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Delaware
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13-2614959
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Large accelerated filer [ X ]
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Accelerated filer [ ]
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Non-accelerated filer [ ] (Do not check if a smaller reporting company)
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Smaller reporting company [ ]
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Class
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Outstanding as of
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June 30, 2014
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Common Stock, $0.01 par value
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1,131,596,230
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Page
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Part I - Financial Information
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Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures About Market Risk:
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Risk management update
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Item 1. Financial Statements:
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Quarter ended
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Year-to-date
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|||||||||||||||
(dollar amounts in millions, except per common share amounts and unless otherwise noted)
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June 30,
2014 |
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March 31,
2014 |
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June 30,
2013 |
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June 30,
2014 |
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June 30,
2013 |
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|||||
Results applicable to common shareholders of The Bank of New York Mellon Corporation:
(a)
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||||||||||
Net income
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$
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554
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$
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661
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$
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831
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$
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1,215
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$
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565
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Basic EPS
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0.48
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0.57
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0.71
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1.05
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0.48
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Diluted EPS
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0.48
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0.57
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0.71
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1.04
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0.48
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Fee and other revenue
(a)
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$
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2,980
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$
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2,883
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$
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3,203
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$
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5,863
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$
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6,063
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Income from consolidated investment management funds
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46
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36
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65
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82
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115
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Net interest revenue
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719
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728
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757
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1,447
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1,476
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Total revenue
(a)
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$
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3,745
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$
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3,647
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$
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4,025
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$
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7,392
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$
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7,654
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||||||||||
Return on common equity
(annualized) (b)
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6.1
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%
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7.4
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%
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9.7
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%
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6.7
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%
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3.3
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%
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Non-GAAP
(a)(b)(c)
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8.4
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%
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7.8
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%
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10.2
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%
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8.1
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%
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9.2
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%
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Return on tangible common equity
(annualized) –
Non-GAAP
(b)
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14.5
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%
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17.6
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%
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25.0
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%
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16.0
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%
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9.5
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%
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Non-GAAP adjusted
(a)(b)(c)
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18.4
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%
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17.3
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%
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24.6
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%
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17.9
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%
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22.0
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%
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|||||
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Return on average assets
(annualized)
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0.60
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%
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0.75
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%
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0.99
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%
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0.68
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%
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0.34
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%
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|||||
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Fee revenue as a percentage of total revenue excluding net securities gains
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79
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%
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79
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%
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79
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%
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79
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%
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79
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%
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|||||
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Percentage of non-U.S. total revenue
(d)
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38
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%
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37
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%
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36
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%
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37
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%
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36
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%
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|||||
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Pre-tax operating margin
(a)(b)
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22
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%
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25
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%
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30
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%
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24
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%
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27
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%
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|||||
Non-GAAP
(b)(c)
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30
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%
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27
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%
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32
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%
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28
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%
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29
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%
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|||||
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Net interest margin (FTE)
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0.98
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%
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1.05
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%
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1.15
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%
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1.02
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%
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1.13
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%
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|||||
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Assets under management at period end
(in billions) (e)
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$
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1,636
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$
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1,620
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$
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1,427
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$
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1,636
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$
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1,427
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Assets under custody and/or administration (“AUC/A”) at
period end
(in trillions) (f)
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$
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28.5
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$
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27.9
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$
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26.2
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$
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28.5
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$
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26.2
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Market value of securities on loan at period
end
(in billions) (g)
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$
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280
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$
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264
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$
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255
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$
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280
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$
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255
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Average common shares and equivalents outstanding
(in thousands)
:
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Basic
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1,133,556
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1,138,645
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1,152,545
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1,136,086
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1,155,667
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Diluted
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1,139,800
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1,144,510
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1,155,981
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1,141,948
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1,159,169
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Capital ratios
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Estimated common equity Tier 1 ratio (“CET1”), fully
phased-in – Non-GAAP:
(b)(h)(i)
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Standardized Approach
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10.3
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%
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11.1
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%
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9.3
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%
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10.3
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%
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9.3
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%
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|||||
Advanced Approach
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10.0
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%
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10.7
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%
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9.8
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%
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10.0
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%
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9.8
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%
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|||||
CET1 ratio
(i)(j)
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11.4
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%
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(b)
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15.7
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%
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13.2
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%
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(b)
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11.4
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%
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(b)
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13.2
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%
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(b)
|
|||||
Tier 1 capital ratio
(i)(j)
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12.4
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%
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(b)
|
17.0
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%
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14.8
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%
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|
12.4
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%
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(b)
|
14.8
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%
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|
|||||
Total (Tier 1 plus Tier 2) capital ratio
(i)(j)
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12.8
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%
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(b)
|
17.8
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%
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15.8
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%
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|
12.8
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%
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(b)
|
15.8
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%
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|
|||||
Leverage capital ratio
|
5.9
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%
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6.1
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%
|
5.3
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%
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5.9
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%
|
|
5.3
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%
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|||||
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BNY Mellon shareholders’ equity to total assets ratio
(a)(b)
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9.6
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%
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|
10.3
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%
|
9.9
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%
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|
9.6
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%
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|
9.9
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%
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|
|||||
BNY Mellon common shareholders’ equity to total
assets ratio
(b)
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9.2
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%
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|
9.9
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%
|
9.5
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%
|
|
9.2
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%
|
|
9.5
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%
|
|
|||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
(b)
|
6.4
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%
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|
6.6
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%
|
5.8
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%
|
|
6.4
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%
|
|
5.8
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%
|
|
|
Quarter ended
|
|
Year-to-date
|
|
|||||||||||||||
(dollar amounts in millions, except per common share amounts and unless otherwise noted)
|
June 30,
2014 |
|
|
March 31,
2014 |
|
June 30,
2013 |
|
|
June 30,
2014 |
|
|
June 30,
2013 |
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|
|||||
Selected average balances
|
|
|
|
|
|
|
|
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|
||||||||||
Interest-earning assets
|
$
|
300,758
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|
|
$
|
284,532
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|
$
|
268,481
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|
|
$
|
292,691
|
|
|
$
|
267,124
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|
|
Assets of operations
|
$
|
357,807
|
|
|
$
|
343,638
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|
$
|
325,931
|
|
|
$
|
350,760
|
|
|
$
|
324,055
|
|
|
Total assets
|
$
|
369,212
|
|
|
$
|
354,992
|
|
$
|
337,455
|
|
|
$
|
362,140
|
|
|
$
|
335,569
|
|
|
Interest-bearing deposits
|
$
|
162,674
|
|
|
$
|
152,986
|
|
$
|
151,219
|
|
|
$
|
157,856
|
|
|
$
|
149,484
|
|
|
Noninterest-bearing deposits
|
$
|
77,820
|
|
|
$
|
81,430
|
|
$
|
70,648
|
|
|
$
|
79,615
|
|
|
$
|
70,493
|
|
|
Preferred stock
|
$
|
1,562
|
|
|
$
|
1,562
|
|
$
|
1,350
|
|
|
$
|
1,562
|
|
|
$
|
1,210
|
|
|
Total The Bank of New York Mellon Corporation common shareholders’ equity
|
$
|
36,565
|
|
|
$
|
36,289
|
|
$
|
34,467
|
|
|
$
|
36,428
|
|
|
$
|
34,681
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other information at period end
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per common share
|
$
|
0.17
|
|
|
$
|
0.15
|
|
$
|
0.15
|
|
|
$
|
0.32
|
|
|
$
|
0.28
|
|
|
Common dividend payout ratio
|
35
|
%
|
|
26
|
%
|
21
|
%
|
|
31
|
%
|
|
58
|
%
|
|
|||||
Common dividend yield
(annualized)
|
1.8
|
%
|
|
1.7
|
%
|
2.1
|
%
|
|
1.7
|
%
|
|
2.0
|
%
|
|
|||||
Closing stock price per common share
|
$
|
37.48
|
|
|
$
|
35.29
|
|
$
|
28.05
|
|
|
$
|
37.48
|
|
|
$
|
28.05
|
|
|
Market capitalization
|
$
|
42,412
|
|
|
$
|
40,244
|
|
$
|
32,271
|
|
|
$
|
42,412
|
|
|
$
|
32,271
|
|
|
Book value per common share – GAAP
(a)(b)
|
$
|
32.49
|
|
|
$
|
31.94
|
|
$
|
29.81
|
|
|
$
|
32.49
|
|
|
$
|
29.81
|
|
|
Tangible book value per common share – Non-GAAP
(a)(b)
|
$
|
14.88
|
|
|
$
|
14.48
|
|
$
|
12.40
|
|
|
$
|
14.88
|
|
|
$
|
12.40
|
|
|
Full-time employees
|
51,100
|
|
|
51,400
|
|
49,800
|
|
|
51,100
|
|
|
49,800
|
|
|
|||||
Common shares outstanding
(in thousands)
|
1,131,596
|
|
|
1,140,373
|
|
1,150,477
|
|
|
1,131,596
|
|
|
1,150,477
|
|
|
(a)
|
The three and six months ended June 30, 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page
55
for a reconciliation of these ratios.
|
(c)
|
Non-GAAP excludes amortization of intangible assets, merger and integration (“M&I”), litigation, restructuring charges, a previously disclosed charge (recovery) related to investment management funds, net of incentives and the impact of the disallowance of certain foreign tax credits, if applicable.
|
(d)
|
Includes fee revenue, net interest revenue and income of consolidated investment management funds, net of net income attributable to noncontrolling interests.
|
(e)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business. Also excludes assets under management related to Newton’s private client business that was sold in September 2013.
|
(f)
|
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
June 30, 2014
and
March 31, 2014
, and
$1.1 trillion
at
June 30, 2013
.
|
(g)
|
Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as an agent, beginning in the fourth quarter of 2013, on behalf of CIBC Mellon clients, which totaled $64 billion at
June 30, 2014
and $66 billion at
March 31, 2014
.
|
(h)
|
The estimated fully phased-in Basel III CET1 ratios are based on our interpretation of the final rules released by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) on July 2, 2013 (the “Final Capital Rules”), which are being gradually phased-in over a multi-year period. The estimated fully phased-in Basel III CET1 ratios assume all relevant regulatory model approvals. The Final Capital Rules require approval by banking regulators of certain models used as part of risk-weighted asset calculations. If these models are not approved, the estimated fully phased-in capital ratios would likely be adversely impacted.
|
(i)
|
Beginning with June 30, 2014, risk-based capital ratios include the net impact of including the total consolidated assets of certain consolidated investment management funds in risk-weighted assets. These assets were not included in prior periods. The net impact of such consolidated assets for the June 30, 2014 estimated CET1 ratio on a fully phased-in basis was a decrease of
101
basis points under the Advanced Approach and
58
basis points under the Standardized Approach. The net impact of such consolidated assets for June 30, 2014 regulatory capital ratios, as calculated under the Advanced Approach, was a decrease of
116
basis points to the CET1 ratio,
126
basis points to the Tier 1 capital ratio, and
129
basis points to the Total capital ratio. The leverage ratio was not affected. For additional information on these ratios, see “Capital” beginning on page
46
.
|
(j)
|
At June 30, 2014, our risk-weighted assets were calculated under the Advanced Approach framework.
Risk-weighted assets at June 30, 2014 under the Advanced Approach does not reflect the use of a simple value-at-risk methodology for repo-style transactions (including agented indemnified securities lending transactions), eligible margin loans, and similar transactions. The company has requested written approval to use this methodology. The estimated net impact of such a value-at-risk methodology for June 30, 2014 regulatory capital ratios calculated under the Advanced Approach would have been an increase of approximately 20 basis points to the CET1, Tier 1 and Total capital ratios.
The leverage ratio was not affected. For additional information on these ratios, see “Capital” beginning on page
46
.
|
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
|
•
|
Curtis Arledge, currently Vice Chairman and CEO of Investment Management, added to his responsibilities the oversight for a newly formed BNY Mellon Markets Group. The BNY Mellon Markets Group includes Global Markets, Global Collateral Services and Prime Services. Day to day operations of the group will be managed by Kurt Woetzel, the President of the BNY Mellon Markets Group.
|
•
|
Brian Shea was appointed Vice Chairman and CEO of Investment Services, in addition to his role as Head of Client Service Delivery and Client Technology Solutions.
|
•
|
Tim Keaney, the former Vice Chairman and CEO of Investment Services, announced he will be leaving the company to pursue other opportunities on Sept. 30, 2014.
|
•
|
Brian Rogan, Vice Chairman and Chief Risk Officer, and Art Certosimo, CEO of Global Markets, announced their plans to retire at year end.
|
•
|
Monique Herena was named Senior Executive Vice President and Chief Human Resources Officer.
|
•
|
Kevin McCarthy was named Senior Executive Vice President, General Counsel and Corporate Secretary.
|
•
|
AUC/A totaled
$28.5 trillion
at
June 30, 2014
compared with
$26.2 trillion
at
June 30, 2013
. The increase of 9% primarily reflects higher market values. (See the “Investment Services business” beginning on page
23
).
|
•
|
Assets under management (“AUM”), excluding securities lending cash management assets and assets managed in the Investment Services business, totaled a record
$1.64 trillion
at
June 30, 2014
compared with
$1.43 trillion
at
June 30, 2013
. The increase of 15% resulted from higher market values, the impact of a weaker U.S. dollar and net new business. (See the “Investment Management business” beginning on page
20
).
|
•
|
Investment services fees totaled $1.7 billion, a decrease of 1% compared with the
second quarter of 2013
. The decrease primarily reflects lower Depositary Receipts revenue driven by lower corporate actions, lower Corporate Trust revenue and higher money market fee waivers, partially offset by higher asset servicing and clearing
|
•
|
Investment management and performance fees totaled
$883 million
, a 4% increase compared with the
second quarter of 2013
. The increase primarily reflects higher equity market values, the average impact of a weaker U.S. dollar and net new business, partially offset by higher money market fee waivers and lower performance fees. (See the “Investment Management business” beginning on page
20
).
|
•
|
Foreign exchange and other trading revenue totaled
$130 million
in the
second quarter of 2014
compared with
$207 million
in the
second quarter of 2013
. Foreign exchange revenue decreased 28% year-over-year primarily driven by lower volatility, partially offset by higher volumes. Other trading revenue decreased year-over-year reflecting lower derivatives trading revenue. (See “Fee and other revenue” beginning on page
7
).
|
•
|
Investment and other income totaled
$142 million
in the
second quarter of 2014
compared with
$285 million
in the
second quarter of 2013
. The decrease primarily reflects the gain related to an equity investment recorded in the
second quarter of 2013
, partially offset by higher other income and seed capital gains. (See “Fee and other revenue” beginning on page
7
).
|
•
|
Net interest revenue totaled
$719 million
in the
second quarter of 2014
compared with
$757 million
in the
second quarter of 2013
. The decrease primarily resulted from lower yields on investment securities, partially offset by higher average interest-earning assets driven by higher deposits. (See “Net interest revenue” beginning on page
11
).
|
•
|
The net unrealized pre-tax gain on our total investment securities portfolio was
$1.2 billion
at
June 30, 2014
compared with
$676 million
at
March 31, 2014
. The increase was primarily driven by the reduction in market interest rates. (See “Investment securities” beginning on page
32
).
|
•
|
The provision for credit losses was a credit of
$12 million
in the
second quarter of 2014
driven by the continued improvement in the credit quality of the loan portfolio. (See “Asset quality and allowance for credit losses” beginning on page
37
).
|
•
|
Noninterest expense totaled
$2.9 billion
in the
second quarter of 2014
compared with
$2.8 billion
in the
second quarter of 2013
. The
|
•
|
The provision for income taxes was
$217 million
(26.7
%
effective tax rate) in the
second quarter of 2014
. (See “Income taxes” on page
15
).
|
•
|
At
June 30, 2014
, our estimated CET1 ratio (Non-GAAP) calculated under the Standardized Approach, and based on our interpretation of the Final Capital Rules, on a fully phased-in basis,
|
•
|
In the
second quarter of 2014
, we repurchased
12.6 million
common shares for a total cost of
$431 million
.
|
Fee and other revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD14
|
|||||||||||
|
|
|
|
|
2Q14 vs.
|
|
Year-to-date
|
|
vs.
|
|||||||||||||||
(dollars in millions, unless otherwise noted)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
|
2Q13
|
|
1Q14
|
|
|
2014
|
|
2013
|
|
|
YTD13
|
||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Asset servicing
(a)
|
$
|
1,022
|
|
$
|
1,009
|
|
$
|
988
|
|
|
3
|
%
|
1
|
%
|
|
$
|
2,031
|
|
$
|
1,957
|
|
|
4
|
%
|
Clearing services
|
326
|
|
325
|
|
321
|
|
|
2
|
|
—
|
|
|
651
|
|
625
|
|
|
4
|
|
|||||
Issuer services
|
231
|
|
229
|
|
294
|
|
|
(21
|
)
|
1
|
|
|
460
|
|
531
|
|
|
(13
|
)
|
|||||
Treasury services
|
141
|
|
136
|
|
139
|
|
|
1
|
|
4
|
|
|
277
|
|
280
|
|
|
(1
|
)
|
|||||
Total investment services fees
|
1,720
|
|
1,699
|
|
1,742
|
|
|
(1
|
)
|
1
|
|
|
3,419
|
|
3,393
|
|
|
1
|
|
|||||
Investment management and performance fees
|
883
|
|
843
|
|
848
|
|
|
4
|
|
5
|
|
|
1,726
|
|
1,670
|
|
|
3
|
|
|||||
Foreign exchange and other trading revenue
|
130
|
|
136
|
|
207
|
|
|
(37
|
)
|
(4
|
)
|
|
266
|
|
368
|
|
|
(28
|
)
|
|||||
Distribution and servicing
|
43
|
|
43
|
|
45
|
|
|
(4
|
)
|
—
|
|
|
86
|
|
94
|
|
|
(9
|
)
|
|||||
Financing-related fees
|
44
|
|
38
|
|
44
|
|
|
—
|
|
16
|
|
|
82
|
|
85
|
|
|
(4
|
)
|
|||||
Investment and other income
(b)
|
142
|
|
102
|
|
285
|
|
|
N/M
|
N/M
|
|
244
|
|
373
|
|
|
N/M
|
||||||||
Total fee revenue
(b)
|
2,962
|
|
2,861
|
|
3,171
|
|
|
(7
|
)
|
4
|
|
|
5,823
|
|
5,983
|
|
|
(3
|
)
|
|||||
Net securities gains
|
18
|
|
22
|
|
32
|
|
|
N/M
|
N/M
|
|
40
|
|
80
|
|
|
N/M
|
||||||||
Total fee and other revenue
(b)
|
$
|
2,980
|
|
$
|
2,883
|
|
$
|
3,203
|
|
|
(7
|
)%
|
3
|
%
|
|
$
|
5,863
|
|
$
|
6,063
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
AUM at period end
(in billions) (c)
|
$
|
1,636
|
|
$
|
1,620
|
|
$
|
1,427
|
|
|
15
|
%
|
1
|
%
|
|
$
|
1,636
|
|
$
|
1,427
|
|
|
15
|
%
|
AUC/A at period end
(in trillions) (d)
|
$
|
28.5
|
|
$
|
27.9
|
|
$
|
26.2
|
|
|
9
|
%
|
2
|
%
|
|
$
|
28.5
|
|
$
|
26.2
|
|
|
9
|
%
|
(a)
|
Asset servicing fees include securities lending revenue of
$46 million
in the
second quarter of 2014
,
$38 million
in the
first quarter of 2014
,
$50 million
in the
second quarter of 2013
,
$84 million
in the
first six months of 2014
and
$89 million
in the
first six months of 2013
.
|
(b)
|
Results for the second quarter of 2013 and the first six months of 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(c)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business. Also excludes assets under management related to Newton’s private client business that was sold in September 2013.
|
(d)
|
Includes the AUC/A of CIBC Mellon of
$1.2 trillion
at
June 30, 2014
and
March 31, 2014
and
$1.1 trillion
at
June 30, 2013
.
|
•
|
Asset servicing fees increased
3%
year-over-year and
1%
(unannualized) sequentially. The year-over-year increase primarily reflects higher market values, the average impact of a weaker U.S. dollar, net new business and organic growth, partially offset by lower securities lending revenue. The sequential increase primarily reflects seasonally higher securities lending revenue and higher market values.
|
•
|
Clearing services fees increased
2%
year-over-year and were up slightly sequentially. The year-over-year increase was driven by higher mutual fund fees, partially offset by a decrease in daily average revenue trades (“DARTS”) and higher money market fee waivers. The sequential increase primarily reflects higher mutual fund, cash management and technology fees, primarily offset by lower clearance revenue driven by lower volumes.
|
•
|
Issuer services fees decreased
21%
year-over-year and increased
1%
(unannualized) sequentially. The year-over-year decrease reflects lower dividend fees, partially due to timing, and corporate actions in Depositary Receipts and lower customer reimbursements related to technology expenditures, higher money market fee waivers and the impact of continued net maturities of high margin securitizations in Corporate Trust. We continue to estimate that net maturities of high margin structured debt securitizations could reduce the Company’s total annual revenue by up to one-half of 1% if the structured debt markets do not recover.
|
•
|
Treasury services fees increased
1%
year-over-year and
4%
(unannualized) sequentially. Both increases reflect higher payment volumes. The sequential increase also reflects additional business days.
|
Foreign exchange and other trading revenue
|
Year-to-date
|
||||||||||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
2014
|
|
2013
|
|
|||||
Foreign exchange
|
$
|
129
|
|
$
|
130
|
|
$
|
179
|
|
$
|
259
|
|
$
|
328
|
|
Other trading revenue (loss):
|
|
|
|
|
|
||||||||||
Fixed income
|
(1
|
)
|
1
|
|
12
|
|
—
|
|
20
|
|
|||||
Equity/other
|
2
|
|
5
|
|
16
|
|
7
|
|
20
|
|
|||||
Total other trading revenue
|
1
|
|
6
|
|
28
|
|
7
|
|
40
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
130
|
|
$
|
136
|
|
$
|
207
|
|
$
|
266
|
|
$
|
368
|
|
Investment and other income
|
|
|
|||||||||||||
|
|
|
|
Year-to-date
|
|||||||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
2014
|
|
2013
|
|
|||||
Corporate/bank-owned life insurance
|
$
|
30
|
|
$
|
30
|
|
$
|
32
|
|
$
|
60
|
|
$
|
66
|
|
Lease residual gains
|
4
|
|
35
|
|
10
|
|
39
|
|
11
|
|
|||||
Expense reimbursements from joint venture
|
15
|
|
12
|
|
8
|
|
27
|
|
19
|
|
|||||
Seed capital gains
|
15
|
|
6
|
|
1
|
|
21
|
|
7
|
|
|||||
Asset-related gains (losses)
|
17
|
|
(1
|
)
|
7
|
|
16
|
|
14
|
|
|||||
Equity investment revenue (loss)
|
17
|
|
(2
|
)
|
200
|
|
15
|
|
213
|
|
|||||
Private equity gains (losses)
|
(2
|
)
|
5
|
|
5
|
|
3
|
|
3
|
|
|||||
Transitional services agreements
|
—
|
|
—
|
|
4
|
|
—
|
|
9
|
|
|||||
Other income
(a)
|
46
|
|
17
|
|
18
|
|
63
|
|
31
|
|
|||||
Total investment and other income
(a)
|
$
|
142
|
|
$
|
102
|
|
$
|
285
|
|
$
|
244
|
|
$
|
373
|
|
(a)
|
Results for the second quarter of 2013 and the first six months of 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
Net interest revenue
|
|
|
|
|
|
|
|
|
YTD14
|
|
|||||||||||||||||
|
|
|
|
|
2Q14 vs.
|
|
Year-to-date
|
|
vs.
|
|
|||||||||||||||||
(dollars in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
|
2Q13
|
|
|
1Q14
|
|
|
|
2014
|
|
2013
|
|
|
YTD13
|
|
||||||
Net interest revenue (non-FTE)
|
$
|
719
|
|
$
|
728
|
|
$
|
757
|
|
|
(5
|
)
|
%
|
(1
|
)
|
%
|
|
$
|
1,447
|
|
$
|
1,476
|
|
|
(2
|
)
|
%
|
Tax equivalent adjustment
|
17
|
|
16
|
|
14
|
|
|
21
|
|
|
6
|
|
|
|
33
|
|
28
|
|
|
18
|
|
|
|||||
Net interest revenue (FTE) – Non-GAAP
|
$
|
736
|
|
$
|
744
|
|
$
|
771
|
|
|
(5
|
)
|
%
|
(1
|
)
|
%
|
|
$
|
1,480
|
|
$
|
1,504
|
|
|
(2
|
)
|
%
|
Average interest-earning assets
|
$
|
300,758
|
|
$
|
284,532
|
|
$
|
268,481
|
|
|
12
|
|
%
|
6
|
|
%
|
|
$
|
292,691
|
|
$
|
267,124
|
|
|
10
|
|
%
|
Net interest margin (FTE)
|
0.98
|
%
|
1.05
|
%
|
1.15
|
%
|
|
(17
|
)
|
bps
|
(7
|
)
|
bps
|
|
1.02
|
%
|
1.13
|
%
|
|
(11
|
)
|
bps
|
•
|
the European Central Bank’s reduction in their deposit rate to negative, and the resulting impact on lower reinvestment rates across the euro yield curve; as well as
|
•
|
prolonged low reinvestment rates in the U.S.
|
Average balances and interest rates
|
Quarter ended
|
|||||||||||||||||||
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|||||||||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average balance
|
|
Average rates
|
|
Average balance
|
|
Average rates
|
|
Average balance
|
|
Average rates
|
|||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
41,424
|
|
|
0.74
|
%
|
|
$
|
41,617
|
|
|
0.71
|
%
|
|
$
|
42,772
|
|
|
0.64
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
85,546
|
|
|
0.26
|
|
|
74,399
|
|
|
0.25
|
|
|
55,911
|
|
|
0.22
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
13,387
|
|
|
0.58
|
|
|
11,118
|
|
|
0.61
|
|
|
7,878
|
|
|
0.52
|
|
|||
Margin loans
|
17,050
|
|
|
1.05
|
|
|
15,840
|
|
|
1.07
|
|
|
13,906
|
|
|
1.14
|
|
|||
Non-margin loans:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic offices
|
22,566
|
|
|
2.30
|
|
|
22,002
|
|
|
2.31
|
|
|
21,689
|
|
|
2.40
|
|
|||
Foreign offices
|
13,833
|
|
|
1.34
|
|
|
13,805
|
|
|
1.26
|
|
|
12,318
|
|
|
1.32
|
|
|||
Total non-margin loans
|
36,399
|
|
|
1.94
|
|
|
35,807
|
|
|
1.90
|
|
|
34,007
|
|
|
2.01
|
|
|||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Government obligations
|
17,462
|
|
|
1.63
|
|
|
17,213
|
|
|
1.61
|
|
|
19,887
|
|
|
1.62
|
|
|||
U.S. Government agency obligations
|
43,167
|
|
|
1.67
|
|
|
42,710
|
|
|
1.87
|
|
|
47,631
|
|
|
1.80
|
|
|||
State and political subdivisions – tax-exempt
|
6,473
|
|
|
2.58
|
|
|
6,691
|
|
|
2.50
|
|
|
6,377
|
|
|
2.26
|
|
|||
Other securities
|
34,318
|
|
|
1.55
|
|
|
33,920
|
|
|
1.64
|
|
|
33,243
|
|
|
1.93
|
|
|||
Trading securities
|
5,532
|
|
|
2.19
|
|
|
5,217
|
|
|
2.60
|
|
|
6,869
|
|
|
2.33
|
|
|||
Total securities
|
106,952
|
|
|
1.71
|
|
|
105,751
|
|
|
1.83
|
|
|
114,007
|
|
|
1.86
|
|
|||
Total interest-earning assets
|
$
|
300,758
|
|
|
1.10
|
%
|
|
$
|
284,532
|
|
|
1.17
|
%
|
|
$
|
268,481
|
|
|
1.27
|
%
|
Allowance for loan losses
|
(197
|
)
|
|
|
|
(210
|
)
|
|
|
|
(237
|
)
|
|
|
||||||
Cash and due from banks
|
5,064
|
|
|
|
|
5,886
|
|
|
|
|
5,060
|
|
|
|
||||||
Other assets
|
52,182
|
|
|
|
|
53,430
|
|
|
|
|
52,627
|
|
|
|
||||||
Assets of consolidated investment management funds
|
11,405
|
|
|
|
|
11,354
|
|
|
|
|
11,524
|
|
|
|
||||||
Total assets
|
$
|
369,212
|
|
|
|
|
$
|
354,992
|
|
|
|
|
$
|
337,455
|
|
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Money market rate accounts
|
$
|
5,177
|
|
|
0.12
|
%
|
|
$
|
5,660
|
|
|
0.13
|
%
|
|
$
|
5,746
|
|
|
0.27
|
%
|
Savings
|
1,185
|
|
|
0.27
|
|
|
1,034
|
|
|
0.25
|
|
|
897
|
|
|
0.24
|
|
|||
Demand deposits
|
2,406
|
|
|
0.14
|
|
|
3,673
|
|
|
0.08
|
|
|
2,437
|
|
|
0.09
|
|
|||
Time deposits
|
42,824
|
|
|
0.04
|
|
|
41,544
|
|
|
0.04
|
|
|
41,706
|
|
|
0.04
|
|
|||
Foreign offices
|
111,082
|
|
|
0.06
|
|
|
101,075
|
|
|
0.06
|
|
|
100,433
|
|
|
0.07
|
|
|||
Total interest-bearing deposits
|
162,674
|
|
|
0.06
|
|
|
152,986
|
|
|
0.06
|
|
|
151,219
|
|
|
0.07
|
|
|||
Federal funds purchased and securities sold under repurchase agreements
|
19,030
|
|
|
(0.05
|
)
|
|
14,505
|
|
|
(0.13
|
)
|
|
9,206
|
|
|
(0.28
|
)
|
|||
Trading liabilities
|
2,993
|
|
|
0.97
|
|
|
1,978
|
|
|
1.59
|
|
|
3,036
|
|
|
1.40
|
|
|||
Other borrowed funds
|
1,272
|
|
|
0.47
|
|
|
1,035
|
|
|
0.51
|
|
|
1,385
|
|
|
0.20
|
|
|||
Commercial paper
|
1,970
|
|
|
0.08
|
|
|
102
|
|
|
0.05
|
|
|
58
|
|
|
0.04
|
|
|||
Payables to customers and broker-dealers
|
8,916
|
|
|
0.09
|
|
|
8,883
|
|
|
0.09
|
|
|
9,073
|
|
|
0.08
|
|
|||
Long-term debt
|
20,361
|
|
|
1.16
|
|
|
20,420
|
|
|
1.09
|
|
|
19,002
|
|
|
0.94
|
|
|||
Total interest-bearing liabilities
|
$
|
217,216
|
|
|
0.17
|
%
|
|
$
|
199,909
|
|
|
0.17
|
%
|
|
$
|
192,979
|
|
|
0.16
|
%
|
Total noninterest-bearing deposits
|
77,820
|
|
|
|
|
81,430
|
|
|
|
|
70,648
|
|
|
|
||||||
Other liabilities
|
24,854
|
|
|
|
|
24,608
|
|
|
|
|
26,779
|
|
|
|
||||||
Liabilities and obligations of consolidated investment management funds
|
10,180
|
|
|
|
|
10,128
|
|
|
|
|
10,242
|
|
|
|
||||||
Total liabilities
|
330,070
|
|
|
|
|
316,075
|
|
|
|
|
300,648
|
|
|
|
||||||
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Redeemable noncontrolling interests
|
225
|
|
|
|
|
246
|
|
|
|
|
189
|
|
|
|
||||||
Permanent equity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total BNY Mellon shareholders’ equity
|
38,127
|
|
|
|
|
37,851
|
|
|
|
|
35,817
|
|
|
|
||||||
Noncontrolling interests
|
790
|
|
|
|
|
820
|
|
|
|
|
801
|
|
|
|
||||||
Total permanent equity
|
38,917
|
|
|
|
|
38,671
|
|
|
|
|
36,618
|
|
|
|
||||||
Total liabilities, temporary equity and
permanent equity
|
$
|
369,212
|
|
|
|
|
$
|
354,992
|
|
|
|
|
$
|
337,455
|
|
|
|
|||
Net interest margin (FTE)
|
|
|
0.98
|
%
|
|
|
|
1.05
|
%
|
|
|
|
1.15
|
%
|
Note:
|
Interest and average rates were calculated on a taxable equivalent basis, at tax rates approximating 35%, using dollar amounts in thousands and actual number of days in the year.
|
Average balances and interest rates
|
Year-to-date
|
||||||||||||
|
June 30, 2014
|
|
June 30, 2013
|
||||||||||
(dollar amounts in millions, presented on an FTE basis)
|
Average balance
|
|
|
Average rates
|
|
|
Average balance
|
|
|
Average rates
|
|
||
Assets
|
|
|
|
|
|
|
|
||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits with banks (primarily foreign banks)
|
$
|
41,520
|
|
|
0.73
|
%
|
|
$
|
41,874
|
|
|
0.67
|
%
|
Interest-bearing deposits held at the Federal Reserve and other central banks
|
80,004
|
|
|
0.25
|
|
|
59,555
|
|
|
0.21
|
|
||
Federal funds sold and securities purchased under resale agreements
|
12,259
|
|
|
0.59
|
|
|
7,679
|
|
|
0.53
|
|
||
Margin loans
|
16,448
|
|
|
1.06
|
|
|
13,627
|
|
|
1.15
|
|
||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||
Domestic offices
|
22,286
|
|
|
2.31
|
|
|
21,524
|
|
|
2.39
|
|
||
Foreign offices
|
13,819
|
|
|
1.30
|
|
|
11,949
|
|
|
1.34
|
|
||
Total non-margin loans
|
36,105
|
|
|
1.92
|
|
|
33,473
|
|
|
2.02
|
|
||
Securities:
|
|
|
|
|
|
|
|
||||||
U.S. government obligations
|
17,339
|
|
|
1.62
|
|
|
19,353
|
|
|
1.57
|
|
||
U.S. government agency obligations
|
42,940
|
|
|
1.77
|
|
|
45,028
|
|
|
1.82
|
|
||
State and political subdivisions – tax-exempt
|
6,581
|
|
|
2.54
|
|
|
6,286
|
|
|
2.32
|
|
||
Other securities
|
34,120
|
|
|
1.60
|
|
|
33,873
|
|
|
1.98
|
|
||
Trading securities
|
5,375
|
|
|
2.39
|
|
|
6,376
|
|
|
2.36
|
|
||
Total securities
|
106,355
|
|
|
1.77
|
|
|
110,916
|
|
|
1.88
|
|
||
Total interest-earning assets
|
$
|
292,691
|
|
|
1.14
|
%
|
|
$
|
267,124
|
|
|
1.26
|
%
|
Allowance for loan losses
|
(204
|
)
|
|
|
|
(250
|
)
|
|
|
||||
Cash and due from banks
|
5,473
|
|
|
|
|
4,798
|
|
|
|
||||
Other assets
|
52,800
|
|
|
|
|
52,383
|
|
|
|
||||
Assets of consolidated investment management funds
|
11,380
|
|
|
|
|
11,514
|
|
|
|
||||
Total assets
|
$
|
362,140
|
|
|
|
|
$
|
335,569
|
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
||||||
Money market rate accounts
|
$
|
5,417
|
|
|
0.12
|
%
|
|
$
|
5,731
|
|
|
0.26
|
%
|
Savings
|
1,110
|
|
|
0.26
|
|
|
859
|
|
|
0.26
|
|
||
Demand deposits
|
3,036
|
|
|
0.10
|
|
|
2,748
|
|
|
0.08
|
|
||
Time deposits
|
42,187
|
|
|
0.04
|
|
|
40,406
|
|
|
0.05
|
|
||
Foreign offices
|
106,106
|
|
|
0.06
|
|
|
99,740
|
|
|
0.08
|
|
||
Total interest-bearing deposits
|
157,856
|
|
|
0.06
|
|
|
149,484
|
|
|
0.08
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
16,780
|
|
|
(0.08
|
)
|
|
9,197
|
|
|
(0.20
|
)
|
||
Trading liabilities
|
2,489
|
|
|
1.22
|
|
|
2,795
|
|
|
1.38
|
|
||
Other borrowed funds
|
1,154
|
|
|
0.49
|
|
|
1,269
|
|
|
0.51
|
|
||
Commercial paper
|
1,041
|
|
|
0.08
|
|
|
151
|
|
|
0.08
|
|
||
Payables to customers and broker-dealers
|
8,900
|
|
|
0.09
|
|
|
9,046
|
|
|
0.08
|
|
||
Long-term debt
|
20,391
|
|
|
1.13
|
|
|
18,940
|
|
|
1.06
|
|
||
Total interest-bearing liabilities
|
$
|
208,611
|
|
|
0.17
|
%
|
|
$
|
190,882
|
|
|
0.19
|
%
|
Total noninterest-bearing deposits
|
79,615
|
|
|
|
|
70,493
|
|
|
|
||||
Other liabilities
|
24,730
|
|
|
|
|
27,095
|
|
|
|
||||
Liabilities and obligations of consolidated investment management funds
|
10,154
|
|
|
|
|
10,214
|
|
|
|
||||
Total liabilities
|
323,110
|
|
|
|
|
298,684
|
|
|
|
||||
Temporary equity
|
|
|
|
|
|
|
|
||||||
Redeemable noncontrolling interests
|
236
|
|
|
|
|
182
|
|
|
|
||||
Permanent equity
|
|
|
|
|
|
|
|
||||||
Total BNY Mellon shareholders’ equity
|
37,990
|
|
|
|
|
35,891
|
|
|
|
||||
Noncontrolling interests
|
804
|
|
|
|
|
812
|
|
|
|
||||
Total permanent equity
|
38,794
|
|
|
|
|
36,703
|
|
|
|
||||
Total liabilities, temporary equity and permanent equity
|
$
|
362,140
|
|
|
|
|
$
|
335,569
|
|
|
|
||
Net interest margin (FTE)
|
|
|
1.02
|
%
|
|
|
|
1.13
|
%
|
Note:
|
Interest and average rates were calculated on a taxable equivalent basis, at tax rates approximating 35%, using dollar amounts in thousands and actual number of days in the year.
|
Noninterest expense
|
|
|
|
|
|
|
|
|
YTD14
|
||||||||||||||
|
|
|
|
|
2Q14 vs.
|
|
Year-to-date
|
vs.
