3
|
|
18
|
|
13
|
|
—
|
|
|
15
|
|
122
|
|
(a)
|
Includes $524 million of domestic overdrafts, $11,907 million of margin loans and $1,167 million of other loans at Dec. 31, 2019.
|
Notes to Consolidated Financial Statements (continued)
|
|
Allowance for credit losses activity for the quarter ended March 31, 2019
|
Wealth management loans and mortgages
|
|
Other
residential
mortgages
|
|
All
other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
81
|
|
$
|
75
|
|
$
|
22
|
|
$
|
5
|
|
$
|
21
|
|
$
|
16
|
|
$
|
—
|
|
|
$
|
32
|
|
$
|
252
|
|
Charge-offs
|
(11
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(11
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Net recoveries
|
(11
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(11
|
)
|
|||||||||
Provision
|
12
|
|
(1
|
)
|
1
|
|
(1
|
)
|
—
|
|
(1
|
)
|
—
|
|
|
(3
|
)
|
7
|
|
|||||||||
Ending balance
|
$
|
82
|
|
$
|
74
|
|
$
|
23
|
|
$
|
4
|
|
$
|
21
|
|
$
|
15
|
|
$
|
—
|
|
|
$
|
29
|
|
$
|
248
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
24
|
|
$
|
56
|
|
$
|
10
|
|
$
|
4
|
|
$
|
18
|
|
$
|
15
|
|
$
|
—
|
|
|
$
|
19
|
|
$
|
146
|
|
Lending-related commitments
|
58
|
|
18
|
|
13
|
|
—
|
|
3
|
|
—
|
|
—
|
|
|
10
|
|
102
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
96
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
100
|
|
Allowance for loan losses
|
10
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
10
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,626
|
|
$
|
4,921
|
|
$
|
4,652
|
|
$
|
653
|
|
$
|
15,724
|
|
$
|
574
|
|
$
|
13,913
|
|
(a)
|
$
|
11,324
|
|
$
|
53,387
|
|
Allowance for loan losses
|
14
|
|
56
|
|
10
|
|
4
|
|
18
|
|
15
|
|
—
|
|
|
19
|
|
136
|
|
(a)
|
Includes $654 million of domestic overdrafts, $12,107 million of margin loans and $1,152 million of other loans at March 31, 2019.
|
Nonperforming assets
|
March 31, 2020
|
Dec. 31, 2019
|
|
|||||||||
|
Recorded investment
|
|||||||||||
|
With an
allowance
|
|
Without an allowance
|
|
|
|||||||
(in millions)
|
Total
|
|
||||||||||
Nonperforming loans:
|
|
|
|
|
||||||||
Other residential mortgages
|
$
|
60
|
|
$
|
—
|
|
$
|
60
|
|
$
|
62
|
|
Wealth management loans and mortgages
|
9
|
|
18
|
|
27
|
|
24
|
|
||||
Total nonperforming loans
|
69
|
|
18
|
|
87
|
|
86
|
|
||||
Other assets owned
|
1
|
|
—
|
|
1
|
|
3
|
|
||||
Total nonperforming assets
|
$
|
70
|
|
$
|
18
|
|
$
|
88
|
|
$
|
89
|
|
Past due loans and still accruing interest
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||||||||
|
Days past due
|
Total
past due
|
|
|
Days past due
|
Total
past due
|
|
||||||||||||||||||
(in millions)
|
30-59
|
|
60-89
|
|
≥90
|
|
30-59
|
|
60-89
|
|
≥90
|
|
|||||||||||||
Financial institutions
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
1
|
|
$
|
30
|
|
$
|
—
|
|
$
|
31
|
|
Wealth management loans and mortgages
|
77
|
|
1
|
|
—
|
|
78
|
|
|
22
|
|
5
|
|
—
|
|
27
|
|
||||||||
Commercial real estate
|
—
|
|
—
|
|
—
|
|
—
|
|
|
6
|
|
12
|
|
—
|
|
18
|
|
||||||||
Other residential mortgages
|
9
|
|
1
|
|
—
|
|
10
|
|
|
8
|
|
3
|
|
—
|
|
11
|
|
||||||||
Total past due loans
|
$
|
86
|
|
$
|
2
|
|
$
|
—
|
|
$
|
88
|
|
|
$
|
37
|
|
$
|
50
|
|
$
|
—
|
|
$
|
87
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Credit profile of the loan portfolio
|
|
|
|
March 31, 2020
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving loans
|
|
|
|
|
|||||||||||||
|
Originated, at amortized cost
|
Amortized cost
|
|
Converted to term loans - Amortized cost
|
|
|
|
Accrued
interest receivable |
|
|||||||||||||||||||||
(in millions)
|
1Q20
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior to 2016
|
|
Total (a)
|
|
||||||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Investment grade
|
$
|
20
|
|
$
|
286
|
|
$
|
107
|
|
$
|
600
|
|
$
|
57
|
|
$
|
—
|
|
$
|
1,994
|
|
$
|
—
|
|
$
|
3,064
|
|
|
||
Non-investment grade
|
41
|
|
72
|
|
12
|
|
—
|
|
6
|
|
—
|
|
240
|
|
—
|
|
371
|
|
|
|||||||||||
Total commercial
|
61
|
|
358
|
|
119
|
|
600
|
|
63
|
|
—
|
|
2,234
|
|
—
|
|
3,435
|
|
$
|
4
|
|
|||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Investment grade
|
414
|
|
1,412
|
|
1,047
|
|
624
|
|
636
|
|
640
|
|
586
|
|
—
|
|
$
|
5,359
|
|
|
||||||||||
Non-investment grade
|
15
|
|
136
|
|
213
|
|
106
|
|
313
|
|
48
|
|
232
|
|
29
|
|
1,092
|
|
|
|||||||||||
Total commercial real estate
|
429
|
|
1,548
|
|
1,260
|
|
730
|
|
949
|
|
688
|
|
818
|
|
29
|
|
6,451
|
|
11
|
|
||||||||||
Financial institutions:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Investment grade
|
49
|
|
270
|
|
133
|
|
125
|
|
14
|
|
189
|
|
11,429
|
|
—
|
|
$
|
12,209
|
|
|
||||||||||
Non-investment grade
|
15
|
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,984
|
|
—
|
|
2,007
|
|
|
|||||||||||
Total financial institutions
|
64
|
|
278
|
|
133
|
|
125
|
|
14
|
|
189
|
|
13,413
|
|
—
|
|
14,216
|
|
26
|
|
||||||||||
Wealth management loans and mortgages:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Investment grade
|
3
|
|
83
|
|
12
|
|
178
|
|
58
|
|
94
|
|
7,049
|
|
—
|
|
$
|
7,477
|
|
|
||||||||||
Non-investment grade
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
132
|
|
—
|
|
132
|
|
|
|||||||||||
Wealth management mortgages
|
208
|
|
1,139
|
|
752
|
|
1,438
|
|
1,833
|
|
3,239
|
|
41
|
|
—
|
|
8,650
|
|
|
|||||||||||
Total wealth management loans and mortgages
|
211
|
|
1,222
|
|
764
|
|
1,616
|
|
1,891
|
|
3,333
|
|
7,222
|
|
—
|
|
16,259
|
|
38
|
|
||||||||||
Lease financings
|
—
|
|
21
|
|
23
|
|
72
|
|
34
|
|
904
|
|
—
|
|
—
|
|
1,054
|
|
—
|
|
||||||||||
Other residential mortgages
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
472
|
|
—
|
|
—
|
|
472
|
|
2
|
|
||||||||||
Other loans
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,214
|
|
—
|
|
1,219
|
|
1
|
|
||||||||||
Margin loans
|
2,260
|
|
1,300
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,555
|
|
—
|
|
13,115
|
|
12
|
|
||||||||||
Total loans
|
$
|
3,030
|
|
$
|
4,727
|
|
$
|
2,299
|
|
$
|
3,143
|
|
$
|
2,951
|
|
$
|
5,586
|
|
$
|
34,456
|
|
$
|
29
|
|
$
|
56,221
|
|
$
|
94
|
|
(a)
|
Excludes overdrafts of $6,147 million. Overdrafts occur on a daily basis primarily in the custody and securities clearance business and are generally repaid within two business days.
|
Notes to Consolidated Financial Statements (continued)
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Goodwill by business
(in millions)
|
Investment
Services |
|
Investment
Management |
|
Other
|
|
Consolidated
|
|
||||
Balance at Dec. 31, 2019
|
$
|
8,332
|
|
$
|
9,007
|
|
$
|
47
|
|
$
|
17,386
|
|
Foreign currency translation
|
(43
|
)
|
(103
|
)
|
—
|
|
(146
|
)
|
||||
Other (a)
|
47
|
|
—
|
|
(47
|
)
|
—
|
|
||||
Balance at March 31, 2020
|
$
|
8,336
|
|
$
|
8,904
|
|
$
|
—
|
|
$
|
17,240
|
|
(a)
|
Reflects the transfer of goodwill associated with the Capital Markets business.