|
|||||||||||||||
(dollars in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
|
2Q13
|
|
1Q14
|
|
|
2014
|
|
2013
|
|
YTD13
|
||||||
Staff:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Compensation
|
$
|
903
|
|
$
|
925
|
|
$
|
891
|
|
|
1
|
%
|
(2
|
)%
|
|
$
|
1,828
|
|
$
|
1,776
|
|
3
|
%
|
Incentives
|
313
|
|
359
|
|
364
|
|
|
(14
|
)
|
(13
|
)
|
|
672
|
|
702
|
|
(4
|
)
|
|||||
Employee benefits
|
223
|
|
227
|
|
254
|
|
|
(12
|
)
|
(2
|
)
|
|
450
|
|
503
|
|
(11
|
)
|
|||||
Total staff
|
1,439
|
|
1,511
|
|
1,509
|
|
|
(5
|
)
|
(5
|
)
|
|
2,950
|
|
2,981
|
|
(1
|
)
|
|||||
Professional, legal and other purchased services
|
314
|
|
312
|
|
317
|
|
|
(1
|
)
|
1
|
|
|
626
|
|
612
|
|
2
|
|
|||||
Software
|
154
|
|
152
|
|
157
|
|
|
(2
|
)
|
1
|
|
|
306
|
|
297
|
|
3
|
|
|||||
Net occupancy
|
152
|
|
154
|
|
159
|
|
|
(4
|
)
|
(1
|
)
|
|
306
|
|
322
|
|
(5
|
)
|
|||||
Distribution and servicing
|
112
|
|
107
|
|
111
|
|
|
1
|
|
5
|
|
|
219
|
|
217
|
|
1
|
|
|||||
Furniture and equipment
|
82
|
|
85
|
|
81
|
|
|
1
|
|
(4
|
)
|
|
167
|
|
169
|
|
(1
|
)
|
|||||
Sub-custodian
|
81
|
|
68
|
|
77
|
|
|
5
|
|
19
|
|
|
149
|
|
141
|
|
6
|
|
|||||
Business development
|
68
|
|
64
|
|
90
|
|
|
(24
|
)
|
6
|
|
|
132
|
|
158
|
|
(16
|
)
|
|||||
Other
|
347
|
|
223
|
|
215
|
|
|
61
|
|
56
|
|
|
570
|
|
522
|
|
9
|
|
|||||
Amortization of intangible assets
|
75
|
|
75
|
|
93
|
|
|
(19
|
)
|
—
|
|
|
150
|
|
179
|
|
(16
|
)
|
|||||
M&I, litigation and restructuring charges
|
122
|
|
(12
|
)
|
13
|
|
|
N/M
|
|
N/M
|
|
|
110
|
|
52
|
|
N/M
|
|
|||||
Total noninterest expense - GAAP
|
$
|
2,946
|
|
$
|
2,739
|
|
$
|
2,822
|
|
|
4
|
%
|
8
|
%
|
|
$
|
5,685
|
|
$
|
5,650
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total staff expense as a percentage of total
revenue
(a)
|
38
|
%
|
41
|
%
|
37
|
%
|
|
|
|
|
40
|
%
|
39
|
%
|
|
||||||||
Full-time employees at period end
|
51,100
|
|
51,400
|
|
49,800
|
|
|
3
|
%
|
(1
|
)%
|
|
51,100
|
|
49,800
|
|
3
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Memo:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total noninterest expense excluding amortization of intangible assets, M&I, litigation and restructuring charges and the charge (recovery) related to investment management funds, net of incentives - Non-GAAP
|
$
|
2,640
|
|
$
|
2,681
|
|
$
|
2,743
|
|
|
(4
|
)%
|
(2
|
)%
|
|
$
|
5,321
|
|
$
|
5,407
|
|
(2
|
)%
|
(a)
|
Results for the second quarter of 2013 and the first six months of 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
Key market metrics
|
|
|
|
|
|
|
|
|
|
|
YTD14 vs. YTD13
|
||||||||||
|
|
|
|
|
2Q14 vs.
|
|
Year-to-date
|
||||||||||||||
2Q13
|
|
3Q13
|
|
4Q13
|
|
1Q14
|
|
2Q14
|
|
2Q13
|
|
1Q14
|
|
|
2014
|
|
2013
|
|
|||
S&P 500 Index
(a)
|
1606
|
|
1682
|
|
1848
|
|
1872
|
|
1960
|
|
22
|
%
|
5
|
%
|
|
1960
|
|
1606
|
|
22
|
%
|
S&P 500 Index – daily average
|
1609
|
|
1675
|
|
1769
|
|
1835
|
|
1900
|
|
18
|
|
4
|
|
|
1868
|
|
1562
|
|
20
|
|
FTSE 100 Index
(a)
|
6215
|
|
6462
|
|
6749
|
|
6598
|
|
6744
|
|
9
|
|
2
|
|
|
6744
|
|
6215
|
|
9
|
|
FTSE 100 Index – daily average
|
6438
|
|
6530
|
|
6612
|
|
6680
|
|
6764
|
|
5
|
|
1
|
|
|
6722
|
|
6365
|
|
6
|
|
MSCI World Index
(a)
|
1434
|
|
1544
|
|
1661
|
|
1674
|
|
1743
|
|
22
|
|
4
|
|
|
1743
|
|
1434
|
|
22
|
|
MSCI World Index – daily average
|
1463
|
|
1511
|
|
1602
|
|
1647
|
|
1698
|
|
16
|
|
3
|
|
|
1673
|
|
1434
|
|
17
|
|
Barclays Capital Global Aggregate
Bond
SM
Index
(a)(b)
|
343
|
|
356
|
|
354
|
|
365
|
|
376
|
|
10
|
|
3
|
|
|
376
|
|
343
|
|
10
|
|
NYSE and NASDAQ share volume
(in billions)
|
186
|
|
166
|
|
179
|
|
196
|
|
187
|
|
1
|
|
(5
|
)
|
|
383
|
|
360
|
|
6
|
|
JPMorgan G7 Volatility Index – daily average
(c)
|
9.84
|
|
9.72
|
|
8.20
|
|
7.80
|
|
6.22
|
|
(37
|
)
|
(20
|
)
|
|
7.01
|
|
9.43
|
|
(26
|
)
|
Average Fed Funds effective rate
|
0.12
|
%
|
0.09
|
%
|
0.09
|
%
|
0.07
|
%
|
0.09
|
%
|
(3) bps
|
|
2 bps
|
|
|
0.08
|
%
|
0.13
|
%
|
(5) bps
|
|
(a)
|
Period end.
|
(b)
|
Unhedged in U.S. dollar terms.
|
(c)
|
The JPMorgan G7 Volatility Index is based on the implied volatility in 3-month currency options.
|
For the quarter ended June 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
970
|
|
(a)
|
$
|
1,920
|
|
|
$
|
119
|
|
|
$
|
3,009
|
|
(a)
|
Net interest revenue
|
66
|
|
|
593
|
|
|
60
|
|
|
719
|
|
|
||||
Total revenue
|
1,036
|
|
(a)
|
2,513
|
|
|
179
|
|
|
3,728
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
||||
Noninterest expense
|
865
|
|
|
1,868
|
|
|
213
|
|
|
2,946
|
|
|
||||
Income (loss) before taxes
|
$
|
171
|
|
(a)
|
$
|
645
|
|
|
$
|
(22
|
)
|
|
$
|
794
|
|
(a)
|
Pre-tax operating margin
(b)
|
16
|
%
|
|
26
|
%
|
|
N/M
|
|
|
21
|
%
|
|
||||
Average assets
|
$
|
37,750
|
|
|
$
|
264,221
|
|
|
$
|
67,241
|
|
|
$
|
369,212
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
834
|
|
|
$
|
1,824
|
|
|
$
|
213
|
|
|
$
|
2,871
|
|
|
Income (loss) before taxes
|
202
|
|
(a)
|
689
|
|
|
(22
|
)
|
|
869
|
|
(a)
|
||||
Pre-tax operating margin
(b)
|
19
|
%
|
|
27
|
%
|
|
N/M
|
|
|
23
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$46 million
, net of noncontrolling interests of
$17 million
, for a net impact of
$29 million
. Income (loss) before taxes is net of noncontrolling interests of
$17 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
For the quarter ended March 31, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
900
|
|
(a)
|
$
|
1,887
|
|
|
$
|
112
|
|
|
$
|
2,899
|
|
(a)
|
Net interest revenue
|
70
|
|
|
590
|
|
|
68
|
|
|
728
|
|
|
||||
Total revenue
|
970
|
|
(a)
|
2,477
|
|
|
180
|
|
|
3,627
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|
||||
Noninterest expense
|
724
|
|
|
1,822
|
|
|
193
|
|
|
2,739
|
|
|
||||
Income before taxes
|
$
|
246
|
|
(a)
|
$
|
655
|
|
|
$
|
5
|
|
|
$
|
906
|
|
(a)
|
Pre-tax operating margin
(b)
|
25
|
%
|
|
26
|
%
|
|
N/M
|
|
|
25
|
%
|
|
||||
Average assets
|
$
|
39,463
|
|
|
$
|
258,470
|
|
|
$
|
57,059
|
|
|
$
|
354,992
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
693
|
|
|
$
|
1,778
|
|
|
$
|
193
|
|
|
$
|
2,664
|
|
|
Income before taxes
|
277
|
|
(a)
|
699
|
|
|
5
|
|
|
981
|
|
(a)
|
||||
Pre-tax operating margin
(b)
|
29
|
%
|
|
28
|
%
|
|
N/M
|
|
|
27
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$36 million
, net of noncontrolling interests of
$20 million
, for a net impact of
$16 million
. Income before taxes is net of noncontrolling interests of
$20 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
For the quarter ended June 30, 2013
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
(a)
|
$
|
912
|
|
(b)
|
$
|
1,970
|
|
|
$
|
347
|
|
|
$
|
3,229
|
|
(b)
|
Net interest revenue
|
63
|
|
|
633
|
|
|
61
|
|
|
757
|
|
|
||||
Total revenue
(a)
|
975
|
|
(b)
|
2,603
|
|
|
408
|
|
|
3,986
|
|
(b)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|
||||
Noninterest expense
|
704
|
|
|
1,879
|
|
|
239
|
|
|
2,822
|
|
|
||||
Income before taxes
(a)
|
$
|
271
|
|
(b)
|
$
|
724
|
|
|
$
|
188
|
|
|
$
|
1,183
|
|
(b)
|
Pre-tax operating margin
(a) (c)
|
28
|
%
|
|
28
|
%
|
|
N/M
|
|
|
30
|
%
|
|
||||
Average assets
|
$
|
37,953
|
|
|
$
|
244,802
|
|
|
$
|
54,700
|
|
|
$
|
337,455
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
665
|
|
|
$
|
1,825
|
|
|
$
|
239
|
|
|
$
|
2,729
|
|
|
Income before taxes
(a)
|
310
|
|
(b)
|
778
|
|
|
188
|
|
|
1,276
|
|
(b)
|
||||
Pre-tax operating margin
(a) (c)
|
32
|
%
|
|
30
|
%
|
|
N/M
|
|
|
32
|
%
|
|
(a)
|
Other segment and consolidated results have been restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$65 million
, net of noncontrolling interests of
$39 million
, for a net impact of
$26 million
. Income before taxes is net of noncontrolling interests of
$39 million
.
|
(c)
|
Income before taxes divided by total revenue.
|
For the six months ended June 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
1,870
|
|
(a)
|
$
|
3,807
|
|
|
$
|
231
|
|
|
$
|
5,908
|
|
(a)
|
Net interest revenue
|
136
|
|
|
1,183
|
|
|
128
|
|
|
1,447
|
|
|
||||
Total revenue
|
2,006
|
|
(a)
|
4,990
|
|
|
359
|
|
|
7,355
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|
||||
Noninterest expense
|
1,589
|
|
|
3,690
|
|
|
406
|
|
|
5,685
|
|
|
||||
Income (loss) before taxes
|
$
|
417
|
|
(a)
|
$
|
1,300
|
|
|
$
|
(17
|
)
|
|
$
|
1,700
|
|
(a)
|
Pre-tax operating margin
(b)
|
21
|
%
|
|
26
|
%
|
|
N/M
|
|
|
23
|
%
|
|
||||
Average assets
|
$
|
38,602
|
|
|
$
|
261,362
|
|
|
$
|
62,176
|
|
|
$
|
362,140
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
1,527
|
|
|
$
|
3,602
|
|
|
$
|
406
|
|
|
$
|
5,535
|
|
|
Income (loss) before taxes
|
479
|
|
(a)
|
1,388
|
|
|
(17
|
)
|
|
1,850
|
|
(a)
|
||||
Pre-tax operating margin
(b)
|
24
|
%
|
|
28
|
%
|
|
N/M
|
|
|
25
|
%
|
|
(a)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$82 million
, net of noncontrolling interests of
$37 million
, for a net impact of
$45 million
. Income (loss) before taxes is net of noncontrolling interests of
$37 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
For the six months ended June 30, 2013
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
(a)
|
$
|
1,793
|
|
(b)
|
$
|
3,831
|
|
|
$
|
499
|
|
|
$
|
6,123
|
|
(b)
|
Net interest revenue
|
125
|
|
|
1,286
|
|
|
65
|
|
|
1,476
|
|
|
||||
Total revenue
(a)
|
1,918
|
|
(b)
|
5,117
|
|
|
564
|
|
|
7,599
|
|
(b)
|
||||
Provision for credit losses
|
—
|
|
|
1
|
|
|
(44
|
)
|
|
(43
|
)
|
|
||||
Noninterest expense
|
1,441
|
|
|
3,722
|
|
|
487
|
|
|
5,650
|
|
|
||||
Income before taxes
(a)
|
$
|
477
|
|
(b)
|
$
|
1,394
|
|
|
$
|
121
|
|
|
$
|
1,992
|
|
(b)
|
Pre-tax operating margin
(a) (c)
|
25
|
%
|
|
27
|
%
|
|
N/M
|
|
|
26
|
%
|
|
||||
Average assets
|
$
|
38,346
|
|
|
$
|
242,507
|
|
|
$
|
54,716
|
|
|
$
|
335,569
|
|
|
Excluding amortization of intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Noninterest expense
|
$
|
1,363
|
|
|
$
|
3,621
|
|
|
$
|
487
|
|
|
$
|
5,471
|
|
|
Income before taxes
(a)
|
555
|
|
(b)
|
1,495
|
|
|
121
|
|
|
2,171
|
|
(b)
|
||||
Pre-tax operating margin
(a) (c)
|
29
|
%
|
|
29
|
%
|
|
N/M
|
|
|
29
|
%
|
|
(a)
|
Other segment and consolidated results have been restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$115 million
, net of noncontrolling interests of
$55 million
, for a net impact of
$60 million
. Income before taxes is net of noncontrolling interests of
$55 million
.
|
(c)
|
Income before taxes divided by total revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD14
|
|||||||||||||||||
(dollar amounts in millions)
|
|
|
|
|
|
|
2Q14 vs.
|
|
Year-to-date
|
|
vs.
|
|||||||||||||||||||
2Q13
|
|
3Q13
|
|
4Q13
|
|
1Q14
|
|
2Q14
|
|
|
2Q13
|
1Q14
|
|
2014
|
2013
|
|
YTD13
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment management fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Mutual funds
|
$
|
299
|
|
$
|
293
|
|
$
|
303
|
|
$
|
299
|
|
$
|
311
|
|
|
4
|
%
|
4
|
%
|
|
$
|
610
|
|
$
|
598
|
|
|
2
|
%
|
Institutional clients
|
366
|
|
367
|
|
385
|
|
372
|
|
385
|
|
|
5
|
|
3
|
|
|
757
|
|
726
|
|
|
4
|
|
|||||||
Wealth management
|
146
|
|
145
|
|
149
|
|
153
|
|
156
|
|
|
7
|
|
2
|
|
|
309
|
|
289
|
|
|
7
|
|
|||||||
Investment management fees
|
811
|
|
805
|
|
837
|
|
824
|
|
852
|
|
|
5
|
|
3
|
|
|
1,676
|
|
1,613
|
|
|
4
|
|
|||||||
Performance fees
|
33
|
|
10
|
|
72
|
|
20
|
|
29
|
|
|
(12
|
)
|
N/M
|
|
|
49
|
|
48
|
|
|
2
|
|
|||||||
Investment management and performance fees
|
844
|
|
815
|
|
909
|
|
844
|
|
881
|
|
|
4
|
|
4
|
|
|
1,725
|
|
1,661
|
|
|
4
|
|
|||||||
Distribution and servicing
|
44
|
|
41
|
|
41
|
|
40
|
|
41
|
|
|
(7
|
)
|
3
|
|
|
81
|
|
90
|
|
|
(10
|
)
|
|||||||
Other
(a)
|
24
|
|
26
|
|
43
|
|
16
|
|
48
|
|
|
N/M
|
|
N/M
|
|
|
64
|
|
42
|
|
|
52
|
|
|||||||
Total fee and other revenue
(a)
|
912
|
|
882
|
|
993
|
|
900
|
|
970
|
|
|
6
|
|
8
|
|
|
1,870
|
|
1,793
|
|
|
4
|
|
|||||||
Net interest revenue
|
63
|
|
67
|
|
68
|
|
70
|
|
66
|
|
|
5
|
|
(6
|
)
|
|
136
|
|
125
|
|
|
9
|
|
|||||||
Total revenue
|
975
|
|
949
|
|
1,061
|
|
970
|
|
1,036
|
|
|
6
|
|
7
|
|
|
2,006
|
|
1,918
|
|
|
5
|
|
|||||||
Noninterest expense (ex. amortization of intangible assets and the charge (recovery) related to investment management funds, net of incentives)
|
692
|
|
689
|
|
760
|
|
698
|
|
725
|
|
|
5
|
|
4
|
|
|
1,423
|
|
1,351
|
|
|
5
|
|
|||||||
Income before taxes (ex. amortization of intangible assets and the charge (recovery) related to investment management funds, net of incentives)
|
283
|
|
260
|
|
301
|
|
272
|
|
311
|
|
|
10
|
|
14
|
|
|
583
|
|
567
|
|
|
3
|
|
|||||||
Amortization of intangible assets
|
39
|
|
35
|
|
35
|
|
31
|
|
31
|
|
|
(21
|
)
|
—
|
|
|
62
|
|
78
|
|
|
(21
|
)
|
|||||||
Charge (recovery) related to investment management funds, net of incentives
|
(27
|
)
|
—
|
|
—
|
|
(5
|
)
|
109
|
|
|
N/M
|
|
N/M
|
|
|
104
|
|
12
|
|
|
N/M
|
|
|||||||
Income before taxes
|
$
|
271
|
|
$
|
225
|
|
$
|
266
|
|
$
|
246
|
|
$
|
171
|
|
|
(37
|
)%
|
(30
|
)%
|
|
$
|
417
|
|
$
|
477
|
|
|
(13
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Pre-tax operating margin
|
28
|
%
|
24
|
%
|
25
|
%
|
25
|
%
|
16
|
%
|
|
|
|
|
21
|
%
|
25
|
%
|
|
|
||||||||||
Adjusted pre-tax operating margin
(a)
|
34
|
%
|
33
|
%
|
34
|
%
|
34
|
%
|
36
|
%
|
|
|
|
|
35
|
%
|
35
|
%
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Wealth management:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average loans
|
$
|
9,253
|
|
$
|
9,453
|
|
$
|
9,755
|
|
$
|
10,075
|
|
$
|
10,372
|
|
|
12
|
%
|
3
|
%
|
|
$
|
10,224
|
|
$
|
9,113
|
|
|
12
|
%
|
Average deposits
|
$
|
13,306
|
|
$
|
13,898
|
|
$
|
14,161
|
|
$
|
14,805
|
|
$
|
13,458
|
|
|
1
|
%
|
(9
|
)%
|
|
$
|
14,128
|
|
$
|
13,475
|
|
|
5
|
%
|
(a)
|
Total fee and other revenue includes the impact of the consolidated investment management funds. Adjusted pre-tax operating margin includes the pro forma impact of money market fee waivers, is net of distribution and servicing expense and excludes amortization of intangible assets and the charge (recovery) related to investment management funds, net of incentives. See “Supplemental information - Explanation of GAAP and Non-GAAP financial measures” beginning on page
55
for the reconciliation of Non-GAAP measures.
|
AUM trends
(a)
|
|
|
|
|
|
2Q14 vs.
|
|||||||||||||
(dollar amounts in billions)
|
2Q13
|
|
3Q13
|
|
4Q13
|
|
1Q14
|
|
2Q14
|
|
2Q13
|
|
1Q14
|
|
|||||
AUM at period end, by product type:
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
$
|
242
|
|
$
|
266
|
|
$
|
276
|
|
$
|
277
|
|
$
|
282
|
|
17
|
%
|
2
|
%
|
Fixed income
|
218
|
|
215
|
|
220
|
|
224
|
|
224
|
|
3
|
|
—
|
|
|||||
Index
|
280
|
|
303
|
|
323
|
|
328
|
|
353
|
|
26
|
|
8
|
|
|||||
Liability-driven investments
(b)
|
347
|
|
394
|
|
403
|
|
436
|
|
436
|
|
26
|
|
—
|
|
|||||
Alternative investments
|
63
|
|
62
|
|
62
|
|
63
|
|
66
|
|
5
|
|
5
|
|
|||||
Cash
|
277
|
|
292
|
|
299
|
|
292
|
|
275
|
|
(1
|
)
|
(6
|
)
|
|||||
Total AUM
|
$
|
1,427
|
|
$
|
1,532
|
|
$
|
1,583
|
|
$
|
1,620
|
|
$
|
1,636
|
|
15
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
||||||||||||
AUM at period end, by client type:
|
|
|
|
|
|
|
|
||||||||||||
Institutional
|
$
|
968
|
|
$
|
1,041
|
|
$
|
1,072
|
|
$
|
1,118
|
|
$
|
1,109
|
|
15
|
%
|
(1
|
)%
|
Mutual funds
|
378
|
|
407
|
|
425
|
|
415
|
|
440
|
|
16
|
|
6
|
|
|||||
Private client
|
81
|
|
84
|
|
86
|
|
87
|
|
87
|
|
7
|
|
—
|
|
|||||
Total AUM
|
$
|
1,427
|
|
$
|
1,532
|
|
$
|
1,583
|
|
$
|
1,620
|
|
$
|
1,636
|
|
15
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in AUM:
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance of AUM
|
$
|
1,423
|
|
$
|
1,427
|
|
$
|
1,532
|
|
$
|
1,583
|
|
$
|
1,620
|
|
|
|
||
Net inflows (outflows):
|
|
|
|
|
|
|
|
||||||||||||
Long-term:
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
1
|
|
3
|
|
(5
|
)
|
(1
|
)
|
(4
|
)
|
|
|
|||||||
Fixed income
|
2
|
|
(1
|
)
|
5
|
|
—
|
|
(1
|
)
|
|
|
|||||||
Index
|
8
|
|
2
|
|
(3
|
)
|
—
|
|
7
|
|
|
|
|||||||
Liability-driven investments
(b)
|
11
|
|
27
|
|
4
|
|
20
|
|
(17
|
)
|
|
|
|||||||
Alternative investments
|
(1
|
)
|
1
|
|
1
|
|
2
|
|
2
|
|
|
|
|||||||
Total long-term inflows (outflows)
|
21
|
|
32
|
|
2
|
|
21
|
|
(13
|
)
|
|
|
|||||||
Short term:
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
(1
|
)
|
13
|
|
6
|
|
(7
|
)
|
(18
|
)
|
|
|
|||||||
Total net inflows (outflows)
|
20
|
|
45
|
|
8
|
|
14
|
|
(31
|
)
|
|
|
|||||||
Net market/currency impact
|
(16
|
)
|
60
|
|
43
|
|
23
|
|
47
|
|
|
|
|||||||
Ending balance of AUM
|
$
|
1,427
|
|
$
|
1,532
|
|
$
|
1,583
|
|
$
|
1,620
|
|
$
|
1,636
|
|
15
|
%
|
1
|
%
|
(a)
|
Excludes securities lending cash management assets and assets managed in the Investment Services business. Also excludes assets under management related to Newton’s private client business that was sold in September 2013.
|
(b)
|
Includes currency and overlay assets under management.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD14
|
|
||||||||||||||||
(dollar amounts in millions,
unless otherwise noted)
|
|
|
|
|
|
|
2Q14 vs.
|
|
Year-to-date
|
|
vs.
|
|||||||||||||||||||
2Q13
|
|
3Q13
|
|
4Q13
|
|
1Q14
|
|
2Q14
|
|
|
2Q13
|
|
1Q14
|
|
|
2014
|
|
2013
|
|
|
YTD13
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Asset servicing
|
$
|
961
|
|
$
|
939
|
|
$
|
957
|
|
$
|
985
|
|
$
|
993
|
|
|
3
|
%
|
1
|
%
|
|
$
|
1,978
|
|
$
|
1,904
|
|
|
4
|
%
|
Clearing services
|
320
|
|
314
|
|
322
|
|
323
|
|
324
|
|
|
1
|
|
—
|
|
|
647
|
|
622
|
|
|
4
|
|
|||||||
Issuer services
|
294
|
|
321
|
|
236
|
|
228
|
|
231
|
|
|
(21
|
)
|
1
|
|
|
459
|
|
530
|
|
|
(13
|
)
|
|||||||
Treasury services
|
135
|
|
135
|
|
137
|
|
134
|
|
140
|
|
|
4
|
|
4
|
|
|
274
|
|
272
|
|
|
1
|
|
|||||||
Total investment services fees
|
1,710
|
|
1,709
|
|
1,652
|
|
1,670
|
|
1,688
|
|
|
(1
|
)
|
1
|
|
|
3,358
|
|
3,328
|
|
|
1
|
|
|||||||
Foreign exchange and other trading revenue
|
193
|
|
177
|
|
150
|
|
158
|
|
145
|
|
|
(25
|
)
|
(8
|
)
|
|
303
|
|
366
|
|
|
(17
|
)
|
|||||||
Other
(a)
|
67
|
|
63
|
|
58
|
|
59
|
|
87
|
|
|
30
|
|
47
|
|
|
146
|
|
137
|
|
|
7
|
|
|||||||
Total fee and other revenue
(a)
|
1,970
|
|
1,949
|
|
1,860
|
|
1,887
|
|
1,920
|
|
|
(3
|
)
|
2
|
|
|
3,807
|
|
3,831
|
|
|
(1
|
)
|
|||||||
Net interest revenue
|
633
|
|
619
|
|
610
|
|
590
|
|
593
|
|
|
(6
|
)
|
1
|
|
|
1,183
|
|
1,286
|
|
|
(8
|
)
|
|||||||
Total revenue
|
2,603
|
|
2,568
|
|
2,470
|
|
2,477
|
|
2,513
|
|
|
(3
|
)
|
1
|
|
|
4,990
|
|
5,117
|
|
|
(2
|
)
|
|||||||
Provision for credit losses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
N/M
|
N/M
|
|
—
|
|
1
|
|
|
N/M
|
||||||||||
Noninterest expense (ex. amortization of intangible assets)
|
1,825
|
|
1,765
|
|
1,822
|
|
1,778
|
|
1,824
|
|
|
—
|
|
3
|
|
|
3,602
|
|
3,621
|
|
|
(1
|
)
|
|||||||
Income before taxes (ex. amortization of intangible assets)
|
778
|
|
803
|
|
648
|
|
699
|
|
689
|
|
|
(11
|
)
|
(1
|
)
|
|
1,388
|
|
1,495
|
|
|
(7
|
)
|
|||||||
Amortization of intangible assets
|
54
|
|
46
|
|
47
|
|
44
|
|
44
|
|
|
(19
|
)
|
—
|
|
|
88
|
|
101
|
|
|
(13
|
)
|
|||||||
Income before taxes
|
$
|
724
|
|
$
|
757
|
|
$
|
601
|
|
$
|
655
|
|
$
|
645
|
|
|
(11
|
)%
|
(2
|
)%
|
|
$
|
1,300
|
|
$
|
1,394
|
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pre-tax operating margin
|
28
|
%
|
29
|
%
|
24
|
%
|
26
|
%
|
26
|
%
|
|
|
|
|
26
|
%
|
27
|
%
|
|
|
||||||||||
Pre-tax operating margin (ex. amortization of intangible assets)
|
30
|
%
|
31
|
%
|
26
|
%
|
28
|
%
|
27
|
%
|
|
|
|
|
28
|
%
|
29
|
%
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment services fees as a percentage of noninterest expense
(b)
|
94
|
%
|
97
|
%
|
90
|
%
|
93
|
%
|
93
|
%
|
|
|
|
|
93
|
%
|
93
|
%
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Securities lending revenue
|
$
|
39
|
|
$
|
26
|
|
$
|
21
|
|
$
|
30
|
|
$
|
35
|
|
|
(10
|
)%
|
17
|
%
|
|
$
|
65
|
|
$
|
70
|
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average loans
|
$
|
27,814
|
|
$
|
27,865
|
|
$
|
31,211
|
|
$
|
31,468
|
|
$
|
33,115
|
|
|
19
|
%
|
5
|
%
|
|
$
|
32,296
|
|
$
|
27,258
|
|
|
18
|
%
|
Average deposits
|
$
|
204,499
|
|
$
|
206,068
|
|
$
|
216,216
|
|
$
|
214,947
|
|
$
|
220,701
|
|
|
8
|
%
|
3
|
%
|
|
$
|
217,840
|
|
$
|
202,372
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
AUC/A at period end
(in trillions) (c)
|
$
|
26.2
|
|
$
|
27.4
|
|
$
|
27.6
|
|
$
|
27.9
|
|
$
|
28.5
|
|
|
9
|
%
|
2
|
%
|
|
|
|
|
|
|||||
Market value of securities on loan at period end
(in billions) (d)
|
$
|
255
|
|
$
|
255
|
|
$
|
235
|
|
$
|
264
|
|
$
|
280
|
|
|
10
|
%
|
6
|
%
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Asset servicing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Estimated new business wins (AUC/A)
(in billions)
|
$
|
201
|
|
$
|
110
|
|
$
|
123
|
|
$
|
161
|
|
$
|
130
|
|
|
|
|
|
|
|
|
|
|||||||
Depositary Receipts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Number of sponsored programs
|
1,349
|
|
1,350
|
|
1,335
|
|
1,332
|
|
1,316
|
|
|
(2
|
)%
|
(1
|
)%
|
|
|
|
|
|
||||||||||
Clearing services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Global DARTS volume
(in thousands)
|
217
|
|
212
|
|
213
|
|
230
|
|
207
|
|
|
(5
|
)%
|
(10
|
)%
|
|
|
|
|
|
||||||||||
Average active clearing accounts (U.S. platform) (
in thousands)
|
5,591
|
|
5,622
|
|
5,643
|
|
5,695
|
|
5,752
|
|
|
3
|
%
|
1
|
%
|
|
|
|
|
|
||||||||||
Average long-term mutual fund assets (U.S. platform)
|
$
|
371,196
|
|
$
|
377,131
|
|
$
|
401,434
|
|
$
|
413,658
|
|
$
|
433,047
|
|
|
17
|
%
|
5
|
%
|
|
|
|
|
|
|||||
Average investor margin loans (U.S. platform)
|
$
|
8,235
|
|
$
|
8,845
|
|
$
|
8,848
|
|
$
|
8,919
|
|
$
|
9,236
|
|
|
12
|
%
|
4
|
%
|
|
|
|
|
|
|||||
Broker-Dealer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average tri-party repo balances (
in billions)
|
$
|
2,037
|
|
$
|
1,952
|
|
$
|
2,005
|
|
$
|
1,983
|
|
$
|
2,022
|
|
|
(1
|
)%
|
2
|
%
|
|
|
|
|
|
(a)
|
Total fee and other revenue includes investment management fees and distribution and servicing revenue.
|
(b)
|
Noninterest expense excludes amortization of intangible assets and litigation expense.
|
(c)
|
Includes the AUC/A of CIBC Mellon of
$1.1 trillion
at
June 30, 2013
and $1.2 trillion at
Sept. 30, 2013
,
Dec. 31, 2013
,
March 31, 2014
and
June 30, 2014
.
|
(d)
|
Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent, beginning in the fourth quarter of 2013, on behalf of CIBC Mellon clients, which totaled $62 billion at
Dec. 31, 2013
, $66 billion at
March 31, 2014
and $64 billion at
June 30, 2014
.
|
•
|
Asset servicing fees (global custody, broker-dealer services and global collateral services) were
$993 million
in the
second quarter of 2014
compared with
$961 million
in the
second quarter of 2013
and
$985 million
in the
first quarter of 2014
. The year-over-year increase primarily reflects higher market values, the impact of a weaker U.S. dollar, net new business and organic growth, partially offset by lower securities lending revenue. The sequential increase primarily reflects seasonally higher securities lending revenue and higher market values.
|
•
|
Clearing services fees were
$324 million
in the
second quarter of 2014
compared with
$320 million
in the
second quarter of 2013
and
$323 million
in the
first quarter of 2014
. The year-over-year increase was driven by higher mutual fund fees, partially offset by a decrease in DARTS and higher money market fee waivers. Sequentially, the increase primarily reflects higher mutual fund, cash management and technology fees, primarily offset by lower clearance revenue driven by lower volumes.
|
•
|
Issuer services fees (Corporate Trust and Depositary Receipts) were
$231 million
in the
second quarter of 2014
, compared with
$294 million
in the
second quarter of 2013
and $228 million in the
first quarter of 2014
. The year-over-year decrease reflects lower dividend fees, partially due to timing, and corporate actions in Depositary Receipts and lower customer reimbursements related to technology expenditures, higher money market fee waivers
|
•
|
Treasury services fees were
$140 million
in the
second quarter of 2014
compared with
$135 million
in the
second quarter of 2013
and $134 million in the
first quarter of 2014
. Both increases primarily reflect higher payment volumes. The sequential increase also reflects additional business days.
|
|
|
|
|
|
|
Year-to-date
|
|||||||||||||||
(dollars in millions)
|
2Q13
|
|
3Q13
|
|
4Q13
|
|
1Q14
|
|
2Q14
|
|
2014
|
|
2013
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||||||||
Fee and other revenue
|
$
|
347
|
|
$
|
172
|
|
$
|
(20
|
)
|
$
|
112
|
|
$
|
119
|
|
$
|
231
|
|
$
|
499
|
|
Net interest revenue
|
61
|
|
86
|
|
83
|
|
68
|
|
60
|
|
128
|
|
65
|
|
|||||||
Total revenue
|
408
|
|
258
|
|
63
|
|
180
|
|
179
|
|
359
|
|
564
|
|
|||||||
Provision for credit losses
|
(19
|
)
|
2
|
|
6
|
|
(18
|
)
|
(12
|
)
|
(30
|
)
|
(44
|
)
|
|||||||
Noninterest expense (ex. M&I and restructuring charges)
|
236
|
|
230
|
|
200
|
|
193
|
|
93
|
|
286
|
|
479
|
|
|||||||
Income (loss) before taxes (ex. M&I and restructuring charges)
|
191
|
|
26
|
|
(143
|
)
|
5
|
|
98
|
|
103
|
|
129
|
|
|||||||
M&I and restructuring charges
|
3
|
|
14
|
|
13
|
|
—
|
|
120
|
|
120
|
|
8
|
|
|||||||
Income (loss) before taxes
|
$
|
188
|
|
$
|
12
|
|
$
|
(156
|
)
|
$
|
5
|
|
$
|
(22
|
)
|
$
|
(17
|
)
|
$
|
121
|
|
Average loans and leases
|
$
|
10,846
|
|
$
|
10,938
|
|
$
|
9,802
|
|
$
|
10,104
|
|
$
|
9,962
|
|
$
|
10,033
|
|
$
|
10,729
|
|
On- and off-balance sheet exposure at June 30, 2014
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Ireland
|
|
Italy
|
|
Spain
|
|
Russia
|
|
|
Total
|
|
|||||
On-balance sheet exposure
|
|
|
|
|
|
|
||||||||||
Gross:
|
|
|
|
|
|
|
||||||||||
Deposits with banks (primarily interest-bearing)
(a)
|
$
|
154
|
|
$
|
254
|
|
$
|
301
|
|
$
|
20
|
|
|
$
|
729
|
|
Investment securities (primarily sovereign debt and European Floating Rate Notes)
(b)
|
165
|
|
700
|
|
800
|
|
—
|
|
|
1,665
|
|
|||||
Loans and leases
(c)
|
415
|
|
3
|
|
3
|
|
462
|
|
|
883
|
|
|||||
Trading assets
(d)
|
62
|
|
30
|
|
15
|
|
—
|
|
|
107
|
|
|||||
Total gross on-balance sheet exposure
|
796
|
|
987
|
|
1,119
|
|
482
|
|
|
3,384
|
|
|||||
Less:
|
|
|
|
|
|
|
||||||||||
Collateral
|
75
|
|
29
|
|
15
|
|
—
|
|
|
119
|
|
|||||
Guarantees
|
—
|
|
2
|
|
1
|
|
—
|
|
|
3
|
|
|||||
Total collateral and guarantees
|
75
|
|
31
|
|
16
|
|
—
|
|
|
122
|
|
|||||
Total net on-balance sheet exposure
|
$
|
721
|
|
$
|
956
|
|
$
|
1,103
|
|
$
|
482
|
|
|
$
|
3,262
|
|
Off-balance sheet exposure
|
|
|
|
|
|
|
||||||||||
Gross:
|
|
|
|
|
|
|
||||||||||
Lending-related commitments
(e)
|
$
|
78
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
78
|
|
Letters of credit
(f)
|
60
|
|
3
|
|
13
|
|
1
|
|
|
77
|
|
|||||
Total gross off-balance sheet exposure
|
138
|
|
3
|
|
13
|
|
1
|
|
|
155
|
|
|||||
Less:
|
|
|
|
|
|
|
||||||||||
Collateral
|
68
|
|
—
|
|
13
|
|
—
|
|
|
81
|
|
|||||
Total net off-balance sheet exposure
|
$
|
70
|
|
$
|
3
|
|
$
|
—
|
|
$
|
1
|
|
|
$
|
74
|
|
Total exposure:
|
|
|
|
|
|
|
||||||||||
Total gross on- and off-balance sheet exposure
|
$
|
934
|
|
$
|
990
|
|
$
|
1,132
|
|
$
|
483
|
|
|
$
|
3,539
|
|
Less: Total collateral and guarantees
|
143
|
|
31
|
|
29
|
|
—
|
|
|
203
|
|
|||||
Total net on- and off-balance sheet exposure
|
$
|
791
|
|
$
|
959
|
|
$
|
1,103
|
|
$
|
483
|
|
(g)
|
$
|
3,336
|
|
(a)
|
Interest-bearing deposits with banks represent a $99 million placement with an Irish subsidiary of a UK holding company, a $49 million placement with an Irish financial institution, a $100 million placement with a financial institution in Italy, a $247 million placement with a financial institution in Spain, $214 million of nostro accounts related to our custody activities located in Ireland, Italy and Spain and $20 million of nostro accounts related to our depositary receipts business in Russia.
|
(b)
|
Investment securities represent $165 million, fair value, of residential mortgage-backed securities located in Ireland and Italy, $1,447 million, fair value, of sovereign debt located in Spain and Italy and $53 million, fair value, of corporate bonds located in Ireland, Italy and Spain. The investment securities were 90% investment grade.
|
(c)
|
Loans and leases include $342 million of overdrafts primarily to Irish-domiciled investment funds resulting from our custody business, a $72 million commercial lease to a company located in Ireland, which was fully collateralized by U.S. Treasuries, a $1 million loan to a broker-dealer in Ireland, $3 million of overdrafts to financial institutions located in Italy and Spain, $3 million of leases to airline manufacturing companies located in Italy and Spain, which are under joint and several guarantee arrangements with guarantors outside of the Eurozone and $462 million of trade finance and syndicated loans primarily to large, state-owned financial institutions in Russia. There is no impairment associated with these loans and leases. Overdrafts occur on a daily basis in our Investment Services businesses and are generally repaid within two business days.