|
Goodwill by business
(in millions)
|
Investment
Services |
|
Investment
Management |
|
Other
|
|
Consolidated
|
|
||||
Balance at Dec. 31, 2018
|
$
|
8,333
|
|
$
|
8,970
|
|
$
|
47
|
|
$
|
17,350
|
|
Foreign currency translation
|
(5
|
)
|
22
|
|
—
|
|
17
|
|
||||
Balance at March 31, 2019
|
$
|
8,328
|
|
$
|
8,992
|
|
$
|
47
|
|
$
|
17,367
|
|
Intangible assets – net carrying amount by business
(in millions) |
Investment
Services |
|
Investment
Management |
|
Other
|
|
Consolidated
|
|
||||
Balance at Dec. 31, 2019
|
$
|
678
|
|
$
|
1,580
|
|
$
|
849
|
|
$
|
3,107
|
|
Amortization
|
(18
|
)
|
(8
|
)
|
—
|
|
(26
|
)
|
||||
Foreign currency translation
|
(1
|
)
|
(10
|
)
|
—
|
|
(11
|
)
|
||||
Balance at March 31, 2020
|
$
|
659
|
|
$
|
1,562
|
|
$
|
849
|
|
$
|
3,070
|
|
Intangible assets – net carrying amount by business
(in millions) |
Investment
Services |
|
Investment
Management |
|
Other
|
|
Consolidated
|
|
||||
Balance at Dec. 31, 2018
|
$
|
758
|
|
$
|
1,613
|
|
$
|
849
|
|
$
|
3,220
|
|
Amortization
|
(20
|
)
|
(9
|
)
|
—
|
|
(29
|
)
|
||||
Foreign currency translation
|
(1
|
)
|
3
|
|
—
|
|
2
|
|
||||
Balance at March 31, 2019
|
$
|
737
|
|
$
|
1,607
|
|
$
|
849
|
|
$
|
3,193
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Intangible assets
|
March 31, 2020
|
|
Dec. 31, 2019
|
|||||||||||||||||
(in millions)
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
carrying
amount
|
|
Remaining
weighted-
average
amortization
period
|
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net
carrying
amount
|
|
||||||
Subject to amortization: (a)
|
|
|
|
|
|
|
|
|
||||||||||||
Customer contracts—Investment Services
|
$
|
1,515
|
|
$
|
(1,227
|
)
|
$
|
288
|
|
10 years
|
|
$
|
1,520
|
|
$
|
(1,214
|
)
|
$
|
306
|
|
Customer relationships—Investment Management
|
709
|
|
(548
|
)
|
161
|
|
11 years
|
|
712
|
|
(544
|
)
|
168
|
|
||||||
Other
|
64
|
|
(18
|
)
|
46
|
|
14 years
|
|
64
|
|
(16
|
)
|
48
|
|
||||||
Total subject to amortization
|
2,288
|
|
(1,793
|
)
|
495
|
|
10 years
|
|
2,296
|
|
(1,774
|
)
|
522
|
|
||||||
Not subject to amortization: (b)
|
|
|
|
|
|
|
|
|
||||||||||||
Tradenames
|
1,291
|
|
N/A
|
|
1,291
|
|
N/A
|
|
1,293
|
|
N/A
|
|
1,293
|
|
||||||
Customer relationships
|
1,284
|
|
N/A
|
|
1,284
|
|
N/A
|
|
1,292
|
|
N/A
|
|
1,292
|
|
||||||
Total not subject to amortization
|
2,575
|
|
N/A
|
|
2,575
|
|
N/A
|
|
2,585
|
|
N/A
|
|
2,585
|
|
||||||
Total intangible assets
|
$
|
4,863
|
|
$
|
(1,793
|
)
|
$
|
3,070
|
|
N/A
|
|
$
|
4,881
|
|
$
|
(1,774
|
)
|
$
|
3,107
|
|
(a)
|
Excludes fully amortized intangible assets.
|
(b)
|
Intangible assets not subject to amortization have an indefinite life.
|
For the year ended
Dec. 31, |
Estimated amortization expense
(in millions)
|
|
||
2020
|
|
$
|
104
|
|
2021
|
|
81
|
|
|
2022
|
|
63
|
|
|
2023
|
|
52
|
|
|
2024
|
|
45
|
|
Other assets
|
March 31, 2020
|
|
|
Dec. 31, 2019
|
|
||
(in millions)
|
|||||||
Fails to deliver
|
$
|
8,200
|
|
(a)
|
$
|
1,671
|
|
Corporate/bank-owned life insurance
|
5,240
|
|
|
5,219
|
|
||
Accounts receivable
|
4,649
|
|
|
3,802
|
|
||
Software
|
1,678
|
|
|
1,590
|
|
||
Prepaid pension assets
|
1,502
|
|
|
1,464
|
|
||
Renewable energy investments
|
1,119
|
|
|
1,144
|
|
||
Equity in a joint venture and other investments
|
1,091
|
|
|
1,102
|
|
||
Qualified affordable housing project investments
|
993
|
|
|
1,024
|
|
||
Prepaid expense
|
515
|
|
|
491
|
|
||
Federal Reserve Bank stock
|
466
|
|
|
466
|
|
||
Fair value of hedging derivatives
|
187
|
|
|
21
|
|
||
Seed capital
|
141
|
|
|
184
|
|
||
Income taxes receivable
|
47
|
|
|
388
|
|
||
Other (b)
|
1,618
|
|
|
1,655
|
|
||
Total other assets
|
$
|
27,446
|
|
|
$
|
20,221
|
|
(a)
|
The increase at March 31, 2020 primarily reflects higher trade volumes in the current macroeconomic environment.
|
(b)
|
At March 31, 2020 and Dec. 31, 2019, other assets include $20 million and $22 million, respectively, of Federal Home Loan Bank stock, at cost.
|
Notes to Consolidated Financial Statements (continued)
|
|
Non-readily marketable equity securities
|
|
Life-to-date
|
|
|||||||||
(in millions)
|
1Q20
|
4Q19
|
1Q19
|
|||||||||
Upward adjustments
|
$
|
4
|
|
$
|
1
|
|
$
|
—
|
|
$
|
36
|
|
Downward adjustments
|
—
|
|
(2
|
)
|
—
|
|
(4
|
)
|
||||
Net adjustments
|
$
|
4
|
|
$
|
(1
|
)
|
$
|
—
|
|
$
|
32
|
|
(a)
|
Primarily includes leveraged loans and structured credit funds, which are generally not redeemable. Distributions from such investments will be received as the underlying investments in the funds, which have a life of six years, are liquidated.
|
(b)
|
Private equity investments include Volcker Rule-compliant investments in SBICs that invest in various sectors of the economy. Private equity investments do not have redemption rights. Distributions from such investments will be received as the underlying investments in the private equity investments, which have a life of 10 years, are liquidated.
|
(c)
|
Primarily includes investments in funds that relate to deferred compensation arrangements with employees. Investments in funds can be redeemed on a quarterly basis with redemption notice periods of up to 95 days.
|
Notes to Consolidated Financial Statements (continued)
|
|
(a)
|
Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting.
|
(b)
|
Prior periods have been restated to reflect the reclassifications. See Note 19 for additional information.
|
(c)
|
Primarily includes foreign exchange and other trading revenue, financing-related fees, asset servicing fees, net securities gains (losses) and investment and other income (loss), all of which are accounted for using other accounting guidance.
|
(d)
|
The Investment Management business includes (loss) income from consolidated investment management funds, net of noncontrolling interests, of $(20) million in the first quarter of 2020, $8 million in the fourth quarter of 2019 and $16 million in the first quarter of 2019.
|
Notes to Consolidated Financial Statements (continued)
|
|
Net interest revenue
|
Quarter ended
|
||||||||
(in millions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|
|||
Interest revenue
|
|
|
|
||||||
Deposits with the Federal Reserve and other central banks
|
$
|
80
|
|
$
|
94
|
|
$
|
139
|
|
Deposits with banks
|
58
|
|
65
|
|
63
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
396
|
|
452
|
|
474
|
|
|||
Margin loans
|
87
|
|
96
|
|
135
|
|
|||
Non-margin loans
|
309
|
|
328
|
|
355
|
|
|||
Securities:
|
|
|
|
||||||
Taxable
|
594
|
|
639
|
|
706
|
|
|||
Exempt from federal income taxes
|
6
|
|
7
|
|
12
|
|
|||
Total securities
|
600
|
|
646
|
|
718
|
|
|||
Trading securities
|
40
|
|
40
|
|
36
|
|
|||
Total interest revenue
|
1,570
|
|
1,721
|
|
1,920
|
|
|||
Interest expense
|
|
|
|
||||||
Deposits
|
240
|
|
334
|
|
391
|
|
|||
Federal funds purchased and securities sold under repurchase agreements
|
275
|
|
291
|
|
331
|
|
|||
Trading liabilities
|
7
|
|
9
|
|
7
|
|
|||
Other borrowed funds
|
4
|
|
5
|
|
24
|
|
|||
Commercial paper
|
6
|
|
7
|
|
8
|
|
|||
Customer payables
|
30
|
|
40
|
|
70
|
|
|||
Long-term debt
|
194
|
|
220
|
|
248
|
|
|||
Total interest expense
|
756
|
|
906
|
|
1,079
|
|
|||
Net interest revenue
|
814
|
|
815
|
|
841
|
|
|||
Provision for credit losses
|
169
|
|
(8
|
)
|
7
|
|
|||
Net interest revenue after provision for credit losses
|
$
|
645
|
|
$
|
823
|
|
$
|
834
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Net periodic benefit (credit) cost
|
Quarter ended
|
||||||||||||||||||
March 31, 2020
|
|
March 31, 2019
|
|||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
||||||
Service cost
|
$
|
—
|
|
$
|
3
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
3
|
|
$
|
—
|
|
Interest cost
|
39
|
|
7
|
|
1
|
|
|
44
|
|
8
|
|
2
|
|
||||||
Expected return on assets
|
(80
|
)
|
(10
|
)
|
(1
|
)
|
|
(84
|
)
|
(11
|
)
|
(2
|
)
|
||||||
Other
|
22
|
|
3
|
|
(1
|
)
|
|
13
|
|
—
|
|
(1
|
)
|
||||||
Net periodic benefit (credit) cost
|
$
|
(19
|
)
|
$
|
3
|
|
$
|
(1
|
)
|
|
$
|
(27
|
)
|
$
|
—
|
|
$
|
(1
|
)
|
Notes to Consolidated Financial Statements (continued)
|
|
Consolidated investments
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||||
(in millions)
|
Investment
Management
funds
|
Securitization
|
|
Total
consolidated
investments
|
|
|
Investment
Management
funds
|
Securitization
|
|
Total
consolidated
investments
|
|
||||||||||
Trading assets
|
$
|
215
|
|
|
$
|
400
|
|
$
|
615
|
|
|
$
|
229
|
|
|
$
|
400
|
|
$
|
629
|
|
Other assets
|
14
|
|
|
—
|
|
14
|
|
|
16
|
|
|
—
|
|
16
|
|
||||||
Total assets
|
$
|
229
|
|
(a)
|
$
|
400
|
|
$
|
629
|
|
|
$
|
245
|
|
(b)
|
$
|
400
|
|
$
|
645
|
|
Other liabilities
|
$
|
1
|
|
|
$
|
397
|
|
$
|
398
|
|
|
$
|
1
|
|
|
$
|
387
|
|
$
|
388
|
|
Total liabilities
|
$
|
1
|
|
(a)
|
$
|
397
|
|
$
|
398
|
|
|
$
|
1
|
|
(b)
|
$
|
387
|
|
$
|
388
|
|
Nonredeemable noncontrolling interests
|
$
|
94
|
|
(a)
|
$
|
—
|
|
$
|
94
|
|
|
$
|
102
|
|
(b)
|
$
|
—
|
|
$
|
102
|
|
(a)
|
Includes voting model entities (“VMEs”) with assets of $44 million, liabilities of $1 million and nonredeemable noncontrolling interests of less than $1 million.