|
(d)
|
Trading assets represent the receivable related to over-the-counter foreign exchange and interest rate derivatives, net of master netting agreements. Trading assets include $62 million of receivables primarily due from Irish-domiciled investment funds and $45 million of receivables primarily due from financial institutions in Italy and Spain. Cash collateral on trading assets totaled $3 million in Ireland, $29 million in Italy and $4 million in Spain. Additionally, trading assets in Spain were collateralized by $11 million of U.S. Treasuries.
|
(e)
|
Lending-related commitments include $78 million to an insurance company in Ireland, collateralized by $13 million of marketable securities.
|
(f)
|
Letters of credit represent $58 million extended to an insurance company in Ireland, collateralized by $55 million of marketable securities, $2 million extended to an oil and gas company in Ireland, $3 million extended to a financial institution in Italy, $13 million extended to an insurance company in Spain, fully collateralized by marketable securities, and $1 million extended to a financial institution in Russia. Risk participations with higher risk countries counterparties are excluded.
|
(g)
|
Total net on- and off-balance sheet exposure in Russia at March 31, 2014 was approximately $550 million.
|
On- and off-balance sheet exposure at Dec. 31, 2013
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
Ireland
|
|
|
Italy
|
|
|
Spain
|
|
|
Total
|
|
||||
On-balance sheet exposure
|
|
|
|
|
|
|
|
||||||||
Gross:
|
|
|
|
|
|
|
|
||||||||
Deposits with banks (primarily interest-bearing)
(a)
|
$
|
100
|
|
|
$
|
217
|
|
|
$
|
375
|
|
|
$
|
692
|
|
Investment securities (primarily sovereign debt and European Floating Rate Notes)
(b)
|
165
|
|
|
279
|
|
|
137
|
|
|
581
|
|
||||
Loans and leases
(c)
|
267
|
|
|
3
|
|
|
1
|
|
|
271
|
|
||||
Trading assets
(d)
|
62
|
|
|
35
|
|
|
18
|
|
|
115
|
|
||||
Total gross on-balance sheet exposure
|
594
|
|
|
534
|
|
|
531
|
|
|
1,659
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Collateral
|
87
|
|
|
30
|
|
|
18
|
|
|
135
|
|
||||
Guarantees
|
—
|
|
|
2
|
|
|
1
|
|
|
3
|
|
||||
Total collateral and guarantees
|
87
|
|
|
32
|
|
|
19
|
|
|
138
|
|
||||
Total net on-balance sheet exposure
|
$
|
507
|
|
|
$
|
502
|
|
|
$
|
512
|
|
|
$
|
1,521
|
|
Off-balance sheet exposure
|
|
|
|
|
|
|
|
||||||||
Gross:
|
|
|
|
|
|
|
|
||||||||
Lending-related commitments
(e)
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70
|
|
Letters of credit
(f)
|
115
|
|
|
3
|
|
|
13
|
|
|
131
|
|
||||
Total gross off-balance sheet exposure
|
185
|
|
|
3
|
|
|
13
|
|
|
201
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Collateral
|
68
|
|
|
—
|
|
|
13
|
|
|
81
|
|
||||
Total net off-balance sheet exposure
|
$
|
117
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
120
|
|
Total exposure:
|
|
|
|
|
|
|
|
||||||||
Total gross on- and off-balance sheet exposure
|
$
|
779
|
|
|
$
|
537
|
|
|
$
|
544
|
|
|
$
|
1,860
|
|
Less: Total collateral and guarantees
|
155
|
|
|
32
|
|
|
32
|
|
|
219
|
|
||||
Total net on- and off-balance sheet exposure
|
$
|
624
|
|
|
$
|
505
|
|
|
$
|
512
|
|
|
$
|
1,641
|
|
(a)
|
Interest-bearing deposits with banks represent a $99 million placement with an Irish subsidiary of a UK holding company, a $100 million placement with a financial institution in Italy, $350 million of placements with financial institutions in Spain and $143 million of nostro accounts related to our custody activities located in Italy, Spain and Ireland.
|
(b)
|
Investment securities represent $257 million, fair value, of residential mortgage-backed securities located in Ireland and Italy, $308 million, fair value, of sovereign debt located in Spain and Italy, and $16 million, fair value, of asset-backed collateralized loan obligations (“CLOs”) located in Ireland. The investment securities were 74% investment grade.
|
(c)
|
Loans and leases include $184 million of overdrafts primarily to Irish-domiciled investment funds resulting from our custody business, a $70 million commercial lease to a company located in Ireland, which was fully collateralized by U.S. Treasuries, $13 million of loans to financial institutions located in Ireland, which were collateralized by $12 million of marketable securities, $1 million of overdrafts to a financial institution located in Italy and $3 million of leases to airline manufacturing companies located in Italy and Spain, which are under joint and several guarantee arrangements with guarantors outside of the Eurozone. There is no impairment associated with these loans and leases. Overdrafts occur on a daily basis in our Investment Services businesses and are generally repaid within two business days.
|
(d)
|
Trading assets represent the receivable related to the over-the-counter foreign exchange and interest rate derivatives, net of master netting agreements. Trading assets include $62 million of receivables primarily due from Irish-domiciled investment funds and $53 million of receivables primarily due from financial institutions in Italy and Spain. Cash collateral on trading assets totaled $5 million in Ireland, $30 million in Italy and $5 million in Spain. Trading assets located in Spain are also collateralized by $13 million of U.S. Treasuries.
|
(e)
|
Lending-related commitments include $70 million to an insurance company, collateralized by $3 million of marketable securities.
|
(f)
|
Letters of credit represent $65 million extended to an insurance company in Ireland, fully collateralized by marketable securities, $48 million extended to a financial institution in Ireland, $2 million extended to an oil and gas company in Ireland, $3 million extended to a financial institution in Italy and $13 million extended to an insurance company in Spain, fully collateralized by marketable securities.
|
Investment securities
portfolio
(dollars in millions)
|
March 31, 2014
|
|
|
2Q14
change in
unrealized
gain (loss)
|
|
June 30, 2014
|
Fair value
as a % of amortized
cost
(a)
|
|
Unrealized
gain (loss)
|
|
|
Ratings
|
||||||||||||||||||
|
|
|
|
BB+
and
lower
|
|
|||||||||||||||||||||||||
Fair
value
|
|
|
Amortized
cost
|
|
Fair
value
|
|
|
|
AAA/
AA-
|
A+/
A-
|
BBB+/
BBB-
|
Not
rated
|
||||||||||||||||||
Agency RMBS
|
$
|
39,143
|
|
|
$
|
340
|
|
$
|
41,493
|
|
$
|
41,552
|
|
|
100
|
%
|
$
|
59
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S. Treasury
|
17,299
|
|
|
63
|
|
18,568
|
|
18,791
|
|
|
101
|
|
223
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Sovereign debt/sovereign guaranteed
(b)
|
12,856
|
|
|
22
|
|
14,736
|
|
14,812
|
|
|
101
|
|
76
|
|
|
90
|
|
—
|
|
10
|
|
—
|
|
—
|
|
|||||
Non-agency RMBS
(c)
|
2,637
|
|
|
(8
|
)
|
2,010
|
|
2,574
|
|
|
80
|
|
564
|
|
|
—
|
|
1
|
|
2
|
|
93
|
|
4
|
|
|||||
Non-agency RMBS
|
1,287
|
|
|
8
|
|
1,207
|
|
1,227
|
|
|
94
|
|
20
|
|
|
1
|
|
11
|
|
22
|
|
65
|
|
1
|
|
|||||
European floating rate notes
(d)
|
2,580
|
|
|
9
|
|
2,535
|
|
2,525
|
|
|
99
|
|
(10
|
)
|
|
72
|
|
22
|
|
—
|
|
6
|
|
—
|
|
|||||
Commercial MBS
|
4,168
|
|
|
30
|
|
4,338
|
|
4,397
|
|
|
101
|
|
59
|
|
|
93
|
|
6
|
|
1
|
|
—
|
|
—
|
|
|||||
State and political subdivisions
|
6,693
|
|
|
48
|
|
6,182
|
|
6,253
|
|
|
101
|
|
71
|
|
|
80
|
|
19
|
|
—
|
|
—
|
|
1
|
|
|||||
Foreign covered bonds
(e)
|
2,716
|
|
|
8
|
|
2,699
|
|
2,788
|
|
|
103
|
|
89
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Corporate bonds
|
1,781
|
|
|
16
|
|
1,654
|
|
1,693
|
|
|
102
|
|
39
|
|
|
21
|
|
65
|
|
14
|
|
—
|
|
—
|
|
|||||
CLO
|
1,391
|
|
|
1
|
|
1,442
|
|
1,455
|
|
|
101
|
|
13
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
U.S. Government agencies
|
859
|
|
|
4
|
|
789
|
|
787
|
|
|
100
|
|
(2
|
)
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Consumer ABS
|
3,364
|
|
|
2
|
|
3,274
|
|
3,278
|
|
|
100
|
|
4
|
|
|
98
|
|
2
|
|
—
|
|
—
|
|
—
|
|
|||||
Other
(f)
|
2,922
|
|
|
(5
|
)
|
2,971
|
|
2,980
|
|
|
100
|
|
9
|
|
|
38
|
|
55
|
|
—
|
|
—
|
|
7
|
|
|||||
Total investment securities
|
$
|
99,696
|
|
(g)
|
$
|
538
|
|
$
|
103,898
|
|
$
|
105,112
|
|
(g)
|
100
|
%
|
$
|
1,214
|
|
(h)
|
89
|
%
|
5
|
%
|
2
|
%
|
3
|
%
|
1
|
%
|
(a)
|
Amortized cost before impairments.
|
(b)
|
Primarily comprised of exposure to UK, France, Germany and Netherlands.
|
(c)
|
These RMBS were included in the former Grantor Trust and were marked-to-market in 2009. We believe these RMBS would receive higher credit ratings if these ratings incorporated, as additional credit enhancement, the difference between the written-down amortized cost and the current face amount of each of these securities.
|
(d)
|
Includes RMBS, commercial MBS and other securities. Primarily comprised of exposure to UK and Netherlands.
|
(e)
|
Primarily comprised of exposure to Canada, UK and Netherlands.
|
(f)
|
Includes commercial paper of
$1.7 billion
and
$1.7 billion
, fair value, and money market funds of
$849 million
and
$810 million
, fair value, at
March 31, 2014
and
June 30, 2014
, respectively.
|
(g)
|
Includes net unrealized gains on derivatives hedging securities available-for-sale of
$388 million
at
March 31, 2014
and
$213 million
at
June 30, 2014
.
|
(h)
|
Unrealized gains of
$1,105 million
at
June 30, 2014
related to available-for-sale securities.
|
Net premium amortization and discount accretion of investment securities
(a)
|
|
|
|
|
|
||||||||||
(dollars in millions)
|
2Q13
|
|
3Q13
|
|
4Q13
|
|
1Q14
|
|
2Q14
|
|
|||||
Amortizable purchase premium (net of discount) relating to investment securities:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
2,720
|
|
$
|
2,519
|
|
$
|
2,377
|
|
$
|
2,236
|
|
$
|
2,225
|
|
Estimated average life remaining at period end
(in years)
|
5.1
|
|
5.2
|
|
5.2
|
|
5.0
|
|
4.8
|
|
|||||
Amortization
|
$
|
172
|
|
$
|
147
|
|
$
|
142
|
|
$
|
145
|
|
$
|
156
|
|
Accretable discount related to the restructuring of the investment securities portfolio:
|
|
|
|
|
|
||||||||||
Balance at period end
|
$
|
743
|
|
$
|
675
|
|
$
|
642
|
|
$
|
534
|
|
$
|
510
|
|
Estimated average life remaining at period end
(in years)
|
6.0
|
|
6.1
|
|
6.0
|
|
6.3
|
|
6.2
|
|
|||||
Accretion
|
$
|
54
|
|
$
|
55
|
|
$
|
52
|
|
$
|
46
|
|
$
|
41
|
|
(a)
|
Amortization of purchase premium decreases net interest revenue while accretion of discount increases net interest revenue. Both were recorded on a level yield basis.
|
Net securities gains (losses)
|
|
|
|||||||||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
U.S. Treasury
|
$
|
1
|
|
$
|
10
|
|
$
|
31
|
|
$
|
11
|
|
$
|
27
|
|
U.S. Government agencies
|
—
|
|
7
|
|
—
|
|
7
|
|
—
|
|
|||||
State and political subdivisions
|
7
|
|
(1
|
)
|
—
|
|
6
|
|
—
|
|
|||||
Foreign covered bonds
|
3
|
|
—
|
|
—
|
|
3
|
|
8
|
|
|||||
Commercial MBS
|
—
|
|
—
|
|
7
|
|
—
|
|
15
|
|
|||||
European floating rate notes
|
—
|
|
(1
|
)
|
(10
|
)
|
(1
|
)
|
(6
|
)
|
|||||
Non-agency RMBS
|
(2
|
)
|
(2
|
)
|
(3
|
)
|
(4
|
)
|
1
|
|
|||||
Other
|
9
|
|
9
|
|
7
|
|
18
|
|
35
|
|
|||||
Total net securities gains
|
$
|
18
|
|
$
|
22
|
|
$
|
32
|
|
$
|
40
|
|
$
|
80
|
|
(a)
|
72%
of these securities are in the AAA to AA- ratings category.
|
Total exposure – consolidated
|
June 30, 2014
|
|
Dec. 31, 2013
|
||||||||||||||||
(in billions)
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
|
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||||
Non-margin loans:
|
|
|
|
|
|
|
|
||||||||||||
Financial institutions
|
$
|
15.0
|
|
$
|
16.3
|
|
$
|
31.3
|
|
|
$
|
14.4
|
|
$
|
17.0
|
|
$
|
31.4
|
|
Commercial
|
1.8
|
|
19.2
|
|
21.0
|
|
|
1.6
|
|
19.5
|
|
21.1
|
|
||||||
Subtotal institutional
|
16.8
|
|
35.5
|
|
52.3
|
|
|
16.0
|
|
36.5
|
|
52.5
|
|
||||||
Wealth management loans and mortgages
|
10.4
|
|
1.7
|
|
12.1
|
|
|
9.8
|
|
1.7
|
|
11.5
|
|
||||||
Commercial real estate
|
2.2
|
|
2.5
|
|
4.7
|
|
|
2.0
|
|
2.4
|
|
4.4
|
|
||||||
Lease financings
|
2.2
|
|
—
|
|
2.2
|
|
|
2.3
|
|
—
|
|
2.3
|
|
||||||
Other residential mortgages
|
1.3
|
|
—
|
|
1.3
|
|
|
1.4
|
|
—
|
|
1.4
|
|
||||||
Overdrafts
|
7.8
|
|
—
|
|
7.8
|
|
|
3.7
|
|
—
|
|
3.7
|
|
||||||
Other
|
0.8
|
|
—
|
|
0.8
|
|
|
0.8
|
|
—
|
|
0.8
|
|
||||||
Subtotal non-margin loans
|
41.5
|
|
39.7
|
|
81.2
|
|
|
36.0
|
|
40.6
|
|
76.6
|
|
||||||
Margin loans
|
17.7
|
|
0.5
|
|
18.2
|
|
|
15.7
|
|
0.5
|
|
16.2
|
|
||||||
Total
|
$
|
59.2
|
|
$
|
40.2
|
|
$
|
99.4
|
|
|
$
|
51.7
|
|
$
|
41.1
|
|
$
|
92.8
|
|
Financial institutions
portfolio exposure
(dollar amounts in billions)
|
June 30, 2014
|
|
Dec. 31, 2013
|
||||||||||||||||||||||||||
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
|
% Inv.
grade
|
|
|
% due
<1 yr
|
|
|
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
|||||||
Banks
|
$
|
9.0
|
|
|
$
|
1.9
|
|
|
$
|
10.9
|
|
|
88
|
%
|
|
91
|
%
|
|
$
|
9.4
|
|
|
$
|
2.3
|
|
|
$
|
11.7
|
|
Asset managers
|
1.6
|
|
|
4.8
|
|
|
6.4
|
|
|
99
|
|
|
78
|
|
|
1.4
|
|
|
4.1
|
|
|
5.5
|
|
||||||
Securities industry
|
3.9
|
|
|
1.3
|
|
|
5.2
|
|
|
89
|
|
|
98
|
|
|
2.9
|
|
|
2.0
|
|
|
4.9
|
|
||||||
Insurance
|
0.1
|
|
|
4.2
|
|
|
4.3
|
|
|
99
|
|
|
22
|
|
|
0.1
|
|
|
4.3
|
|
|
4.4
|
|
||||||
Government
|
—
|
|
|
3.1
|
|
|
3.1
|
|
|
97
|
|
|
26
|
|
|
0.4
|
|
|
3.2
|
|
|
3.6
|
|
||||||
Other
|
0.4
|
|
|
1.0
|
|
|
1.4
|
|
|
93
|
|
|
29
|
|
|
0.2
|
|
|
1.1
|
|
|
1.3
|
|
||||||
Total
|
$
|
15.0
|
|
|
$
|
16.3
|
|
|
$
|
31.3
|
|
|
93
|
%
|
|
71
|
%
|
|
$
|
14.4
|
|
|
$
|
17.0
|
|
|
$
|
31.4
|
|
Commercial portfolio exposure
|
June 30, 2014
|
|
Dec. 31, 2013
|
||||||||||||||||||||||||||
(dollar amounts in billions)
|
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
|
% Inv.
grade
|
|
|
% due
<1 yr
|
|
|
Loans
|
|
|
Unfunded
commitments
|
|
|
Total
exposure
|
|
||||||
Services and other
|
$
|
1.0
|
|
|
$
|
6.3
|
|
|
$
|
7.3
|
|
|
94
|
%
|
|
25
|
%
|
|
$
|
0.6
|
|
|
$
|
6.0
|
|
|
$
|
6.6
|
|
Energy and utilities
|
0.4
|
|
|
5.8
|
|
|
6.2
|
|
|
99
|
|
|
10
|
|
|
0.7
|
|
|
5.9
|
|
|
6.6
|
|
||||||
Manufacturing
|
0.3
|
|
|
5.5
|
|
|
5.8
|
|
|
90
|
|
|
9
|
|
|
0.2
|
|
|
5.9
|
|
|
6.1
|
|
||||||
Media and telecom
|
0.1
|
|
|
1.6
|
|
|
1.7
|
|
|
90
|
|
|
7
|
|
|
0.1
|
|
|
1.7
|
|
|
1.8
|
|
||||||
Total
|
$
|
1.8
|
|
|
$
|
19.2
|
|
|
$
|
21.0
|
|
|
94
|
%
|
|
15
|
%
|
|
$
|
1.6
|
|
|
$
|
19.5
|
|
|
$
|
21.1
|
|
Allowance for credit losses activity
(dollar amounts in millions)
|
June 30,
2014 |
|
March 31, 2014
|
|
Dec. 31, 2013
|
|
June 30,
2013 |
|
||||
Margin loans
|
$
|
17,685
|
|
$
|
16,430
|
|
$
|
15,652
|
|
$
|
14,434
|
|
Non-margin loans
|
41,563
|
|
37,606
|
|
36,005
|
|
35,873
|
|
||||
Total loans
|
$
|
59,248
|
|
$
|
54,036
|
|
$
|
51,657
|
|
$
|
50,307
|
|
Allowance for credit losses - beginning of period
|
$
|
326
|
|
$
|
344
|
|
$
|
339
|
|
$
|
358
|
|
Provision for credit losses
|
(12
|
)
|
(18
|
)
|
6
|
|
(19
|
)
|
||||
Net (charge-offs) recoveries:
|
|
|
|
|
||||||||
Foreign
|
(2
|
)
|
—
|
|
(3
|
)
|
—
|
|
||||
Wealth management loans and mortgages
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
||||
Other residential mortgages
|
(1
|
)
|
—
|
|
—
|
|
(2
|
)
|
||||
Financial institutions
|
—
|
|
—
|
|
3
|
|
—
|
|
||||
Commercial
|
1
|
|
—
|
|
(1
|
)
|
—
|
|
||||
Net (charge-offs)
|
(3
|
)
|
—
|
|
(1
|
)
|
(2
|
)
|
||||
Allowance for credit losses - end of period
|
$
|
311
|
|
$
|
326
|
|
$
|
344
|
|
$
|
337
|
|
Allowance for loan losses
|
$
|
187
|
|
$
|
198
|
|
$
|
210
|
|
$
|
212
|
|
Allowance for lending-related commitments
|
124
|
|
128
|
|
134
|
|
125
|
|
||||
Allowance for loan losses as a percentage of total loans
|
0.32
|
%
|
0.37
|
%
|
0.41
|
%
|
0.42
|
%
|
||||
Allowance for loan losses as a percentage of non-margin loans
|
0.45
|
|
0.53
|
|
0.58
|
|
0.59
|
|
||||
Total allowance for credit losses as a percentage of total loans
|
0.52
|
|
0.60
|
|
0.67
|
|
0.67
|
|
||||
Total allowance for credit losses as a percentage of non-margin loans
|
0.75
|
|
0.87
|
|
0.96
|
|
0.94
|
|
•
|
an allowance for impaired credits of $1 million or greater;
|
•
|
an allowance for higher risk-rated credits and pass-rated credits; and
|
•
|
an allowance for residential mortgage loans.
|
•
|
Nonperforming loans to total non-margin loans;
|
•
|
Criticized assets to total loans and lending-related commitments;
|
•
|
Ratings volatility;
|
•
|
Borrower concentration; and
|
•
|
Significant concentration in high risk industries.
|
•
|
U.S. non-investment grade default rate;
|
•
|
Unemployment rate; and
|
•
|
Change in real GDP (quarter over quarter).
|
Allocation of allowance
|
June 30,
2014 |
|
March 31,
2014 |
|
Dec. 31, 2013
|
|
June 30,
2013 |
|
Commercial
|
24
|
%
|
24
|
%
|
24
|
%
|
28
|
%
|
Other residential mortgages
|
15
|
|
15
|
|
16
|
|
22
|
|
Foreign
|
15
|
|
15
|
|
16
|
|
13
|
|
Financial institutions
|
14
|
|
15
|
|
14
|
|
10
|
|
Commercial real estate
|
14
|
|
13
|
|
12
|
|
9
|
|
Lease financing
|
11
|
|
11
|
|
11
|
|
12
|
|
Wealth management
(a)
|
7
|
|
7
|
|
7
|
|
6
|
|
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Includes the allowance for wealth management mortgages.
|
Nonperforming assets
(dollars in millions)
|
June 30, 2014
|
|
March 31, 2014
|
|
Dec. 31, 2013
|
|
|||
Loans:
|
|
|
|
||||||
Other residential mortgages
|
$
|
105
|
|
$
|
107
|
|
$
|
117
|
|
Commercial
|
13
|
|
13
|
|
15
|
|
|||
Wealth management loans and mortgages
|
12
|
|
12
|
|
11
|
|
|||
Foreign
|
4
|
|
7
|
|
6
|
|
|||
Commercial real estate
|
4
|
|
4
|
|
4
|
|
|||
Total nonperforming loans
|
138
|
|
143
|
|
153
|
|
|||
Other assets owned
|
4
|
|
3
|
|
3
|
|
|||
Total nonperforming assets
(a)
|
$
|
142
|
|
$
|
146
|
|
$
|
156
|
|
Nonperforming assets ratio
|
0.24
|
%
|
0.27
|
%
|
0.30
|
%
|
|||
Nonperforming assets ratio, excluding margin loans
|
0.3
|
|
0.4
|
|
0.4
|
|
|||
Allowance for loan losses/nonperforming loans
|
135.5
|
|
138.5
|
|
137.3
|
|
|||
Allowance for loan losses/nonperforming assets
|
131.7
|
|
135.6
|
|
134.6
|
|
|||
Total allowance for credit losses/nonperforming loans
|
225.4
|
|
228.0
|
|
224.8
|
|
|||
Total allowance for credit losses/nonperforming assets
|
219.0
|
|
223.3
|
|
220.5
|
|
(a)
|
Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in the loans of consolidated investment management funds are nonperforming loans of
$68 million
at June 30, 2014,
$74 million
at March 31, 2014 and
$16 million
at Dec. 31, 2013. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above.
|
Nonperforming assets activity
(in millions)
|
June 30, 2014
|
|
March 31, 2014
|
|
Dec. 31, 2013
|
|
|||
Balance at beginning of period
|
$
|
146
|
|
$
|
156
|
|
$
|
172
|
|
Additions
|
7
|
|
8
|
|
7
|
|
|||
Return to accrual status
|
(3
|
)
|
(9
|
)
|
(10
|
)
|
|||
Charge-offs
|
(4
|
)
|
(1
|
)
|
(5
|
)
|
|||
Paydowns/sales
|
(4
|
)
|
(8
|
)
|
(8
|
)
|
|||
Balance at end of period
|
$
|
142
|
|
$
|
146
|
|
$
|
156
|
|
Federal funds purchased and securities sold under
repurchase agreements
|
|||||||||
|
Quarter ended
|
||||||||
(dollar amounts in millions)
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
|||
Maximum daily balance during the quarter
|
$
|
29,522
|
|
$
|
21,089
|
|
$
|
13,484
|
|
Average daily balance
|
$
|
19,030
|
|
$
|
14,505
|
|
$
|
9,206
|
|
Weighted-average rate during the quarter
|
(0.05
|
)%
|
(0.13
|
)%
|
(0.28
|
)%
|
|||
Ending balance
|
$
|
10,301
|
|
$
|
9,935
|
|
$
|
12,600
|
|
Weighted-average rate at period end
|
(0.04
|
)%
|
(0.14
|
)%
|
(0.26
|
)%
|
(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
$8,916 million
in the
second quarter of 2014
,
$8,883 million
in the
first quarter of 2014
and
$9,073 million
in the
second quarter of 2013
.
|
Commercial paper
|
Quarter ended
|
||||||||
(dollar amounts in millions)
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
|||
Maximum daily balance during the quarter
|
$
|
4,932
|
|
$
|
1,697
|
|
$
|
924
|
|
Average daily balance
|
$
|
1,970
|
|
$
|
102
|
|
$
|
58
|
|
Weighted-average rate during the quarter
|
0.08
|
%
|
0.05
|
%
|
0.04
|
%
|
|||
Ending balance
|
$
|
27
|
|
$
|
27
|
|
$
|
111
|
|
Weighted-average rate at period end
|
0.01
|
%
|
0.02
|
%
|
0.03
|
%
|
Other borrowed funds
|
Quarter ended
|
||||||||
(dollar amounts in millions)
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
|||
Maximum daily balance during the quarter
|
$
|
1,983
|
|
$
|
2,000
|
|
$
|
3,720
|
|
Average daily balance
|
$
|
1,272
|
|
$
|
1,035
|
|
$
|
1,385
|
|
Weighted-average rate during the quarter
|
0.47
|
%
|
0.51
|
%
|
0.20
|
%
|
|||
Ending balance
|
$
|
1,458
|
|
$
|
1,305
|
|
$
|
1,060
|
|
Weighted-average rate at period end
|
0.45
|
%
|
0.34
|
%
|
0.34
|
%
|
Available and liquid funds
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
|
Average
|
||||||||||||||||
(in millions)
|
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||||||||
Available funds:
|
|
|
|
|
|
|
|
|
||||||||||||||
Liquid funds:
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest-bearing deposits with banks
|
$
|
41,459
|
|
$
|
35,300
|
|
|
$
|
41,424
|
|
$
|
41,617
|
|
$
|
42,772
|
|
$
|
41,520
|
|
$
|
41,874
|
|
Federal funds sold and securities purchased under resale agreements
|
15,062
|
|
9,161
|
|
|
13,387
|
|
11,118
|
|
7,878
|
|
12,259
|
|
7,679
|
|
|||||||
Total liquid funds
|
56,521
|
|
44,461
|
|
|
54,811
|
|
52,735
|
|
50,650
|
|
53,779
|
|
49,553
|
|
|||||||
Cash and due from banks
|
6,173
|
|
6,460
|
|
|
5,064
|
|
5,886
|
|
5,060
|
|
5,473
|
|
4,798
|
|
|||||||
Interest-bearing deposits with the Federal Reserve and other central banks
|
105,657
|
|
104,359
|
|
|
85,546
|
|
74,399
|
|
55,911
|
|
80,004
|
|
59,555
|
|
|||||||
Total available funds
|
$
|
168,351
|
|
$
|
155,280
|
|
|
$
|
145,421
|
|
$
|
133,020
|
|
$
|
111,621
|
|
$
|
139,256
|
|
$
|
113,906
|
|
Total available funds as a percentage of total assets
|
42
|
%
|
41
|
%
|
|
39
|
%
|
37
|
%
|
33
|
%
|
38
|
%
|
34
|
%
|
•
|
cash on hand;
|
•
|
dividends from its subsidiaries;
|
•
|
access to the commercial paper market; and
|
•
|
access to the debt and equity markets.
|
(a)
|
Represents senior debt issuer default rating.
|
Debt issuances
|
Quarter ended
|
|
|
(in millions)
|
June 30, 2014
|
|
|
Senior medium-term notes:
|
|
||
2.2% senior medium-term notes due 2019
|
$
|
750
|
|
3.4% senior medium-term notes due 2024
|
500
|
|
|
Total debt issuances
|
$
|
1,250
|
|
Capital data
(dollar amounts in millions except per share amounts; common shares in thousands)
|
June 30,
2014 |
|
|
March 31,
2014 |
|
|
Dec. 31, 2013
|
|
|
June 30,
2013 |
|
||||
Average common equity to average assets
|
9.9
|
%
|
|
10.2
|
%
|
|
10.0
|
%
|
|
10.2
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
At period end:
|
|
|
|
|
|
|
|
||||||||
BNY Mellon shareholders’ equity to total assets ratio
(a)(b)
|
9.6
|
%
|
|
10.3
|
%
|
|
10.0
|
%
|
|
9.9
|
%
|
||||
BNY Mellon common shareholders’ equity to total assets ratio
(a)
|
9.2
|
%
|
|
9.9
|
%
|
|
9.6
|
%
|
|
9.5
|
%
|
||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP
(a)
|
6.4
|
%
|
|
6.6
|
%
|
|
6.8
|
%
|
|
5.8
|
%
|
||||
Total BNY Mellon shareholders’ equity – GAAP
(b)
|
$
|
38,326
|
|
|
$
|
37,986
|
|
|
$
|
37,497
|
|
|
$
|
35,863
|
|
Total BNY Mellon common shareholders’ equity – GAAP
(b)
|
$
|
36,764
|
|
|
$
|
36,424
|
|
|
$
|
35,935
|
|
|
$
|
34,301
|
|
BNY Mellon tangible common shareholders’ equity – Non-GAAP
(a)(b)
|
$
|
16,839
|
|
|
$
|
16,509
|
|
|
$
|
15,934
|
|
|
$
|
14,263
|
|
Book value per common share – GAAP
(a)(b)
|
$
|
32.49
|
|
|
$
|
31.94
|
|
|
$
|
31.46
|
|
|
$
|
29.81
|
|
Tangible book value per common share – Non-GAAP
(a)(b)
|
$
|
14.88
|
|
|
$
|
14.48
|
|
|
$
|
13.95
|
|
|
$
|
12.40
|
|
Closing stock price per common share
|
$
|
37.48
|
|
|
$
|
35.29
|
|
|
$
|
34.94
|
|
|
$
|
28.05
|
|
Market capitalization
|
$
|
42,412
|
|
|
$
|
40,244
|
|
|
$
|
39,910
|
|
|
$
|
32,271
|
|
Common shares outstanding
|
1,131,596
|
|
|
1,140,373
|
|
|
1,142,250
|
|
|
1,150,477
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends per common share
|
$
|
0.17
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
Common dividend payout ratio
|
35
|
%
|
|
26
|
%
|
|
34
|
%
|
|
21
|
%
|
||||
Common dividend yield
(annualized)
|
1.8
|
%
|
|
1.7
|
%
|
|
1.7
|
%
|
|
2.1
|
%
|
(a)
|
See “Supplemental information - Explanation of GAAP and Non-GAAP financial measures” beginning on page
55
for a reconciliation of GAAP to non-GAAP.
|
(b)
|
Information for the period ended Dec. 31, 2013 and June 30, 2013 was restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
Consolidated and largest bank subsidiary capital ratios
|
Well
capitalized |
|
Adequately
capitalized |
|
June 30,
2014 |
|
|
March 31,
2014 |
|
|
Dec. 31, 2013
|
|
|
June 30,
2013 |
|
|
Consolidated capital ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Estimated CET1 ratio, fully phased-in – Non-GAAP:
(a)(b)(c)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Standardized Approach
|
(f)
|
|
(f)
|
|
10.3
|
%
|
|
11.1
|
%
|
|
10.6
|
%
|
|
9.3
|
%
|
|
Advanced Approach
|
(f)
|
|
(f)
|
|
10.0
|
%
|
|
10.7
|
%
|
|
11.3
|
%
|
|
9.8
|
%
|
|
CET1 ratio
(b)(d)(e)
|
N/A
|
|
4%
|
|
11.4
|
%
|
(c)
|
15.7
|
%
|
|
14.5
|
%
|
(c)
|
13.2
|
%
|
(c)
|
Tier 1 capital ratio
(b)(d)(e)
|
6
|
%
|
5.5%
|
|
12.4
|
%
|
(c)
|
17.0
|
%
|
|
16.2
|
%
|
|
14.8
|
%
|
|
Total (Tier 1 plus Tier 2) capital
ratio
(b)(d)(e)
|
10
|
%
|
8%
|
|
12.8
|
%
|
(c)
|
17.8
|
%
|
|
17.0
|
%
|
|
15.8
|
%
|
|
Leverage capital ratio
(d)
|
N/A
|
|
4%
|
|
5.9
|
%
|
|
6.1
|
%
|
|
5.4
|
%
|
|
5.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The Bank of New York Mellon capital ratios
:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tier 1 capital ratio
(d)
|
6
|
%
|
4%
|
|
12.9
|
%
|
|
15.9
|
%
|
|
14.6
|
%
|
|
13.4
|
%
|
|
Total (Tier 1 plus Tier 2) capital ratio
(d)
|
10
|
%
|
8%
|
|
13.2
|
%
|
|
16.6
|
%
|
|
15.1
|
%
|
|
13.9
|
%
|
|
Leverage capital ratio
(d)
|
5
|
%
|
3-4%
|
(g)
|
5.4
|
%
|
|
5.6
|
%
|
|
5.3
|
%
|
|
5.3
|
%
|
|
(a)
|
The estimated fully phased-in Basel III CET1 ratios are based on our interpretation of the Final Capital Rules released by the Federal Reserve on July 2, 2013, which are being gradually phased-in over a multi-year period. The estimated fully phased-in Basel III CET1 ratios assume all relevant regulatory model approvals. The Final Capital Rules require approval by banking regulators of certain models used as part of risk-weighted asset calculations. If these models are not approved, the estimated fully phased-in capital ratios would likely be adversely impacted.
|
(b)
|
Beginning with June 30, 2014, risk-based capital ratios include the net impact of including the total consolidated assets of certain consolidated investment management funds in risk-weighted assets. These assets were not included in prior periods. The net impact of such consolidated assets for the June 30, 2014 estimated CET1 ratio on a fully phased-in basis was a decrease of
101
basis points under the Advanced Approach and
58
basis points under the Standardized Approach. The net impact of such consolidated assets for June 30, 2014 regulatory capital ratios was a decrease of
116
basis points to the CET1 ratio,
126
basis points to the Tier 1 capital ratio, and
129
basis points to the Total capital ratio. The leverage ratio was not affected.
|
(c)
|
See “Supplemental Information - Explanation of GAAP and Non-GAAP financial measures” beginning on page
55
for a reconciliation of these ratios.
|
(d)
|
At June 30, 2014, our capital ratios were calculated under the Advanced Approach framework. At
March 31, 2014
, the capital ratios were based on Basel III components of capital, as phased-in, and asset risk-weightings using the general risk-based guidelines included in the Final Capital Rules (which for 2014 look to Basel I-based requirements). Periods prior to March 31, 2014 are based on Basel I rules, while the CET1 ratio is a Basel I Tier 1 common ratio.
|
(e)
|
Risk-weighted assets at June 30, 2014 under the Advanced Approach does not reflect the use of a simple value-at-risk methodology for repo-style transactions (including agented indemnified securities lending transactions), eligible margin loans, and similar transactions. The company has requested written approval to use this methodology. The estimated net impact of such a value-at-risk methodology for June 30, 2014 regulatory capital ratios calculated under the Advanced Approach would have been an increase of approximately 20 basis points to the CET1, Tier 1 and Total capital ratios.
|
(f)
|
On a fully phased-in basis, we expect to satisfy a minimum Basel III CET1 ratio of at least 7%, expected to rise to 8%, assuming an additional G-SIB buffer of 1%.
|
(g)
|
The required leverage ratio for state member banks to be adequately capitalized is 3% or 4%, depending on factors specified in regulations.
|
Basel III CET1 generation presented on a fully phased-in basis - Non-GAAP
|
Quarter ended
|
||||||||||
(in millions) |
June 30,
2014 |
|
|
March 31,
2014 |
|
|
Dec. 31, 2013
|
|
|||
Estimated Basel III CET1 - Beginning of period balance
|
$
|
15,951
|
|
|
$
|
14,810
|
|
|
$
|
14,643
|
|
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
554
|
|
|
661
|
|
|
513
|
|
|||
Goodwill and intangible assets, net of related deferred tax liabilities
|
(10
|
)
|
|
17
|
|
|
35
|
|
|||
Gross Basel III CET1 generated
|
544
|
|
|
678
|
|
|
548
|
|
|||
Capital deployed:
|
|
|
|
|
|
||||||
Dividends
|
(197
|
)
|
|
(174
|
)
|
|
(176
|
)
|
|||
Common stock repurchased
|
(431
|
)
|
|
(375
|
)
|
|
(321
|
)
|
|||
Total capital deployed
|
(628
|
)
|
|
(549
|
)
|
|
(497
|
)
|
|||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation
|
76
|
|
|
34
|
|
|
93
|
|
|||
Unrealized gain (loss) on assets available-for-sale
|
196
|
|
|
149
|
|
|
(100
|
)
|
|||
Pension liabilities
|
17
|
|
|
19
|
|
|
449
|
|
|||
Unrealized gain (loss) on cash flow hedges
|
(2
|
)
|
|
1
|
|
|
5
|
|
|||
Total other comprehensive income
|
287
|
|
|
203
|
|
|
447
|
|
|||
Additional paid-in capital
(a)
|
127
|
|
|
174
|
|
|
99
|
|
|||
Other additions (deductions):
|
|
|
|
|
|
||||||
Net pension fund assets
|
(2
|
)
|
|
609
|
|
|
(434
|
)
|
|||
Deferred tax assets
|
1
|
|
|
31
|
|
|
(23
|
)
|
|||
Cash flow hedges
|
2
|
|
|
(1
|
)
|
|
(5
|
)
|
|||
Embedded goodwill
|
(4
|
)
|
|
12
|
|
|
41
|
|
|||
Investment in unconsolidated subsidiaries
|
—
|
|
|
7
|
|
|
(7
|
)
|
|||
Other
|
(1
|
)
|
|
(23
|
)
|
(b)
|
(2
|
)
|
|||
Total other additions (deductions)
|
(4
|
)
|
|
635
|
|
|
(430
|
)
|
|||
Net Basel III CET1 generated
|
326
|
|
|
1,141
|
|
|
167
|
|
|||
Basel III CET1 - End of period balance - Non-GAAP
|
$
|
16,277
|
|
|
$
|
15,951
|
|
|
$
|
14,810
|
|
(a)
|
Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.