|
(b)
|
Includes VMEs with assets of $50 million, liabilities of $1 million and nonredeemable noncontrolling interests of $1 million.
|
Non-consolidated VIEs
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
|
Assets
|
|
Liabilities
|
|
Maximum loss exposure
|
|
||||||
Securities - Available-for-sale (a)
|
$
|
180
|
|
$
|
—
|
|
$
|
180
|
|
|
$
|
208
|
|
$
|
—
|
|
$
|
208
|
|
Other
|
2,287
|
|
390
|
|
2,677
|
|
|
2,400
|
|
422
|
|
2,822
|
|
(a)
|
Includes investments in the Company’s sponsored CLOs.
|
Preferred stock summary (a)
|
Total shares issued and outstanding
|
|
Carrying value (b)
|
|||||||||
|
|
(in millions)
|
||||||||||
|
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
|||
|
Per annum dividend rate
|
|||||||||||
Series A
|
Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%
|
5,001
|
|
5,001
|
|
|
$
|
500
|
|
$
|
500
|
|
Series C
|
5.2%
|
5,825
|
|
5,825
|
|
|
568
|
|
568
|
|
||
Series D
|
4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%
|
5,000
|
|
5,000
|
|
|
494
|
|
494
|
|
||
Series E
|
4.95% to and including June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42%
|
10,000
|
|
10,000
|
|
|
990
|
|
990
|
|
||
Series F
|
4.625% to and including Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131%
|
10,000
|
|
10,000
|
|
|
990
|
|
990
|
|
||
Total
|
35,826
|
|
35,826
|
|
|
$
|
3,542
|
|
$
|
3,542
|
|
(a)
|
All outstanding preferred stock is noncumulative perpetual preferred stock with a liquidation preference of $100,000 per share.
|
(b)
|
The carrying value of the Series C, Series D, Series E and Series F preferred stock is recorded net of issuance costs.
|
Notes to Consolidated Financial Statements (continued)
|
|
Preferred dividends paid
|
|
|
|
|
|
|
|||||||||||||||||||
(dollars in millions, except per share amounts)
|
Depositary shares
per share
|
|
|
|
1Q20
|
|
4Q19
|
|
1Q19
|
||||||||||||||||
|
|
Per share
|
|
Total
dividend |
|
|
Per share
|
|
Total
dividend |
|
|
Per share
|
|
Total
dividend |
|
||||||||||
Series A
|
|
100
|
|
(a)
|
|
$
|
1,011.11
|
|
$
|
5
|
|
|
$
|
1,011.11
|
|
$
|
5
|
|
|
$
|
1,000.00
|
|
$
|
5
|
|
Series C
|
|
4,000
|
|
|
|
1,300.00
|
|
8
|
|
|
1,300.00
|
|
8
|
|
|
1,300.00
|
|
8
|
|
||||||
Series D
|
|
100
|
|
|
|
N/A
|
|
—
|
|
|
2,250.00
|
|
11
|
|
|
N/A
|
|
—
|
|
||||||
Series E
|
|
100
|
|
|
|
N/A
|
|
—
|
|
|
2,475.00
|
|
25
|
|
|
N/A
|
|
—
|
|
||||||
Series F
|
|
100
|
|
|
|
2,312.50
|
|
23
|
|
|
N/A
|
|
—
|
|
|
2,312.50
|
|
23
|
|
||||||
Total
|
|
|
|
|
|
$
|
36
|
|
|
|
$
|
49
|
|
|
|
$
|
36
|
|
(a)
|
Represents Normal Preferred Capital Securities.
|
Components of other comprehensive income (loss)
|
Quarter ended
|
||||||||||||||||||||||||||||
March 31, 2020
|
|
Dec. 31, 2019
|
|
March 31, 2019
|
|||||||||||||||||||||||||
(in millions)
|
Pre-tax
amount |
|
Tax
(expense) benefit |
|
After-tax
amount |
|
|
Pre-tax
amount |
|
Tax
(expense) benefit |
|
After-tax
amount |
|
|
Pre-tax
amount |
|
Tax
(expense) benefit |
|
After-tax
amount |
|
|||||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign currency translation adjustments arising during the period (a)
|
$
|
(265
|
)
|
$
|
(104
|
)
|
$
|
(369
|
)
|
|
$
|
292
|
|
$
|
96
|
|
$
|
388
|
|
|
$
|
27
|
|
$
|
2
|
|
$
|
29
|
|
Total foreign currency translation
|
(265
|
)
|
(104
|
)
|
(369
|
)
|
|
292
|
|
96
|
|
388
|
|
|
27
|
|
2
|
|
29
|
|
|||||||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized gain (loss) arising during period
|
243
|
|
(60
|
)
|
183
|
|
|
(114
|
)
|
37
|
|
(77
|
)
|
|
322
|
|
(83
|
)
|
239
|
|
|||||||||
Reclassification adjustment (b)
|
(9
|
)
|
2
|
|
(7
|
)
|
|
25
|
|
(6
|
)
|
19
|
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|||||||||
Net unrealized gain (loss) on assets available-for-sale
|
234
|
|
(58
|
)
|
176
|
|
|
(89
|
)
|
31
|
|
(58
|
)
|
|
321
|
|
(83
|
)
|
238
|
|
|||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service cost arising during the period
|
—
|
|
—
|
|
—
|
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Net (loss) gain arising during the period
|
—
|
|
—
|
|
—
|
|
|
(110
|
)
|
32
|
|
(78
|
)
|
|
(11
|
)
|
2
|
|
(9
|
)
|
|||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b)
|
24
|
|
(6
|
)
|
18
|
|
|
14
|
|
(10
|
)
|
4
|
|
|
13
|
|
(3
|
)
|
10
|
|
|||||||||
Total defined benefit plans
|
24
|
|
(6
|
)
|
18
|
|
|
(97
|
)
|
22
|
|
(75
|
)
|
|
2
|
|
(1
|
)
|
1
|
|
|||||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized hedge (loss) gain arising during period
|
(13
|
)
|
3
|
|
(10
|
)
|
|
17
|
|
(5
|
)
|
12
|
|
|
6
|
|
(4
|
)
|
2
|
|
|||||||||
Reclassification of net loss (gain) to net income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest rate contracts - interest expense
|
—
|
|
—
|
|
—
|
|
|
(8
|
)
|
2
|
|
(6
|
)
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Foreign exchange (“FX”) contracts - staff expense
|
(1
|
)
|
—
|
|
(1
|
)
|
|
(2
|
)
|
—
|
|
(2
|
)
|
|
1
|
|
2
|
|
3
|
|
|||||||||
Total reclassifications to net income
|
(1
|
)
|
—
|
|
(1
|
)
|
|
(10
|
)
|
2
|
|
(8
|
)
|
|
1
|
|
2
|
|
3
|
|
|||||||||
Net unrealized (loss) gain on cash flow hedges
|
(14
|
)
|
3
|
|
(11
|
)
|
|
7
|
|
(3
|
)
|
4
|
|
|
7
|
|
(2
|
)
|
5
|
|
|||||||||
Total other comprehensive (loss) income
|
$
|
(21
|
)
|
$
|
(165
|
)
|
$
|
(186
|
)
|
|
$
|
113
|
|
$
|
146
|
|
$
|
259
|
|
|
$
|
357
|
|
$
|
(84
|
)
|
$
|
273
|
|
(a)
|
Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 for additional information.
|
(b)
|
The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement.
|
Notes to Consolidated Financial Statements (continued)
|
|
Assets measured at fair value on a recurring basis at March 31, 2020
|
Total carrying
value |
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting (a)
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
Agency RMBS
|
$
|
—
|
|
$
|
26,691
|
|
$
|
—
|
|
$
|
—
|
|
$
|
26,691
|
|
U.S. Treasury
|
23,081
|
|
—
|
|
—
|
|
—
|
|
23,081
|
|
|||||
Sovereign debt/sovereign guaranteed
|
7,070
|
|
5,840
|
|
—
|
|
—
|
|
12,910
|
|
|||||
Agency commercial MBS
|
—
|
|
9,805
|
|
—
|
|
—
|
|
9,805
|
|
|||||
Foreign covered bonds
|
—
|
|
5,272
|
|
—
|
|
—
|
|
5,272
|
|
|||||
Supranational
|
—
|
|
4,348
|
|
—
|
|
—
|
|
4,348
|
|
|||||
CLOs
|
—
|
|
4,098
|
|
—
|
|
—
|
|
4,098
|
|
|||||
Commercial paper/CDs
|
—
|
|
2,814
|
|
—
|
|
—
|
|
2,814
|
|
|||||
Foreign government agencies
|
—
|
|
2,764
|
|
—
|
|
—
|
|
2,764
|
|
|||||
Non-agency commercial MBS
|
—
|
|
2,473
|
|
—
|
|
—
|
|
2,473
|
|
|||||
Other ABS
|
—
|
|
2,220
|
|
—
|
|
—
|
|
2,220
|
|
|||||
U.S. government agencies
|
—
|
|
2,213
|
|
—
|
|
—
|
|
2,213
|
|
|||||
Non-agency RMBS (b)
|
—
|
|
1,475
|
|
—
|
|
—
|
|
1,475
|
|
|||||
State and political subdivisions
|
—
|
|
985
|
|
—
|
|
—
|
|
985
|
|
|||||
Corporate bonds
|
—
|
|
818
|
|
—
|
|
—
|
|
818
|
|
|||||
Other debt securities
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||
Total available-for-sale securities
|
30,151
|
|
71,817
|
|
—
|
|
—
|
|
101,968
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt instruments
|
1,812
|
|
3,179
|
|
—
|
|
—
|
|
4,991
|
|
|||||
Equity instruments (c)
|
2,231
|
|
—
|
|
—
|
|
—
|
|
2,231
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
8
|
|
6,035
|
|
—
|
|
(3,047
|
)
|
2,996
|
|
|||||
Foreign exchange
|
—
|
|
9,964
|
|
—
|
|
(7,272
|
)
|
2,692
|
|
|||||
Equity and other contracts
|
6
|
|
11
|
|
—
|
|
(9
|
)
|
8
|
|
|||||
Total derivative assets not designated as hedging
|
14
|
|
16,010
|
|
—
|
|
(10,328
|
)
|
5,696
|
|
|||||
Total trading assets
|
4,057
|
|
19,189
|
|
—
|
|
(10,328
|
)
|
12,918
|
|
|||||
Other assets:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Foreign exchange
|
—
|
|
187
|
|
—
|
|
—
|
|
187
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
187
|
|
—
|
|
—
|
|
187
|
|
|||||
Other assets (d)
|
46
|
|
136
|
|
—
|
|
—
|
|
182
|
|
|||||
Assets measured at NAV (d)
|
|
|
|
|
158
|
|
|||||||||
Subtotal assets of operations at fair value
|
34,254
|
|
91,329
|
|
—
|
|
(10,328
|
)
|
115,413
|
|
|||||
Percentage of assets of operations prior to netting
|
27
|
%
|
73
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds
|
188
|
|
41
|
|
—
|
|
—
|
|
229
|
|
|||||
Total assets
|
$
|
34,442
|
|
$
|
91,370
|
|
$
|
—
|
|
$
|
(10,328
|
)
|
$
|
115,642
|
|
Percentage of total assets prior to netting
|
27
|
%
|
73
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Liabilities measured at fair value on a recurring basis at March 31, 2020
|
Total carrying
value |
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting (a)
|
|
|||||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt instruments
|
$
|
1,101
|
|
$
|
143
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,244
|
|
Equity instruments
|
64
|
|
—
|
|
—
|
|
—
|
|
64
|
|
|||||
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
14
|
|
5,261
|
|
—
|
|
(3,479
|
)
|
1,796
|
|
|||||
Foreign exchange
|
—
|
|
11,854
|
|
—
|
|
(8,382
|
)
|
3,472
|
|
|||||
Equity and other contracts
|
1
|
|
51
|
|
—
|
|
(3
|
)
|
49
|
|
|||||
Total derivative liabilities not designated as hedging
|
15
|
|
17,166
|
|
—
|
|
(11,864
|
)
|
5,317
|
|
|||||
Total trading liabilities
|
1,180
|
|
17,309
|
|
—
|
|
(11,864
|
)
|
6,625
|
|
|||||
Long-term debt (c)
|
—
|
|
397
|
|
—
|
|
—
|
|
397
|
|
|||||
Other liabilities – derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
927
|
|
—
|
|
—
|
|
927
|
|
|||||
Foreign exchange
|
—
|
|
46
|
|
—
|
|
—
|
|
46
|
|
|||||
Total other liabilities – derivative liabilities designated as hedging
|
—
|
|
973
|
|
—
|
|
—
|
|
973
|
|
|||||
Subtotal liabilities of operations at fair value
|
1,180
|
|
18,679
|
|
—
|
|
(11,864
|
)
|
7,995
|
|
|||||
Percentage of liabilities of operations prior to netting
|
6
|
%
|
94
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||
Total liabilities
|
$
|
1,180
|
|
$
|
18,680
|
|
$
|
—
|
|
$
|
(11,864
|
)
|
$
|
7,996
|
|
Percentage of total liabilities prior to netting
|
6
|
%
|
94
|
%
|
—
|
%
|
|
|
(a)
|
ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.
|
(b)
|
Includes $535 million in Level 2 that was included in the former Grantor Trust.
|
(c)
|
Includes certain interests in securitizations.
|
(d)
|
Includes seed capital, private equity investments and other assets.
|
Notes to Consolidated Financial Statements (continued)
|
|
Assets measured at fair value on a recurring basis at Dec. 31, 2019
|
Total carrying
value
|
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting (a)
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
Agency RMBS
|
$
|
—
|
|
$
|
27,043
|
|
$
|
—
|
|
$
|
—
|
|
$
|
27,043
|
|
U.S. Treasury
|
15,431
|
|
—
|
|
—
|
|
—
|
|
15,431
|
|
|||||
Sovereign debt/sovereign guaranteed
|
7,784
|
|
4,862
|
|
—
|
|
—
|
|
12,646
|
|
|||||
Agency commercial MBS
|
—
|
|
9,417
|
|
—
|
|
—
|
|
9,417
|
|
|||||
Foreign covered bonds
|
—
|
|
4,197
|
|
—
|
|
—
|
|
4,197
|
|
|||||
CLOs
|
—
|
|
4,063
|
|
—
|
|
—
|
|
4,063
|
|
|||||
Supranational
|
—
|
|
3,709
|
|
—
|
|
—
|
|
3,709
|
|
|||||
Foreign government agencies
|
—
|
|
2,643
|
|
—
|
|
—
|
|
2,643
|
|
|||||
Non-agency commercial MBS
|
—
|
|
2,178
|
|
—
|
|
—
|
|
2,178
|
|
|||||
Other ABS
|
—
|
|
2,143
|
|
—
|
|
—
|
|
2,143
|
|
|||||
U.S. government agencies
|
—
|
|
1,949
|
|
—
|
|
—
|
|
1,949
|
|
|||||
Non-agency RMBS (b)
|
—
|
|
1,233
|
|
—
|
|
—
|
|
1,233
|
|
|||||
State and political subdivisions
|
—
|
|
1,044
|
|
—
|
|
—
|
|
1,044
|
|
|||||
Corporate bonds
|
—
|
|
853
|
|
—
|
|
—
|
|
853
|
|
|||||
Other debt securities
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||
Total available-for-sale securities
|
23,215
|
|
65,335
|
|
—
|
|
—
|
|
88,550
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt instruments
|
1,568
|
|
4,243
|
|
—
|
|
—
|
|
5,811
|
|
|||||
Equity instruments (c)
|
4,539
|
|
—
|
|
—
|
|
—
|
|
4,539
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
4
|
|
3,686
|
|
—
|
|
(1,792
|
)
|
1,898
|
|
|||||
Foreign exchange
|
—
|
|
5,331
|
|
—
|
|
(4,021
|
)
|
1,310
|
|
|||||
Equity and other contracts
|
—
|
|
19
|
|
—
|
|
(6
|
)
|
13
|
|
|||||
Total derivative assets not designated as hedging
|
4
|
|
9,036
|
|
—
|
|
(5,819
|
)
|
3,221
|
|
|||||
Total trading assets
|
6,111
|
|
13,279
|
|
—
|
|
(5,819
|
)
|
13,571
|
|
|||||
Other assets:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Foreign exchange
|
—
|
|
21
|
|
—
|
|
—
|
|
21
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
21
|
|
—
|
|
—
|
|
21
|
|
|||||
Other assets (d)
|
38
|
|
179
|
|
—
|
|
—
|
|
217
|
|
|||||
Assets measured at NAV (d)
|
|
|
|
|
181
|
|
|||||||||
Subtotal assets of operations at fair value
|
29,364
|
|
78,814
|
|
—
|
|
(5,819
|
)
|
102,540
|
|
|||||
Percentage of assets of operations prior to netting
|
27
|
%
|
73
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds
|
212
|
|
33
|
|
—
|
|
—
|
|
245
|
|
|||||
Total assets
|
$
|
29,576
|
|
$
|
78,847
|
|
$
|
—
|
|
$
|
(5,819
|
)
|
$
|
102,785
|
|
Percentage of total assets prior to netting
|
27
|
%
|
73
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Liabilities measured at fair value on a recurring basis at Dec. 31, 2019
|
Total carrying
value
|
|
|||||||||||||
(dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting (a)
|
|
|||||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt instruments
|
$
|
1,477
|
|
$
|
107
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,584
|
|
Equity instruments
|
73
|
|
—
|
|
—
|
|
—
|
|
73
|
|
|||||
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
6
|
|
3,244
|
|
—
|
|
(1,986
|
)
|
1,264
|
|
|||||
Foreign exchange
|
—
|
|
5,340
|
|
—
|
|
(3,428
|
)
|
1,912
|
|
|||||
Equity and other contracts
|
3
|
|
6
|
|
—
|
|
(1
|
)
|
8
|
|
|||||
Total derivative liabilities not designated as hedging
|
9
|
|
8,590
|
|
—
|
|
(5,415
|
)
|
3,184
|
|
|||||
Total trading liabilities
|
1,559
|
|
8,697
|
|
—
|
|
(5,415
|
)
|
4,841
|
|
|||||
Long-term debt (c)
|
—
|
|
387
|
|
—
|
|
—
|
|
387
|
|
|||||
Other liabilities – derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
350
|
|
—
|
|
—
|
|
350
|
|
|||||
Foreign exchange
|
—
|
|
257
|
|
—
|
|
—
|
|
257
|
|
|||||
Total other liabilities – derivative liabilities designated as hedging
|
—
|
|
607
|
|
—
|
|
—
|
|
607
|
|
|||||
Subtotal liabilities of operations at fair value
|
1,559
|
|
9,691
|
|
—
|
|
(5,415
|
)
|
5,835
|
|
|||||
Percentage of liabilities of operations prior to netting
|
14
|
%
|
86
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||
Total liabilities
|
$
|
1,560
|
|
$
|
9,691
|
|
$
|
—
|
|
$
|
(5,415
|
)
|
$
|
5,836
|
|
Percentage of total liabilities prior to netting
|
14
|
%
|
86
|
%
|
—
|
%
|
|
|
(a)
|
ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.
|
(b)
|
Includes $640 million in Level 2 that was included in the former Grantor Trust.
|
(c)
|
Includes certain interests in securitizations.
|
(d)
|
Includes seed capital, private equity investments and other assets.