|
(b)
|
Includes the restatement of retained earnings due to the retrospective application of adopting new accounting guidance related to our investments in qualified affordable housing projects (ASU 2014-01).
|
Components of Basel I Tier 1 and total risk-based capital
(a)
(in millions) |
Dec. 31, 2013
|
|
June 30,
2013 |
|
||
Tier 1 capital:
|
|
|
||||
Common shareholders’ equity
|
$
|
35,959
|
|
$
|
34,320
|
|
Preferred stock
|
1,562
|
|
1,562
|
|
||
Trust preferred securities
|
330
|
|
303
|
|
||
Adjustments for:
|
|
|
||||
Goodwill and other intangibles
(b)
|
(20,001
|
)
|
(20,038
|
)
|
||
Pensions/cash flow hedges
|
891
|
|
1,387
|
|
||
Securities valuation allowance
|
(387
|
)
|
(560
|
)
|
||
Merchant banking investments
|
(19
|
)
|
(23
|
)
|
||
Total Tier 1 capital
|
18,335
|
|
16,951
|
|
||
Tier 2 capital:
|
|
|
||||
Qualifying unrealized gains on equity securities
|
1
|
|
3
|
|
||
Qualifying subordinated debt
|
550
|
|
853
|
|
||
Qualifying allowance for credit losses
|
344
|
|
337
|
|
||
Total Tier 2 capital
|
895
|
|
1,193
|
|
||
Total risk-based capital
|
$
|
19,230
|
|
$
|
18,144
|
|
Total risk-weighted assets
|
$
|
113,322
|
|
$
|
114,511
|
|
Average assets for leverage capital purposes
|
$
|
336,787
|
|
$
|
317,542
|
|
(a)
|
On a regulatory basis as determined under Basel I rules.
|
(b)
|
Reduced by deferred tax liabilities associated with non-tax deductible identifiable intangible assets of $1,222 million at
Dec. 31, 2013
and
$1,269 million
at
June 30, 2013
and deferred tax liabilities associated with tax deductible goodwill of $1,302 million at
Dec. 31, 2013
and
$1,200 million
at
June 30, 2013
.
|
Capital above thresholds at June 30, 2014
(in millions)
|
Consolidated
|
|
|
The Bank of
New York
Mellon
|
|
||
CET1
|
$
|
12,376
|
|
|
N/A
|
|
|
Tier 1 capital
|
10,680
|
|
|
$
|
8,120
|
|
|
Total capital
|
4,635
|
|
|
3,705
|
|
||
Leverage
|
6,605
|
|
|
1,131
|
|
VaR
(a)
|
2nd Quarter 2014
|
June 30,
2014 |
|
|||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
|||||||||
Interest rate
|
$
|
7.7
|
|
$
|
5.5
|
|
$
|
10.5
|
|
$
|
6.4
|
|
Foreign exchange
|
1.0
|
|
0.6
|
|
2.7
|
|
1.1
|
|
||||
Equity
|
1.8
|
|
1.3
|
|
2.9
|
|
1.8
|
|
||||
Diversification
|
(2.6
|
)
|
N/M
|
|
N/M
|
|
(3.0
|
)
|
||||
Overall portfolio
|
7.9
|
|
5.7
|
|
10.3
|
|
6.3
|
|
VaR
(a)
|
1st Quarter 2014
|
March 31,
2014 |
|
|||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
|||||||||
Interest rate
|
$
|
8.5
|
|
$
|
6.5
|
|
$
|
13.4
|
|
$
|
9.0
|
|
Foreign exchange
|
1.1
|
|
0.5
|
|
1.8
|
|
1.2
|
|
||||
Equity
|
2.3
|
|
1.3
|
|
4.0
|
|
1.9
|
|
||||
Diversification
|
(2.9
|
)
|
N/M
|
|
N/M
|
|
(3.3
|
)
|
||||
Overall portfolio
|
9.0
|
|
6.9
|
|
13.0
|
|
8.8
|
|
VaR
(a)
|
2nd Quarter 2013
|
June 30,
2013 |
|
|||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
|||||||||
Interest rate
|
$
|
11.4
|
|
$
|
8.7
|
|
$
|
14.2
|
|
$
|
9.9
|
|
Foreign exchange
|
1.1
|
|
0.5
|
|
2.3
|
|
1.0
|
|
||||
Equity
|
3.1
|
|
1.4
|
|
4.4
|
|
3.3
|
|
||||
Diversification
|
(3.3
|
)
|
N/M
|
|
N/M
|
|
(2.9
|
)
|
||||
Overall portfolio
|
12.3
|
|
10.0
|
|
14.8
|
|
11.3
|
|
VaR
(a)
|
Year-to-date 2014
|
||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
||||||
Interest rate
|
$
|
8.2
|
|
$
|
5.5
|
|
$
|
13.4
|
|
Foreign exchange
|
1.1
|
|
0.5
|
|
2.7
|
|
|||
Equity
|
2.0
|
|
1.3
|
|
4.0
|
|
|||
Diversification
|
(2.8
|
)
|
N/M
|
|
N/M
|
|
|||
Overall portfolio
|
8.5
|
|
5.7
|
|
13.0
|
|
VaR
(a)
|
Year-to-date 2013
|
||||||||
(in millions)
|
Average
|
Minimum
|
Maximum
|
||||||
Interest rate
|
$
|
11.3
|
|
$
|
8.6
|
|
$
|
14.8
|
|
Foreign exchange
|
1.1
|
|
0.5
|
|
2.3
|
|
|||
Equity
|
2.5
|
|
1.1
|
|
4.4
|
|
|||
Diversification
|
(3.0
|
)
|
N/M
|
|
N/M
|
|
|||
Overall portfolio
|
11.9
|
|
8.8
|
|
14.8
|
|
(a)
|
VaR figures do not reflect the impact of credit valuation adjustment (“CVA”) guidance in Accounting Standards Codification (“ASC”) 820. This is consistent with the regulatory treatment. VaR exposure does not include the impact of the Company’s consolidated investment management funds and seed capital investments.
|
(a)
|
Trading revenue (loss) includes realized and unrealized gains and losses primarily related to spot and forward foreign exchange transactions, derivatives, and securities trades for our customers and excludes any associated commissions, underwriting fees and net interest revenue.
|
(a)
|
Represents credit rating agency equivalent of internal credit ratings.
|
Estimated changes in net interest revenue
|
|
||||||||||||||||||
(dollars in millions)
|
June 30, 2013
|
|
|
Sept. 30, 2013
|
|
|
Dec. 31, 2013
|
|
|
March 31, 2014
|
|
|
June 30, 2014
|
|
|||||
up 200 bps parallel rate ramp vs. baseline
(a)
|
$
|
402
|
|
|
$
|
617
|
|
|
$
|
677
|
|
|
$
|
447
|
|
|
$
|
426
|
|
up 100 bps parallel rate ramp vs. baseline
(a)
|
324
|
|
|
387
|
|
|
466
|
|
|
376
|
|
|
364
|
|
|||||
Long-term up 50 bps, short-term unchanged
(b)
|
130
|
|
|
174
|
|
|
44
|
|
|
50
|
|
|
47
|
|
|||||
Long-term down 50 bps, short-term unchanged
(b)
|
(123
|
)
|
|
(144
|
)
|
|
(47
|
)
|
|
(46
|
)
|
|
(40
|
)
|
(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.
|
•
|
Monetary policy;
|
•
|
Global economic uncertainty;
|
•
|
Our ratings relative to other financial institutions’ ratings; and
|
•
|
Money market mutual fund and other regulatory reform.
|
•
|
ensure that appropriate risk tolerances (“limits”) are in place to govern our risk-taking activities across all businesses and risk types;
|
•
|
ensure that our risk appetite principles permeate the company’s culture and are incorporated into our strategic decision-making processes;
|
•
|
ensure rigorous monitoring and reporting of key risk metrics to senior management and the Board of Directors;
|
•
|
ensure that there is an on-going, and forward-looking, capital planning process to support our risk-taking activities.”
|
Reconciliation of net income and diluted EPS - GAAP to Non-GAAP
|
2Q14
|
|
2Q13
|
||||||||||
(in millions, except per common share amounts)
|
Net income
|
|
Diluted EPS
|
|
|
Net income
|
|
Diluted EPS
|
|
||||
Net income applicable to common shareholders of The Bank of New York Mellon
Corporation – GAAP
|
$
|
554
|
|
$
|
0.48
|
|
|
$
|
831
|
|
$
|
0.71
|
|
Less: Gain related to an equity investment (after-tax)
|
N/A
|
|
N/A
|
|
|
109
|
|
0.09
|
|
||||
Add: Charge (recovery) related to investment management funds, net of incentives and severance expense
|
161
|
|
0.14
|
|
|
(21
|
)
|
(0.02
|
)
|
||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP
|
$
|
715
|
|
$
|
0.62
|
|
|
$
|
701
|
|
$
|
0.60
|
|
Reconciliation of income before income taxes – pre-tax operating margin
(dollars in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
Income before income taxes – GAAP
|
$
|
811
|
|
$
|
926
|
|
$
|
1,222
|
|
$
|
1,737
|
|
$
|
2,047
|
|
Less: Net income attributable to noncontrolling interests of consolidated investment management funds
|
17
|
|
20
|
|
39
|
|
37
|
|
55
|
|
|||||
Add: Amortization of intangible assets
|
75
|
|
75
|
|
93
|
|
150
|
|
179
|
|
|||||
M&I, litigation and restructuring charges
|
122
|
|
(12
|
)
|
13
|
|
110
|
|
52
|
|
|||||
Charge (recovery) related to investment management funds, net of incentives
|
109
|
|
(5
|
)
|
(27
|
)
|
104
|
|
12
|
|
|||||
Income before income taxes excluding net income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets, M&I, litigation and restructuring charges and the charge (recovery) related to investment management funds, net of incentives – Non-GAAP
|
$
|
1,100
|
|
$
|
964
|
|
$
|
1,262
|
|
$
|
2,064
|
|
$
|
2,235
|
|
Fee and other revenue – GAAP
|
$
|
2,980
|
|
$
|
2,883
|
|
$
|
3,203
|
|
$
|
5,863
|
|
$
|
6,063
|
|
Income from consolidated investment management funds – GAAP
|
46
|
|
36
|
|
65
|
|
82
|
|
115
|
|
|||||
Net interest revenue – GAAP
|
719
|
|
728
|
|
757
|
|
1,447
|
|
1,476
|
|
|||||
Total revenue – GAAP
|
3,745
|
|
3,647
|
|
4,025
|
|
7,392
|
|
7,654
|
|
|||||
Less: Net income attributable to noncontrolling interests of consolidated investment management funds
|
17
|
|
20
|
|
39
|
|
37
|
|
55
|
|
|||||
Total revenue excluding net income attributable to noncontrolling interests of consolidated investment management funds – Non-GAAP
|
$
|
3,728
|
|
$
|
3,627
|
|
$
|
3,986
|
|
$
|
7,355
|
|
$
|
7,599
|
|
|
|
|
|
|
|
||||||||||
Pre-tax operating margin
(a)
|
22
|
%
|
25
|
%
|
30
|
%
|
24
|
%
|
27
|
%
|
|||||
Pre-tax operating margin excluding net income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets, M&I, litigation and restructuring charges and the charge (recovery) related to investment management funds, net of incentives – Non-GAAP
(a)
|
30
|
%
|
27
|
%
|
32
|
%
|
28
|
%
|
29
|
%
|
(a)
|
Income before taxes divided by total revenue.
|
Return on common equity and tangible common equity
(dollars in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
|
$
|
554
|
|
$
|
661
|
|
$
|
831
|
|
$
|
1,215
|
|
$
|
565
|
|
Add: Amortization of intangible assets, net of tax
|
49
|
|
49
|
|
59
|
|
98
|
|
115
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation excluding amortization of intangible assets – Non-GAAP
|
603
|
|
710
|
|
890
|
|
1,313
|
|
680
|
|
|||||
Add: M&I, litigation and restructuring charges, net of tax
|
76
|
|
(7
|
)
|
8
|
|
69
|
|
32
|
|
|||||
Charge related to the disallowance of certain foreign tax credits
|
—
|
|
—
|
|
—
|
|
—
|
|
854
|
|
|||||
Charge (recovery) related to investment management funds, net of incentives
|
85
|
|
(4
|
)
|
(21
|
)
|
81
|
|
9
|
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation excluding amortization of intangible assets, M&I, litigation and restructuring charges, the charge related to the disallowance of certain foreign tax credits and the charge (recovery) related to investment management funds, net of incentives – Non-GAAP
|
$
|
764
|
|
$
|
699
|
|
$
|
877
|
|
$
|
1,463
|
|
$
|
1,575
|
|
|
|
|
|
|
|
||||||||||
Average common shareholders’ equity
|
$
|
36,565
|
|
$
|
36,289
|
|
$
|
34,467
|
|
$
|
36,428
|
|
$
|
34,681
|
|
Less: Average goodwill
|
18,149
|
|
18,072
|
|
17,957
|
|
18,110
|
|
17,975
|
|
|||||
Average intangible assets
|
4,354
|
|
4,422
|
|
4,661
|
|
4,388
|
|
4,709
|
|
|||||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,338
|
|
1,306
|
|
1,200
|
|
1,338
|
|
1,200
|
|
|||||
Deferred tax liability – intangible assets
(a)
|
1,247
|
|
1,259
|
|
1,269
|
|
1,247
|
|
1,269
|
|
|||||
Average tangible common shareholders’ equity – Non-GAAP
|
$
|
16,647
|
|
$
|
16,360
|
|
$
|
14,318
|
|
$
|
16,515
|
|
$
|
14,466
|
|
|
|
|
|
|
|
||||||||||
Return on common equity – GAAP
(b)
|
6.1
|
%
|
7.4
|
%
|
9.7
|
%
|
6.7
|
%
|
3.3
|
%
|
|||||
Return on common equity excluding amortization of intangible assets, M&I, litigation and restructuring charges, the charge related to the disallowance of certain foreign tax credits and the charge (recovery) related to investment management funds, net of incentives – Non-GAAP
(b)
|
8.4
|
%
|
7.8
|
%
|
10.2
|
%
|
8.1
|
%
|
9.2
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Return on tangible common equity – Non-GAAP
(b)
|
14.5
|
%
|
17.6
|
%
|
25.0
|
%
|
16.0
|
%
|
9.5
|
%
|
|||||
Return on tangible common equity excluding M&I, litigation and restructuring charges, the charge related to the disallowance of certain foreign tax credits and the charge (recovery) related to investment management funds, net of incentives – Non-GAAP
(b)
|
18.4
|
%
|
17.3
|
%
|
24.6
|
%
|
17.9
|
%
|
22.0
|
%
|
(a)
|
Deferred tax liabilities are based on fully phased-in Basel III rules. The first and second quarters of 2014 include deferred tax liabilities on tax deductible intangible assets permitted under Basel III rules.
|
(b)
|
Annualized.
|
Equity to assets and book value per common share
|
June 30,
2014 |
|
March 31,
2014 |
|
Dec. 31, 2013
|
|
June 30,
2013 |
|
||||
(dollars in millions, unless otherwise noted)
|
||||||||||||
BNY Mellon shareholders’ equity at period end – GAAP
|
$
|
38,326
|
|
$
|
37,986
|
|
$
|
37,497
|
|
$
|
35,863
|
|
Less: Preferred stock
|
1,562
|
|
1,562
|
|
1,562
|
|
1,562
|
|
||||
BNY Mellon common shareholders’ equity at period end – GAAP
|
36,764
|
|
36,424
|
|
35,935
|
|
34,301
|
|
||||
Less: Goodwill
|
18,196
|
|
18,100
|
|
18,073
|
|
17,919
|
|
||||
Intangible assets
|
4,314
|
|
4,380
|
|
4,452
|
|
4,588
|
|
||||
Add: Deferred tax liability – tax deductible goodwill
(a)
|
1,338
|
|
1,306
|
|
1,302
|
|
1,200
|
|
||||
Deferred tax liability – intangible assets
(a)
|
1,247
|
|
1,259
|
|
1,222
|
|
1,269
|
|
||||
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP
|
$
|
16,839
|
|
$
|
16,509
|
|
$
|
15,934
|
|
$
|
14,263
|
|
|
|
|
|
|
||||||||
Total assets at period end – GAAP
|
$
|
400,740
|
|
$
|
368,241
|
|
$
|
374,516
|
|
$
|
360,688
|
|
Less: Assets of consolidated investment management funds
|
10,428
|
|
11,451
|
|
11,272
|
|
11,471
|
|
||||
Subtotal assets of operations – Non-GAAP
|
390,312
|
|
356,790
|
|
363,244
|
|
349,217
|
|
||||
Less: Goodwill
|
18,196
|
|
18,100
|
|
18,073
|
|
17,919
|
|
||||
Intangible assets
|
4,314
|
|
4,380
|
|
4,452
|
|
4,588
|
|
||||
Cash on deposit with the Federal Reserve and other central banks
(b)
|
104,916
|
|
83,736
|
|
105,384
|
|
78,671
|
|
||||
Tangible total assets of operations at period end – Non-GAAP
|
$
|
262,886
|
|
$
|
250,574
|
|
$
|
235,335
|
|
$
|
248,039
|
|
|
|
|
|
|
||||||||
BNY Mellon shareholders’ equity to total assets – GAAP
|
9.6
|
%
|
10.3
|
%
|
10.0
|
%
|
9.9
|
%
|
||||
BNY Mellon common shareholders’ equity to total assets – GAAP
|
9.2
|
%
|
9.9
|
%
|
9.6
|
%
|
9.5
|
%
|
||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations – Non-GAAP
|
6.4
|
%
|
6.6
|
%
|
6.8
|
%
|
5.8
|
%
|
||||
|
|
|
|
|
||||||||
Period-end common shares outstanding
(in thousands)
|
1,131,596
|
|
1,140,373
|
|
1,142,250
|
|
1,150,477
|
|
||||
|
|
|
|
|
||||||||
Book value per common share – GAAP
|
$
|
32.49
|
|
$
|
31.94
|
|
$
|
31.46
|
|
$
|
29.81
|
|
Tangible book value per common share – Non-GAAP
|
$
|
14.88
|
|
$
|
14.48
|
|
$
|
13.95
|
|
$
|
12.40
|
|
(a)
|
Deferred tax liabilities are based on fully phased-in Basel III rules. Deferred tax liabilities at June 30, 2014 and March 31, 2014 include deferred tax liabilities on tax deductible intangible assets permitted under Basel III rules.
|
(b)
|
Assigned a zero percentage risk-weighting by the regulators.
|
Investment management and performance fees
|
|
|
|
2Q14 vs.
|
|||||||||
(dollars in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
2Q13
|
|
1Q14
|
|
|||
Investment management and performance fees – GAAP
|
$
|
883
|
|
$
|
843
|
|
$
|
848
|
|
4
|
%
|
5
|
%
|
Add: Money market fee waivers
|
72
|
|
81
|
|
64
|
|
13
|
|
(11
|
)
|
|||
Investment management and performance fees excluding money market fee waivers – Non-GAAP
|
$
|
955
|
|
$
|
924
|
|
$
|
912
|
|
5
|
%
|
3
|
%
|
Income from consolidated investment management funds, net of
noncontrolling interests
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
Income from consolidated investment management funds
|
$
|
46
|
|
$
|
36
|
|
$
|
65
|
|
$
|
82
|
|
$
|
115
|
|
Less: Net income attributable to noncontrolling interests of consolidated investment management funds
|
17
|
|
20
|
|
39
|
|
37
|
|
55
|
|
|||||
Income from consolidated investment management funds, net of noncontrolling interests
|
$
|
29
|
|
$
|
16
|
|
$
|
26
|
|
$
|
45
|
|
$
|
60
|
|
Income from consolidated investment management funds, net of
noncontrolling interests
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
Investment management fees
|
$
|
18
|
|
$
|
18
|
|
$
|
20
|
|
$
|
36
|
|
$
|
40
|
|
Other (Investment income)
|
11
|
|
(2
|
)
|
6
|
|
9
|
|
20
|
|
|||||
Income from consolidated investment management funds, net of noncontrolling interests
|
$
|
29
|
|
$
|
16
|
|
$
|
26
|
|
$
|
45
|
|
$
|
60
|
|
Pre-tax operating margin - Investment Management business
|
|
|
|
|
|
|
Year-to-date
|
|||||||||||||||
(dollars in millions)
|
2Q13
|
|
3Q13
|
|
4Q13
|
|
1Q14
|
|
2Q14
|
|
|
2014
|
2013
|
|||||||||
Income before income taxes – GAAP
|
$
|
271
|
|
$
|
225
|
|
$
|
266
|
|
$
|
246
|
|
$
|
171
|
|
|
$
|
417
|
|
$
|
477
|
|
Add: Amortization of intangible assets
|
39
|
|
35
|
|
35
|
|
31
|
|
31
|
|
|
62
|
|
78
|
|
|||||||
Money market fee waivers
|
24
|
|
30
|
|
33
|
|
35
|
|
28
|
|
|
63
|
|
45
|
|
|||||||
Charge (recovery) related to investment management funds, net of incentives
|
(27
|
)
|
—
|
|
—
|
|
(5
|
)
|
109
|
|
|
104
|
|
12
|
|
|||||||
Income before income taxes excluding amortization of intangible assets, money market fee waivers and the charge (recovery) related to investment management funds, net of incentives – Non-GAAP
|
$
|
307
|
|
$
|
290
|
|
$
|
334
|
|
$
|
307
|
|
$
|
339
|
|
|
$
|
646
|
|
$
|
612
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total revenue – GAAP
|
$
|
975
|
|
$
|
949
|
|
$
|
1,061
|
|
$
|
970
|
|
$
|
1,036
|
|
|
$
|
2,006
|
|
$
|
1,918
|
|
Less: Distribution and servicing expense
|
110
|
|
107
|
|
108
|
|
106
|
|
111
|
|
|
217
|
|
214
|
|
|||||||
Money market fee waivers benefiting distribution and servicing expense
|
35
|
|
38
|
|
38
|
|
38
|
|
37
|
|
|
75
|
|
71
|
|
|||||||
Add: Money market fee waivers impacting total revenue
|
59
|
|
68
|
|
71
|
|
73
|
|
65
|
|
|
138
|
|
116
|
|
|||||||
Total revenue net of distribution and servicing expense and excluding money market fee waivers – Non-GAAP
|
$
|
889
|
|
$
|
872
|
|
$
|
986
|
|
$
|
899
|
|
$
|
953
|
|
|
$
|
1,852
|
|
$
|
1,749
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pre-tax operating margin
(a)
|
28
|
%
|
24
|
%
|
25
|
%
|
25
|
%
|
16
|
%
|
|
21
|
%
|
25
|
%
|
|||||||
Pre-tax operating margin, excluding amortization of intangible assets, money market fee waivers, the charge (recovery) related to investment management funds, net of incentives and net of distribution and servicing expense – Non-GAAP
(a)
|
34
|
%
|
33
|
%
|
34
|
%
|
34
|
%
|
36
|
%
|
|
35
|
%
|
35
|
%
|
(a)
|
Income before taxes divided by total revenue.
|
Basel I CET1 ratio
(dollars in millions)
|
Dec. 31, 2013
|
|
June 30,
2013 |
|
||
Total Tier 1 capital – Basel I
|
$
|
18,335
|
|
$
|
16,951
|
|
Less: Trust preferred securities
|
330
|
|
303
|
|
||
Preferred stock
|
1,562
|
|
1,562
|
|
||
Total CET1 – Basel I
|
$
|
16,443
|
|
$
|
15,086
|
|
|
|
|
||||
Total risk-weighted assets – Basel I
|
$
|
113,322
|
|
$
|
114,511
|
|
|
|
|
||||
Basel I CET1 ratio – Non-GAAP
|
14.5
|
%
|
13.2
|
%
|
Basel III capital components and ratios at June 30, 2014
|
Fully phased-in Basel III
|
|
|
|
Transitional Approach
|
|
||||
|
Adjustments
(a)
|
|||||||||
(dollars in millions)
|
||||||||||
CET1:
|
|
|
|
|
||||||
Common equity
|
$
|
36,764
|
|
$
|
105
|
|
(b)
|
$
|
36,869
|
|
Goodwill and intangible assets
|
(19,925
|
)
|
2,453
|
|
(c)
|
(17,472
|
)
|
|||
Net pension fund assets
|
(106
|
)
|
85
|
|
(d)
|
(21
|
)
|
|||
Equity method investments
|
(430
|
)
|
99
|
|
(c)
|
(331
|
)
|
|||
Deferred tax assets
|
(17
|
)
|
14
|
|
(d)
|
(3
|
)
|
|||
Other
|
(9
|
)
|
2
|
|
(e)
|
(7
|
)
|
|||
Total CET1
|
16,277
|
|
2,758
|
|
|
19,035
|
|
|||
Other Tier 1 capital:
|
|
|
|
|
||||||
Preferred stock
|
1,562
|
|
—
|
|
|
1,562
|
|
|||
Trust-preferred securities
|
—
|
|
171
|
|
(f)
|
171
|
|
|||
Disallowed deferred tax assets
|
—
|
|
(14
|
)
|
(d)
|
(14
|
)
|
|||
Net pension fund assets
|
—
|
|
(85
|
)
|
(d)
|
(85
|
)
|
|||
Total Tier 1 capital
|
17,839
|
|
2,830
|
|
|
20,669
|
|
|||
|
|
|
|
|
||||||
Tier 2 capital:
|
|
|
|
|
||||||
Trust-preferred securities
|
—
|
|
171
|
|
(f)
|
171
|
|
|||
Subordinated debt
|
398
|
|
—
|
|
|
398
|
|
|||
Allowance for credit losses
|
311
|
|
—
|
|
|
311
|
|
|||
Total Tier 2 capital - Standardized Approach
|
709
|
|
171
|
|
|
880
|
|
|||
Excess of expected credit losses
|
45
|
|
—
|
|
|
45
|
|
|||
Less: Allowance for credit losses
|
311
|
|
—
|
|
|
311
|
|
|||
Total Tier 2 capital - Advanced Approach
|
$
|
443
|
|
$
|
171
|
|
|
$
|
614
|
|
Total capital - Standardized Approach
|
$
|
18,548
|
|
$
|
3,001
|
|
|
$
|
21,549
|
|
Total capital - Advanced Approach
|
$
|
18,282
|
|
$
|
3,001
|
|
|
$
|
21,283
|
|
|
|
|
|
|
||||||
Risk-weighted assets - Standardized Approach
|
$
|
158,168
|
|
$
|
(25,119
|
)
|
(g)
|
$
|
133,049
|
|
Risk-weighted assets - Advanced Approach
|
$
|
162,072
|
|
$
|
4,409
|
|
(g)
|
$
|
166,481
|
|
|
|
|
|
|
||||||
Standardized Approach:
|
|
|
|
|
||||||
Estimated Basel III CET1 ratio
|
10.3
|
%
|
|
|
14.3
|
%
|
||||
Tier 1 capital ratio
|
11.3
|
|
|
|
15.5
|
|
||||
Total (Tier 1 plus Tier 2) capital ratio
|
11.7
|
|
|
|
16.2
|
|
||||
|
|
|
|
|
||||||
Advanced Approach:
|
|
|
|
|
||||||
Estimated Basel III CET1 ratio
|
10.0
|
%
|
|
|
11.4
|
%
|
||||
Tier 1 capital ratio
|
11.0
|
|
|
|
12.4
|
|
||||
Total (Tier 1 plus Tier 2) capital ratio
|
11.3
|
|
|
|
12.8
|
|
(a)
|
Reflects transition adjustments to CET1, Tier 1 capital and Tier 2 capital required in 2014 under the Final Capital Rules.
|
(b)
|
Represents the portion of accumulated other comprehensive (income) loss excluded from common equity.
|
(c)
|
Represents intangible assets, other than goodwill, net of the corresponding deferred tax liabilities.
|
(d)
|
Represents the deduction for net pension fund assets and disallowed deferred tax assets in CET1 and Tier 1 capital.
|
(e)
|
Represents the transition adjustment related to cash flow hedges.
|
(f)
|
During 2014, 50% of outstanding trust preferred securities are included in Tier 1 capital and 50% in Tier 2 capital.
|
(g)
|
Following are the primary differences between risk-weighted assets determined under fully phased-in Basel III-Standardized Approach and Basel I. Credit risk is determined under Basel I using predetermined risk-weights and asset classes and relies in part on the use of external credit ratings. Under fully phased-in Basel III, the Standardized Approach uses a broader range of predetermined risk-weights and asset classes and certain alternatives to external credit ratings. Securitization exposure receives a higher risk-weighting under fully phased-in Basel III than Basel I, and fully phased-in Basel III includes additional adjustments for market risk, counterparty credit risk and equity exposures. Additionally, the Standardized Approach eliminates the use of the VaR approach, whereas the Advanced Approach permits the VaR approach but requires certain model qualifications and approvals, for determining risk-weighted assets on certain repo-style transactions. In 2014, Standardized Approach and Advanced Approach risk-weighted assets include transition adjustments for intangible assets, other than goodwill, and equity exposure.
|
Estimated fully phased-in Basel III CET1 ratio – Non-GAAP
(a)
|
June 30,
2014 |
|
March 31,
2014 |
|
Dec. 31, 2013
|
|
June 30,
2013 |
|
||||
(dollars in millions)
|
||||||||||||
Total Tier 1 capital
|
$
|
20,669
|
|
$
|
20,553
|
|
$
|
18,335
|
|
$
|
16,951
|
|
Adjustments to determine estimated fully phased-in Basel III CET1:
|
|
|
|
|
||||||||
Deferred tax liability – tax deductible intangible assets
|
—
|
|
—
|
|
70
|
|
81
|
|
||||
Intangible deduction
|
(2,453
|
)
|
(2,496
|
)
|
—
|
|
—
|
|
||||
Preferred stock
|
(1,562
|
)
|
(1,562
|
)
|
(1,562
|
)
|
(1,562
|
)
|
||||
Trust preferred securities
|
(171
|
)
|
(167
|
)
|
(330
|
)
|
(303
|
)
|
||||
Other comprehensive income (loss) and net pension fund assets:
|
|
|
|
|
||||||||
Securities available-for-sale
|
586
|
|
430
|
|
387
|
|
560
|
|
||||
Pension liabilities
|
(691
|
)
|
(705
|
)
|
(900
|
)
|
(1,379
|
)
|
||||
Net pension fund assets
|
—
|
|
—
|
|
(713
|
)
|
(268
|
)
|
||||
Total other comprehensive income (loss) and net pension fund assets
|
(105
|
)
|
(275
|
)
|
(1,226
|
)
|
(1,087
|
)
|
||||
Equity method investments
|
(99
|
)
|
(102
|
)
|
(445
|
)
|
(500
|
)
|
||||
Deferred tax assets
|
—
|
|
—
|
|
(49
|
)
|
(26
|
)
|
||||
Other
|
(2
|
)
|
—
|
|
17
|
|
23
|
|
||||
Total estimated fully phased-in Basel III CET1
|
$
|
16,277
|
|
$
|
15,951
|
|
$
|
14,810
|
|
$
|
13,577
|
|
|
|
|
|
|
||||||||
Under the Standardized Approach:
|
|
|
|
|
||||||||
Estimated fully phased-in Basel III risk-weighted assets
|
$
|
158,168
|
|
$
|
143,882
|
|
$
|
139,865
|
|
$
|
145,841
|
|
|
|
|
|
|
||||||||
Estimated fully phased-in Basel III CET1 ratio – Non-GAAP
(b)
|
10.3
|
%
|
11.1
|
%
|
10.6
|
%
|
9.3
|
%
|
||||
|
|
|
|
|
||||||||
Under the Advanced Approach:
|
|
|
|
|
||||||||
Estimated fully phased-in Basel III risk-weighted assets
|
$
|
162,072
|
|
$
|
148,736
|
|
$
|
130,849
|
|
$
|
138,304
|
|
|
|
|
|
|
||||||||
Estimated fully phased-in Basel III CET1 ratio – Non-GAAP
(b)
|
10.0
|
%
|
10.7
|
%
|
11.3
|
%
|
9.8
|
%
|
(a)
|
The estimated fully phased-in Basel III CET1 ratios are based on our interpretation of the Final Capital Rules, which are being gradually phased-in over a multi-year period. The estimated fully phased-in Basel III CET1 ratios assume all relevant regulatory model approvals. The Final Capital Rules require approval by banking regulators of certain models used as part of risk-weighted asset calculations. If these models are not approved, the estimated fully phased-in capital ratios would likely be adversely impacted.
|
(b)
|
Beginning with June 30, 2014, risk-based capital ratios include the net impact of including the total consolidated assets of certain consolidated investment management funds in risk-weighted assets. These assets were not included in prior periods. The net impact of such consolidated assets for the June 30, 2014 estimated CET1 ratio on a fully phased-in basis was a decrease of
101
basis points under the Advanced Approach and
58
basis points under the Standardized Approach.
|
•
|
Limits exposures between a banking organization and a single counterparty or a group of connected counterparties to 25% of Tier 1 capital;
|
•
|
Limits exposures between G-SIBs to 15% of Tier 1 capital;
|
•
|
Excludes intraday interbank exposures and sovereign and central bank exposures; and
|
•
|
Allows banking organizations to use risk-based capital measurements for securities financing transactions (e.g., value-at-risk) until the Basel Committee finalizes a revised exposure measurement methodology.
|
•
|
All of our SEC filings, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, SEC Forms 3, 4 and 5 and any proxy statement mailed by us in connection with the solicitation of proxies;
|
•
|
Financial statements and footnotes prepared using Extensible Business Reporting Language (“XBRL”);
|
•
|
Our Earnings Release, Quarterly Earnings Review, Quarterly Financial Trends and selected management conference calls and presentations;
|
•
|
Other regulatory disclosures, including: Basel II.5 Market Risk Disclosures; Pillar 3 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, Directors Code of Conduct and the Charters of the Audit, Corporate Governance and Nominating, Corporate Social Responsibility, Human Resources and Compensation, Risk and Technology Committees of our Board of Directors.
|
|
Quarter ended
|
|
Year-to-date
|
||||||||||||||||
(in millions)
|
June 30,
2014 |
|
|
March 31,
2014 |
|
|
June 30,
2013 |
|
|
June 30,
2014 |
|
|
June 30,
2013 |
|
|||||
Fee and other revenue
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment services fees:
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset servicing
|
$
|
1,022
|
|
|
$
|
1,009
|
|
|
$
|
988
|
|
|
$
|
2,031
|
|
|
$
|
1,957
|
|
Clearing services
|
326
|
|
|
325
|
|
|
321
|
|
|
651
|
|
|
625
|
|
|||||
Issuer services
|
231
|
|
|
229
|
|
|
294
|
|
|
460
|
|
|
531
|
|
|||||
Treasury services
|
141
|
|
|
136
|
|
|
139
|
|
|
277
|
|
|
280
|
|
|||||
Total investment services fees
|
1,720
|
|
|
1,699
|
|
|
1,742
|
|
|
3,419
|
|
|
3,393
|
|
|||||
Investment management and performance fees
|
883
|
|
|
843
|
|
|
848
|
|
|
1,726
|
|
|
1,670
|
|
|||||
Foreign exchange and other trading revenue
|
130
|
|
|
136
|
|
|
207
|
|
|
266
|
|
|
368
|
|
|||||
Distribution and servicing
|
43
|
|
|
43
|
|
|
45
|
|
|
86
|
|
|
94
|
|
|||||
Financing-related fees
|
44
|
|
|
38
|
|
|
44
|
|
|
82
|
|
|
85
|
|
|||||
Investment and other income
(a)
|
142
|
|
|
102
|
|
|
285
|
|
|
244
|
|
|
373
|
|
|||||
Total fee revenue
(a)
|
2,962
|
|
|
2,861
|
|
|
3,171
|
|
|
5,823
|
|
|
5,983
|
|
|||||
Net securities gains — including other-than-temporary impairment
|
18
|
|
|
23
|
|
|
35
|
|
|
41
|
|
|
83
|
|
|||||
Noncredit-related portion of other-than-temporary impairment
(recognized in other comprehensive income)
|
—
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
3
|
|
|||||
Net securities gains
|
18
|
|
|
22
|
|
|
32
|
|
|
40
|
|
|
80
|
|
|||||
Total fee and other revenue
(a)
|
2,980
|
|
|
2,883
|
|
|
3,203
|
|
|
5,863
|
|
|
6,063
|
|
|||||
Operations of consolidated investment management funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment income
|
141
|
|
|
138
|
|
|
159
|
|
|
279
|
|
|
305
|
|
|||||
Interest of investment management fund note holders
|
95
|
|
|
102
|
|
|
94
|
|
|
197
|
|
|
190
|
|
|||||
Income from consolidated investment management funds
|
46
|
|
|
36
|
|
|
65
|
|
|
82
|
|
|
115
|
|
|||||
Net interest revenue
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest revenue
|
811
|
|
|
812
|
|
|
836
|
|
|
1,623
|
|
|
1,651
|
|
|||||
Interest expense
|
92
|
|
|
84
|
|
|
79
|
|
|
176
|
|
|
175
|
|
|||||
Net interest revenue
|
719
|
|
|
728
|
|
|
757
|
|
|
1,447
|
|
|
1,476
|
|
|||||
Provision for credit losses
|
(12
|
)
|
|
(18
|
)
|
|
(19
|
)
|
|
(30
|
)
|
|
(43
|
)
|
|||||
Net interest revenue after provision for credit losses
|
731
|
|
|
746
|
|
|
776
|
|
|
1,477
|
|
|
1,519
|
|
|||||
Noninterest expense
|
|
|
|
|
|
|
|
|
|
||||||||||
Staff
|
1,439
|
|
|
1,511
|
|
|
1,509
|
|
|
2,950
|
|
|
2,981
|
|
|||||
Professional, legal and other purchased services
|
314
|
|
|
312
|
|
|
317
|
|
|
626
|
|
|
612
|
|
|||||
Software
|
154
|
|
|
152
|
|
|
157
|
|
|
306
|
|
|
297
|
|
|||||
Net occupancy
|
152
|
|
|
154
|
|
|
159
|
|
|
306
|
|
|
322
|
|
|||||
Distribution and servicing
|
112
|
|
|
107
|
|
|
111
|
|
|
219
|
|
|
217
|
|
|||||
Furniture and equipment
|
82
|
|
|
85
|
|
|
81
|
|
|
167
|
|
|
169
|
|
|||||
Sub-custodian
|
81
|
|
|
68
|
|
|
77
|
|
|
149
|
|
|
141
|
|
|||||
Business development
|
68
|
|
|
64
|
|
|
90
|
|
|
132
|
|
|
158
|
|
|||||
Other
|
347
|
|
|
223
|
|
|
215
|
|
|
570
|
|
|
522
|
|
|||||
Amortization of intangible assets
|
75
|
|
|
75
|
|
|
93
|
|
|
150
|
|
|
179
|
|
|||||
Merger and integration, litigation and restructuring charges
|
122
|
|
|
(12
|
)
|
|
13
|
|
|
110
|
|
|
52
|
|
|||||
Total noninterest expense
|
2,946
|
|
|
2,739
|
|
|
2,822
|
|
|
5,685
|
|
|
5,650
|
|
|||||
Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
(a)
|
811
|
|
|
926
|
|
|
1,222
|
|
|
1,737
|
|
|
2,047
|
|
|||||
Provision for income taxes
(a)
|
217
|
|
|
232
|
|
|
339
|
|
|
449
|
|
|
1,401
|
|
|||||
Net income
(a)
|
594
|
|
|
694
|
|
|
883
|
|
|
1,288
|
|
|
646
|
|
|||||
Net (income) attributable to noncontrolling interests (includes $(17), $(20), $(39), $(37) and $(55) related to consolidated investment management funds, respectively)
|
(17
|
)
|
|
(20
|
)
|
|
(40
|
)
|
|
(37
|
)
|
|
(56
|
)
|
|||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
(a)
|
577
|
|
|
674
|
|
|
843
|
|
|
1,251
|
|
|
590
|
|
|||||
Preferred stock dividends
|
(23
|
)
|
|
(13
|
)
|
|
(12
|
)
|
|
(36
|
)
|
|
(25
|
)
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
(a)
|
$
|
554
|
|
|
$
|
661
|
|
|
$
|
831
|
|
|
$
|
1,215
|
|
|
$
|
565
|
|
(a)
|
Results for the second quarter of 2013 and the first six months of 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). 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
|
Quarter ended
|
|
Year-to-date
|
||||||||||||||||
(in millions)
|
June 30,
2014 |
|
|
March 31,
2014 |
|
|
June 30,
2013 |
|
|
June 30,
2014 |
|
|
June 30,
2013 |
|
|||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
(a)
|
$
|
554
|
|
|
$
|
661
|
|
|
$
|
831
|
|
|
$
|
1,215
|
|
|
$
|
565
|
|
Less: Earnings allocated to participating securities
(a)
|
10
|
|
|
13
|
|
|
15
|
|
|
23
|
|
|
10
|
|
|||||
Change in the excess of redeemable value over the fair value of noncontrolling interests
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
N/A
|
|
|
1
|
|
|||||
Net income applicable to the common shareholders of The Bank of New York Mellon Corporation after required adjustments for the calculation of basic and diluted earnings per common share
(a)
|
$
|
544
|
|
|
$
|
648
|
|
|
$
|
816
|
|
|
$
|
1,192
|
|
|
$
|
554
|
|
Earnings per share applicable to the common shareholders
of The Bank of New York Mellon Corporation
(a)(c)
|
Quarter ended
|
|
Year-to-date
|
||||||||||||||||
(in dollars)
|
June 30,
2014 |
|
|
March 31,
2014 |
|
|
June 30,
2013 |
|
|
June 30,
2014 |
|
|
June 30,
2013 |
|
|||||
Basic
|
$
|
0.48
|
|
|
$
|
0.57
|
|
|
$
|
0.71
|
|
|
$
|
1.05
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.48
|
|
|
$
|
0.57
|
|
|
$
|
0.71
|
|
|
$
|
1.04
|
|
|
$
|
0.48
|
|
(a)
|
Results for the second quarter of 2013 and the first six months of 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
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.
|
(c)
|
Basic and diluted earnings per share under the two-class method are determined on the net income applicable to common shareholders of The Bank of New York Mellon Corporation reported on the income statement less earnings allocated to participating securities, and the change in the excess of redeemable value over the fair value of noncontrolling interests, if applicable.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Quarter ended
|
|
Year-to-date
|
||||||||||||||||
(in millions)
|
June 30, 2014
|
|
|
March 31, 2014
|
|
|
June 30, 2013
|
|
|
June 30, 2014
|
|
|
June 30, 2013
|
|
|||||
Net income
(a)
|
$
|
594
|
|
|
$
|
694
|
|
|
$
|
883
|
|
|
$
|
1,288
|
|
|
$
|
646
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
77
|
|
|
37
|
|
|
5
|
|
|
114
|
|
|
(304
|
)
|
|||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gain (loss) arising during the period
|
210
|
|
|
162
|
|
|
(736
|
)
|
|
372
|
|
|
(742
|
)
|
|||||
Reclassification adjustment
|
(14
|
)
|
|
(13
|
)
|
|
(17
|
)
|
|
(27
|
)
|
|
(47
|
)
|
|||||
Total unrealized gain (loss) on assets available-for-sale
|
196
|
|
|
149
|
|
|
(753
|
)
|
|
345
|
|
|
(789
|
)
|
|||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
|
17
|
|
|
19
|
|
|
31
|
|
|
36
|
|
|
74
|
|
|||||
Total defined benefit plans
|
17
|
|
|
19
|
|
|
31
|
|
|
36
|
|
|
74
|
|
|||||
Net unrealized gain (loss) on cash flow hedges
|
(2
|
)
|
|
1
|
|
|
(9
|
)
|
|
(1
|
)
|
|
(8
|
)
|
|||||
Total other comprehensive income (loss), net of tax
(b)
|
288
|
|
|
206
|
|
|
(726
|
)
|
|
494
|
|
|
(1,027
|
)
|
|||||
Net (income) attributable to noncontrolling interests
|
(17
|
)
|
|
(20
|
)
|
|
(40
|
)
|
|
(37
|
)
|
|
(56
|
)
|
|||||
Other comprehensive (income) loss attributable to noncontrolling interests
|
(1
|
)
|
|
(3
|
)
|
|
(10
|
)
|
|
(4
|
)
|
|
19
|
|
|||||
Net comprehensive income (loss)
|
$
|
864
|
|
|
$
|
877
|
|
|
$
|
107
|
|
|
$
|
1,741
|
|
|
$
|
(418
|
)
|
(a)
|
Prior periods were restated to reflect the retrospective application of adopting new accounting guidance related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was
$287 million
for the
quarter ended
June 30, 2014
,
$203 million
for the
quarter ended
March 31, 2014
,
$(736) million
for the
quarter ended
June 30, 2013
,
$490 million
for the
six months ended June 30, 2014
and
$(1,008) million
for the
six months ended June 30, 2013
.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
June 30,
|
|
|
Dec. 31,
|
|
||
(dollars in millions, except per share amounts)
|
2014
|
|
|
2013
|
|
||
Assets
|
|
|
|
||||
Cash and due from:
|
|
|
|
||||
Banks
|
$
|
6,173
|
|
|
$
|
6,460
|
|
Interest-bearing deposits with the Federal Reserve and other central banks
|
105,657
|
|
|
104,359
|
|
||
Interest-bearing deposits with banks
|
41,459
|
|
|
35,300
|
|
||
Federal funds sold and securities purchased under resale agreements
|
15,062
|
|
|
9,161
|
|
||
Securities:
|
|
|
|
||||
Held-to-maturity (fair value of $19,211 and $19,443)
|
19,102
|
|
|
19,743
|
|
||
Available-for-sale
|
85,688
|
|
|
79,309
|
|
||
Total securities
|
104,790
|
|
|
99,052
|
|
||
Trading assets
|
10,856
|
|
|
12,098
|
|
||
Loans
|
59,248
|
|
|
51,657
|
|
||
Allowance for loan losses
|
(187
|
)
|
|
(210
|
)
|
||
Net loans
|
59,061
|
|
|
51,447
|
|
||
Premises and equipment
|
1,590
|
|
|
1,655
|
|
||
Accrued interest receivable
|
624
|
|
|
621
|
|
||
Goodwill
|
18,196
|
|
|
18,073
|
|
||
Intangible assets
|
4,314
|
|
|
4,452
|
|
||
Other assets (includes $1,650 and $1,728, at fair value)
|
22,530
|
|
|
20,566
|
|
||
Subtotal assets of operations
|
390,312
|
|
|
363,244
|
|
||
Assets of consolidated investment management funds, at fair value:
|
|
|
|
||||
Trading assets
|
9,402
|
|
|
10,397
|
|
||
Other assets
|
1,026
|
|
|
875
|
|
||
Subtotal assets of consolidated investment management funds, at fair value
|
10,428
|
|
|
11,272
|
|
||
Total assets
|
$
|
400,740
|
|
|
$
|
374,516
|
|
Liabilities
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Noninterest-bearing (principally U.S. offices)
|
$
|
109,570
|
|
|
$
|
95,475
|
|
Interest-bearing deposits in U.S. offices
|
52,954
|
|
|
56,640
|
|
||
Interest-bearing deposits in Non-U.S. offices
|
119,915
|
|
|
109,014
|
|
||
Total deposits
|
282,439
|
|
|
261,129
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
10,301
|
|
|
9,648
|
|
||
Trading liabilities
|
6,844
|
|
|
6,945
|
|
||
Payables to customers and broker-dealers
|
17,242
|
|
|
15,707
|
|
||
Commercial paper
|
27
|
|
|
96
|
|
||
Other borrowed funds
|
1,458
|
|
|
663
|
|
||
Accrued taxes and other expenses
|
6,433
|
|
|
6,996
|
|
||
Other liabilities (including allowance for lending-related commitments of $124 and $134, also includes $392 and $503, at fair value)
|
7,066
|
|
|
4,827
|
|
||
Long-term debt (includes $338 and $321, at fair value)
|
20,327
|
|
|
19,864
|
|
||
Subtotal liabilities of operations
|
352,137
|
|
|
325,875
|
|
||
Liabilities of consolidated investment management funds, at fair value:
|
|
|
|
||||
Trading liabilities
|
9,123
|
|
|
10,085
|
|
||
Other liabilities
|
6
|
|
|
46
|
|
||
Subtotal liabilities of consolidated investment management funds, at fair value
|
9,129
|
|
|
10,131
|
|
||
Total liabilities
|
361,266
|
|
|
336,006
|
|
||
Temporary equity
|
|
|
|
||||
Redeemable noncontrolling interests
|
239
|
|
|
230
|
|
||
Permanent equity
|
|
|
|
||||
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 15,826 and 15,826 shares
|
1,562
|
|
|
1,562
|
|
||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,281,585,137 and 1,268,036,220 shares
|
13
|
|
|
13
|
|
||
Additional paid-in capital
|
24,303
|
|
|
24,002
|
|
||
Retained earnings
|
16,796
|
|
|
15,952
|
|
||
Accumulated other comprehensive loss, net of tax
|
(402
|
)
|
|
(892
|
)
|
||
Less: Treasury stock of 149,988,907 and 125,786,430 common shares, at cost
|
(3,946
|
)
|
|
(3,140
|
)
|
||
Total The Bank of New York Mellon Corporation shareholders’ equity
|
38,326
|
|
|
37,497
|
|
||
Nonredeemable noncontrolling interests of consolidated investment management funds
|
909
|
|
|
783
|
|
||
Total permanent equity
|
39,235
|
|
|
38,280
|
|
||
Total liabilities, temporary equity and permanent equity
|
$
|
400,740
|
|
|
$
|
374,516
|
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
Six months ended June 30,
|
||||||
(in millions)
|
2014
|
|
|
2013
|
|
||
Operating activities
|
|
|
|
||||
Net income
(a)
|
$
|
1,288
|
|
|
$
|
646
|
|
Net (income) attributable to noncontrolling interests
|
(37
|
)
|
|
(56
|
)
|
||
Net income applicable to shareholders of The Bank of New York Mellon Corporation
(a)
|
1,251
|
|
|
590
|
|
||
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
|
||||
Provision for credit losses
|
(30
|
)
|
|
(43
|
)
|
||
Pension plan contributions
|
(25
|
)
|
|
(22
|
)
|
||
Depreciation and amortization
|
646
|
|
|
706
|
|
||
Deferred tax (benefit)
(a)
|
(101
|
)
|
|
(32
|
)
|
||
Net securities (gains) and venture capital (income)
|
(43
|
)
|
|
(83
|
)
|
||
Change in trading activities
|
1,027
|
|
|
(1,692
|
)
|
||
Change in accruals and other, net
(a)
|
(340
|
)
|
|
(383
|
)
|
||
Net cash provided by (used for) operating activities
|
2,385
|
|
|
(959
|
)
|
||
Investing activities
|
|
|
|
||||
Change in interest-bearing deposits with banks
|
(6,376
|
)
|
|
2,682
|
|
||
Change in interest-bearing deposits with the Federal Reserve and other central banks
|
(1,298
|
)
|
|
12,960
|
|
||
Purchases of securities held-to-maturity
|
(457
|
)
|
|
(6,724
|
)
|
||
Paydowns of securities held-to-maturity
|
880
|
|
|
687
|
|
||
Maturities of securities held-to-maturity
|
93
|
|
|
24
|
|
||
Purchases of securities available-for-sale
|
(32,071
|
)
|
|
(17,468
|
)
|
||
Sales of securities available-for-sale
|
20,806
|
|
|
9,218
|
|
||
Paydowns of securities available-for-sale
|
3,480
|
|
|
5,266
|
|
||
Maturities of securities available-for-sale
|
2,584
|
|
|
1,442
|
|
||
Net change in loans
|
(7,743
|
)
|
|
(3,800
|
)
|
||
Sales of loans and other real estate
|
222
|
|
|
80
|
|
||
Change in federal funds sold and securities purchased under resale agreements
|
(5,901
|
)
|
|
(3,385
|
)
|
||
Change in seed capital investments
|
(205
|
)
|
|
(38
|
)
|
||
Purchases of premises and equipment/capitalized software
|
(380
|
)
|
|
(258
|
)
|
||
Acquisitions, net of cash
|
(25
|
)
|
|
(5
|
)
|
||
Dispositions, net of cash
|
64
|
|
|
—
|
|
||
Other, net
|
9
|
|
|
(1,313
|
)
|
||
Net cash (used for) investing activities
|
(26,318
|
)
|
|
(632
|
)
|
||
Financing activities
|
|
|
|
||||
Change in deposits
|
21,238
|
|
|
164
|
|
||
Change in federal funds purchased and securities sold under repurchase agreements
|
653
|
|
|
5,173
|
|
||
Change in payables to customers and broker-dealers
|
1,535
|
|
|
(828
|
)
|
||
Change in other borrowed funds
|
892
|
|
|
(304
|
)
|
||
Change in commercial paper
|
(69
|
)
|
|
(227
|
)
|
||
Net proceeds from the issuance of long-term debt
|
2,691
|
|
|
1,497
|
|
||
Repayments of long-term debt
|
(2,321
|
)
|
|
(1,128
|
)
|
||
Proceeds from the exercise of stock options
|
136
|
|
|
136
|
|
||
Issuance of common stock
|
13
|
|
|
12
|
|
||
Issuance of preferred stock
|
—
|
|
|
494
|
|
||
Treasury stock acquired
|
(806
|
)
|
|
(583
|
)
|
||
Common cash dividends paid
|
(370
|
)
|
|
(330
|
)
|
||
Preferred cash dividends paid
|
(36
|
)
|
|
(25
|
)
|
||
Other, net
|
79
|
|
|
(120
|
)
|
||
Net cash provided by financing activities
|
23,635
|
|
|
3,931
|
|
||
Effect of exchange rate changes on cash
|
11
|
|
|
(127
|
)
|
||
Change in cash and due from banks
|
|
|
|
||||
Change in cash and due from banks
|
(287
|
)
|
|
2,213
|
|
||
Cash and due from banks at beginning of period
|
6,460
|
|
|
4,727
|
|
||
Cash and due from banks at end of period
|
$
|
6,173
|
|
|
$
|
6,940
|
|
Supplemental disclosures
|
|
|
|
||||
Interest paid
|
$
|
169
|
|
|
$
|
178
|
|
Income taxes paid
|
268
|
|
|
175
|
|
||
Income taxes refunded
|
141
|
|
|
17
|
|
(a)
|
Information for the six months ended June 30, 2013 was restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
The Bank of New York Mellon Corporation (and its subsidiaries)
|
|
The Bank of New York Mellon Corporation shareholders
|
Non-
redeemable
noncontrolling
interests of
consolidated
investment
management
funds
|
|
Total
permanent
equity
|
|
|
Redeemable
non-
controlling
interests/
temporary
equity
|
|
||||||||||||||||||||
(in millions, except per
share amounts)
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss),
net of tax
|
|
Treasury
stock
|
|
||||||||||||||||
Balance at Dec. 31, 2013
(a)
|
$
|
1,562
|
|
$
|
13
|
|
$
|
24,002
|
|
$
|
15,952
|
|
$
|
(892
|
)
|
$
|
(3,140
|
)
|
$
|
783
|
|
$
|
38,280
|
|
(b)
|
$
|
230
|
|
Shares issued to shareholders of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
32
|
|
|||||||||
Redemption of subsidiary shares from noncontrolling interests
|
—
|
|
—
|
|
(31
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(31
|
)
|
|
(54
|
)
|
|||||||||
Other net changes in noncontrolling interests
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
|
—
|
|
93
|
|
103
|
|
|
23
|
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
1,251
|
|
—
|
|
—
|
|
37
|
|
1,288
|
|
|
—
|
|
|||||||||
Other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
490
|
|
—
|
|
(4
|
)
|
486
|
|
|
8
|
|
|||||||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stock at $0.32 per share
|
—
|
|
—
|
|
—
|
|
(371
|
)
|
—
|
|
—
|
|
—
|
|
(371
|
)
|
|
—
|
|
|||||||||
Preferred stock
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
—
|
|
—
|
|
—
|
|
(36
|
)
|
|
—
|
|
|||||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(806
|
)
|
—
|
|
(806
|
)
|
|
—
|
|
|||||||||
Common stock issued under:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee benefit plans
|
—
|
|
—
|
|
13
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13
|
|
|
—
|
|
|||||||||
Direct stock purchase and dividend reinvestment plan
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10
|
|
|
—
|
|
|||||||||
Stock awards and options exercised
|
—
|
|
—
|
|
299
|
|
—
|
|
—
|
|
—
|
|
—
|
|
299
|
|
|
—
|
|
|||||||||
Balance at June 30, 2014
|
$
|
1,562
|
|
$
|
13
|
|
$
|
24,303
|
|
$
|
16,796
|
|
$
|
(402
|
)
|
$
|
(3,946
|
)
|
$
|
909
|
|
$
|
39,235
|
|
(b)
|
$
|
239
|
|
(a)
|
Retained earnings was restated to reflect the retrospective application of adopting new accounting guidance related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Includes total The Bank of New York Mellon Corporation common shareholders’ equity of
$35,935 million
at
Dec. 31, 2013
and
$36,764 million
at
June 30, 2014
.
|
Notes to Consolidated Financial Statements
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
|
As previously reported
|
|
As revised
|
||||||||||||
(in dollars)
|
2Q13
|
|
|
YTD13
|
|
|
2Q13
|
|
|
YTD13
|
|
||||
Basic
|
$
|
0.71
|
|
|
$
|
0.48
|
|
|
$
|
0.71
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.71
|
|
|
$
|
0.48
|
|
|
$
|
0.71
|
|
|
$
|
0.48
|
|
Income Statement
|
As previously reported
|
|
Adjustments
|
|
As revised
|
||||||||||||||||||
(in millions)
|
2Q13
|
|
|
YTD13
|
|
|
2Q13
|
|
|
YTD13
|
|
|
2Q13
|
|
|
YTD13
|
|
||||||
Investment and other income
|
$
|
269
|
|
|
$
|
341
|
|
|
$
|
16
|
|
|
$
|
32
|
|
|
$
|
285
|
|
|
$
|
373
|
|
Total fee revenue
|
3,155
|
|
|
5,951
|
|
|
16
|
|
|
32
|
|
|
3,171
|
|
|
5,983
|
|
||||||
Total fee and other revenue
|
3,187
|
|
|
6,031
|
|
|
16
|
|
|
32
|
|
|
3,203
|
|
|
6,063
|
|
||||||
Income before income taxes
|
1,206
|
|
|
2,015
|
|
|
16
|
|
|
32
|
|
|
1,222
|
|
|
2,047
|
|
||||||
Provision for income taxes
|
321
|
|
|
1,367
|
|
|
18
|
|
|
34
|
|
|
339
|
|
|
1,401
|
|
||||||
Net income (loss)
|
885
|
|
|
648
|
|
|
(2
|
)
|
|
(2
|
)
|
|
883
|
|
|
646
|
|
||||||
Net income (loss) applicable to shareholders of The Bank of New York Mellon Corporation
|
845
|
|
|
592
|
|
|
(2
|
)
|
|
(2
|
)
|
|
843
|
|
|
590
|
|
||||||
Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation
|
833
|
|
|
567
|
|
|
(2
|
)
|
|
(2
|
)
|
|
831
|
|
|
565
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Securities at June 30, 2014
|
Amortized cost
|
|
Gross unrealized
|
Fair value
|
|
|
|||||||
(in millions)
|
Gains
|
|
Losses
|
|
|||||||||
Available-for-sale:
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
15,243
|
|
$
|
116
|
|
$
|
157
|
|
$
|
15,202
|
|
|
U.S. Government agencies
|
445
|
|
5
|
|
2
|
|
448
|
|
|
||||
State and political subdivisions
|
6,149
|
|
105
|
|
35
|
|
6,219
|
|
|
||||
Agency RMBS
|
27,369
|
|
338
|
|
389
|
|
27,318
|
|
|
||||
Non-agency RMBS
|
1,036
|
|
45
|
|
34
|
|
1,047
|
|
|
||||
Other RMBS
|
2,034
|
|
36
|
|
32
|
|
2,038
|
|
|
||||
Commercial MBS
|
2,010
|
|
57
|
|
11
|
|
2,056
|
|
|
||||
Agency commercial MBS
|
2,412
|
|
28
|
|
9
|
|
2,431
|
|
|
||||
Asset-backed CLOs
|
1,481
|
|
13
|
|
—
|
|
1,494
|
|
|
||||
Other asset-backed securities
|
3,274
|
|
10
|
|
6
|
|
3,278
|
|
|
||||
Foreign covered bonds
|
2,699
|
|
89
|
|
—
|
|
2,788
|
|
|
||||
Corporate bonds
|
1,654
|
|
49
|
|
10
|
|
1,693
|
|
|
||||
Other debt securities
|
16,070
|
|
133
|
|
12
|
|
16,191
|
|
(a)
|
||||
Equity securities
|
100
|
|
1
|
|
—
|
|
101
|
|
|
||||
Money market funds
|
810
|
|
—
|
|
—
|
|
810
|
|
|
||||
Non-agency RMBS
(b)
|
2,010
|
|
568
|
|
4
|
|
2,574
|
|
|
||||
Total securities available-for-sale
(c)
|
84,796
|
|
1,593
|
|
701
|
|
85,688
|
|
|
||||
Held-to-maturity:
|
|
|
|
|
|
||||||||
U.S. Treasury
|
3,325
|
|
31
|
|
35
|
|
3,321
|
|
|
||||
U.S. Government agencies
|
344
|
|
—
|
|
5
|
|
339
|
|
|
||||
State and political subdivisions
|
33
|
|
1
|
|
—
|
|
34
|
|
|
||||
Agency RMBS
|
14,124
|
|
177
|
|
67
|
|
14,234
|
|
|
||||
Non-agency RMBS
|
171
|
|
11
|
|
2
|
|
180
|
|
|
||||
Other RMBS
|
372
|
|
3
|
|
14
|
|
361
|
|
|
||||
Commercial MBS
|
15
|
|
—
|
|
—
|
|
15
|
|
|
||||
Other securities
|
718
|
|
9
|
|
—
|
|
727
|
|
|
||||
Total securities held-to-maturity
|
19,102
|
|
232
|
|
123
|
|
19,211
|
|
|
||||
Total securities
|
$
|
103,898
|
|
$
|
1,825
|
|
$
|
824
|
|
$
|
104,899
|
|
|
(a)
|
Includes
$14.1 billion
, at fair value, of government-sponsored and guaranteed entities, and sovereign debt.
|
(b)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(c)
|
Includes gross unrealized gains of
$67 million
and gross unrealized losses of
$312 million
recorded in accumulated other comprehensive income primarily related to Agency RMBS that were transferred from available-for-sale to held-to-maturity in 2013. The unrealized gains and losses will be amortized into net interest revenue over the estimated lives of the securities.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Securities at Dec. 31, 2013
|
Amortized cost
|
|
Gross unrealized
|
Fair value
|
|
|
|||||||
(in millions)
|
Gains
|
|
Losses
|
|
|||||||||
Available-for-sale:
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
13,363
|
|
$
|
94
|
|
$
|
605
|
|
$
|
12,852
|
|
|
U.S. Government agencies
|
937
|
|
16
|
|
5
|
|
948
|
|
|
||||
State and political subdivisions
|
6,706
|
|
60
|
|
92
|
|
6,674
|
|
|
||||
Agency RMBS
|
25,564
|
|
307
|
|
550
|
|
25,321
|
|
|
||||
Non-agency RMBS
|
1,148
|
|
44
|
|
50
|
|
1,142
|
|
|
||||
Other RMBS
|
2,299
|
|
43
|
|
57
|
|
2,285
|
|
|
||||
Commercial MBS
|
2,324
|
|
60
|
|
27
|
|
2,357
|
|
|
||||
Agency commercial MBS
|
1,822
|
|
1
|
|
34
|
|
1,789
|
|
|
||||
Asset-backed CLOs
|
1,551
|
|
11
|
|
—
|
|
1,562
|
|
|
||||
Other asset-backed securities
|
2,894
|
|
6
|
|
9
|
|
2,891
|
|
|
||||
Foreign covered bonds
|
2,798
|
|
73
|
|
—
|
|
2,871
|
|
|
||||
Corporate bonds
|
1,808
|
|
32
|
|
25
|
|
1,815
|
|
|
||||
Other debt securities
|
13,077
|
|
91
|
|
18
|
|
13,150
|
|
(a)
|
||||
Equity securities
|
18
|
|
1
|
|
—
|
|
19
|
|
|
||||
Money market funds
|
938
|
|
—
|
|
—
|
|
938
|
|
|
||||
Non-agency RMBS
(b)
|
2,131
|
|
567
|
|
3
|
|
2,695
|
|
|
||||
Total securities available-for-sale
(c)
|
79,378
|
|
1,406
|
|
1,475
|
|
79,309
|
|
|
||||
Held-to-maturity:
|
|
|
|
|
|
||||||||
U.S. Treasury
|
3,324
|
|
28
|
|
84
|
|
3,268
|
|
|
||||
U.S. Government agencies
|
419
|
|
—
|
|
13
|
|
406
|
|
|
||||
State and political subdivisions
|
44
|
|
—
|
|
—
|
|
44
|
|
|
||||
Agency RMBS
|
14,568
|
|
20
|
|
236
|
|
14,352
|
|
|
||||
Non-agency RMBS
|
186
|
|
10
|
|
3
|
|
193
|
|
|
||||
Other RMBS
|
466
|
|
3
|
|
20
|
|
449
|
|
|
||||
Commercial MBS
|
16
|
|
1
|
|
—
|
|
17
|
|
|
||||
Other securities
|
720
|
|
—
|
|
6
|
|
714
|
|
|
||||
Total securities held-to-maturity
|
19,743
|
|
62
|
|
362
|
|
19,443
|
|
|
||||
Total securities
|
$
|
99,121
|
|
$
|
1,468
|
|
$
|
1,837
|
|
$
|
98,752
|
|
|
(a)
|
Includes
$11.4 billion
, at fair value, of government-sponsored and guaranteed entities, and sovereign debt.
|
(b)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(c)
|
Includes gross unrealized gains of
$74 million
and gross unrealized losses of
$343 million
recorded in accumulated other comprehensive income primarily related to Agency RMBS that were transferred from available-for-sale to held-to-maturity in 2013. The unrealized gains and losses will be amortized into net interest revenue over the estimated lives of the securities.
|
Net securities gains (losses)
|
|
|
|
|
|||||||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
Realized gross gains
|
$
|
20
|
|
$
|
30
|
|
$
|
51
|
|
$
|
50
|
|
$
|
108
|
|
Realized gross losses
|
—
|
|
(3
|
)
|
(1
|
)
|
(3
|
)
|
(6
|
)
|
|||||
Recognized gross impairments
|
(2
|
)
|
(5
|
)
|
(18
|
)
|
(7
|
)
|
(22
|
)
|
|||||
Total net securities gains
|
$
|
18
|
|
$
|
22
|
|
$
|
32
|
|
$
|
40
|
|
$
|
80
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Temporarily impaired securities at June 30, 2014
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||
(in millions)
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
5,371
|
|
$
|
138
|
|
|
$
|
198
|
|
$
|
19
|
|
|
$
|
5,569
|
|
$
|
157
|
|
U.S. Government agencies
|
99
|
|
2
|
|
|
—
|
|
—
|
|
|
99
|
|
2
|
|
||||||
State and political subdivisions
|
751
|
|
29
|
|
|
278
|
|
6
|
|
|
1,029
|
|
35
|
|
||||||
Agency RMBS
|
12,873
|
|
90
|
|
|
173
|
|
299
|
|
|
13,046
|
|
389
|
|
||||||
Non-agency RMBS
|
54
|
|
2
|
|
|
439
|
|
32
|
|
|
493
|
|
34
|
|
||||||
Other RMBS
|
196
|
|
1
|
|
|
539
|
|
31
|
|
|
735
|
|
32
|
|
||||||
Commercial MBS
|
332
|
|
6
|
|
|
187
|
|
5
|
|
|
519
|
|
11
|
|
||||||
Agency commercial MBS
|
685
|
|
9
|
|
|
—
|
|
—
|
|
|
685
|
|
9
|
|
||||||
Other asset-backed securities
|
378
|
|
4
|
|
|
406
|
|
2
|
|
|
784
|
|
6
|
|
||||||
Corporate bonds
|
101
|
|
3
|
|
|
137
|
|
7
|
|
|
238
|
|
10
|
|
||||||
Other debt securities
|
2,707
|
|
12
|
|
|
—
|
|
—
|
|
|
2,707
|
|
12
|
|
||||||
Non-agency RMBS
(a)
|
41
|
|
2
|
|
|
19
|
|
2
|
|
|
60
|
|
4
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
23,588
|
|
$
|
298
|
|
|
$
|
2,376
|
|
$
|
403
|
|
|
$
|
25,964
|
|
$
|
701
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
2,279
|
|
$
|
35
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
2,279
|
|
$
|
35
|
|
U.S. Government agencies
|
338
|
|
5
|
|
|
—
|
|
—
|
|
|
338
|
|
5
|
|
||||||
Agency RMBS
|
4,399
|
|
62
|
|
|
1,302
|
|
5
|
|
|
5,701
|
|
67
|
|
||||||
Non-agency RMBS
|
10
|
|
—
|
|
|
18
|
|
2
|
|
|
28
|
|
2
|
|
||||||
Other RMBS
|
—
|
|
—
|
|
|
254
|
|
14
|
|
|
254
|
|
14
|
|
||||||
Total securities held-to-maturity
|
$
|
7,026
|
|
$
|
102
|
|
|
$
|
1,574
|
|
$
|
21
|
|
|
$
|
8,600
|
|
$
|
123
|
|
Total temporarily impaired securities
|
$
|
30,614
|
|
$
|
400
|
|
|
$
|
3,950
|
|
$
|
424
|
|
|
$
|
34,564
|
|
$
|
824
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized losses for 12 months or more of
$312 million
recorded in accumulated other comprehensive income primarily related to Agency RMBS that were transferred from available-for-sale to held-to-maturity in 2013. The unrealized gains and losses will be amortized into net interest revenue over the estimated lives of the securities.
|
Temporarily impaired securities at Dec. 31, 2013
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||
(in millions)
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
7,719
|
|
$
|
605
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
7,719
|
|
$
|
605
|
|
U.S. Government agencies
|
97
|
|
5
|
|
|
—
|
|
—
|
|
|
97
|
|
5
|
|
||||||
State and political subdivisions
|
2,374
|
|
55
|
|
|
222
|
|
37
|
|
|
2,596
|
|
92
|
|
||||||
Agency RMBS
|
12,011
|
|
226
|
|
|
83
|
|
324
|
|
|
12,094
|
|
550
|
|
||||||
Non-agency RMBS
|
102
|
|
7
|
|
|
592
|
|
43
|
|
|
694
|
|
50
|
|
||||||
Other RMBS
|
93
|
|
14
|
|
|
614
|
|
43
|
|
|
707
|
|
57
|
|
||||||
Commercial MBS
|
517
|
|
21
|
|
|
174
|
|
6
|
|
|
691
|
|
27
|
|
||||||
Agency commercial MBS
|
1,390
|
|
34
|
|
|
—
|
|
—
|
|
|
1,390
|
|
34
|
|
||||||
Other asset-backed securities
|
1,529
|
|
9
|
|
|
38
|
|
—
|
|
|
1,567
|
|
9
|
|
||||||
Corporate bonds
|
612
|
|
25
|
|
|
—
|
|
—
|
|
|
612
|
|
25
|
|
||||||
Other debt securities
|
2,976
|
|
18
|
|
|
—
|
|
—
|
|
|
2,976
|
|
18
|
|
||||||
Non-agency RMBS
(a)
|
59
|
|
1
|
|
|
22
|
|
2
|
|
|
81
|
|
3
|
|
||||||
Total securities available-for-sale
(b)
|
$
|
29,479
|
|
$
|
1,020
|
|
|
$
|
1,745
|
|
$
|
455
|
|
|
$
|
31,224
|
|
$
|
1,475
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
2,278
|
|
$
|
84
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
2,278
|
|
$
|
84
|
|
U.S. Government agencies
|
406
|
|
13
|
|
|
—
|
|
—
|
|
|
406
|
|
13
|
|
||||||
Agency RMBS
|
12,639
|
|
236
|
|
|
—
|
|
—
|
|
|
12,639
|
|
236
|
|
||||||
Non-agency RMBS
|
10
|
|
—
|
|
|
65
|
|
3
|
|
|
75
|
|
3
|
|
||||||
Other RMBS
|
—
|
|
—
|
|
|
261
|
|
20
|
|
|
261
|
|
20
|
|
||||||
Other securities
|
641
|
|
6
|
|
|
—
|
|
—
|
|
|
641
|
|
6
|
|
||||||
Total securities held-to-maturity
|
$
|
15,974
|
|
$
|
339
|
|
|
$
|
326
|
|
$
|
23
|
|
|
$
|
16,300
|
|
$
|
362
|
|
Total temporarily impaired securities
|
$
|
45,453
|
|
$
|
1,359
|
|
|
$
|
2,071
|
|
$
|
478
|
|
|
$
|
47,524
|
|
$
|
1,837
|
|
(a)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(b)
|
Includes gross unrealized losses for 12 months or more of
$343 million
recorded in accumulated other comprehensive income primarily related to Agency RMBS that were transferred from available-for-sale to held-to-maturity in 2013. The unrealized gains and losses will be amortized into net interest revenue over the estimated lives of the securities.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Maturity distribution and yield on investment securities at
June 30, 2014 |
U.S.
Treasury
|
|
U.S.