|
Notes to Consolidated Financial Statements (continued)
|
|
Details of certain available-for-sale securities measured at fair value on a recurring basis
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||||||||
Total
carrying
value
|
|
|
Ratings (a)
|
|
Total
carrying value
|
|
|
Ratings (a)
|
|||||||||||||||||
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
|
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
|||||||||
(dollars in millions)
|
(b)
|
(b)
|
|||||||||||||||||||||||
Non-agency RMBS (c), originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007-2020
|
$
|
826
|
|
|
79
|
%
|
1
|
%
|
—
|
%
|
20
|
%
|
|
$
|
464
|
|
|
55
|
%
|
1
|
%
|
—
|
%
|
44
|
%
|
2006
|
244
|
|
|
—
|
|
22
|
|
—
|
|
78
|
|
|
291
|
|
|
—
|
|
21
|
|
—
|
|
79
|
|
||
2005
|
258
|
|
|
5
|
|
2
|
|
8
|
|
85
|
|
|
305
|
|
|
5
|
|
2
|
|
8
|
|
85
|
|
||
2004 and earlier
|
147
|
|
|
22
|
|
23
|
|
6
|
|
49
|
|
|
173
|
|
|
22
|
|
24
|
|
4
|
|
50
|
|
||
Total non-agency RMBS
|
$
|
1,475
|
|
|
48
|
%
|
6
|
%
|
2
|
%
|
44
|
%
|
|
$
|
1,233
|
|
|
25
|
%
|
9
|
%
|
3
|
%
|
63
|
%
|
Non-agency commercial MBS originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2009-2020
|
$
|
2,473
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,178
|
|
|
98
|
%
|
2
|
%
|
—
|
%
|
—
|
%
|
Foreign covered bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada
|
$
|
2,207
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,798
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
UK
|
1,109
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
984
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Australia
|
605
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
431
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Norway
|
495
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
287
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Germany
|
465
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
357
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
|
391
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
340
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total foreign covered bonds
|
$
|
5,272
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
4,197
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
Sovereign debt/sovereign guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
UK
|
$
|
2,971
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
3,318
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
Germany
|
2,168
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,997
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
France
|
1,577
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,272
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Spain
|
1,546
|
|
|
—
|
|
4
|
|
96
|
|
—
|
|
|
1,453
|
|
|
—
|
|
6
|
|
94
|
|
—
|
|
||
Italy
|
1,390
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
1,260
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Singapore
|
768
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
742
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
462
|
|
|
—
|
|
100
|
|
—
|
|
—
|
|
|
301
|
|
|
—
|
|
100
|
|
—
|
|
—
|
|
||
Netherlands
|
387
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
791
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Austria
|
347
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
240
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Canada
|
345
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
271
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Hong Kong
|
294
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
411
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other (d)
|
655
|
|
|
39
|
|
39
|
|
—
|
|
22
|
|
|
590
|
|
|
29
|
|
48
|
|
—
|
|
23
|
|
||
Total sovereign debt/sovereign guaranteed
|
$
|
12,910
|
|
|
71
|
%
|
6
|
%
|
22
|
%
|
1
|
%
|
|
$
|
12,646
|
|
|
73
|
%
|
5
|
%
|
21
|
%
|
1
|
%
|
Foreign government agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Germany
|
$
|
1,161
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,131
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
Netherlands
|
632
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
678
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Sweden
|
250
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
202
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Finland
|
240
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
245
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
|
481
|
|
|
72
|
|
28
|
|
—
|
|
—
|
|
|
387
|
|
|
67
|
|
33
|
|
—
|
|
—
|
|
||
Total foreign government agencies
|
$
|
2,764
|
|
|
95
|
%
|
5
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,643
|
|
|
95
|
%
|
5
|
%
|
—
|
%
|
—
|
%
|
(a)
|
Represents ratings by S&P or the equivalent.
|
(b)
|
At March 31, 2020 and Dec. 31, 2019, sovereign debt/sovereign guaranteed securities were included in Level 1 and Level 2 in the valuation hierarchy. All other assets in the table are Level 2 assets in the valuation hierarchy.
|
(c)
|
Includes $535 million at March 31, 2020 and $640 million at Dec. 31, 2019 that were included in the former Grantor Trust.
|
(d)
|
Includes non-investment grade sovereign debt/sovereign guaranteed securities related to Brazil of $113 million at March 31, 2020 and $134 million at Dec. 31, 2019.
|
Notes to Consolidated Financial Statements (continued)
|
|
Assets measured at fair value on a nonrecurring basis
|
March 31, 2020
|
|
Dec. 31, 2019
|
||||||||||||||||||||||
|
|
|
Total carrying
value
|
|
|
|
|
|
Total carrying
value
|
|
|||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||||||
Loans (a)
|
$
|
—
|
|
$
|
56
|
|
$
|
—
|
|
$
|
56
|
|
|
$
|
—
|
|
$
|
58
|
|
$
|
—
|
|
$
|
58
|
|
Other assets (b)
|
—
|
|
102
|
|
—
|
|
102
|
|
|
—
|
|
64
|
|
—
|
|
64
|
|
||||||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
$
|
158
|
|
$
|
—
|
|
$
|
158
|
|
|
$
|
—
|
|
$
|
122
|
|
$
|
—
|
|
$
|
122
|
|
(a)
|
The fair value of these loans decreased less than $1 million in the first quarter of 2020 and the fourth quarter of 2019, based on the fair value of the underlying collateral, as required by guidance in ASC 326, Financial Instruments – Credit Losses, with an offset to the allowance for credit losses.
|
(b)
|
Includes non-readily marketable equity securities carried at cost with upward or downward adjustments and other assets received in satisfaction of debt.
|
Summary of financial instruments
|
March 31, 2020
|
||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
estimated fair value |
|
Carrying
amount |
|
|||||
Assets:
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
$
|
—
|
|
$
|
146,535
|
|
$
|
—
|
|
$
|
146,535
|
|
$
|
146,535
|
|
Interest-bearing deposits with banks
|
—
|
|
22,689
|
|
—
|
|
22,689
|
|
22,672
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
27,363
|
|
—
|
|
27,363
|
|
27,363
|
|
|||||
Securities held-to-maturity
|
4,014
|
|
34,404
|
|
—
|
|
38,418
|
|
37,305
|
|
|||||
Loans (a)
|
—
|
|
61,482
|
|
—
|
|
61,482
|
|
61,174
|
|
|||||
Other financial assets
|
5,091
|
|
1,198
|
|
—
|
|
6,289
|
|
6,289
|
|
|||||
Total
|
$
|
9,105
|
|
$
|
293,671
|
|
$
|
—
|
|
$
|
302,776
|
|
$
|
301,338
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
96,600
|
|
$
|
—
|
|
$
|
96,600
|
|
$
|
96,600
|
|
Interest-bearing deposits
|
—
|
|
239,459
|
|
—
|
|
239,459
|
|
240,117
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
13,128
|
|
—
|
|
13,128
|
|
13,128
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
24,016
|
|
—
|
|
24,016
|
|
24,016
|
|
|||||
Commercial paper
|
—
|
|
1,121
|
|
—
|
|
1,121
|
|
1,121
|
|
|||||
Borrowings
|
—
|
|
1,767
|
|
—
|
|
1,767
|
|
1,767
|
|
|||||
Long-term debt
|
—
|
|
27,521
|
|
—
|
|
27,521
|
|
27,097
|
|
|||||
Total
|
$
|
—
|
|
$
|
403,612
|
|
$
|
—
|
|
$
|
403,612
|
|
$
|
403,846
|
|
(a)
|
Does not include the leasing portfolio.
|
Notes to Consolidated Financial Statements (continued)
|
|
Summary of financial instruments
|
Dec. 31, 2019
|
||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total estimated
fair value |
|
Carrying
amount |
|
|||||
Assets:
|
|
|
|
|
|
||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
$
|
—
|
|
$
|
95,042
|
|
$
|
—
|
|
$
|
95,042
|
|
$
|
95,042
|
|
Interest-bearing deposits with banks
|
—
|
|
14,832
|
|
—
|
|
14,832
|
|
14,811
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
30,182
|
|
—
|
|
30,182
|
|
30,182
|
|
|||||
Securities held-to-maturity
|
4,630
|
|
30,175
|
|
—
|
|
34,805
|
|
34,483
|
|
|||||
Loans (a)
|
—
|
|
54,194
|
|
—
|
|
54,194
|
|
53,718
|
|
|||||
Other financial assets
|
4,830
|
|
1,233
|
|
—
|
|
6,063
|
|
6,063
|
|
|||||
Total
|
$
|
9,460
|
|
$
|
225,658
|
|
$
|
—
|
|
$
|
235,118
|
|
$
|
234,299
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
57,630
|
|
$
|
—
|
|
$
|
57,630
|
|
$
|
57,630
|
|
Interest-bearing deposits
|
—
|
|
200,846
|
|
—
|
|
200,846
|
|
201,836
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
11,401
|
|
—
|
|
11,401
|
|
11,401
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
18,758
|
|
—
|
|
18,758
|
|
18,758
|
|
|||||
Commercial paper
|
—
|
|
3,959
|
|
—
|
|
3,959
|
|
3,959
|
|
|||||
Borrowings
|
—
|
|
917
|
|
—
|
|
917
|
|
917
|
|
|||||
Long-term debt
|
—
|
|
27,858
|
|
—
|
|
27,858
|
|
27,114
|
|
|||||
Total
|
$
|
—
|
|
$
|
321,369
|
|
$
|
—
|
|
$
|
321,369
|
|
$
|
321,615
|
|
(a)
|
Does not include the leasing portfolio.