Government
agencies
|
|
State and
political
subdivisions
|
|
Other bonds,
notes and
debentures
|
|
Mortgage/
asset-backed and
equity
securities
|
|
|
||||||||||||||||||||||
(dollars in millions)
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Amount
|
|
Yield
(a)
|
|
|
Total
|
|
||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
369
|
|
0.52
|
%
|
|
$
|
170
|
|
1.64
|
%
|
|
$
|
511
|
|
1.14
|
%
|
|
$
|
6,772
|
|
0.99
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
7,822
|
|
Over 1 through 5 years
|
9,449
|
|
0.78
|
|
|
189
|
|
2.02
|
|
|
3,118
|
|
2.06
|
|
|
11,697
|
|
1.15
|
|
|
—
|
|
—
|
|
|
24,453
|
|
||||||
Over 5 through 10 years
|
1,329
|
|
2.85
|
|
|
89
|
|
1.52
|
|
|
2,272
|
|
3.41
|
|
|
2,197
|
|
2.59
|
|
|
—
|
|
—
|
|
|
5,887
|
|
||||||
Over 10 years
|
4,055
|
|
3.12
|
|
|
—
|
|
—
|
|
|
318
|
|
2.97
|
|
|
6
|
|
2.82
|
|
|
—
|
|
—
|
|
|
4,379
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
37,464
|
|
2.33
|
|
|
37,464
|
|
||||||
Asset-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
4,772
|
|
1.07
|
|
|
4,772
|
|
||||||
Equity securities
(b)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
911
|
|
—
|
|
|
911
|
|
||||||
Total
|
$
|
15,202
|
|
1.58
|
%
|
|
$
|
448
|
|
1.77
|
%
|
|
$
|
6,219
|
|
2.52
|
%
|
|
$
|
20,672
|
|
1.25
|
%
|
|
$
|
43,147
|
|
2.14
|
%
|
|
$
|
85,688
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
One year or less
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
1
|
|
3.80
|
%
|
|
$
|
4
|
|
0.06
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
5
|
|
Over 1 through 5 years
|
2,429
|
|
1.22
|
|
|
233
|
|
1.03
|
|
|
—
|
|
—
|
|
|
714
|
|
0.54
|
|
|
—
|
|
—
|
|
|
3,376
|
|
||||||
Over 5 through 10 years
|
896
|
|
2.24
|
|
|
111
|
|
1.61
|
|
|
12
|
|
6.94
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
1,019
|
|
||||||
Over 10 years
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
20
|
|
4.49
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
20
|
|
||||||
Mortgage-backed securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
14,682
|
|
2.69
|
|
|
14,682
|
|
||||||
Total
|
$
|
3,325
|
|
1.49
|
%
|
|
$
|
344
|
|
1.21
|
%
|
|
$
|
33
|
|
5.36
|
%
|
|
$
|
718
|
|
0.54
|
%
|
|
$
|
14,682
|
|
2.69
|
%
|
|
$
|
19,102
|
|
(a)
|
Yields are based upon the amortized cost of securities.
|
(b)
|
Includes money market funds.
|
•
|
Default rate - the number of mortgage loans expected to go into default over the life of the transaction, which is driven by the roll rate of loans in each performance bucket that will ultimately migrate to default; and
|
•
|
Severity - the loss expected to be realized when a loan defaults.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net securities gains (losses)
|
|
|
|||||||||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
U.S. Treasury
|
$
|
1
|
|
$
|
10
|
|
$
|
31
|
|
$
|
11
|
|
$
|
27
|
|
U.S. Government agencies
|
—
|
|
7
|
|
—
|
|
7
|
|
—
|
|
|||||
State and political subdivisions
|
7
|
|
(1
|
)
|
—
|
|
6
|
|
—
|
|
|||||
Foreign covered bonds
|
3
|
|
—
|
|
—
|
|
3
|
|
8
|
|
|||||
Commercial MBS
|
—
|
|
—
|
|
7
|
|
—
|
|
15
|
|
|||||
European floating rate notes
|
—
|
|
(1
|
)
|
(10
|
)
|
(1
|
)
|
(6
|
)
|
|||||
Non-agency RMBS
|
(2
|
)
|
(2
|
)
|
(3
|
)
|
(4
|
)
|
1
|
|
|||||
Other
|
9
|
|
9
|
|
7
|
|
18
|
|
35
|
|
|||||
Total net securities gains
|
$
|
18
|
|
$
|
22
|
|
$
|
32
|
|
$
|
40
|
|
$
|
80
|
|
Debt securities credit loss roll forward
|
|
|||||
(in millions)
|
2Q14
|
|
2Q13
|
|
||
Beginning balance as of March 31
|
$
|
106
|
|
$
|
174
|
|
Add: Initial OTTI credit losses
|
—
|
|
16
|
|
||
Subsequent OTTI credit losses
|
2
|
|
3
|
|
||
Less: Realized losses for securities sold
|
1
|
|
29
|
|
||
Ending balance as of June 30
|
$
|
107
|
|
$
|
164
|
|
Debt securities credit loss roll forward
|
Year-to-date
|
|||||
(in millions)
|
2014
|
|
2013
|
|
||
Beginning balance as of Jan. 1
|
$
|
119
|
|
$
|
288
|
|
Add: Initial OTTI credit losses
|
2
|
|
16
|
|
||
Subsequent OTTI credit losses
|
5
|
|
7
|
|
||
Less: Realized losses for securities sold
|
19
|
|
147
|
|
||
Ending balance as of June 30
|
$
|
107
|
|
$
|
164
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Loans
|
June 30,
2014 |
|
|
Dec. 31, 2013
|
|
||
(in millions)
|
|
||||||
Domestic:
|
|
|
|
||||
Financial institutions
|
$
|
5,761
|
|
|
$
|
4,511
|
|
Commercial
|
1,544
|
|
|
1,534
|
|
||
Wealth management loans and mortgages
|
10,319
|
|
|
9,743
|
|
||
Commercial real estate
|
2,208
|
|
|
2,001
|
|
||
Lease financings
|
1,321
|
|
|
1,322
|
|
||
Other residential mortgages
|
1,309
|
|
|
1,385
|
|
||
Overdrafts
|
1,748
|
|
|
1,314
|
|
||
Other
|
842
|
|
|
768
|
|
||
Margin loans
|
17,685
|
|
|
15,652
|
|
||
Total domestic
|
42,737
|
|
|
38,230
|
|
||
Foreign:
|
|
|
|
||||
Financial institutions
|
9,284
|
|
|
9,848
|
|
||
Commercial
|
189
|
|
|
113
|
|
||
Wealth management loans and mortgages
|
84
|
|
|
75
|
|
||
Commercial real estate
|
18
|
|
|
9
|
|
||
Lease financings
|
869
|
|
|
945
|
|
||
Other (primarily overdrafts)
|
6,067
|
|
|
2,437
|
|
||
Total foreign
|
16,511
|
|
|
13,427
|
|
||
Total loans
(a)
|
$
|
59,248
|
|
|
$
|
51,657
|
|
(a)
|
Net of unearned income of
$918 million
at
June 30, 2014
and
$1,020 million
at
Dec. 31, 2013
primarily on domestic and foreign lease financings.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the quarter ended June 30, 2014
|
Wealth
management
loans and
mortgages
|
|
Other residential mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
79
|
|
$
|
42
|
|
$
|
48
|
|
$
|
35
|
|
$
|
23
|
|
$
|
50
|
|
$
|
—
|
|
|
$
|
49
|
|
$
|
326
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
—
|
|
|
(2
|
)
|
(4
|
)
|
|||||||||
Recoveries
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net (charge-offs) recoveries
|
1
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
—
|
|
|
(2
|
)
|
(3
|
)
|
|||||||||
Provision
|
(6
|
)
|
3
|
|
(5
|
)
|
(2
|
)
|
—
|
|
(2
|
)
|
—
|
|
|
—
|
|
(12
|
)
|
|||||||||
Ending balance
|
$
|
74
|
|
$
|
45
|
|
$
|
43
|
|
$
|
33
|
|
$
|
22
|
|
$
|
47
|
|
$
|
—
|
|
|
$
|
47
|
|
$
|
311
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
17
|
|
$
|
27
|
|
$
|
8
|
|
$
|
33
|
|
$
|
16
|
|
$
|
47
|
|
$
|
—
|
|
|
$
|
39
|
|
$
|
187
|
|
Lending-related commitments
|
57
|
|
18
|
|
35
|
|
—
|
|
6
|
|
—
|
|
—
|
|
|
8
|
|
124
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
13
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
5
|
|
$
|
30
|
|
Allowance for loan losses
|
3
|
|
1
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
|
1
|
|
7
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,531
|
|
$
|
2,205
|
|
$
|
5,761
|
|
$
|
1,321
|
|
$
|
10,310
|
|
$
|
1,309
|
|
$
|
20,275
|
|
(a)
|
$
|
16,506
|
|
$
|
59,218
|
|
Allowance for loan losses
|
14
|
|
26
|
|
8
|
|
33
|
|
14
|
|
47
|
|
—
|
|
|
38
|
|
180
|
|
(a)
|
Includes
$1,748 million
of domestic overdrafts,
$17,685 million
of margin loans and
$842 million
of other loans at
June 30, 2014
.
|
Allowance for credit losses activity for the quarter ended March 31, 2014
|
Wealth
management
loans and
mortgages
|
|
Other residential mortgages
|
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||
Beginning balance
|
$
|
83
|
|
$
|
41
|
|
$
|
49
|
|
$
|
37
|
|
$
|
24
|
|
$
|
54
|
|
$
|
—
|
|
|
$
|
56
|
|
$
|
344
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net (charge-offs) recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||||
Provision
|
(4
|
)
|
1
|
|
(1
|
)
|
(2
|
)
|
(1
|
)
|
(4
|
)
|
—
|
|
|
(7
|
)
|
(18
|
)
|
|||||||||
Ending balance
|
$
|
79
|
|
$
|
42
|
|
$
|
48
|
|
$
|
35
|
|
$
|
23
|
|
$
|
50
|
|
$
|
—
|
|
|
$
|
49
|
|
$
|
326
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
20
|
|
$
|
23
|
|
$
|
9
|
|
$
|
35
|
|
$
|
18
|
|
$
|
50
|
|
$
|
—
|
|
|
$
|
43
|
|
$
|
198
|
|
Lending-related commitments
|
59
|
|
19
|
|
39
|
|
—
|
|
5
|
|
—
|
|
—
|
|
|
6
|
|
128
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
13
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
7
|
|
$
|
33
|
|
Allowance for loan losses
|
3
|
|
1
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
|
2
|
|
8
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,741
|
|
$
|
2,125
|
|
$
|
4,492
|
|
$
|
1,308
|
|
$
|
9,912
|
|
$
|
1,346
|
|
$
|
18,296
|
|
(a)
|
$
|
14,783
|
|
$
|
54,003
|
|
Allowance for loan losses
|
17
|
|
22
|
|
9
|
|
35
|
|
16
|
|
50
|
|
—
|
|
|
41
|
|
190
|
|
(a)
|
Includes
$1,078 million
of domestic overdrafts,
$16,430 million
of margin loans and
$788 million
of other loans at
March 31, 2014
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Allowance for credit losses activity for the quarter ended June 30, 2013
|
Wealth
management
loans and
mortgages
|
|
Other
residential
mortgages
|
|
All
Other
|
|
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
97
|
|
$
|
31
|
|
$
|
33
|
|
$
|
39
|
|
$
|
29
|
|
$
|
81
|
|
$
|
2
|
|
|
$
|
46
|
|
$
|
358
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3
|
)
|
—
|
|
|
—
|
|
(3
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
1
|
|
|||||||||
Net (charge-offs)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
|
—
|
|
(2
|
)
|
|||||||||
Provision
|
(4
|
)
|
(1
|
)
|
1
|
|
2
|
|
(10
|
)
|
(4
|
)
|
(2
|
)
|
|
(1
|
)
|
(19
|
)
|
|||||||||
Ending balance
|
$
|
93
|
|
$
|
30
|
|
$
|
34
|
|
$
|
41
|
|
$
|
19
|
|
$
|
75
|
|
$
|
—
|
|
|
$
|
45
|
|
$
|
337
|
|
Allowance for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan losses
|
$
|
19
|
|
$
|
18
|
|
$
|
7
|
|
$
|
41
|
|
$
|
15
|
|
$
|
75
|
|
$
|
—
|
|
|
$
|
37
|
|
$
|
212
|
|
Lending-related commitments
|
74
|
|
12
|
|
27
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
8
|
|
125
|
|
|||||||||
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
54
|
|
$
|
15
|
|
$
|
2
|
|
$
|
—
|
|
$
|
14
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
9
|
|
$
|
94
|
|
Allowance for loan losses
|
3
|
|
1
|
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
|
4
|
|
11
|
|
|||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loan balance
|
$
|
1,457
|
|
$
|
2,060
|
|
$
|
3,944
|
|
$
|
1,282
|
|
$
|
9,176
|
|
$
|
1,505
|
|
$
|
16,853
|
|
(a)
|
$
|
13,936
|
|
$
|
50,213
|
|
Allowance for loan losses
|
16
|
|
17
|
|
7
|
|
41
|
|
12
|
|
75
|
|
—
|
|
|
33
|
|
201
|
|
(a)
|
Includes
$1,762 million
of domestic overdrafts,
$14,434 million
of margin loans and
$657 million
of other loans at
June 30, 2013
.
|
Allowance for credit losses activity for the six months ended June 30, 2014
|
Wealth
management
loans and
mortgages
|
|
Other
residential
mortgages
|
|
All
Other
|
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|||||||||||||||||||
Beginning balance
|
$
|
83
|
|
$
|
41
|
|
$
|
49
|
|
$
|
37
|
|
$
|
24
|
|
$
|
54
|
|
$
|
—
|
|
$
|
56
|
|
$
|
344
|
|
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(2
|
)
|
—
|
|
(2
|
)
|
(5
|
)
|
|||||||||
Recoveries
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
2
|
|
|||||||||
Net (charge-offs) recoveries
|
1
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
—
|
|
(2
|
)
|
(3
|
)
|
|||||||||
Provision
|
(10
|
)
|
4
|
|
(6
|
)
|
(4
|
)
|
(1
|
)
|
(6
|
)
|
—
|
|
(7
|
)
|
(30
|
)
|
|||||||||
Ending balance
|
$
|
74
|
|
$
|
45
|
|
$
|
43
|
|
$
|
33
|
|
$
|
22
|
|
$
|
47
|
|
$
|
—
|
|
$
|
47
|
|
$
|
311
|
|
Allowance for credit losses activity for the six months ended June 30, 2013
|
Wealth
management
loans and
mortgages
|
|
Other
residential
mortgages
|
|
All
Other
|
|
Foreign
|
|
Total
|
|
|||||||||||||||||
(in millions)
|
Commercial
|
|
Commercial
real estate
|
|
Financial
institutions
|
|
Lease
financings
|
|
|||||||||||||||||||
Beginning balance
|
$
|
104
|
|
$
|
30
|
|
$
|
36
|
|
$
|
49
|
|
$
|
30
|
|
$
|
88
|
|
$
|
2
|
|
$
|
48
|
|
$
|
387
|
|
Charge-offs
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
—
|
|
(8
|
)
|
|||||||||
Recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||||||
Net (charge-offs)
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
(7
|
)
|
|||||||||
Provision
|
(9
|
)
|
—
|
|
(2
|
)
|
(8
|
)
|
(11
|
)
|
(8
|
)
|
(2
|
)
|
(3
|
)
|
(43
|
)
|
|||||||||
Ending balance
|
$
|
93
|
|
$
|
30
|
|
$
|
34
|
|
$
|
41
|
|
$
|
19
|
|
$
|
75
|
|
$
|
—
|
|
$
|
45
|
|
$
|
337
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Nonperforming assets
|
June 30, 2014
|
|
|
Dec. 31, 2013
|
|
||
(in millions)
|
|||||||
Nonperforming loans:
|
|
|
|
||||
Other residential mortgages
|
$
|
105
|
|
|
$
|
117
|
|
Commercial
|
13
|
|
|
15
|
|
||
Wealth management loans and mortgages
|
12
|
|
|
11
|
|
||
Foreign
|
4
|
|
|
6
|
|
||
Commercial real estate
|
4
|
|
|
4
|
|
||
Total nonperforming loans
|
138
|
|
|
153
|
|
||
Other assets owned
|
4
|
|
|
3
|
|
||
Total nonperforming assets
(a)
|
$
|
142
|
|
|
$
|
156
|
|
(a)
|
Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in the loans of consolidated investment management funds are nonperforming loans of
$68 million
at
June 30, 2014
and
$16 million
at
Dec. 31, 2013
. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above.
|
Lost interest
|
|
|
|
|
|
||||||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
YTD14
|
|
YTD13
|
|
|||||
Amount by which interest income recognized on nonperforming loans exceeded reversals
|
$
|
1
|
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
Amount by which interest income would have increased if nonperforming loans at period-end had been performing for the entire period
|
$
|
2
|
|
$
|
2
|
|
$
|
3
|
|
$
|
4
|
|
$
|
5
|
|
Impaired loans
|
Quarter ended
|
||||||||||||||||||||||
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
||||||||||||||||||
(in millions)
|
Average
recorded
investment
|
|
|
Interest
income
recognized
|
|
|
Average
recorded
investment
|
|
|
Interest
income
recognized
|
|
|
Average
recorded
investment
|
|
|
Interest
income
recognized
|
|
||||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
1
|
|
Commercial real estate
|
2
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
Financial institutions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Wealth management loans and mortgages
|
8
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||||
Foreign
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||||
Total impaired loans with an allowance
|
29
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
81
|
|
|
1
|
|
||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||
Commercial real estate
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||||
Financial institutions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
Wealth management loans and mortgages
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||
Total impaired loans without an allowance
(a)
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||||
Total impaired loans
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
104
|
|
|
$
|
1
|
|
(a)
|
When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Impaired loans
|
Year-to-date
|
||||||||||||||
|
June 30, 2014
|
|
June 30, 2013
|
||||||||||||
(in millions)
|
Average
recorded
investment
|
|
|
Interest
income
recognized
|
|
|
Average
recorded
investment
|
|
|
Interest
income
recognized
|
|
||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
2
|
|
Commercial real estate
|
2
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
Financial institutions
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Wealth management loans and mortgages
|
8
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Foreign
|
6
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Total impaired loans with an allowance
|
30
|
|
|
—
|
|
|
90
|
|
|
2
|
|
||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Commercial real estate
|
1
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Financial institutions
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Wealth management loans and mortgages
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total impaired loans without an allowance
(a)
|
3
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Total impaired loans
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
108
|
|
|
$
|
2
|
|
(a)
|
When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.
|
Impaired loans
|
June 30, 2014
|
|
Dec. 31, 2013
|
||||||||||||||||||||
(in millions)
|
Recorded
investment
|
|
|
Unpaid
principal
balance
|
|
|
Related
allowance
(a)
|
|
|
Recorded
investment
|
|
|
Unpaid
principal
balance
|
|
|
Related
allowance
(a)
|
|
||||||
Impaired loans with an allowance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
3
|
|
|
$
|
15
|
|
|
$
|
20
|
|
|
$
|
2
|
|
Commercial real estate
|
2
|
|
|
3
|
|
|
1
|
|
|
2
|
|
|
4
|
|
|
1
|
|
||||||
Financial institutions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Wealth management loans and mortgages
|
7
|
|
|
8
|
|
|
2
|
|
|
9
|
|
|
9
|
|
|
3
|
|
||||||
Foreign
|
5
|
|
|
5
|
|
|
1
|
|
|
6
|
|
|
17
|
|
|
1
|
|
||||||
Total impaired loans with an allowance
|
27
|
|
|
29
|
|
|
7
|
|
|
32
|
|
|
50
|
|
|
7
|
|
||||||
Impaired loans without an allowance
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate
|
1
|
|
|
1
|
|
|
N/A
|
|
|
1
|
|
|
1
|
|
|
N/A
|
|
||||||
Wealth management loans and mortgages
|
2
|
|
|
2
|
|
|
N/A
|
|
|
3
|
|
|
3
|
|
|
N/A
|
|
||||||
Total impaired loans without an allowance
(b)
|
3
|
|
|
3
|
|
|
N/A
|
|
|
4
|
|
|
4
|
|
|
N/A
|
|
||||||
Total impaired loans
(c)
|
$
|
30
|
|
|
$
|
32
|
|
|
$
|
7
|
|
|
$
|
36
|
|
|
$
|
54
|
|
|
$
|
7
|
|
(a)
|
The allowance for impaired loans is included in the allowance for loan losses.
|
(b)
|
When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.
|
(c)
|
Excludes an aggregate of less than
$1 million
of impaired loans in amounts individually less than
$1 million
at both
June 30, 2014
and
Dec. 31, 2013
. The allowance for loan loss associated with these loans totaled less than
$1 million
at both
June 30, 2014
and
Dec. 31, 2013
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Past due loans and still accruing interest
|
June 30, 2014
|
|
Dec. 31, 2013
|
||||||||||||||||||||||
|
Days past due
|
Total
past due
|
|
|
Days past due
|
Total
past due
|
|
||||||||||||||||||
(in millions)
|
30-59
|
|
60-89
|
|
>90
|
|
30-59
|
|
60-89
|
|
>90
|
|
|||||||||||||
Domestic:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial institutions
(a)
|
$
|
—
|
|
$
|
—
|
|
$
|
312
|
|
$
|
312
|
|
|
$
|
37
|
|
$
|
—
|
|
$
|
—
|
|
$
|
37
|
|
Other residential mortgages
|
5
|
|
26
|
|
5
|
|
36
|
|
|
32
|
|
6
|
|
6
|
|
44
|
|
||||||||
Commercial real estate
|
6
|
|
5
|
|
—
|
|
11
|
|
|
22
|
|
2
|
|
—
|
|
24
|
|
||||||||
Wealth management loans and mortgages
|
7
|
|
—
|
|
1
|
|
8
|
|
|
45
|
|
3
|
|
1
|
|
49
|
|
||||||||
Total domestic
|
18
|
|
31
|
|
318
|
|
367
|
|
|
136
|
|
11
|
|
7
|
|
154
|
|
||||||||
Foreign
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total past due loans
|
$
|
18
|
|
$
|
31
|
|
$
|
318
|
|
$
|
367
|
|
|
$
|
136
|
|
$
|
11
|
|
$
|
7
|
|
$
|
154
|
|
(a)
|
Past due loans at June 30, 2014 include a loan to an asset manager, Sentinel Management Group, Inc. (“Sentinel”), which was reestablished as a fully collateralized performing loan in the first quarter of 2014.
|
TDRs
|
2Q14
|
|
1Q14
|
|
2Q13
|
|||||||||||||||||||||||||||
|
|
Outstanding
recorded investment
|
|
|
Outstanding
recorded investment
|
|
|
Outstanding
recorded investment
|
||||||||||||||||||||||||
(dollars in millions)
|
Number of contracts
|
|
Pre-modification
|
|
Post-modification
|
|
|
Number of contracts
|
|
Pre-modification
|
|
Post-modification
|
|
|
Number of contracts
|
|
Pre-modification
|
|
Post-modification
|
|
||||||||||||
Other residential mortgages
|
28
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
31
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
28
|
|
|
$
|
5
|
|
|
$
|
7
|
|
Wealth management loans and mortgages
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total TDRs
|
29
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
32
|
|
|
$
|
10
|
|
|
$
|
9
|
|
|
28
|
|
|
$
|
5
|
|
|
$
|
7
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Goodwill by business
(in millions)
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
||||
Balance at Dec. 31, 2013
|
$
|
9,473
|
|
|
$
|
8,550
|
|
|
$
|
50
|
|
|
$
|
18,073
|
|
Acquisitions/dispositions
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
||||
Foreign currency translation
|
67
|
|
|
17
|
|
|
—
|
|
|
84
|
|
||||
Balance at June 30, 2014
|
$
|
9,540
|
|
|
$
|
8,606
|
|
|
$
|
50
|
|
|
$
|
18,196
|
|
Goodwill by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2012
|
$
|
9,440
|
|
|
$
|
8,517
|
|
|
$
|
118
|
|
|
$
|
18,075
|
|
Foreign currency translation
|
(120
|
)
|
|
(49
|
)
|
|
(4
|
)
|
|
(173
|
)
|
||||
Other (
b
)
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Balance at June 30, 2013
|
$
|
9,337
|
|
|
$
|
8,468
|
|
|
$
|
114
|
|
|
$
|
17,919
|
|
(a)
|
Includes the reclassification of goodwill associated with the Newton Private Clients business from Investment Management to the Other segment.
|
(b)
|
Other changes in goodwill include purchase price adjustments and certain other reclassifications.
|
Intangible assets – net carrying amount by business
(in millions)
|
Investment
Management |
|
|
Investment
Services |
|
|
Other
|
|
|
Consolidated
|
|
||||
Balance at Dec. 31, 2013
|
$
|
2,065
|
|
|
$
|
1,538
|
|
|
$
|
849
|
|
|
$
|
4,452
|
|
Amortization
|
(62
|
)
|
|
(88
|
)
|
|
—
|
|
|
(150
|
)
|
||||
Foreign currency translation
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Balance at June 30, 2014
|
$
|
2,015
|
|
|
$
|
1,450
|
|
|
$
|
849
|
|
|
$
|
4,314
|
|
Intangible assets – net carrying amount by business
(in millions)
|
Investment
Management |
|
(a)
|
Investment
Services |
|
|
Other
|
|
(a)
|
Consolidated
|
|
||||
Balance at Dec. 31, 2012
|
$
|
2,220
|
|
|
$
|
1,732
|
|
|
$
|
857
|
|
|
$
|
4,809
|
|
Disposition
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Amortization
|
(77
|
)
|
|
(102
|
)
|
(b)
|
—
|
|
|
(179
|
)
|
||||
Foreign currency translation
|
(24
|
)
|
|
(3
|
)
|
|
—
|
|
|
(27
|
)
|
||||
Other
(c)
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Balance at June 30, 2013
|
$
|
2,105
|
|
|
$
|
1,626
|
|
|
$
|
857
|
|
|
$
|
4,588
|
|
(a)
|
Includes the reclassification of intangible assets associated with the Newton Private Clients business from Investment Management to the Other segment.
|
(b)
|
Includes an
$8 million
intangible asset impairment recorded in the second quarter of 2013.
|
(c)
|
Other changes in intangible assets include purchase price adjustments and certain other reclassifications.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Intangible assets
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
||||||||||
(in millions)
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
carrying
amount
|
|
Remaining
weighted-
average
amortization
period
|
|
Net
carrying
amount
|
|
||||
Subject to amortization:
|
|
|
|
|
|
|
||||||||
Customer relationships—Investment Management
|
$
|
2,069
|
|
$
|
(1,532
|
)
|
$
|
537
|
|
11 years
|
|
$
|
594
|
|
Customer contracts—Investment Services
|
2,347
|
|
(1,281
|
)
|
1,066
|
|
11 years
|
|
1,150
|
|
||||
Other
|
84
|
|
(66
|
)
|
18
|
|
4 years
|
|
16
|
|
||||
Total subject to amortization
|
4,500
|
|
(2,879
|
)
|
1,621
|
|
11 years
|
|
1,760
|
|
||||
Not subject to amortization:
(a)
|
|
|
|
|
|
|
||||||||
Trade name
|
1,364
|
|
N/A
|
|
1,364
|
|
N/A
|
|
1,369
|
|
||||
Customer relationships
|
1,329
|
|
N/A
|
|
1,329
|
|
N/A
|
|
1,323
|
|
||||
Total not subject to amortization
|
2,693
|
|
N/A
|
|
2,693
|
|
N/A
|
|
2,692
|
|
||||
Total intangible assets
|
$
|
7,193
|
|
$
|
(2,879
|
)
|
$
|
4,314
|
|
N/A
|
|
$
|
4,452
|
|
(a)
|
Intangible assets not subject to amortization have an indefinite life.
|
For the year ended
Dec. 31, |
Estimated amortization expense
(in millions)
|
|
||
2014
|
|
$
|
302
|
|
2015
|
|
271
|
|
|
2016
|
|
242
|
|
|
2017
|
|
218
|
|
|
2018
|
|
182
|
|
Other assets
|
June 30,
|
|
|
Dec. 31,
|
|
||
(in millions)
|
2014
|
|
|
2013
|
|
||
Corporate/bank owned life insurance
|
$
|
4,529
|
|
|
$
|
4,482
|
|
Accounts receivable
|
4,056
|
|
|
3,616
|
|
||
Equity in joint venture and other investments
(a) (b)
|
3,350
|
|
|
3,220
|
|
||
Fails to deliver
|
2,772
|
|
|
864
|
|
||
Income taxes receivable
(b)
|
2,092
|
|
|
2,499
|
|
||
Software
|
1,317
|
|
|
1,251
|
|
||
Prepaid pension assets
|
1,277
|
|
|
1,209
|
|
||
Fair value of hedging derivatives
|
769
|
|
|
1,282
|
|
||
Prepaid expenses
|
447
|
|
|
451
|
|
||
Due from customers on acceptances
|
143
|
|
|
379
|
|
||
Other
|
1,778
|
|
|
1,313
|
|
||
Total other assets
(b)
|
$
|
22,530
|
|
|
$
|
20,566
|
|
(a)
|
Includes Federal Reserve Bank stock of
$444 million
and
$441 million
, respectively, at cost.
|
(b)
|
Prior period was restated to reflect the retrospective application of adopting new accounting guidance related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Seed capital and private equity investments valued using NAV
|
|||||||||||||||||||
|
June 30, 2014
|
|
Dec. 31, 2013
|
||||||||||||||||
(dollar amounts
in millions)
|
Fair
value
|
|
Unfunded
commitments
|
|
Redemption
frequency
|
Redemption
notice period
|
|
Fair
value
|
|
Unfunded
commitments
|
|
Redemption
frequency
|
Redemption
notice period
|
||||||
Seed capital and other funds
(a)
|
$
|
318
|
|
|
$
|
—
|
|
Daily-quarterly
|
0-180 days
|
|
$
|
275
|
|
|
$
|
23
|
|
Monthly-yearly
|
3-45 days
|
Private equity funds
(b)
|
82
|
|
|
21
|
|
N/A
|
N/A
|
|
86
|
|
|
31
|
|
N/A
|
N/A
|
||||
Total
|
$
|
400
|
|
|
$
|
21
|
|
|
|
|
$
|
361
|
|
|
$
|
54
|
|
|
|
(a)
|
Other funds include various market neutral, leveraged loans, hedge funds, real estate and structured credit funds. Redemption notice periods vary by fund.
|
(b)
|
Private equity funds primarily include numerous venture capital funds that invest in various sectors of the economy. Private equity funds do not have redemption rights. Distributions from such funds will be received as the underlying investments in the funds are liquidated.
|
Net interest revenue
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(in millions)
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
|
|
June 30, 2014
|
|
June 30, 2013
|
|
|||||
Interest revenue
|
|
|
|
|
|
|
||||||||||
Non-margin loans
|
$
|
176
|
|
$
|
169
|
|
$
|
171
|
|
|
$
|
345
|
|
$
|
336
|
|
Margin loans
|
44
|
|
42
|
|
40
|
|
|
86
|
|
78
|
|
|||||
Securities:
|
|
|
|
|
|
|
||||||||||
Taxable
|
383
|
|
405
|
|
453
|
|
|
788
|
|
894
|
|
|||||
Exempt from federal income taxes
|
27
|
|
27
|
|
23
|
|
|
54
|
|
47
|
|
|||||
Total securities
|
410
|
|
432
|
|
476
|
|
|
842
|
|
941
|
|
|||||
Deposits with banks
|
77
|
|
73
|
|
68
|
|
|
150
|
|
139
|
|
|||||
Deposits with the Federal Reserve and other central banks
|
55
|
|
46
|
|
31
|
|
|
101
|
|
62
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
19
|
|
17
|
|
10
|
|
|
36
|
|
20
|
|
|||||
Trading assets
|
30
|
|
33
|
|
40
|
|
|
63
|
|
75
|
|
|||||
Total interest revenue
|
811
|
|
812
|
|
836
|
|
|
1,623
|
|
1,651
|
|
|||||
Interest expense
|
|
|
|
|
|
|
||||||||||
Deposits
|
24
|
|
22
|
|
27
|
|
|
46
|
|
57
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
(3
|
)
|
(4
|
)
|
(6
|
)
|
|
(7
|
)
|
(9
|
)
|
|||||
Trading liabilities
|
7
|
|
8
|
|
11
|
|
|
15
|
|
20
|
|
|||||
Other borrowed funds
|
2
|
|
1
|
|
1
|
|
|
3
|
|
3
|
|
|||||
Customer payables
|
2
|
|
2
|
|
2
|
|
|
4
|
|
4
|
|
|||||
Long-term debt
|
60
|
|
55
|
|
44
|
|
|
115
|
|
100
|
|
|||||
Total interest expense
|
92
|
|
84
|
|
79
|
|
|
176
|
|
175
|
|
|||||
Net interest revenue
|
$
|
719
|
|
$
|
728
|
|
$
|
757
|
|
|
$
|
1,447
|
|
$
|
1,476
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Net periodic benefit cost (credit)
|
|
Quarter ended
|
|
|
|||||||||||||||||||||||||
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
||||||||||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|||||||||
Service cost
|
$
|
14
|
|
$
|
9
|
|
$
|
1
|
|
|
$
|
14
|
|
$
|
9
|
|
$
|
1
|
|
|
$
|
16
|
|
$
|
9
|
|
$
|
1
|
|
Interest cost
|
45
|
|
11
|
|
3
|
|
|
45
|
|
11
|
|
3
|
|
|
43
|
|
10
|
|
2
|
|
|||||||||
Expected return on assets
|
(79
|
)
|
(15
|
)
|
(2
|
)
|
|
(79
|
)
|
(15
|
)
|
(2
|
)
|
|
(73
|
)
|
(12
|
)
|
(2
|
)
|
|||||||||
Other
|
30
|
|
4
|
|
—
|
|
|
28
|
|
4
|
|
—
|
|
|
46
|
|
4
|
|
1
|
|
|||||||||
Net periodic benefit cost
|
$
|
10
|
|
$
|
9
|
|
$
|
2
|
|
|
$
|
8
|
|
$
|
9
|
|
$
|
2
|
|
|
$
|
32
|
|
$
|
11
|
|
$
|
2
|
|
Net periodic benefit cost (credit)
|
|
Year-to-date
|
|
|
|||||||||||||||
|
June 30, 2014
|
|
June 30, 2013
|
||||||||||||||||
(in millions)
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
|
Domestic pension benefits
|
|
Foreign pension benefits
|
|
Health care benefits
|
|
||||||
Service cost
|
$
|
28
|
|
$
|
18
|
|
$
|
2
|
|
|
$
|
32
|
|
$
|
18
|
|
$
|
2
|
|
Interest cost
|
90
|
|
22
|
|
6
|
|
|
86
|
|
20
|
|
4
|
|
||||||
Expected return on assets
|
(158
|
)
|
(30
|
)
|
(4
|
)
|
|
(146
|
)
|
(24
|
)
|
(4
|
)
|
||||||
Other
|
58
|
|
8
|
|
—
|
|
|
93
|
|
8
|
|
2
|
|
||||||
Net periodic benefit cost
|
$
|
18
|
|
$
|
18
|
|
$
|
4
|
|
|
$
|
65
|
|
$
|
22
|
|
$
|
4
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Operational Excellence Initiatives 2011 – restructuring charge (recovery) by business
|
|
Total charges since inception
|
|
|||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
|
|||||
Investment Management
|
$
|
—
|
|
$
|
—
|
|
|
$
|
52
|
|
Investment Services
|
(3
|
)
|
—
|
|
|
82
|
|
|||
Other segment (including Business Partners)
|
(2
|
)
|
—
|
|
|
11
|
|
|||
Total restructuring charge (recovery)
|
$
|
(5
|
)
|
$
|
—
|
|
|
$
|
145
|
|
Effective tax rate
|
Six months ended
|
|||
|
June 30, 2014
|
|
June 30, 2013
(a)
|
|
Federal rate
|
35.0
|
%
|
35.0
|
%
|
State and local income taxes, net of federal income tax benefit
|
1.5
|
|
2.8
|
|
Tax-exempt income
|
(3.1
|
)
|
(2.8
|
)
|
Foreign operations
|
(3.5
|
)
|
(4.2
|
)
|
Tax credits
|
(1.0
|
)
|
(1.9
|
)
|
Tax litigation
|
—
|
|
41.7
|
|
Leverage lease adjustment
|
(1.6
|
)
|
(3.3
|
)
|
Other – net
|
(1.5
|
)
|
1.1
|
|
Effective tax rate
|
25.8
|
%
|
68.4
|
%
|
(a)
|
Results for the first six months of 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Non-consolidated VIEs at June 30, 2014
|
Maximum loss exposure
|
|
|||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
|||||
Other
|
$
|
138
|
|
$
|
—
|
|
$
|
138
|
|
Non-consolidated VIEs at Dec. 31, 2013
|
Maximum loss exposure
|
|
|||||||
(in millions)
|
Assets
|
|
Liabilities
|
|
|||||
Other
|
$
|
134
|
|
$
|
—
|
|
$
|
134
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Preferred stock summary
|
Liquidation
preference
per share
(in dollars)
|
|
Total shares issued and outstanding
|
|
|
|
||||||||||||
|
|
|
|
Carrying value
(a)
|
||||||||||||||
(dollars in millions, unless
otherwise noted)
|
Per annum dividend rate
|
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
||||||||
Series A
|
Noncumulative Perpetual Preferred Stock
|
Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%
|
|
$
|
100,000
|
|
|
5,001
|
|
5,001
|
|
|
$
|
500
|
|
$
|
500
|
|
Series C
|
Noncumulative Perpetual Preferred Stock
|
5.2
|
%
|
$
|
100,000
|
|
|
5,825
|
|
5,825
|
|
|
568
|
|
568
|
|
||
Series D
|
Noncumulative Perpetual Preferred Stock
|
4.50% commencing Dec. 20, 2013 to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%
|
|
$
|
100,000
|
|
|
5,000
|
|
5,000
|
|
|
494
|
|
494
|
|
||
Total
|
|
|
|
15,826
|
|
15,826
|
|
|
$
|
1,562
|
|
$
|
1,562
|
|
(a)
|
The carrying value of the Series C and Series D preferred stock is recorded net of issuance costs.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Preferred stock dividends
(a)
|
|
|
|
Dividend paid per share
(in dollars)
|
|
||
Declaration date
|
Record date
|
Payment date
|
|||||
Series A
(b)
|
April 7, 2014
|
June 5, 2014
|
June 20, 2014
|
|
$
|
10.2222
|
|
|
Jan. 17, 2014
|
March 5, 2014
|
March 20, 2014
|
|
10.0000
|
|
|
|
Oct. 16, 2013
|
Dec. 5, 2013
|
Dec. 20, 2013
|
|
10.1111
|
|
|
|
July 17, 2013
|
Sept. 5, 2013
|
Sept. 20, 2013
|
|
10.2222
|
|
|
|
April 9, 2013
|
June 5, 2013
|
June 20, 2013
|
|
10.2222
|
|
|
|
Jan. 16, 2013
|
March 5, 2013
|
March 20, 2013
|
|
10.0000
|
|
|
Series C
(c)
|
April 7, 2014
|
June 5, 2014
|
June 20, 2014
|
|
$
|
0.3250
|
|
|
Jan. 17, 2014
|
March 5, 2014
|
March 20, 2014
|
|
0.3250
|
|
|
|
Oct. 16, 2013
|
Dec. 5, 2013
|
Dec. 20, 2013
|
|
0.3250
|
|
|
|
July 17, 2013
|
Sept. 5, 2013
|
Sept. 20, 2013
|
|
0.3250
|
|
|
|
April 9, 2013
|
June 5, 2013
|
June 20, 2013
|
|
0.3250
|
|
|
|
Jan. 16, 2013
|
March 5, 2013
|
March 20, 2013
|
|
0.3250
|
|
|
Series D
(d)
|
April 7, 2014
|
June 5, 2014
|
June 20, 2014
|
|
$
|
22.5000
|
|
|
Oct. 16, 2013
|
Dec. 5, 2013
|
Dec. 20, 2013
|
|
26.6250
|
|
(a)
|
Dividends are noncumulative.
|
(b)
|
Dividend per Normal Preferred Capital Security of Mellon Capital IV, each representing 1/100th interest in a share of Series A preferred stock.
|
(c)
|
Dividend per depositary share, each representing a 1/4,000th interest in a share of Series C preferred stock.
|
(d)
|
Dividend per depository share, each representing a 1/100th interest in a share of Series D preferred stock.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Components of other comprehensive income (loss)
|
|||||||||||||||||||||||||||||
|
Quarter ended
|
||||||||||||||||||||||||||||
|
June 30, 2014
|
|
March 31, 2014
|
|
June 30, 2013
|
||||||||||||||||||||||||
(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
|
$
|
49
|
|
$
|
28
|
|
$
|
77
|
|
|
$
|
24
|
|
$
|
13
|
|
$
|
37
|
|
|
$
|
(9
|
)
|
$
|
14
|
|
$
|
5
|
|
Total foreign currency translation
|
49
|
|
28
|
|
77
|
|
|
24
|
|
13
|
|
37
|
|
|
(9
|
)
|
14
|
|
5
|
|
|||||||||
Unrealized gain (loss) on assets available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized gain (loss) arising during period
|
287
|
|
(77
|
)
|
210
|
|
|
250
|
|
(88
|
)
|
162
|
|
|
(1,215
|
)
|
479
|
|
(736
|
)
|
|||||||||
Reclassification adjustment
(a)
|
(18
|
)
|
4
|
|
(14
|
)
|
|
(22
|
)
|
9
|
|
(13
|
)
|
|
(32
|
)
|
15
|
|
(17
|
)
|
|||||||||
Net unrealized gain (loss) on assets available-for-sale
|
269
|
|
(73
|
)
|
196
|
|
|
228
|
|
(79
|
)
|
149
|
|
|
(1,247
|
)
|
494
|
|
(753
|
)
|
|||||||||
Defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost
(a)
|
31
|
|
(14
|
)
|
17
|
|
|
30
|
|
(11
|
)
|
19
|
|
|
51
|
|
(20
|
)
|
31
|
|
|||||||||
Total defined benefit plans
|
31
|
|
(14
|
)
|
17
|
|
|
30
|
|
(11
|
)
|
19
|
|
|
51
|
|
(20
|
)
|
31
|
|
|||||||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized hedge gain (loss) arising during period
|
(3
|
)
|
(3
|
)
|
(6
|
)
|
|
6
|
|
—
|
|
6
|
|
|
13
|
|
(6
|
)
|
7
|
|
|||||||||
Reclassification adjustment
(a)
|
1
|
|
3
|
|
4
|
|
|
(4
|
)
|
(1
|
)
|
(5
|
)
|
|
(27
|
)
|
11
|
|
(16
|
)
|
|||||||||
Net unrealized gain (loss) on cash flow hedges
|
(2
|
)
|
—
|
|
(2
|
)
|
|
2
|
|
(1
|
)
|
1
|
|
|
(14
|
)
|
5
|
|
(9
|
)
|
|||||||||
Total other comprehensive income (loss)
|
$
|
347
|
|
$
|
(59
|
)
|
$
|
288
|
|
|
$
|
284
|
|
$
|
(78
|
)
|
$
|
206
|
|
|
$
|
(1,219
|
)
|
$
|
493
|
|
$
|
(726
|
)
|
(a)
|
The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the Consolidated Income Statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the Consolidated Income Statement. See Note 17 of the Notes to Consolidated Financial Statements for the location of the reclassification adjustment related to cash flow hedges on the Consolidated Income Statement.
|
(a)
|
The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the Consolidated Income Statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the Consolidated Income Statement. See Note 17 of the Notes to Consolidated Financial Statements for the location of the reclassification adjustment related to cash flow hedges on the Consolidated Income Statement.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a recurring basis at June 30, 2014
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value |
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
15,202
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15,202
|
|
U.S. Government agencies
|
—
|
|
448
|
|
—
|
|
—
|
|
448
|
|
|||||
Sovereign debt
|
39
|
|
14,092
|
|
—
|
|
—
|
|
14,131
|
|
|||||
State and political subdivisions
(b)
|
—
|
|
6,208
|
|
11
|
|
—
|
|
6,219
|
|
|||||
Agency RMBS
|
—
|
|
27,318
|
|
—
|
|
—
|
|
27,318
|
|
|||||
Non-agency RMBS
|
—
|
|
1,047
|
|
—
|
|
—
|
|
1,047
|
|
|||||
Other RMBS
|
—
|
|
2,038
|
|
—
|
|
—
|
|
2,038
|
|
|||||
Commercial MBS
|
—
|
|
2,056
|
|
—
|
|
—
|
|
2,056
|
|
|||||
Agency commercial MBS
|
—
|
|
2,431
|
|
—
|
|
—
|
|
2,431
|
|
|||||
Asset-backed CLOs
|
—
|
|
1,494
|
|
—
|
|
—
|
|
1,494
|
|
|||||
Other asset-backed securities
|
—
|
|
3,278
|
|
—
|
|
—
|
|
3,278
|
|
|||||
Equity securities
|
101
|
|
—
|
|
—
|
|
—
|
|
101
|
|
|||||
Money market funds
(b)
|
810
|
|
—
|
|
—
|
|
—
|
|
810
|
|
|||||
Corporate bonds
|
—
|
|
1,693
|
|
—
|
|
—
|
|
1,693
|
|
|||||
Other debt securities
|
—
|
|
2,060
|
|
—
|
|
—
|
|
2,060
|
|
|||||
Foreign covered bonds
|
2,276
|
|
512
|
|
—
|
|
—
|
|
2,788
|
|
|||||
Non-agency RMBS
(c)
|
—
|
|
2,574
|
|
—
|
|
—
|
|
2,574
|
|
|||||
Total available-for-sale securities
|
18,428
|
|
67,249
|
|
11
|
|
—
|
|
85,688
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(b)
|
3,922
|
|
3,756
|
|
1
|
|
—
|
|
7,679
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
8
|
|
15,808
|
|
5
|
|
(13,830
|
)
|
1,991
|
|
|||||
Foreign exchange
|
—
|
|
2,280
|
|
1
|
|
(1,383
|
)
|
898
|
|
|||||
Equity
|
142
|
|
385
|
|
16
|
|
(255
|
)
|
288
|
|
|||||
Total derivative assets not designated as hedging
|
150
|
|
18,473
|
|
22
|
|
(15,468
|
)
|
3,177
|
|
|||||
Total trading assets
|
4,072
|
|
22,229
|
|
23
|
|
(15,468
|
)
|
10,856
|
|
|||||
Other assets:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
750
|
|
—
|
|
—
|
|
750
|
|
|||||
Foreign exchange
|
—
|
|
19
|
|
—
|
|
—
|
|
19
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
769
|
|
—
|
|
—
|
|
769
|
|
|||||
Other assets
(d)
|
250
|
|
533
|
|
98
|
|
—
|
|
881
|
|
|||||
Total other assets
|
250
|
|
1,302
|
|
98
|
|
—
|
|
1,650
|
|
|||||
Subtotal assets of operations at fair value
|
22,750
|
|
90,780
|
|
132
|
|
(15,468
|
)
|
98,194
|
|
|||||
Percentage of assets prior to netting
|
20
|
%
|
80
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading assets
|
87
|
|
9,315
|
|
—
|
|
—
|
|
9,402
|
|
|||||
Other assets
|
926
|
|
100
|
|
—
|
|
—
|
|
1,026
|
|
|||||
Total assets of consolidated investment management funds
|
1,013
|
|
9,415
|
|
—
|
|
—
|
|
10,428
|
|
|||||
Total assets
|
$
|
23,763
|
|
$
|
100,195
|
|
$
|
132
|
|
$
|
(15,468
|
)
|
$
|
108,622
|
|
Percentage of assets prior to netting
|
19
|
%
|
81
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at June 30, 2014
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value |
|
|||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
1,845
|
|
$
|
466
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,311
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
3
|
|
16,366
|
|
44
|
|
(13,430
|
)
|
2,983
|
|
|||||
Foreign exchange
|
—
|
|
2,253
|
|
—
|
|
(1,259
|
)
|
994
|
|
|||||
Equity and other contracts
|
66
|
|
744
|
|
7
|
|
(261
|
)
|
556
|
|
|||||
Total derivative liabilities not designated as hedging
|
69
|
|
19,363
|
|
51
|
|
(14,950
|
)
|
4,533
|
|
|||||
Total trading liabilities
|
1,914
|
|
19,829
|
|
51
|
|
(14,950
|
)
|
6,844
|
|
|||||
Long-term debt
(b)
|
—
|
|
338
|
|
—
|
|
—
|
|
338
|
|
|||||
Other liabilities - derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
144
|
|
—
|
|
—
|
|
144
|
|
|||||
Foreign exchange
|
—
|
|
248
|
|
—
|
|
—
|
|
248
|
|
|||||
Total other liabilities - derivative liabilities designated as hedging
|
—
|
|
392
|
|
—
|
|
—
|
|
392
|
|
|||||
Subtotal liabilities of operations at fair value
|
1,914
|
|
20,559
|
|
51
|
|
(14,950
|
)
|
7,574
|
|
|||||
Percentage of liabilities prior to netting
|
8
|
%
|
92
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading liabilities
|
1
|
|
9,122
|
|
—
|
|
—
|
|
9,123
|
|
|||||
Other liabilities
|
—
|
|
6
|
|
—
|
|
—
|
|
6
|
|
|||||
Total liabilities of consolidated investment management funds
|
1
|
|
9,128
|
|
—
|
|
—
|
|
9,129
|
|
|||||
Total liabilities
|
$
|
1,915
|
|
$
|
29,687
|
|
$
|
51
|
|
$
|
(14,950
|
)
|
$
|
16,703
|
|
Percentage of liabilities prior to netting
|
6
|
%
|
94
|
%
|
—
|
%
|
|
|
(a)
|
ASC 815 permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities, and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.
|
(b)
|
Includes certain interests in securitizations.
|
(c)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(d)
|
Includes private equity investments and seed capital.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a recurring basis at Dec. 31, 2013
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value
|
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
||||||||||
U.S. Treasury
|
$
|
12,852
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
12,852
|
|
U.S. Government agencies
|
—
|
|
948
|
|
—
|
|
—
|
|
948
|
|
|||||
Sovereign debt
|
40
|
|
11,314
|
|
—
|
|
—
|
|
11,354
|
|
|||||
State and political subdivisions
(b)
|
—
|
|
6,663
|
|
11
|
|
—
|
|
6,674
|
|
|||||
Agency RMBS
|
—
|
|
25,321
|
|
—
|
|
—
|
|
25,321
|
|
|||||
Non-agency RMBS
|
—
|
|
1,142
|
|
—
|
|
—
|
|
1,142
|
|
|||||
Other RMBS
|
—
|
|
2,285
|
|
—
|
|
—
|
|
2,285
|
|
|||||
Commercial MBS
|
—
|
|
2,357
|
|
—
|
|
—
|
|
2,357
|
|
|||||
Agency commercial MBS
|
—
|
|
1,789
|
|
—
|
|
—
|
|
1,789
|
|
|||||
Asset-backed CLOs
|
—
|
|
1,562
|
|
—
|
|
—
|
|
1,562
|
|
|||||
Other asset-backed securities
|
—
|
|
2,891
|
|
—
|
|
—
|
|
2,891
|
|
|||||
Equity securities
|
19
|
|
—
|
|
—
|
|
—
|
|
19
|
|
|||||
Money market funds
(b)
|
938
|
|
—
|
|
—
|
|
—
|
|
938
|
|
|||||
Corporate bonds
|
—
|
|
1,815
|
|
—
|
|
—
|
|
1,815
|
|
|||||
Other debt securities
|
—
|
|
1,796
|
|
—
|
|
—
|
|
1,796
|
|
|||||
Foreign covered bonds
|
2,238
|
|
633
|
|
—
|
|
—
|
|
2,871
|
|
|||||
Non-agency RMBS
(c)
|
—
|
|
2,695
|
|
—
|
|
—
|
|
2,695
|
|
|||||
Total available-for-sale securities
|
16,087
|
|
63,211
|
|
11
|
|
—
|
|
79,309
|
|
|||||
Trading assets:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(b)
|
4,559
|
|
4,338
|
|
1
|
|
—
|
|
8,898
|
|
|||||
Derivative assets not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
4
|
|
14,702
|
|
6
|
|
(13,231
|
)
|
1,481
|
|
|||||
Foreign exchange
|
—
|
|
3,609
|
|
1
|
|
(2,294
|
)
|
1,316
|
|
|||||
Equity
|
274
|
|
395
|
|
15
|
|
(281
|
)
|
403
|
|
|||||
Total derivative assets not designated as hedging
|
278
|
|
18,706
|
|
22
|
|
(15,806
|
)
|
3,200
|
|
|||||
Total trading assets
|
4,837
|
|
23,044
|
|
23
|
|
(15,806
|
)
|
12,098
|
|
|||||
Other assets
:
|
|
|
|
|
|
||||||||||
Derivative assets designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
1,206
|
|
—
|
|
—
|
|
1,206
|
|
|||||
Foreign exchange
|
—
|
|
76
|
|
—
|
|
—
|
|
76
|
|
|||||
Total derivative assets designated as hedging
|
—
|
|
1,282
|
|
—
|
|
—
|
|
1,282
|
|
|||||
Other assets
(d)
|
148
|
|
193
|
|
105
|
|
—
|
|
446
|
|
|||||
Total other assets
|
148
|
|
1,475
|
|
105
|
|
—
|
|
1,728
|
|
|||||
Subtotal assets of operations at fair value
|
21,072
|
|
87,730
|
|
139
|
|
(15,806
|
)
|
93,135
|
|
|||||
Percentage of assets prior to netting
|
19
|
%
|
81
|
%
|
—
|
%
|
|
|
|||||||
Assets of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading assets
|
61
|
|
10,336
|
|
—
|
|
—
|
|
10,397
|
|
|||||
Other assets
|
739
|
|
136
|
|
—
|
|
—
|
|
875
|
|
|||||
Total assets of consolidated investment management funds
|
800
|
|
10,472
|
|
—
|
|
—
|
|
11,272
|
|
|||||
Total assets
|
$
|
21,872
|
|
$
|
98,202
|
|
$
|
139
|
|
$
|
(15,806
|
)
|
$
|
104,407
|
|
Percentage of assets prior to netting
|
18
|
%
|
82
|
%
|
—
|
%
|
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Liabilities measured at fair value on a recurring basis at Dec. 31, 2013
|
|||||||||||||||
(dollar amounts in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total carrying
value
|
|
|||||
Trading liabilities:
|
|
|
|
|
|
||||||||||
Debt and equity instruments
|
$
|
1,030
|
|
$
|
585
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,615
|
|
Derivative liabilities not designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
3
|
|
15,178
|
|
31
|
|
(12,429
|
)
|
2,783
|
|
|||||
Foreign exchange
|
—
|
|
3,536
|
|
—
|
|
(1,711
|
)
|
1,825
|
|
|||||
Equity and other contracts
|
214
|
|
745
|
|
44
|
|
(281
|
)
|
722
|
|
|||||
Total derivative liabilities not designated as hedging
|
217
|
|
19,459
|
|
75
|
|
(14,421
|
)
|
5,330
|
|
|||||
Total trading liabilities
|
1,247
|
|
20,044
|
|
75
|
|
(14,421
|
)
|
6,945
|
|
|||||
Long-term debt (
b
)
|
—
|
|
321
|
|
—
|
|
—
|
|
321
|
|
|||||
Other liabilities - derivative liabilities designated as hedging:
|
|
|
|
|
|
||||||||||
Interest rate
|
—
|
|
167
|
|
—
|
|
—
|
|
167
|
|
|||||
Foreign exchange
|
—
|
|
336
|
|
—
|
|
—
|
|
336
|
|
|||||
Total other liabilities - derivative liabilities designated as hedging
|
—
|
|
503
|
|
—
|
|
—
|
|
503
|
|
|||||
Subtotal liabilities of operations at fair value
|
1,247
|
|
20,868
|
|
75
|
|
(14,421
|
)
|
7,769
|
|
|||||
Percentage of liabilities prior to netting
|
6
|
%
|
94
|
%
|
—
|
%
|
|
|
|||||||
Liabilities of consolidated investment management funds:
|
|
|
|
|
|
||||||||||
Trading liabilities
|
16
|
|
10,069
|
|
—
|
|
—
|
|
10,085
|
|
|||||
Other liabilities
|
—
|
|
46
|
|
—
|
|
—
|
|
46
|
|
|||||
Total liabilities of consolidated investment management funds
|
16
|
|
10,115
|
|
—
|
|
—
|
|
10,131
|
|
|||||
Total liabilities
|
$
|
1,263
|
|
$
|
30,983
|
|
$
|
75
|
|
$
|
(14,421
|
)
|
$
|
17,900
|
|
Percentage of liabilities prior to netting
|
4
|
%
|
96
|
%
|
—
|
%
|
|
|
(a)
|
ASC 815 permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities, and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.
|
(b)
|
Includes certain interests in securitizations.
|
(c)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
(d)
|
Includes private equity investments and seed capital.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Details of certain items measured at fair value
on a recurring basis
|
June 30, 2014
|
|
Dec. 31, 2013
|
||||||||||||||||||||||
Total
carrying
value
(a)
|
|
|
Ratings
|
|
Total
carrying value
(a)
|
|
|
Ratings
|
|||||||||||||||||
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
|
|
AAA/
AA-
|
|
A+/
A-
|
|
BBB+/
BBB-
|
|
BB+ and
lower
|
|
||||||||
(dollar amounts in millions)
|
|
||||||||||||||||||||||||
Non-agency RMBS, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007
|
$
|
82
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
90
|
|
|
—
|
%
|
—
|
%
|
41
|
%
|
59
|
%
|
2006
|
155
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
156
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
||
2005
|
310
|
|
|
—
|
|
22
|
|
17
|
|
61
|
|
|
330
|
|
|
—
|
|
24
|
|
16
|
|
60
|
|
||
2004 and earlier
|
500
|
|
|
3
|
|
5
|
|
30
|
|
62
|
|
|
566
|
|
|
3
|
|
6
|
|
30
|
|
61
|
|
||
Total non-agency RMBS
|
$
|
1,047
|
|
|
2
|
%
|
9
|
%
|
19
|
%
|
70
|
%
|
|
$
|
1,142
|
|
|
1
|
%
|
10
|
%
|
23
|
%
|
66
|
%
|
Commercial MBS - Domestic, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2009-2014
|
$
|
521
|
|
|
82
|
%
|
18
|
%
|
—
|
%
|
—
|
%
|
|
$
|
466
|
|
|
81
|
%
|
19
|
%
|
—
|
%
|
—
|
%
|
2008
|
22
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
22
|
|
|
59
|
|
41
|
|
—
|
|
—
|
|
||
2007
|
376
|
|
|
66
|
|
21
|
|
13
|
|
—
|
|
|
457
|
|
|
69
|
|
20
|
|
11
|
|
—
|
|
||
2006
|
634
|
|
|
83
|
|
17
|
|
—
|
|
—
|
|
|
683
|
|
|
84
|
|
16
|
|
—
|
|
—
|
|
||
2005
|
373
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
486
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
2004 and earlier
|
49
|
|
|
94
|
|
6
|
|
—
|
|
—
|
|
|
153
|
|
|
93
|
|
7
|
|
—
|
|
—
|
|
||
Total commercial MBS - Domestic
|
$
|
1,975
|
|
|
83
|
%
|
15
|
%
|
2
|
%
|
—
|
%
|
|
$
|
2,267
|
|
|
84
|
%
|
14
|
%
|
2
|
%
|
—
|
%
|
Foreign covered bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada
|
$
|
973
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
851
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
United Kingdom
|
798
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
803
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Netherlands
|
273
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
298
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Other
|
744
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
919
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total foreign covered bonds
|
$
|
2,788
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
2,871
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
European floating rate notes - available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
1,595
|
|
|
84
|
%
|
16
|
%
|
—
|
%
|
—
|
%
|
|
$
|
1,668
|
|
|
79
|
%
|
21
|
%
|
—
|
%
|
—
|
%
|
Netherlands
|
355
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
434
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Ireland
|
161
|
|
|
—
|
|
—
|
|
—
|
|
100
|
|
|
165
|
|
|
10
|
|
—
|
|
—
|
|
90
|
|
||
Italy
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
104
|
|
|
—
|
|
100
|
|
—
|
|
—
|
|
||
Other
|
37
|
|
|
90
|
|
3
|
|
—
|
|
7
|
|
|
42
|
|
|
89
|
|
5
|
|
—
|
|
6
|
|
||
Total European floating rate notes - available-for-sale
|
$
|
2,148
|
|
|
80
|
%
|
12
|
%
|
—
|
%
|
8
|
%
|
|
$
|
2,413
|
|
|
75
|
%
|
19
|
%
|
—
|
%
|
6
|
%
|
Sovereign debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United Kingdom
|
$
|
5,038
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
$
|
4,709
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
France
|
2,658
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
1,568
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Netherlands
|
2,146
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
2,105
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Germany
|
1,498
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
2,182
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Spain
|
785
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
137
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Italy
|
662
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
|
171
|
|
|
—
|
|
—
|
|
100
|
|
—
|
|
||
Other
|
1,344
|
|
|
91
|
|
—
|
|
9
|
|
—
|
|
|
482
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
||
Total sovereign debt
|
$
|
14,131
|
|
|
89
|
%
|
—
|
%
|
11
|
%
|
—
|
%
|
|
$
|
11,354
|
|
|
97
|
%
|
—
|
%
|
3
|
%
|
—
|
%
|
Non-agency RMBS
(b)
, originated in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007
|
$
|
776
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
|
$
|
812
|
|
|
—
|
%
|
—
|
%
|
—
|
%
|
100
|
%
|
2006
|
744
|
|
|
—
|
|
—
|
|
1
|
|
99
|
|
|
780
|
|
|
—
|
|
—
|
|
1
|
|
99
|
|
||
2005
|
818
|
|
|
—
|
|
3
|
|
1
|
|
96
|
|
|
854
|
|
|
—
|
|
3
|
|
—
|
|
97
|
|
||
2004 and earlier
|
236
|
|
|
—
|
|
4
|
|
11
|
|
85
|
|
|
249
|
|
|
—
|
|
4
|
|
16
|
|
80
|
|
||
Total non-agency RMBS
(b)
|
$
|
2,574
|
|
|
—
|
%
|
1
|
%
|
2
|
%
|
97
|
%
|
|
$
|
2,695
|
|
|
—
|
%
|
1
|
%
|
2
|
%
|
97
|
%
|
(a)
|
At June 30, 2014 and Dec. 31, 2013, foreign covered bonds and sovereign debt were included in Level 1 and Level 2 in the valuation hierarchy. All other assets in the table are Level 2 assets in the valuation hierarchy.
|
(b)
|
Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Fair value measurements for assets using significant unobservable inputs for the three months ended June 30, 2014
|
|||||||||||||||||||
|
Available-for-sale securities
|
|
|
Trading assets
|
|
|
|
Total assets
|
|
||||||||||
(in millions)
|
State and
political
subdivisions
|
|
|
Debt and equity
instruments
|
|
|
Derivative
assets
|
|
(a)
|
Other
assets
|
|
|
|||||||
Fair value at March 31, 2014
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
19
|
|
|
$
|
110
|
|
|
$
|
141
|
|
Total gains or (losses) for the period:
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in earnings (or changes in net assets)
|
—
|
|
(b)
|
—
|
|
(c)
|
3
|
|
(c)
|
3
|
|
(d)
|
6
|
|
|||||
Purchases and sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
|||||
Fair value at June 30, 2014
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
22
|
|
|
$
|
98
|
|
|
$
|
132
|
|
Change in unrealized gains or (losses) for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(c)
|
Reported in foreign exchange and other trading revenue.
|
(d)
|
Reported in investment and other income.
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(c)
|
Reported in foreign exchange and other trading revenue.
|
(d)
|
Reported in investment and other income.
|
(e)
|
Reported in income from consolidated investment management funds.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Fair value measurements for liabilities using significant unobservable inputs for the three months ended June 30, 2013
|
|||||||
|
Trading liabilities
|
|
|
Total liabilities
|
|
||
(in millions)
|
Derivative liabilities
|
|
(a)
|
||||
Fair value at March 31, 2013
|
$
|
170
|
|
|
$
|
170
|
|
Transfers out of Level 3
|
(4
|
)
|
|
(4
|
)
|
||
Total (gains) or losses for the period:
|
|
|
|
||||
Included in earnings (or changes in net liabilities)
|
(49
|
)
|
(b)
|
(49
|
)
|
||
Fair value at June 30, 2013
|
$
|
117
|
|
|
$
|
117
|
|
Change in unrealized (gains) or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period
|
$
|
(23
|
)
|
|
$
|
(23
|
)
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(c)
|
Reported in foreign exchange and other trading revenue.
|
(d)
|
Reported in investment and other income.
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Fair value measurements for assets using significant unobservable inputs for the six months ended June 30, 2013
|
|
||||||||||||||||||||||
|
Available-for-sale securities
|
|
Trading assets
|
|
|
|
|
Assets of
consolidated
investment
management
funds
|
|
|
|||||||||||||
(in millions)
|
State and political
subdivisions |
|
|
Debt and equity
instruments |
|
|
Derivative
assets |
|
(a)
|
Other
assets
|
|
|
Total
assets of operations
|
|
|
||||||||
Fair value at Dec. 31, 2012
|
$
|
45
|
|
|
$
|
48
|
|
|
$
|
58
|
|
|
$
|
120
|
|
|
$
|
271
|
|
$
|
44
|
|
|
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
—
|
|
|
||||||
Total gains or (losses) for the period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings (or changes in net assets)
|
7
|
|
(b)
|
3
|
|
(c)
|
(11
|
)
|
(c)
|
—
|
|
(d)
|
(1
|
)
|
—
|
|
(e)
|
||||||
Purchases and sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
—
|
|
|
||||||
Sales
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
(10
|
)
|
|
(59
|
)
|
—
|
|
|
||||||
Fair value at June 30, 2013
|
$
|
52
|
|
|
$
|
2
|
|
|
$
|
42
|
|
|
$
|
113
|
|
|
$
|
209
|
|
$
|
44
|
|
|
Change in unrealized gains or (losses) for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
$
|
—
|
|
|
(a)
|
Derivative assets are reported on a gross basis.
|
(b)
|
Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses).
|
(c)
|
Reported in foreign exchange and other trading revenue.
|
(d)
|
Reported in investment and other income.
|
(e)
|
Reported in income from consolidated investment management funds.
|
(a)
|
Derivative liabilities are reported on a gross basis.
|
(b)
|
Reported in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets measured at fair value on a nonrecurring basis at June 30, 2014
|
|
Total carrying
value
|
|
||||||||||||
(in millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
||||||
Loans
(a)
|
$
|
—
|
|
|
$
|
122
|
|
|
$
|
6
|
|
|
$
|
128
|
|
Other assets
(b)
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
|
$
|
133
|
|
|
$
|
6
|
|
|
$
|
139
|
|
Assets measured at fair value on a nonrecurring basis at Dec. 31, 2013
|
|
Total carrying
value
|
|
||||||||||||
(in millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
||||||
Loans
(a)
|
$
|
—
|
|
|
$
|
128
|
|
|
$
|
9
|
|
|
$
|
137
|
|
Other assets
(b)
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
Total assets at fair value on a nonrecurring basis
|
$
|
—
|
|
|
$
|
143
|
|
|
$
|
9
|
|
|
$
|
152
|
|
(a)
|
During the quarters end June 30, 2014 and Dec. 31, 2013, the fair value of these loans decreased
$2 million
and
$1 million
, respectively, based on the fair value of the underlying collateral as allowed by ASC 310, Accounting by Creditors for Impairment of a loan, with an offset to the allowance for credit losses.
|
(b)
|
Includes other assets received in satisfaction of debt and loans held for sale. Loans held for sale are carried on the balance sheet at the lower of cost or market value.
|
(a)
|
The option pricing model uses market inputs such as foreign currency exchange rates, interest rates and volatility to calculate the fair value of the option.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Summary of financial instruments
|
June 30, 2014
|
||||||||||||||||
(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
|
$
|
—
|
|
$
|
105,657
|
|
$
|
—
|
|
|
$
|
105,657
|
|
|
$
|
105,657
|
|
Interest-bearing deposits with banks
|
—
|
|
41,483
|
|
—
|
|
|
41,483
|
|
|
41,459
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
15,062
|
|
—
|
|
|
15,062
|
|
|
15,062
|
|
|||||
Securities held-to-maturity
|
3,321
|
|
15,890
|
|
—
|
|
|
19,211
|
|
|
19,102
|
|
|||||
Loans
|
—
|
|
57,099
|
|
—
|
|
|
57,099
|
|
|
56,871
|
|
|||||
Other financial assets
|
6,173
|
|
1,137
|
|
—
|
|
|
7,310
|
|
|
7,316
|
|
|||||
Total
|
$
|
9,494
|
|
$
|
236,328
|
|
$
|
—
|
|
|
$
|
245,822
|
|
|
$
|
245,467
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
109,570
|
|
$
|
—
|
|
|
$
|
109,570
|
|
|
$
|
109,570
|
|
Interest-bearing deposits
|
—
|
|
171,903
|
|
—
|
|
|
171,903
|
|
|
172,869
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
10,301
|
|
—
|
|
|
10,301
|
|
|
10,301
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
17,242
|
|
—
|
|
|
17,242
|
|
|
17,242
|
|
|||||
Borrowings
|
—
|
|
1,652
|
|
—
|
|
|
1,652
|
|
|
1,652
|
|
|||||
Long-term debt
|
—
|
|
20,565
|
|
—
|
|
|
20,565
|
|
|
19,989
|
|
|||||
Total
|
$
|
—
|
|
$
|
331,233
|
|
$
|
—
|
|
|
$
|
331,233
|
|
|
$
|
331,623
|
|
Summary of financial instruments
|
Dec. 31, 2013
|
||||||||||||||||
(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
|
$
|
—
|
|
$
|
104,359
|
|
$
|
—
|
|
|
$
|
104,359
|
|
|
$
|
104,359
|
|
Interest-bearing deposits with banks
|
—
|
|
35,323
|
|
—
|
|
|
35,323
|
|
|
35,300
|
|
|||||
Federal funds sold and securities purchased under resale agreements
|
—
|
|
9,161
|
|
—
|
|
|
9,161
|
|
|
9,161
|
|
|||||
Securities held-to-maturity
|
3,268
|
|
16,175
|
|
—
|
|
|
19,443
|
|
|
19,743
|
|
|||||
Loans
|
—
|
|
49,316
|
|
—
|
|
|
49,316
|
|
|
49,180
|
|
|||||
Other financial assets
|
6,460
|
|
1,141
|
|
—
|
|
|
7,601
|
|
|
7,601
|
|
|||||
Total
|
$
|
9,728
|
|
$
|
215,475
|
|
$
|
—
|
|
|
$
|
225,203
|
|
|
$
|
225,344
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
$
|
—
|
|
$
|
95,475
|
|
$
|
—
|
|
|
$
|
95,475
|
|
|
$
|
95,475
|
|
Interest-bearing deposits
|
—
|
|
165,253
|
|
—
|
|
|
165,253
|
|
|
165,654
|
|
|||||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
9,648
|
|
—
|
|
|
9,648
|
|
|
9,648
|
|
|||||
Payables to customers and broker-dealers
|
—
|
|
15,707
|
|
—
|
|
|
15,707
|
|
|
15,707
|
|
|||||
Borrowings
|
—
|
|
919
|
|
—
|
|
|
919
|
|
|
919
|
|
|||||
Long-term debt
|
—
|
|
19,965
|
|
—
|
|
|
19,965
|
|
|
19,543
|
|
|||||
Total
|
$
|
—
|
|
$
|
306,967
|
|
$
|
—
|
|
|
$
|
306,967
|
|
|
$
|
306,946
|
|
Hedged financial instruments
|
Carrying amount
|
|
Notional amount of hedge
|
|
Unrealized
|
|||||||
(in millions)
|
Gain
|
|
(Loss)
|
|
||||||||
June 30, 2014
|
|
|
|
|
||||||||
Interest-bearing deposits with banks
|
$
|
337
|
|
$
|
337
|
|
$
|
—
|
|
$
|
(3
|
)
|
Securities available-for-sale
|
6,579
|
|
6,854
|
|
293
|
|
(132
|
)
|
||||
Long-term debt
|
16,004
|
|
15,650
|
|
456
|
|
(12
|
)
|
||||
Dec. 31, 2013
|
|
|||||||||||
Interest-bearing deposits with banks
|
$
|
1,396
|
|
$
|
1,396
|
|
$
|
30
|
|
$
|
(19
|
)
|
Securities available-for-sale
|
5,914
|
|
6,647
|
|
721
|
|
(95
|
)
|
||||
Long-term debt
|
15,036
|
|
14,755
|
|
483
|
|
(72
|
)
|
Notes to Consolidated Financial Statements
(continued)
|
|
Assets and liabilities of consolidated investment management funds, at fair value
|
||||||
(in millions)
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
||
Assets of consolidated investment management funds:
|
|
|
||||
Trading assets
|
$
|
9,402
|
|
$
|
10,397
|
|
Other assets
|
1,026
|
|
875
|
|
||
Total assets of consolidated investment management funds
|
$
|
10,428
|
|
$
|
11,272
|
|
Liabilities of consolidated investment management funds:
|
|
|
||||
Trading liabilities
|
$
|
9,123
|
|
$
|
10,085
|
|
Other liabilities
|
6
|
|
46
|
|
||
Total liabilities of consolidated investment management funds
|
$
|
9,129
|
|
$
|
10,131
|
|
(a)
|
The change in fair value of the long-term debt is approximately offset by an economic hedge included in foreign exchange and other trading revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Ineffectiveness
|
Six months ended
|
|||||
(in millions)
|
June 30,
2014 |
|
June 30,
2013 |
|
||
Fair value hedges of securities
|
$
|
(5.4
|
)
|
$
|
7.8
|
|
Fair value hedges of deposits and long-term debt
|
(9.9
|
)
|
(0.5
|
)
|
||
Cash flow hedges
|
(0.1
|
)
|
0.1
|
|
||
Other
(a)
|
0.1
|
|
0.1
|
|
||
Total
|
$
|
(15.3
|
)
|
$
|
7.5
|
|
(a)
|
Includes ineffectiveness recorded on foreign exchange hedges.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Impact of derivative instruments on the balance sheet
|
Notional value
|
|
Asset derivatives
fair value
|
|
Liability derivatives
fair value
|
|||||||||||||||
(in millions)
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
||||||
Derivatives designated as hedging instruments
(a)
:
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
22,504
|
|
$
|
21,402
|
|
|
$
|
750
|
|
$
|
1,206
|
|
|
$
|
144
|
|
$
|
167
|
|
Foreign exchange contracts
|
7,234
|
|
7,382
|
|
|
19
|
|
76
|
|
|
248
|
|
336
|
|
||||||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
769
|
|
$
|
1,282
|
|
|
$
|
392
|
|
$
|
503
|
|
||||
Derivatives not designated as hedging instruments
(b)
:
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
818,646
|
|
$
|
767,341
|
|
|
$
|
15,821
|
|
$
|
14,712
|
|
|
$
|
16,413
|
|
$
|
15,212
|
|
Foreign exchange contracts
|
523,369
|
|
420,142
|
|
|
2,281
|
|
3,610
|
|
|
2,253
|
|
3,536
|
|
||||||
Equity contracts
|
22,658
|
|
24,123
|
|
|
543
|
|
684
|
|
|
817
|
|
1,003
|
|
||||||
Credit contracts
|
20
|
|
101
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
18,645
|
|
$
|
19,006
|
|
|
$
|
19,483
|
|
$
|
19,751
|
|
||||
Total derivatives fair value
(c)
|
|
|
|
$
|
19,414
|
|
$
|
20,288
|
|
|
$
|
19,875
|
|
$
|
20,254
|
|
||||
Effect of master netting agreements
(d)
|
|
|
|
(15,468
|
)
|
(15,806
|
)
|
|
(14,950
|
)
|
(14,421
|
)
|
||||||||
Fair value after effect of master netting agreements
|
|
|
|
$
|
3,946
|
|
$
|
4,482
|
|
|
$
|
4,925
|
|
$
|
5,833
|
|
(a)
|
The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the balance sheet.
|
(b)
|
The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the balance sheet.
|
(c)
|
Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815.
|
(d)
|
Effect of master netting agreements includes cash collateral received and paid of
$990 million
and
$472 million
, respectively, at
June 30, 2014
, and
$1,841 million
and
$456 million
, respectively, at
Dec. 31, 2013
.
|
Derivatives in cash flow hedging
relationships
|
Gain or (loss) recognized
in accumulated
OCI on derivatives (effective portion)
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Location of gain or
(loss) recognized in
income on derivatives
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss) recognized in income on derivatives
(ineffectiveness portion and amount excluded from effectiveness testing)
|
||||||||||||||||||||||||
2Q14
|
|
1Q14
|
|
2Q13
|
|
|
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
|
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
||||||||||||
FX contracts
|
$
|
(1
|
)
|
$
|
(1
|
)
|
$
|
(15
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
(6
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
FX contracts
|
—
|
|
3
|
|
(1
|
)
|
|
Other revenue
|
|
1
|
|
—
|
|
—
|
|
|
Other revenue
|
|
(0.2
|
)
|
0.1
|
|
—
|
|
|||||||||
FX contracts
|
(6
|
)
|
3
|
|
34
|
|
|
Trading revenue
|
|
(6
|
)
|
3
|
|
34
|
|
|
Trading revenue
|
|
—
|
|
—
|
|
—
|
|
|||||||||
FX contracts
|
3
|
|
1
|
|
(5
|
)
|
|
Salary expense
|
|
4
|
|
2
|
|
(1
|
)
|
|
Salary expense
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Total
|
$
|
(4
|
)
|
$
|
6
|
|
$
|
13
|
|
|
|
|
$
|
(1
|
)
|
$
|
4
|
|
$
|
27
|
|
|
|
|
$
|
(0.2
|
)
|
$
|
0.1
|
|
$
|
—
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Derivatives in net
investment hedging
relationships
|
Gain or (loss) recognized in accumulated OCI
on derivatives
(effective portion)
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Location of gain or
(loss) recognized in
income on derivatives
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss) recognized in income on
derivatives
(ineffectiveness portion
and amount excluded
from effectiveness testing)
|
||||||||||||||||||||||||
2Q14
|
|
1Q14
|
|
2Q13
|
|
|
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
|
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
||||||||||||
FX contracts
|
$
|
(129
|
)
|
$
|
(16
|
)
|
$
|
38
|
|
|
Net interest revenue
|
|
$
|
(1
|
)
|
$
|
—
|
|
$
|
—
|
|
|
Other revenue
|
|
$
|
0.2
|
|
$
|
(0.1
|
)
|
$
|
0.2
|
|
Derivatives in cash flow hedging
relationships
|
Gain or (loss) recognized
in accumulated
OCI on derivatives(effective portion)
Six months ended
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
Six months ended
|
|
Location of gain or
(loss) recognized in
income on derivatives
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss) recognized in income on derivatives
(ineffectiveness portion and amount excluded from effectiveness testing)
Six months ended
|
||||||||||||||||||
June 30,
2014 |
|
|
June 30,
2013 |
|
|
|
June 30,
2014 |
|
|
June 30,
2013 |
|
|
|
June 30,
2014 |
|
|
June 30,
2013 |
|
|||||||||
FX contracts
|
$
|
(2
|
)
|
|
$
|
(27
|
)
|
|
Net interest revenue
|
|
$
|
(1
|
)
|
|
$
|
(19
|
)
|
|
Net interest revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
FX contracts
|
3
|
|
|
1
|
|
|
Other revenue
|
|
1
|
|
|
—
|
|
|
Other revenue
|
|
(0.1
|
)
|
|
0.1
|
|
||||||
FX contracts
|
(3
|
)
|
|
217
|
|
|
Trading revenue
|
|
(3
|
)
|
|
217
|
|
|
Trading revenue
|
|
—
|
|
|
—
|
|
||||||
FX contracts
|
4
|
|
|
(7
|
)
|
|
Salary expense
|
|
6
|
|
|
(1
|
)
|
|
Salary expense
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
2
|
|
|
$
|
184
|
|
|
|
|
$
|
3
|
|
|
$
|
197
|
|
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
Derivatives in net
investment hedging
relationships
|
Gain or (loss) recognized in accumulated OCI
on derivatives
(effective portion)
Six months ended
|
|
Location of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
|
|
Gain or (loss) reclassified
from accumulated
OCI into income
(effective portion)
Six months ended
|
|
Location of gain or
(loss) recognized in
income on derivative
(ineffective portion and
amount excluded from
effectiveness testing)
|
|
Gain or (loss)
recognized in income on
derivatives
(ineffectiveness portion and amount excluded from
effectiveness testing)
Six months ended
|
||||||||||||||||||
June 30,
2014 |
|
|
June 30,
2013 |
|
|
|
June 30,
2014 |
|
|
June 30,
2013 |
|
|
|
June 30,
2014 |
|
|
June 30,
2013 |
|
|||||||||
FX contracts
|
$
|
(145
|
)
|
|
$
|
205
|
|
|
Net interest revenue
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
Other revenue
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Foreign exchange and other trading revenue
|
Year-to-date
|
||||||||||||||
(in millions)
|
2Q14
|
|
1Q14
|
|
2Q13
|
|
2014
|
|
2013
|
|
|||||
Foreign exchange
|
$
|
129
|
|
$
|
130
|
|
$
|
179
|
|
$
|
259
|
|
$
|
328
|
|
Other trading revenue (loss):
|
|
|
|
|
|
||||||||||
Fixed income
|
(1
|
)
|
1
|
|
12
|
|
—
|
|
20
|
|
|||||
Equity/other
|
2
|
|
5
|
|
16
|
|
7
|
|
20
|
|
|||||
Total other trading revenue
|
1
|
|
6
|
|
28
|
|
7
|
|
40
|
|
|||||
Total foreign exchange and other trading revenue
|
$
|
130
|
|
$
|
136
|
|
$
|
207
|
|
$
|
266
|
|
$
|
368
|
|
If The Bank of New York Mellon’s rating was changed to (Moody’s/S&P)
|
Potential close-out exposures (fair value)
(a)
|
|
||
A3/A-
|
|
$
|
41
|
million
|
Baa2/BBB
|
|
$
|
801
|
million
|
Ba1/BB+
|
|
$
|
2,044
|
million
|
(a)
|
The amounts represent potential total close-out values if The Bank of New York Mellon’s rating were to immediately drop to the indicated levels.