|
Assets and liabilities of consolidated investment
management funds, at fair value
|
|
|||||
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
(in millions)
|
||||||
Assets of consolidated investment management funds:
|
|
|
||||
Trading assets
|
$
|
215
|
|
$
|
229
|
|
Other assets
|
14
|
|
16
|
|
||
Total assets of consolidated investment management funds
|
$
|
229
|
|
$
|
245
|
|
Liabilities of consolidated investment management funds:
|
|
|
||||
Other liabilities
|
1
|
|
1
|
|
||
Total liabilities of consolidated investment management funds
|
$
|
1
|
|
$
|
1
|
|
Change in fair value of long-term debt (a)
|
|||||||||
(in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
Foreign exchange and other trading revenue
|
$
|
(10
|
)
|
$
|
(1
|
)
|
$
|
(5
|
)
|
(a)
|
The changes in fair value are approximately offset by an economic hedge included in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements (continued)
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Income statement impact of fair value and cash flow hedges
|
|
|
||||||||
(in millions)
|
Location of
gains (losses)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
Interest rate fair value hedges of available-for-sale securities
|
|
|
|
|
||||||
Derivative
|
Interest revenue
|
$
|
(1,033
|
)
|
$
|
324
|
|
$
|
(383
|
)
|
Hedged item
|
Interest revenue
|
1,011
|
|
(311
|
)
|
376
|
|
|||
Interest rate fair value hedges of long-term debt
|
|
|
|
|
||||||
Derivative
|
Interest expense
|
714
|
|
(145
|
)
|
185
|
|
|||
Hedged item
|
Interest expense
|
(708
|
)
|
144
|
|
(184
|
)
|
|||
Foreign exchange fair value hedges of available-for-sale securities
|
|
|
|
|
||||||
Derivative (a)
|
Other revenue
|
7
|
|
6
|
|
6
|
|
|||
Hedged item
|
Other revenue
|
(7
|
)
|
(6
|
)
|
(5
|
)
|
|||
Cash flow hedge of interest rate risk
|
|
|
|
|
||||||
Gain reclassified from OCI into income
|
Interest expense
|
—
|
|
8
|
|
—
|
|
|||
Cash flow hedges of forecasted FX exposures
|
|
|
|
|
||||||
Gain (loss) reclassified from OCI into income
|
Staff expense
|
1
|
|
2
|
|
(1
|
)
|
|||
(Loss) gain recognized in the consolidated income statement due to fair value and cash flow hedging relationships
|
|
$
|
(15
|
)
|
$
|
22
|
|
$
|
(6
|
)
|
(a)
|
Includes gains of less than $1 million in the first quarter of 2020 and the fourth quarter of 2019 and a gain of $1 million in the first quarter of 2019 associated with the amortization of the excluded component. At March 31, 2020 and Dec. 31, 2019, the remaining accumulated OCI balance associated with the excluded component was de minimis.
|
Hedged items in fair value hedging relationships
|
Carrying amount of hedged
asset or liability
|
|
Hedge accounting basis adjustment increase (decrease) (a)
|
||||||||||
|
|||||||||||||
(in millions)
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||||
Available-for-sale securities (b)(c)
|
$
|
16,559
|
|
$
|
13,792
|
|
|
$
|
1,846
|
|
$
|
687
|
|
Long-term debt
|
$
|
14,907
|
|
$
|
13,945
|
|
|
$
|
849
|
|
$
|
116
|
|
(a)
|
Includes $210 million and $53 million of basis adjustment increases on discontinued hedges associated with available-for-sale securities at March 31, 2020 and Dec. 31, 2019, respectively, and $178 million and $200 million of basis adjustment decreases on discontinued hedges associated with long-term debt at March 31, 2020 and Dec. 31, 2019, respectively.
|
(b)
|
Excludes hedged items where only foreign currency risk is the designated hedged risk, as the basis adjustments related to foreign currency hedges will not reverse through the consolidated income statement in future periods. The carrying amount excluded for available-for-sale securities was $- million at March 31, 2020 and $142 million at Dec. 31, 2019.
|
(c)
|
Carrying amount represents the amortized cost.
|
Notes to Consolidated Financial Statements (continued)
|
|
Impact of derivative instruments on the balance sheet
|
Notional value
|
|
Asset derivatives
fair value
|
|
Liability derivatives
fair value
|
|||||||||||||||
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||||||
(in millions)
|
|
|
||||||||||||||||||
Derivatives designated as hedging instruments: (a)(b)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
30,356
|
|
$
|
28,365
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
927
|
|
$
|
350
|
|
Foreign exchange contracts
|
7,524
|
|
8,390
|
|
|
187
|
|
21
|
|
|
46
|
|
257
|
|
||||||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
187
|
|
$
|
21
|
|
|
$
|
973
|
|
$
|
607
|
|
||||
Derivatives not designated as hedging instruments: (b)(c)
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
273,595
|
|
$
|
306,790
|
|
|
$
|
6,043
|
|
$
|
3,690
|
|
|
$
|
5,275
|
|
$
|
3,250
|
|
Foreign exchange contracts
|
924,891
|
|
848,961
|
|
|
9,964
|
|
5,331
|
|
|
11,854
|
|
5,340
|
|
||||||
Equity contracts
|
1,269
|
|
3,189
|
|
|
15
|
|
19
|
|
|
51
|
|
5
|
|
||||||
Credit contracts
|
165
|
|
165
|
|
|
2
|
|
—
|
|
|
1
|
|
4
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
16,024
|
|
$
|
9,040
|
|
|
$
|
17,181
|
|
$
|
8,599
|
|
||||
Total derivatives fair value (d)
|
|
|
|
$
|
16,211
|
|
$
|
9,061
|
|
|
$
|
18,154
|
|
$
|
9,206
|
|
||||
Effect of master netting agreements (e)
|
|
|
|
(10,328
|
)
|
(5,819
|
)
|
|
(11,864
|
)
|
(5,415
|
)
|
||||||||
Fair value after effect of master netting agreements
|
|
|
|
$
|
5,883
|
|
$
|
3,242
|
|
|
$
|
6,290
|
|
$
|
3,791
|
|
(a)
|
The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the consolidated balance sheet.
|
(b)
|
For derivative transactions settled at clearing organizations, cash collateral exchanged is deemed a settlement of the derivative each day. The settlement reduces the gross fair value of derivative assets and liabilities and results in a corresponding decrease in the effect of master netting agreements, with no impact to the consolidated balance sheet.
|
(c)
|
The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the consolidated balance sheet.
|
(d)
|
Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815, Derivatives and Hedging.
|
(e)
|
Effect of master netting agreements includes cash collateral received and paid of $1,320 million and $2,856 million, respectively, at March 31, 2020, and $1,022 million and $618 million, respectively, at Dec. 31, 2019.
|
Foreign exchange and other trading revenue
|
|||||||||
(in millions)
|
1Q20
|
|
4Q19
|
|
1Q19
|
|
|||
Foreign exchange
|
$
|
253
|
|
$
|
138
|
|
$
|
160
|
|
Other trading revenue
|
66
|
|
30
|
|
10
|
|
|||
Total foreign exchange and other trading revenue
|
$
|
319
|
|
$
|
168
|
|
$
|
170
|
|
Notes to Consolidated Financial Statements (continued)
|
|
(a)
|
Before consideration of cash collateral.
|
Potential close-out exposures (fair value) (a)
|
|
|||||
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
(in millions)
|
||||||
If The Bank of New York Mellon’s rating changed to: (b)
|
|
|
||||
A3/A-
|
$
|
106
|
|
$
|
56
|
|
Baa2/BBB
|
$
|
1,213
|
|
$
|
608
|
|
Ba1/BB+
|
$
|
4,766
|
|
$
|
2,084
|
|
(a)
|
The amounts represent potential total close-out values if The Bank of New York Mellon’s long-term issuer rating were to immediately drop to the indicated levels, and do not reflect collateral posted.
|
(b)
|
Represents rating by Moody’s/S&P.
|
Notes to Consolidated Financial Statements (continued)
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation (“FICC”), where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
(a)
|
Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of reverse repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
Notes to Consolidated Financial Statements (continued)
|
|
Offsetting of derivative liabilities and financial liabilities at March 31, 2020
|
Net liabilities recognized in the balance sheet
|
|
|
|
|
||||||||||||||
|
Gross liabilities recognized
|
|
Gross amounts offset in the balance sheet
|
|
|
Gross amounts not offset in the balance sheet
|
|
||||||||||||
(in millions)
|
(a)
|
Financial instruments
|
|
Cash collateral pledged
|
|
Net amount
|
|
||||||||||||
Derivatives subject to netting arrangements:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
6,181
|
|
$
|
3,479
|
|
|
$
|
2,702
|
|
$
|
1,452
|
|
$
|
—
|
|
$
|
1,250
|
|
Foreign exchange contracts
|
10,705
|
|
8,382
|
|
|
2,323
|
|
545
|
|
—
|
|
1,778
|
|
||||||
Equity and other contracts
|
27
|
|
3
|
|
|
24
|
|
—
|
|
—
|
|
24
|
|
||||||
Total derivatives subject to netting arrangements
|
16,913
|
|
11,864
|
|
|
5,049
|
|
1,997
|
|
—
|
|
3,052
|
|
||||||
Total derivatives not subject to netting arrangements
|
1,241
|
|
—
|
|
|
1,241
|
|
—
|
|
—
|
|
1,241
|
|
||||||
Total derivatives
|
18,154
|
|
11,864
|
|
|
6,290
|
|
1,997
|
|
—
|
|
4,293
|
|
||||||
Repurchase agreements
|
92,057
|
|
80,203
|
|
(b)
|
11,854
|
|
11,823
|
|
—
|
|
31
|
|
||||||
Securities lending
|
750
|
|
—
|
|
|
750
|
|
717
|
|
—
|
|
33
|
|
||||||
Total
|
$
|
110,961
|
|
$
|
92,067
|
|
|
$
|
18,894
|
|
$
|
14,537
|
|
$
|
—
|
|
$
|
4,357
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2019
|
Net liabilities recognized
in the
balance sheet
|
|
|
|
|
||||||||||||||
|
Gross liabilities recognized
|
|
Gross amounts offset in the balance sheet
|
|
|
Gross amounts not offset in the balance sheet
|
|
||||||||||||
(in millions)
|
(a)
|
Financial instruments
|
|
Cash collateral pledged
|
|
Net amount
|
|
||||||||||||
Derivatives subject to netting arrangements:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
3,550
|
|
$
|
1,986
|
|
|
$
|
1,564
|
|
$
|
1,539
|
|
$
|
—
|
|
$
|
25
|
|
Foreign exchange contracts
|
4,873
|
|
3,428
|
|
|
1,445
|
|
74
|
|
—
|
|
1,371
|
|
||||||
Equity and other contracts
|
5
|
|
1
|
|
|
4
|
|
2
|
|
—
|
|
2
|
|
||||||
Total derivatives subject to netting arrangements
|
8,428
|
|
5,415
|
|
|
3,013
|
|
1,615
|
|
—
|
|
1,398
|
|
||||||
Total derivatives not subject to netting arrangements
|
778
|
|
—
|
|
|
778
|
|
—
|
|
—
|
|
778
|
|
||||||
Total derivatives
|
9,206
|
|
5,415
|
|
|
3,791
|
|
1,615
|
|
—
|
|
2,176
|
|
||||||
Repurchase agreements
|
104,451
|
|
93,794
|
|
(b)
|
10,657
|
|
10,657
|
|
—
|
|
—
|
|
||||||
Securities lending
|
718
|
|
—
|
|
|
718
|
|
694
|
|
—
|
|
24
|
|
||||||
Total
|
$
|
114,375
|
|
$
|
99,209
|
|
|
$
|
15,166
|
|
$
|
12,966
|
|
$
|
—
|
|
$
|
2,200
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
Notes to Consolidated Financial Statements (continued)
|
|
Off-balance sheet credit risks
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
||
(in millions)
|
||||||
Lending commitments
|
$
|
47,732
|
|
$
|
49,119
|
|
Standby letters of credit (“SBLC”) (a)
|
2,328
|
|
2,298
|
|
||
Commercial letters of credit
|
113
|
|
74
|
|
||
Securities lending indemnifications (b)(c)
|
421,691
|
|
408,378
|
|
(a)
|
Net of participations totaling $146 million at March 31, 2020 and $146 million at Dec. 31, 2019.
|
(b)
|
Excludes the indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled $56 billion at March 31, 2020 and $57 billion at Dec. 31, 2019.
|
(c)
|
Includes cash collateral, invested in indemnified repurchase agreements, held by us as securities lending agent of $38 billion at March 31, 2020 and $37 billion at Dec. 31, 2019.
|
Notes to Consolidated Financial Statements (continued)
|
|
Standby letters of credit
|
March 31, 2020
|
|
Dec. 31, 2019
|
|
|
||||
Investment grade
|
91
|
%
|
90
|
%
|
Non-investment grade
|
9
|
%
|
10
|
%
|
Notes to Consolidated Financial Statements (continued)
|
|
Financial institutions
portfolio exposure
(in billions)
|
March 31, 2020
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total exposure
|
|
||||
Securities industry
|
$
|
4.2
|
|
$
|
24.5
|
|
$
|
28.7
|
|
Banks
|
7.5
|
|
1.1
|
|
8.6
|
|
|||
Asset managers
|
1.3
|
|
6.5
|
|
7.8
|
|
|||
Insurance
|
0.3
|
|
2.4
|
|
2.7
|
|
|||
Government
|
0.1
|
|
0.2
|
|
0.3
|
|
|||
Other
|
0.8
|
|
0.6
|
|
1.4
|
|
|||
Total
|
$
|
14.2
|
|
$
|
35.3
|
|
$
|
49.5
|
|
Commercial portfolio
exposure
(in billions)
|
March 31, 2020
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total exposure
|
|
||||
Manufacturing
|
$
|
1.4
|
|
$
|
3.7
|
|
$
|
5.1
|
|
Services and other
|
1.3
|
|
2.9
|
|
4.2
|
|
|||
Energy and utilities
|
0.7
|
|
3.5
|
|
4.2
|
|
|||
Media and telecom
|
—
|
|
0.9
|
|
0.9
|
|
|||
Total
|
$
|
3.4
|
|
$
|
11.0
|
|
$
|
14.4
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Notes to Consolidated Financial Statements (continued)
|
|
Notes to Consolidated Financial Statements (continued)
|
|
•
|
Revenue amounts reflect fee and other revenue generated by each business and includes revenue
|
Notes to Consolidated Financial Statements (continued)
|
|
•
|
Revenues and expenses associated with specific client bases are included in those businesses. For example, foreign exchange activity associated with clients using custody products is included in Investment Services.
|
•
|
Net interest revenue is allocated to businesses based on the yields on the assets and liabilities generated by each business. We employ a funds transfer pricing system that matches funds with the specific assets and liabilities of each business based on their interest sensitivity and maturity characteristics.
|
•
|
The provision for credit losses associated with the respective credit portfolios is reflected in each business segment.
|
•
|
Incentives expense related to restricted stock is allocated to the businesses.
|
•
|
Support and other indirect expenses, including services provided between segments that are not provided to third parties or not subject to a revenue transfer agreement, are allocated to businesses based on internally developed
|
•
|
Recurring FDIC expense is allocated to the businesses based on average deposits generated within each business.
|
•
|
Litigation expense is generally recorded in the business in which the charge occurs.
|
•
|
Management of the securities portfolio is a shared service contained in the Other segment. As a result, gains and losses associated with the valuation of the securities portfolio are generally included in the Other segment.
|
•
|
Client deposits serve as the primary funding source for our securities portfolio. We typically allocate all interest revenue to the businesses generating the deposits. Accordingly, accretion related to the portion of the securities portfolio restructured in 2009 has been included in the results of the businesses.
|
•
|
Balance sheet assets and liabilities and their related income or expense are specifically assigned to each business. Businesses with a net liability position have been allocated assets.
|
•
|
Goodwill and intangible assets are reflected within individual businesses.
|
For the quarter ended March 31, 2020
|
Investment
Services |
|
|
Investment
Management |
|
|
Other
|
|
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
2,436
|
|
|
$
|
846
|
|
(a)
|
$
|
30
|
|
|
$
|
3,312
|
|
(a)
|
Net interest revenue (expense)
|
806
|
|
|
52
|
|
|
(44
|
)
|
|
814
|
|
|
||||
Total revenue (loss)
|
3,242
|
|
|
898
|
|
(a)
|
(14
|
)
|
|
4,126
|
|
(a)
|
||||
Provision for credit losses
|
149
|
|
|
9
|
|
|
11
|
|
|
169
|
|
|
||||
Noninterest expense
|
1,987
|
|
|
695
|
|
|
30
|
|
|
2,712
|
|
|
||||
Income (loss) before income taxes
|
$
|
1,106
|
|
|
$
|
194
|
|
(a)
|
$
|
(55
|
)
|
|
$
|
1,245
|
|
(a)
|
Pre-tax operating margin (b)
|
34
|
%
|
|
22
|
%
|
|
N/M
|
|
|
30
|
%
|
|
||||
Average assets
|
$
|
304,089
|
|
|
$
|
30,543
|
|
|
$
|
50,646
|
|
|
$
|
385,278
|
|
|
(a)
|
Total fee and other revenue includes net loss from consolidated investment management funds of $20 million, representing $38 million of losses and a loss attributable to noncontrolling interests of $18 million. Total revenue and income before income taxes are net of a loss attributable to noncontrolling interests of $18 million.
|
(b)
|
Income before income taxes divided by total revenue.
|
Notes to Consolidated Financial Statements (continued)
|
|
For the quarter ended Dec. 31, 2019
|
Investment
Services |
|
(a)
|
Investment
Management |
|
(a)
|
Other
|
|
(a)
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
2,236
|
|
|
$
|
924
|
|
(b)
|
$
|
794
|
|
|
$
|
3,954
|
|
(b)
|
Net interest revenue (expense)
|
778
|
|
|
47
|
|
|
(10
|
)
|
|
815
|
|
|
||||
Total revenue
|
3,014
|
|
|
971
|
|
(b)
|
784
|
|
|
4,769
|
|
(b)
|
||||
Provision for credit losses
|
(5
|
)
|
|
—
|
|
|
(3
|
)
|
|
(8
|
)
|
|
||||
Noninterest expense
|
2,179
|
|
|
731
|
|
|
54
|
|
|
2,964
|
|
|
||||
Income (loss) before income taxes
|
$
|
840
|
|
|
$
|
240
|
|
(b)
|
$
|
733
|
|
|
$
|
1,813
|
|
(b)
|
Pre-tax operating margin (c)
|
28
|
%
|
|
25
|
%
|
|
N/M
|
|
|
38
|
%
|
|
||||
Average assets
|
$
|
278,098
|
|
|
$
|
28,481
|
|
|
$
|
47,762
|
|
|
$
|
354,341
|
|
|
(a)
|
Prior periods have been restated to reflect the reclassifications.
|
(b)
|
Total fee and other revenue includes net income from consolidated investment management funds of $8 million, representing $17 million of income and noncontrolling interests of $9 million. Total revenue and income before income taxes are net of noncontrolling interests of $9 million.
|
(c)
|
Income before income taxes divided by total revenue.
|
For the quarter ended March 31, 2019
|
Investment
Services |
|
(a)
|
Investment
Management |
|
(a)
|
Other
|
|
(a)
|
Consolidated
|
|
|
||||
(dollars in millions)
|
||||||||||||||||
Total fee and other revenue
|
$
|
2,161
|
|
|
$
|
869
|
|
(b)
|
$
|
18
|
|
|
$
|
3,048
|
|
(b)
|
Net interest revenue (expense)
|
804
|
|
|
67
|
|
|
(30
|
)
|
|
841
|
|
|
||||
Total revenue (loss)
|
2,965
|
|
|
936
|
|
(b)
|
(12
|
)
|
|
3,889
|
|
(b)
|
||||
Provision for credit losses
|
8
|
|
|
1
|
|
|
(2
|
)
|
|
7
|
|
|
||||
Noninterest expense
|
1,981
|
|
|
669
|
|
|
49
|
|
|
2,699
|
|
|
||||
Income (loss) before income taxes
|
$
|
976
|
|
|
$
|
266
|
|
(b)
|
$
|
(59
|
)
|
|
$
|
1,183
|
|
(b)
|
Pre-tax operating margin (c)
|
33
|
%
|
|
28
|
%
|
|
N/M
|
|
|
31
|
%
|
|
||||
Average assets
|
$
|
256,034
|
|
|
$
|
31,857
|
|
|
$
|
48,274
|
|
|
$
|
336,165
|
|
|
(a)
|
Prior periods have been restated to reflect the reclassifications.
|
(b)
|
Total fee and other revenue includes net income from consolidated investment management funds of $16 million, representing $26 million of income and noncontrolling interests of $10 million. Total revenue and income before income taxes are net of noncontrolling interests of $10 million.
|
(c)
|
Income before income taxes divided by total revenue.
|
Non-cash investing and financing transactions
|
Three months ended March 31,
|
|||||||
(in millions)
|
2020
|
|
|
2019
|
|
|
||
Change in assets of consolidated investment management funds
|
$
|
16
|
|
|
$
|
11
|
|
|
Change in liabilities of consolidated investment management funds
|
—
|
|
|
1
|
|
|
||
Change in nonredeemable noncontrolling interests of consolidated investment management funds
|
8
|
|
|
21
|
|
|
||
Securities purchased not settled
|
1,667
|
|
|
1,407
|
|
|
||
Securities matured not settled
|
9
|
|
|
680
|
|
|
||
Premises and equipment/capitalized software funded by finance lease obligations
|
—
|
|
|
13
|
|
|
||
Premises and equipment/operating lease obligations
|
15
|
|
|
1,281
|
|
(a)
|
||
Investment redemptions not settled
|
37
|
|
|
—
|
|
|
(a)
|
Includes $1,244 million related to the adoption of ASU 2016-02, Leases, and $37 million related to new or modified leases.
|
Item 4. Controls and Procedures
|
|
Forward-looking Statements
|
|
•
|
a communications or technology disruption or failure within our infrastructure or the infrastructure of third parties that results in a loss of information, delays our ability to access information or impacts our ability to provide services to our clients may materially adversely affect our business, financial condition and results of operations;
|
•
|
a cybersecurity incident, or a failure to protect our computer systems, networks and information and our clients’ information against cybersecurity threats, could result in the theft, loss, unauthorized access to, disclosure, use or alteration of information, system or network
|
•
|
our business may be materially adversely affected by operational risk;
|
•
|
the coronavirus pandemic is adversely affecting us and creates significant risks and uncertainties for our business, and the ultimate impact of the pandemic on us will depend on future developments, which are highly uncertain and cannot be predicted;
|
•
|
our risk management framework may not be effective in mitigating risk and reducing the potential for losses;
|
•
|
we are subject to extensive government rulemaking, policies, regulation and supervision; these rules and regulations have, and in the future may, compel us to change how we manage our businesses, which could have a material adverse effect on our business, financial condition and results of operations;
|
•
|
regulatory or enforcement actions or litigation could materially adversely affect our results of operations or harm our businesses or reputation;
|
•
|
our businesses may be negatively affected by adverse events, publicity, government scrutiny or other reputational harm;
|
•
|
failure to satisfy regulatory standards, including “well capitalized” and “well managed” status or capital adequacy and liquidity rules more generally, could result in limitations on our activities and adversely affect our business and financial condition;
|
•
|
a failure or circumvention of our controls and procedures could have a material adverse effect on our business, reputation, results of operations and financial condition;
|
•
|
the application of our Title I preferred resolution strategy or resolution under the Title II orderly liquidation authority could adversely affect the Parent’s liquidity and financial condition and the Parent’s security holders;
|
•
|
impacts from climate change, natural disasters, acts of terrorism, pandemics, global conflicts and other geopolitical events may have a negative impact on our business and operations;
|
•
|
we are dependent on fee-based business for a substantial majority of our revenue and our fee-based revenues could be adversely affected by slowing in market activity, weak financial markets, underperformance and/or negative trends in savings rates or in investment preferences;
|
Forward-looking Statements (continued)
|
|
•
|
weakness and volatility in financial markets and the economy generally may materially adversely affect our business, results of operations and financial condition;
|
•
|
changes in interest rates and yield curves could have a material adverse effect on our profitability;
|
•
|
transitions away from and the anticipated replacement of LIBOR and other IBORs could adversely impact our business and results of operations;
|
•
|
the UK’s withdrawal from the EU may have negative effects on global economic conditions, global financial markets, and our business and results of operations;
|
•
|
we may experience losses on securities related to volatile and illiquid market conditions, reducing our earnings and impacting our financial condition;
|
•
|
the failure or perceived weakness of any of our significant clients or counterparties, many of whom are major financial institutions and sovereign entities, and our assumption of credit and counterparty risk, could expose us to loss and adversely affect our business;
|
•
|
our business, financial condition and results of operations could be adversely affected if we do not effectively manage our liquidity;
|
•
|
we could incur losses if our allowance for credit losses, including loan and lending-related commitments reserves, is inadequate;
|
•
|
any material reduction in our credit ratings or the credit ratings of our principal bank subsidiaries, The Bank of New York Mellon or BNY Mellon, N.A., could increase the cost of funding and borrowing to us and our rated subsidiaries and have a material adverse effect on our results of operations and financial condition and on the value of the securities we issue;
|
•
|
new lines of business, new products and services or transformational or strategic project initiatives may subject us to additional risks, and the failure to implement these initiatives could affect our results of operations;
|
•
|
we are subject to competition in all aspects of our business, which could negatively affect our ability to maintain or increase our profitability;
|
•
|
our business may be adversely affected if we are unable to attract and retain employees;
|
•
|
our strategic transactions present risks and uncertainties and could have an adverse effect on our business, results of operations and financial condition;
|
•
|
tax law changes or challenges to our tax positions with respect to historical transactions may adversely affect our net income, effective tax rate and our overall results of operations and financial condition;
|
•
|
our ability to return capital to shareholders is subject to the discretion of our Board of Directors and may be limited by U.S. banking laws and regulations, including those governing capital and the approval of our capital plan, applicable provisions of Delaware law or our failure to pay full and timely dividends on our preferred stock;
|
•
|
the Parent is a non-operating holding company, and as a result, is dependent on dividends from its subsidiaries and extensions of credit from its IHC to meet its obligations, including with respect to its securities, and to provide funds for share repurchases and payment of dividends to its stockholders; and
|
•
|
changes in accounting standards governing the preparation of our financial statements and future events could have a material impact on our reported financial condition, results of operations, cash flows and other financial data.
|
Part II - Other Information
|
|
Part II - Other Information (continued)
|
|
(c)
|
The following table discloses repurchases of our common stock made in the first quarter of 2020. All of the Company’s preferred stock outstanding has preference over the Company’s common stock with respect to the payment of dividends.
|
Share repurchases – first quarter of 2020
|
|
|
|
|
Total shares
repurchased as
part of a publicly
announced plan
or program
|
|
Maximum approximate dollar value of shares that may yet be purchased under the publicly announced plans or programs at March 31, 2020
|
|
|
|||||
(dollars in millions, except per share amounts; common shares in thousands)
|
Total shares
repurchased |
|
|
Average price
per share |
|
|
|
|||||||
January 2020
|
11,018
|
|
|
$
|
45.71
|
|
|
11,018
|
|
|
$
|
1,415
|
|
|
February 2020
|
8,850
|
|
|
46.29
|
|
|
8,850
|
|
|
1,005
|
|
|
||
March 2020
|
1,810
|
|
|
39.62
|
|
|
1,810
|
|
|
933
|
|
|
||
First quarter of 2020 (a)
|
21,678
|
|
|
$
|
45.44
|
|
|
21,678
|
|
|
933
|
|
(b)
|
(a)
|
Includes 1,924 thousand shares repurchased at a purchase price of $87 million from employees, primarily in connection with the employees’ payment of taxes upon the vesting of restricted stock. The average price per share of open market purchases was $45.47.
|
(b)
|
Represents the maximum value of the shares authorized to be repurchased through the second quarter of 2020, including employee benefit plan repurchases.
|
Index to Exhibits
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
3.1
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference.
|
|
3.2
|
|
|
Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 5, 2007, and incorporated herein by reference.
|
|
3.3
|
|
|
Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 8A12B (File No. 001-35651) as filed with the Commission on Sept. 14, 2012, and incorporated herein by reference.
|
|
3.4
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on May 16, 2013, and incorporated herein by reference.
|
|
3.5
|
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 28, 2015, and incorporated herein by reference.
|
3.6
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Aug. 1, 2016, and incorporated herein by reference.
|
|
3.7
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 10, 2019, and incorporated herein by reference.
|
|
3.8
|
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Feb. 13, 2018, and incorporated herein by reference.
|
Index to Exhibits (continued)
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
4.1
|
|
None of the instruments defining the rights of holders of long-term debt of the Parent or any of its subsidiaries represented long-term debt in excess of 10% of the total assets of the Company as of March 31, 2020. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument.
|
|
N/A
|
31.1
|
|
|
Filed herewith.
|
|
31.2
|
|
|
Filed herewith.
|
|
32.1
|
|
|
Furnished herewith.
|
|
32.2
|
|
|
Furnished herewith.
|
|
101.INS
|
|
Inline XBRL Instance Document.
|
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
Filed herewith.
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
Filed herewith.
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
Filed herewith.
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
Filed herewith.
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Filed herewith.
|
104
|
|
The cover page of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in inline XBRL.
|
|
The cover page interactive data file is embedded within the inline XBRL document and included in Exhibit 101.
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
(Registrant)
|
|
|
|
|
Date: May 7, 2020
|
By:
|
|
/s/ Kurtis R. Kurimsky
|
|
|
|
Kurtis R. Kurimsky
|
|
|
|
Corporate Controller
|
|
|
|
(Duly Authorized Officer and
|
|
|
|
Principal Accounting Officer of
|
|
|
|
the Registrant)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Thomas P. Gibbons
|
|
Name: Thomas P. Gibbons
|
|
Title: Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael P. Santomassimo
|
|
Name: Michael P. Santomassimo
|
|
Title: Chief Financial Officer
|
|
Dated: May 7, 2020
|
|
/s/ Thomas P. Gibbons
|
|
|
|
|
Name:
|
Thomas P. Gibbons
|
|
|
|
Title:
|
Chief Executive Officer
|
Dated: May 7, 2020
|
|
/s/ Michael P. Santomassimo
|
|
|
|
|
Name:
|
Michael P. Santomassimo
|
|
|
|
Title:
|
Chief Financial Officer
|
|