|
Notes to Consolidated Financial Statements
(continued)
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral paid. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
(a)
|
Includes the effect of netting agreements and net cash collateral paid. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Offsetting of financial liabilities and derivative liabilities at June 30, 2014
|
|
|
|
||||||||||||||||
|
|
|
|
|
|||||||||||||||
|
Gross liabilities recognized
|
|
Gross amounts offset in the balance sheet
|
|
|
Net liabilities recognized on the balance sheet
|
|
Gross amounts not offset in the balance sheet
|
|
||||||||||
(in millions)
|
(a)
|
Financial instruments
|
|
Cash collateral pledged
|
|
Net amount
|
|
||||||||||||
Derivatives subject to netting arrangements:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
16,011
|
|
$
|
13,430
|
|
|
$
|
2,581
|
|
$
|
1,878
|
|
$
|
—
|
|
$
|
703
|
|
Foreign exchange contracts
|
1,606
|
|
1,259
|
|
|
347
|
|
346
|
|
—
|
|
1
|
|
||||||
Equity and other contracts
|
642
|
|
261
|
|
|
381
|
|
288
|
|
—
|
|
93
|
|
||||||
Total derivatives subject to netting arrangements
|
18,259
|
|
14,950
|
|
|
3,309
|
|
2,512
|
|
—
|
|
797
|
|
||||||
Total derivatives not subject to netting arrangements
|
1,616
|
|
—
|
|
|
1,616
|
|
—
|
|
—
|
|
1,616
|
|
||||||
Total derivatives
|
19,875
|
|
14,950
|
|
|
4,925
|
|
2,512
|
|
—
|
|
2,413
|
|
||||||
Repurchase agreements
|
8,325
|
|
928
|
|
(b)
|
7,397
|
|
7,395
|
|
—
|
|
2
|
|
||||||
Securities lending
|
2,627
|
|
—
|
|
|
2,627
|
|
2,563
|
|
—
|
|
64
|
|
||||||
Total
|
$
|
30,827
|
|
$
|
15,878
|
|
|
$
|
14,949
|
|
$
|
12,470
|
|
$
|
—
|
|
$
|
2,479
|
|
(a)
|
Includes the effect of netting agreements and net cash collateral received. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
(a)
|
Includes the effect of netting agreements and net cash collateral received. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions.
|
(b)
|
Offsetting of repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Financial institutions
portfolio exposure
(in billions)
|
June 30, 2014
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Banks
|
$
|
9.0
|
|
$
|
1.9
|
|
$
|
10.9
|
|
Asset managers
|
1.6
|
|
4.8
|
|
6.4
|
|
|||
Securities industry
|
3.9
|
|
1.3
|
|
5.2
|
|
|||
Insurance
|
0.1
|
|
4.2
|
|
4.3
|
|
|||
Government
|
—
|
|
3.1
|
|
3.1
|
|
|||
Other
|
0.4
|
|
1.0
|
|
1.4
|
|
|||
Total
|
$
|
15.0
|
|
$
|
16.3
|
|
$
|
31.3
|
|
Commercial portfolio
exposure
(in billions)
|
June 30, 2014
|
||||||||
Loans
|
|
Unfunded
commitments
|
|
Total
exposure
|
|
||||
Services and other
|
$
|
1.0
|
|
$
|
6.3
|
|
$
|
7.3
|
|
Energy and utilities
|
0.4
|
|
5.8
|
|
6.2
|
|
|||
Manufacturing
|
0.3
|
|
5.5
|
|
5.8
|
|
|||
Media and telecom
|
0.1
|
|
1.6
|
|
1.7
|
|
|||
Total
|
$
|
1.8
|
|
$
|
19.2
|
|
$
|
21.0
|
|
Off-balance sheet credit risks
|
June 30,
|
|
Dec. 31,
|
|
||
(in millions)
|
2014
|
|
2013
|
|
||
Lending commitments
(a)
|
$
|
33,824
|
|
$
|
34,039
|
|
Standby letters of credit
(b)
|
6,122
|
|
6,721
|
|
||
Commercial letters of credit
|
241
|
|
310
|
|
||
Securities lending indemnifications
(c)
|
295,597
|
|
244,382
|
|
(a)
|
Net of participations totaling
$6 million
at
June 30, 2014
and
$6 million
at
Dec. 31, 2013
.
|
(b)
|
Net of participations totaling
$663 million
at
June 30, 2014
and
$720 million
at
Dec. 31, 2013
.
|
(c)
|
Excludes the indemnification for securities for which BNY Mellon
acts as an agent
on behalf of CIBC Mellon clients, which totaled
$63 billion
at
June 30, 2014
and
$60 billion
at
Dec. 31, 2013
.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Standby letters of credit
|
June 30,
|
|
|
Dec. 31,
|
|
|
2014
|
|
|
2013
|
|
Investment grade
|
88
|
%
|
|
86
|
%
|
Non-investment grade
|
12
|
%
|
|
14
|
%
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Revenue amounts reflect fee and other revenue generated by each business. Fee and other revenue transferred between businesses under revenue transfer agreements is included within other revenue in each business.
|
•
|
Revenues and expenses associated with specific client bases are included in those businesses. For example, foreign exchange activity associated
|
•
|
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.
|
•
|
Incentive expense related to restricted stock and certain corporate overhead charges are allocated to the businesses.
|
Notes to Consolidated Financial Statements
(continued)
|
|
•
|
Support and other indirect expenses are allocated to businesses based on internally-developed methodologies.
|
•
|
Recurring FDIC expense is allocated to the businesses based on average deposits generated within each business.
|
•
|
Litigation expense is generally recorded in the business in which the charge occurs.
|
•
|
Management of the investment securities portfolio is a shared service contained in the Other segment. As a result, gains and losses associated with the valuation of the securities portfolio are included in the Other segment.
|
•
|
Client deposits serve as the primary funding source for our investment securities portfolio. We typically allocate all interest revenue to the businesses generating the deposits. Accordingly, accretion related to the portion of the investment
|
•
|
M&I expense is a corporate level item and is recorded in the Other segment.
|
•
|
Restructuring charges recorded in the second quarter of 2014 relate to corporate-level initiatives and were therefore recorded in the Other segment. In the fourth quarter of 2013, restructuring charges were recorded in the businesses. Prior to the fourth quarter of 2013, restructuring charges were reported in the Other segment.
|
•
|
Balance sheet assets and liabilities and their related income or expense are specifically assigned to each business. Businesses with a net liability position have been allocated assets.
|
•
|
Goodwill and intangible assets are reflected within individual businesses.
|
For the quarter ended June 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
970
|
|
(a)
|
$
|
1,920
|
|
|
$
|
119
|
|
|
$
|
3,009
|
|
(a)
|
Net interest revenue
|
66
|
|
|
593
|
|
|
60
|
|
|
719
|
|
|
||||
Total revenue
|
1,036
|
|
(a)
|
2,513
|
|
|
179
|
|
|
3,728
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
||||
Noninterest expense
|
865
|
|
|
1,868
|
|
|
213
|
|
|
2,946
|
|
|
||||
Income (loss) before taxes
|
$
|
171
|
|
(a)
|
$
|
645
|
|
|
$
|
(22
|
)
|
|
$
|
794
|
|
(a)
|
Pre-tax operating margin
(b)
|
16
|
%
|
|
26
|
%
|
|
N/M
|
|
|
21
|
%
|
|
||||
Average assets
|
$
|
37,750
|
|
|
$
|
264,221
|
|
|
$
|
67,241
|
|
|
$
|
369,212
|
|
|
(a)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$46 million
, net of noncontrolling interests of
$17 million
, for a net impact of
$29 million
. Income (loss) before taxes is net of noncontrolling interests of
$17 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
For the quarter ended March 31, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
900
|
|
(a)
|
$
|
1,887
|
|
|
$
|
112
|
|
|
$
|
2,899
|
|
(a)
|
Net interest revenue
|
70
|
|
|
590
|
|
|
68
|
|
|
728
|
|
|
||||
Total revenue
|
970
|
|
(a)
|
2,477
|
|
|
180
|
|
|
3,627
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|
||||
Noninterest expense
|
724
|
|
|
1,822
|
|
|
193
|
|
|
2,739
|
|
|
||||
Income before taxes
|
$
|
246
|
|
(a)
|
$
|
655
|
|
|
$
|
5
|
|
|
$
|
906
|
|
(a)
|
Pre-tax operating margin
(b)
|
25
|
%
|
|
26
|
%
|
|
N/M
|
|
|
25
|
%
|
|
||||
Average assets
|
$
|
39,463
|
|
|
$
|
258,470
|
|
|
$
|
57,059
|
|
|
$
|
354,992
|
|
|
(a)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$36 million
, net of noncontrolling interests of
$20 million
, for a net impact of
$16 million
. Income before taxes is net of noncontrolling interests of
$20 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
For the quarter ended June 30, 2013
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
(a)
|
$
|
912
|
|
(b)
|
$
|
1,970
|
|
|
$
|
347
|
|
|
$
|
3,229
|
|
(b)
|
Net interest revenue
|
63
|
|
|
633
|
|
|
61
|
|
|
757
|
|
|
||||
Total revenue
(a)
|
975
|
|
(b)
|
2,603
|
|
|
408
|
|
|
3,986
|
|
(b)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|
||||
Noninterest expense
|
704
|
|
|
1,879
|
|
|
239
|
|
|
2,822
|
|
|
||||
Income before taxes
(a)
|
$
|
271
|
|
(b)
|
$
|
724
|
|
|
$
|
188
|
|
|
$
|
1,183
|
|
(b)
|
Pre-tax operating margin
(a)(c)
|
28
|
%
|
|
28
|
%
|
|
N/M
|
|
|
30
|
%
|
|
||||
Average assets
|
$
|
37,953
|
|
|
$
|
244,802
|
|
|
$
|
54,700
|
|
|
$
|
337,455
|
|
|
(a)
|
Consolidated results and Other segment results have been restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$65 million
, net of noncontrolling interests of
$39 million
, for a net impact of
$26 million
. Income before taxes is net of noncontrolling interests of
$39 million
.
|
(c)
|
Income before taxes divided by total revenue.
|
For the six months ended June 30, 2014
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
|
$
|
1,870
|
|
(a)
|
$
|
3,807
|
|
|
$
|
231
|
|
|
$
|
5,908
|
|
(a)
|
Net interest revenue
|
136
|
|
|
1,183
|
|
|
128
|
|
|
1,447
|
|
|
||||
Total revenue
|
2,006
|
|
(a)
|
4,990
|
|
|
359
|
|
|
7,355
|
|
(a)
|
||||
Provision for credit losses
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|
||||
Noninterest expense
|
1,589
|
|
|
3,690
|
|
|
406
|
|
|
5,685
|
|
|
||||
Income (loss) before taxes
|
$
|
417
|
|
(a)
|
$
|
1,300
|
|
|
$
|
(17
|
)
|
|
$
|
1,700
|
|
(a)
|
Pre-tax operating margin
(b)
|
21
|
%
|
|
26
|
%
|
|
N/M
|
|
|
23
|
%
|
|
||||
Average assets
|
$
|
38,602
|
|
|
$
|
261,362
|
|
|
$
|
62,176
|
|
|
$
|
362,140
|
|
|
(a)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$82 million
, net of noncontrolling interests of
$37 million
, for a net impact of
$45 million
. Income (loss) before taxes is net of noncontrolling interests of
$37 million
.
|
(b)
|
Income before taxes divided by total revenue.
|
For the six months ended June 30, 2013
(dollar amounts in millions)
|
Investment
Management
|
|
|
Investment
Services
|
|
|
Other
|
|
|
Consolidated
|
|
|
||||
Fee and other revenue
(a)
|
$
|
1,793
|
|
(b)
|
$
|
3,831
|
|
|
$
|
499
|
|
|
$
|
6,123
|
|
(b)
|
Net interest revenue
|
125
|
|
|
1,286
|
|
|
65
|
|
|
1,476
|
|
|
||||
Total revenue
(a)
|
1,918
|
|
(b)
|
5,117
|
|
|
564
|
|
|
7,599
|
|
(b)
|
||||
Provision for credit losses
|
—
|
|
|
1
|
|
|
(44
|
)
|
|
(43
|
)
|
|
||||
Noninterest expense
|
1,441
|
|
|
3,722
|
|
|
487
|
|
|
5,650
|
|
|
||||
Income before taxes
(a)
|
$
|
477
|
|
(b)
|
$
|
1,394
|
|
|
$
|
121
|
|
|
$
|
1,992
|
|
(b)
|
Pre-tax operating margin
(a) (c)
|
25
|
%
|
|
27
|
%
|
|
N/M
|
|
|
26
|
%
|
|
||||
Average assets
|
$
|
38,346
|
|
|
$
|
242,507
|
|
|
$
|
54,716
|
|
|
$
|
335,569
|
|
|
(a)
|
Consolidated results and Other segment results have been restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
Both total fee and other revenue and total revenue include income from consolidated investment management funds of
$115 million
, net of noncontrolling interests of
$55 million
, for a net impact of
$60 million
. Income before taxes is net of noncontrolling interests of
$55 million
.
|
(c)
|
Income before taxes divided by total revenue.
|
Notes to Consolidated Financial Statements
(continued)
|
|
Noncash investing and financing transactions
|
Six months ended June 30,
|
|||||
(in millions)
|
2014
|
|
2013
|
|
||
Transfers from loans to other assets for other real estate owned (“OREO”)
|
$
|
2
|
|
$
|
2
|
|
Change in assets of consolidated VIEs
|
844
|
|
10
|
|
||
Change in liabilities of consolidated VIEs
|
1,002
|
|
39
|
|
||
Change in noncontrolling interests of consolidated VIEs
|
126
|
|
27
|
|
Item 4. Controls and Procedures
|
|
Forward-looking Statements
|
|
Forward-looking Statements
(continued)
|
|
Part II - Other Information
|
|
(c)
|
The following table discloses repurchases of our common stock made in the
second quarter of 2014
. All of the Company’s preferred stock outstanding has preference over the Company’s common stock with respect to the payment of dividends.
|
(a)
|
Includes
72 thousand
shares repurchased at a purchase price of
$2 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
$33.61
.
|
(b)
|
Represents the maximum value of the shares authorized to be repurchased through the first quarter of 2015, including employee benefit plan repurchases, in connection with the Federal Reserve’s non-objection to our 2014 capital plan.
|
|
THE BANK OF NEW YORK MELLON CORPORATION
|
|
(Registrant)
|
|
|
|
|
Date: August 11, 2014
|
By:
|
|
/s/ John A. Park
|
|
|
|
John A. Park
|
|
|
|
Corporate Controller
|
|
|
|
(Duly Authorized Officer and
|
|
|
|
Principal Accounting Officer of
|
|
|
|
the Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
Index to Exhibits
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
2.1
|
|
Amended and Restated Agreement and Plan of Merger, dated as of Dec. 3, 2006, as amended and restated as of Feb. 23, 2007, and as further amended and restated as of March 30, 2007, between The Bank of New York Company, Inc., Mellon Financial Corporation and The Bank of New York Mellon Corporation (the “Company”).
|
|
Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File Nos. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference.
|
2.2
|
|
Stock Purchase Agreement, dated as of Feb. 1, 2010, by and between The PNC Financial Services Group, Inc. and The Bank of New York Mellon Corporation.
|
|
Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on Feb. 3, 2010, and incorporated herein by reference.
|
3.1
|
|
Restated Certificate of Incorporation of The Bank of New York Mellon Corporation.
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File Nos. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference.
|
3.2
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series A Noncumulative Preferred Stock dated June 15, 2007.
|
|
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
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series C Noncumulative Perpetual Preferred Stock dated Sept. 13, 2012.
|
|
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
|
|
Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series D Noncumulative Perpetual Preferred Stock, dated May 16, 2013.
|
|
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
|
|
Amended and Restated By-Laws of The Bank of New York Mellon Corporation, as amended and restated on Oct. 8, 2013.
|
|
Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Oct. 8, 2013, and incorporated herein by reference.
|
4.1
|
|
None of the instruments defining the rights of holders of long-term debt of the Parent or any of its subsidiaries represented long-term debt in excess of 10% of the total assets of the Company as of June 30, 2014. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument.
|
|
N/A
|
Index to Exhibits
(continued)
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
10.1
|
|
Purchase and Sale Agreement by and between The Bank of New York Mellon and MIP One Wall Street Acquisition LLC, dated May 20, 2014.
|
|
Previously Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on May 27, 2014.
|
10.2
|
|
Lease agreement by and between The Bank of New York Mellon and WFP Tower Co. L.P., dated June 25, 2014.
|
|
Filed herewith.
|
10.3
|
*
|
Form of Restricted Stock Unit Agreement.
|
|
Filed herewith.
|
10.4
|
*
|
Form of Performance Share Unit Agreement.
|
|
Filed herewith.
|
12.1
|
|
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
Filed herewith.
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
101.INS
|
|
XBRL Instance Document.
|
|
Filed herewith.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
Filed herewith.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
Filed herewith.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
Filed herewith.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
Filed herewith.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Filed herewith.
|
* Management contract or compensatory plan, contract or arrangement.
|
Article 1
|
Terms and Definitions
|
1
|
|
|
|
|
|
Article 2
|
Premises; Term
|
12
|
|
|
|
|
|
Article 3
|
Rent
|
17
|
|
|
|
|
|
Article 4
|
Operating Expenses; Pilot
|
21
|
|
|
|
|
|
Article 5
|
Electricity
|
38
|
|
|
|
|
|
Article 6
|
Use of Premises
|
43
|
|
|
|
|
|
Article 7
|
Work Allowance
|
48
|
|
|
|
|
|
Article 8
|
Subordination and Consent of Superior Parties
|
51
|
|
|
|
|
|
Article 9
|
Quiet Enjoyment
|
53
|
|
|
|
|
|
Article 10
|
Assignment, Subletting and Mortgages
|
54
|
|
|
|
|
|
Article 11
|
Compliance with Laws
|
72
|
|
|
|
|
|
Article 12
|
Insurance
|
76
|
|
|
|
|
|
Article 13
|
Rules and Regulations
|
80
|
|
|
|
|
|
Article 14
|
Alterations; Discharge of Liens
|
80
|
|
|
|
|
|
Article 15
|
Landlord’s and Tenant’s Property
|
90
|
|
|
|
|
|
Article 16
|
Repairs and Maintenance
|
92
|
|
|
|
|
|
Article 17
|
Services; Signage and Access
|
94
|
|
|
|
|
|
Article 18
|
Brokers
|
109
|
|
|
|
|
|
Article 19
|
Right to Perform Tenant’s Covenants
|
109
|
|
|
|
|
|
Article 20
|
Events of Default; Remedies
|
110
|
|
|
|
|
|
Article 21
|
Expedited Arbitration
|
117
|
|
|
|
|
|
Article 22
|
Casualty
|
118
|
|
|
|
|
|
Article 23
|
Condemnation
|
123
|
|
|
|
|
|
Article 24
|
Representations by Landlord
|
124
|
|
|
|
|
|
Article 25
|
Limitation on Liability; Consequential Damages
|
125
|
|
|
|
|
|
Article 26
|
Indemnification
|
126
|
|
|
|
|
|
Article 27
|
OFAC Provisions
|
129
|
|
|
|
|
|
Article 28
|
Surrender of Premises and Holdover
|
130
|
|
|
|
|
|
Article 29
|
Intentionally Omitted
|
133
|
|
|
|
|
|
Article 30
|
Integration; Conflict with Exhibits
|
133
|
|
|
|
|
|
i
|
|
Article 31
|
Notices
|
133
|
|
|
|
|
|
Article 32
|
Miscellaneous
|
135
|
|
|
|
|
|
Article 33
|
Renewal Options
|
143
|
|
|
|
|
|
Article 34
|
Offer Space Option
|
152
|
|
|
|
|
|
Article 35
|
Intentionally Omitted
|
158
|
|
|
|
|
|
Article 36
|
Initial Expansion Option
|
158
|
|
|
|
|
|
Article 37
|
First Expansion Option
|
160
|
|
|
|
|
|
Article 38
|
Second Expansion Option
|
165
|
|
|
|
|
|
Article 39
|
Intentionally Omitted
|
169
|
|
|
|
|
|
Article 40
|
Initial Contraction Option
|
169
|
|
|
|
|
|
Article 41
|
First Contraction Option
|
171
|
|
|
|
|
|
Article 42
|
Second Contraction Option
|
173
|
|
|
|
|
|
Article 43
|
Parking
|
175
|
|
|
|
|
|
Article 44
|
Signage
|
176
|
|
|
|
|
|
Article 45
|
Lobby Desks
|
177
|
|
|
|
|
|
Article 46
|
Roof Rights
|
179
|
|
|
|
|
|
Article 47
|
Emergency Generator
|
181
|
|
|
|
|
|
ii
|
|
EXHIBITS
|
|
A
|
Description of Land
|
B
|
Floor Plan of the Above-Grade Premises
|
C
|
Rules and Regulations
|
D
|
Alterations Rules and Regulations
|
E
|
HVAC Specifications
|
F
|
Standard Cleaning Specifications
|
G
|
Floor Plan of the Basement Premises
|
H
|
Landlord’s Work
|
I
|
Form of Commencement Date Agreement
|
J
|
Form of Lender Nondisturbance Agreement
|
K
|
Form of Ground Lessor Nondisturbance Agreement
|
L
|
Rentable Square Feet and Usable Square Feet of the Premises
|
M
|
Form of Memorandum of Lease
|
N
|
List of Pre-Approved Contractors
|
O
|
Form of Subtenant Recognition Agreement
|
P
|
Passenger Elevator Specifications
|
Q
|
Superior Offer Space Rights
|
R
|
Chilled Water Specifications
|
S
|
Approved Local Unions
|
T-1
|
South End Signs
|
T-2
|
South End Desk Sign
|
T-3
|
Winter Garden Desk Sign
|
T-4
|
Lobby Elevator Bank Sign
|
U
|
Form of Operating Statement
|
V-1
|
South End Concierge Location
|
V-2
|
Winter Garden Concierge Location
|
W
|
Lockbox Account Instructions
|
X
|
Form of Sublease Consent
|
Y
|
Tax Comparison Buildings
|
Z
|
Certificate of Occupancy
|
AA
|
Bicycle Rack
|
BB
|
Confidentiality Agreement
|
CC
|
Termination of 800 AMP Feeder
|
CC-1
|
Location of E-DSWB-10A and E-DSWB-10B Switches and Emergency Distribution Switchboards
|
CC-2
|
Location of SWBD-8B Switch
|
DD
|
Location of Telecommunication Risers
|
EE
|
Example of First Contraction Payment Calculation
|
FF
|
Location of Security Risers
|
GG
|
250 Vesey Corridor Specifications
|
|
iii
|
|
23rd Floor Premises
|
1.01
|
250 Vesey Corridor
|
1.01
|
40% Casualty
|
22.03
|
A Owner
|
1.01
|
AAA
|
4.05(e)(ii)
|
Above-Grade Premises
|
1.01
|
Acceptance Notice
|
34.01(c)
|
Accepted Offer Space
|
34.01(c)
|
ADA
|
11.01(b)
|
Additional Collateral
|
10.01(a)
|
Additional Electric Capacity
|
5.04(b)
|
Additional Electric Capacity Systems
|
5.04(b)
|
Additional Rent
|
3.02
|
Additional Specialty Alterations
|
14.07(b)
|
Affiliate
|
1.01
|
After-Hours
|
17.01(a)(ii)
|
AHU’s
|
17.01(a)(iii)
|
Alterations
|
14.01(a)
|
Amex
|
1.01
|
Amex Bank
|
1.01
|
Annual Reserve Tonnage Charge
|
17.01(a)(iii)
|
Antenna
|
46.01(a)
|
Anticipated Commencement Date
|
2.04(d)
|
Anticipated FES Delivery Date
|
37.01(d)
|
Anticipated Inclusion Date
|
34.01(b)
|
Anticipated SES Delivery Date
|
38.01(d)
|
Anticipated Substantial Completion Date
|
2.04(c)
|
Applicable Percentage
|
28.02(a)(ii)
|
Approved Contractors List
|
14.01(g)
|
Arbiter
|
4.05(e)(ii)
|
Assessed Valuation
|
1.01
|
Assignment Profit
|
10.12(a)(i)
|
Audit Notice
|
4.05(e)(i)
|
Available
|
34.01(a)(i)
|
Available Electric Capacity
|
5.04(c)
|
B Owner
|
1.01
|
Bankruptcy Code
|
1.01
|
Base Electric Capacity
|
5.04(a)
|
Base Lease Year
|
1.01
|
Base Lease Year Statement
|
4.05(b)
|
Base Operating Amount
|
1.01
|
Base PILOT Amount
|
1.01
|
Base PILOT Reconciliation Notice
|
4.06(g)
|
|
iv
|
|
Base Rent
|
3.01(a)
|
Baseball Arbitrators
|
33.06(c)(i)
|
Basement Premises
|
1.01, 1.01
|
BB Water Capacity
|
17.01(a)(iii)
|
Benefits
|
32.11(a)
|
BFP
|
1.01
|
BID Charges
|
1.01
|
BNYM Tenant
|
14.01(d)
|
BOA
|
47.02(d)
|
BPCA
|
1.01
|
Brokers
|
18.01
|
Building
|
Preamble
|
Building Appurtenant Space
|
17.06
|
Building Systems
|
1.01
|
Business Days
|
17.01(a)(i)
|
Business Hours
|
17.01(a)(i)
|
Casualty
|
22.01
|
Casualty Restoration Period
|
22.03
|
Central Plant
|
1.01
|
Commencement Date
|
2.04
|
Commencement Date Agreement
|
2.04(e)
|
Commencement Date Notice
|
2.04(d)
|
Communications
|
31.01(a)
|
Conceptual Alterations
|
14.01(a)
|
Concessions Package
|
33.01(a)
|
Concierge
|
45.02
|
Concierge Option
|
45.01
|
Condemnation
|
23.01
|
Consumer Price Index
|
1.01
|
Contractor
|
11.03(b)
|
Corridor Construction Costs
|
14.10(c)
|
Corridor Work
|
1.01
|
Corridor Work Outside Date
|
14.10(a)
|
CPI
|
1.01
|
CPI Denominator
|
1.01
|
Curing Party
|
19.01
|
D Owner
|
1.01
|
Damage Notice Date
|
28.02(a)(ii)
|
Decorative Alterations
|
14.01(a)
|
Default Interest Charge
|
3.04(a)
|
Default Rate
|
3.04(a)
|
Deficiency
|
20.04 (e)
|
Depositary
|
12.06(b)
|
Dining Facility
|
6.01(ii)
|
Disconnect Switches
|
5.04(a)
|
DOB
|
14.01(e)
|
|
v
|
|
E-DSWB-10A and E-DSWB-10B Switches and Emergency Distribution Switchboards
|
47.01(b)
|
Electricity Audit Notice
|
5.01(d)
|
Electricity Billing Period
|
5.01(b)
|
Electricity Dispute Notice
|
5.01(d)
|
Elevator Lobby Signage
|
44.01
|
Embargoed Person
|
27.01(a)
|
Employment Benefit Commencement Date
|
32.11(h)(i)
|
Employment Benefit Period
|
32.11(h)(i)
|
Employment Credit
|
32.11(h)(i)
|
Estimate
|
33.04(a)
|
Estimate Notice
|
22.03
|
Estimates
|
33.04(a)
|
Estimator
|
22.03
|
Event of Default
|
20.01
|
Expiration Date
|
1.01
|
Extra Personnel
|
1.01
|
Failing Party
|
33.04(b)
|
Fair Market Rent
|
33.01(b)
|
FES Availability Notice
|
37.01(d)
|
FES Concessions Package
|
37.01(e)
|
FES Delivery Date
|
37.01(c)
|
FES Delivery Period
|
37.01(b)
|
FES Fair Market Rent
|
37.01(f)
|
FES Rescission Notice
|
37.05
|
Fifth PILOT Comparison Year
|
1.01
|
First Contraction Date
|
41.01
|
First Contraction Notice
|
41.02
|
First Contraction Option
|
41.01
|
First Contraction Outside Date
|
41.02
|
First Contraction Payment
|
41.02
|
First Contraction Space
|
41.01
|
First Contraction Transaction Costs
|
41.02
|
First Expansion Notice
|
37.02
|
First Expansion Option
|
37.02
|
First Expansion Space
|
37.01(a)
|
First PILOT Comparison Year
|
1.01
|
First Renewal Notice
|
33.02(b)
|
First Renewal Option
|
33.02(a)
|
First Renewal Outside Date
|
33.02(b)
|
First Renewal Premises
|
33.02(b)
|
First Renewal Term
|
33.02(a)
|
First Rent Abatement Period
|
3.01(c)
|
First Rent Credit Date
|
2.05(a)
|
First Rent Period
|
3.01(a)(i)
|
Five Year Renewal Option
|
33.02(a)
|
|
vi
|
|
Floor
|
1.01
|
FMR Negotiation Period
|
33.06(b)
|
Fourth Rent Period
|
3.01(a)(i)
|
Freight Elevator Business Hours
|
17.01(c)
|
GAAP
|
4.01(a)
|
Governmental Authority
|
1.01
|
Gross Sublease Loss
|
10.12(a)(ii)
|
Gross Sublease Profit
|
10.12(a)(ii)
|
Ground Lease
|
1.01
|
Ground Lessor
|
1.01
|
Ground Rents
|
1.01
|
Ground Tenant
|
1.01
|
Hazardous Materials
|
11.04(a)
|
High-Rise Floors
|
1.01
|
Holidays
|
17.01(a)(i)
|
HVAC
|
17.01(a)
|
Indemnified Parties
|
26.01
|
Indemnified Party
|
26.01
|
Initial Contraction Notice
|
40.01
|
Initial Contraction Option
|
40.01
|
Initial Expansion Notice
|
36.01(a)
|
Initial Expansion Option
|
36.01(a)
|
Initial Expansion Space
|
36.01(a)
|
Initial Expansion Space Commencement Date
|
36.01(b)
|
Initial Premises
|
1.01, 1.01
|
Initial Tenant Work
|
7.01(b)
|
Initial Term
|
1.01
|
Insurance Requirements
|
1.01
|
Land
|
Preamble
|
Landlord
|
Introduction
|
Landlord Delay
|
1.01
|
Landlord Service Option
|
45.05
|
Landlord’s Average Cost Per Kilowatt Hour
|
1.01
|
Landlord’s Base Cleaning
|
17.01(d)
|
Landlord’s Benefits Cooperation
|
32.11(a)
|
Landlord’s Designated Specialty Alterations Notice
|
14.07(b)
|
Landlord’s Expansion Work
|
1.01
|
Landlord’s Notice
|
33.06(a)
|
Landlord’s PILOT Reconciliation Notice
|
4.06(b)
|
Landlord’s PILOT Refund Notice
|
4.06(f)
|
Landlord’s Restoration Work
|
22.01
|
Landlord’s Saving Calculation
|
4.01(a)(xiv)
|
Landlord’s Specialty Alterations Restoration Work
|
28.01(b)
|
Landlord’s Tax Consultant
|
4.06(h)
|
Landlord’s Work
|
1.01
|
Late Delivery Termination Date
|
2.05(b)
|
|
vii
|
|
Late Delivery Termination Notice
|
2.05(b)
|
Lease
|
Introduction
|
Lease Year
|
1.01
|
Leasehold Improvements
|
1.01
|
LEED
|
14.08
|
Legal Requirements
|
11.01(b)
|
Lienable Contractors
|
7.01(a)(iii)
|
List
|
27.01(a)
|
Lobby Desk
|
45.01
|
Lobby Desks
|
45.01
|
Lobby Elevator Bank Sign
|
44.01
|
Lockbox Account Instructions
|
1.01
|
Material Alteration
|
14.01(a)
|
Mid-Rise Floors
|
1.01
|
Negotiation Period
|
33.04(c)
|
Net Worth Test
|
10.01(a)
|
New Tenant
|
28.02(a)(ii)
|
No Tax Contest Letter
|
4.06(h)
|
Non-Material Alterations
|
14.01(a)
|
Occupy
|
1.01
|
OFAC
|
27.01(a)
|
Offer Notice
|
34.01(b)
|
Offer Space
|
34.01(a)(ii)
|
Offer Space Concessions Package
|
34.01(a)(iii)
|
Offer Space Conditions
|
34.01(a)(i)
|
Offer Space Fair Market Rent
|
34.01(a)(iv)
|
Offer Space Inclusion Date
|
34.01(e)
|
Offer Space Option
|
34.01(c)
|
Offer Space Termination Notice
|
34.01(f)
|
OFI
|
47.02(d)
|
Operating Estimate
|
4.04
|
Operating Expenses
|
4.01(a)
|
Operating Share Denominator
|
1.01
|
Operating Statement
|
4.05(a)
|
PASNY
|
1.01
|
PASNY Contract
|
1.01
|
Payment Date
|
3.01(a)
|
Permitted Transfer
|
1.01
|
Permitted Users
|
1.01
|
Person
|
1.01
|
PILOT
|
1.01
|
PILOT Charges
|
1.01
|
PILOT Share Denominator
|
1.01
|
PILOT Statement
|
4.06(b)
|
PILOT Year
|
1.01
|
Port Authority Easement Agreement
|
1.01
|
|
viii
|
|
Pre-Approved Contractor
|
14.01(g)
|
Pre-Exercise Estimate Option
|
33.04(a)
|
Pre-Exercise Estimate Request
|
33.04(a)
|
Pre-Existing Hazardous Materials
|
4.01(b)(36)
|
Premises
|
1.01
|
Primary Block
|
33.01(c)
|
Primary Office Use
|
6.01
|
Prime Rate
|
1.01
|
Prohibited Person
|
27.01(b)
|
Prohibited Uses
|
6.02(a)
|
Project
|
1.01
|
Project Operating Agreement
|
1.01
|
Project Operating Charges
|
1.01
|
Property Manager
|
1.01
|
Punch List Items
|
2.04(b)
|
Real Property
|
Preamble
|
Recapture Sublease
|
10.08(f)
|
Recognition Agreement
|
10.2
|
Records
|
32
|
Register’s Office
|
1.01
|
REIT
|
32.1
|
Renewal Notice
|
33.03(b)
|
Renewal Option
|
33.03(a)
|
Renewal Options
|
33.03(a)
|
Renewal Portion
|
33.01(c)
|
Renewal Premises
|
33.03(b)
|
Renewal Term
|
33.03(a)
|
Rent
|
3.03
|
Rent Commencement Date
|
1.01
|
Rentable Square Feet of the Premises
|
1.01
|
Rescheduled Estimate Date
|
33.04(b)
|
Reserved Chilled Water Capacity
|
17.01(a)(iii)
|
Restoration Funds
|
22.06(b)(i)
|
Restroom Renovations
|
14.09
|
retail
|
6.02(a)
|
Rules and Regulations
|
13.01
|
Second Contraction Date
|
42.01
|
Second Contraction Notice
|
42.02
|
Second Contraction Option
|
42.01
|
Second Contraction Outside Date
|
42.02
|
Second Contraction Payment
|
42.02
|
Second Contraction Space
|
42.01
|
Second Contraction Transaction Costs
|
42.02
|
Second Expansion Notice
|
38.02
|
Second Expansion Option
|
38.02
|
Second Expansion Space
|
38.01(a)
|
|
ix
|
|
Second Renewal Notice
|
33.03(b)
|
Second Renewal Option
|
33.03(a)
|
Second Renewal Outside Date
|
33.03(b)
|
Second Renewal Premises
|
33.03(b)
|
Second Renewal Term
|
33.03(a)
|
Second Rent Abatement Period
|
3.01(d)
|
Second Rent Credit Date
|
2.05(a)
|
Second Rent Period
|
3.01(a)(i)
|
Secured Areas
|
17.09
|
Service Provider
|
32.10
|
Service Providers
|
10.01(c)
|
SES Availability Notice
|
38.01(d)
|
SES Concessions Package
|
38.01(e)
|
SES Delivery Date
|
38.01(c)
|
SES Delivery Period
|
38.01(b)
|
SES Fair Market Rent
|
38.01(f)
|
SES Rescission Notice
|
38.05
|
Shearson/Amex
|
1.01
|
Site Manager
|
1.01
|
SNDA
|
8.01(b)
|
South End Desk Sign
|
44.01
|
South End Lobby Desk
|
45.01
|
South End Signs
|
44.01
|
Specialty Alterations
|
14.07(a)
|
Specialty Alterations Amendment
|
14.07(c)
|
Specified Restoration Work
|
22.01
|
Specified Termination Date
|
2.05(b)
|
Stacking Plan
|
34.01(j)
|
Subject to CPI Adjustment
|
1.01
|
Sublease Costs
|
10.12(a)(ii)
|
Substantial Completion Acceptance Notice
|
2.04(c)
|
Substantial Completion Notice
|
2.04(c)
|
Substantially Completed
|
2.04(b)
|
Substantially Completes
|
2.04(b)
|
Subtenant
|
10.03
|
Successor Entity
|
10.01(b)
|
Successor Landlord
|
8.01(a)
|
Superior Instrument
|
8.01(f)
|
Superior Interest
|
8.01(f)
|
Superior Lease
|
8.01(a)
|
Superior Lessor
|
8.01(a)
|
Superior Loads
|
47.02(d)
|
Superior Mortgage
|
8.01(a)
|
Superior Mortgagee
|
8.01(a)
|
Superior Party
|
8.01(f)
|
Supplemental Units
|
17.01(a)(iii)
|
|
x
|
|
SWBD-8B Switch
|
5.04(b)
|
Tax Comparison Buildings
|
1.01
|
Tax Contest
|
4.06(h)
|
Ten Year Renewal Option
|
33.02(a)
|
Tenant
|
Introduction
|
Tenant Change
|
22.01
|
Tenant Delay
|
1.01
|
Tenant Entities
|
26.04
|
Tenant Generator Equipment
|
47.02(a)
|
Tenant Signage
|
44.01
|
Tenant’s Auditor
|
4.05(e)(i)
|
Tenant’s Broker
|
18.01
|
Tenant’s Cleaning Contractors
|
17.01(e)(iii)
|
Tenant’s Commencement Date Dispute Notice
|
2.04(d)
|
Tenant’s Concierge Conditions
|
45.03
|
Tenant’s Direct Electric Service Option
|
5.08
|
Tenant’s Electricity Bill
|
5.01(b)
|
Tenant’s Electricity Costs
|
1.01
|
Tenant’s Electricity Payment
|
5.01(b)
|
Tenant’s Main Data Communications Room
|
17.01(e)(iii)
|
Tenant’s Meters
|
5.08
|
Tenant’s Notice
|
33.06(a)
|
Tenant’s Offer Notice
|
10.08
|
Tenant’s Operating Payment
|
4.03
|
Tenant’s Operating Share
|
1.01
|
Tenant’s Parking Spaces
|
43.01
|
Tenant’s PILOT Payment
|
4.06(a)
|
Tenant’s PILOT Share
|
1.01
|
Tenant’s Preparation Work
|
2.04(f)
|
Tenant’s Property
|
15.02
|
Tenant’s Property Removal Obligation
|
28.01(b)
|
Tenant’s Regulators and Auditors
|
10.02(c)
|
Tenant’s Restoration Notice
|
28.01(b)
|
Tenant’s Restoration Work
|
22.01
|
Tenant’s Second Alterations Request
|
14.01(b)
|
Tenant’s Signage Conditions
|
44.01
|
Tenant’s Specialty Alterations Request Notice
|
14.07(b)
|
Tenant’s Statement
|
4.05(e)(ii)
|
Tenant’s Sublease Profit
|
10.12(a)(ii)
|
Tenant’s Submeters
|
1.01
|
Tenant’s Substantial Completion Dispute Notice
|
2.04(c)
|
Term
|
2.02
|
Third Rent Abatement Period
|
3.01(d)
|
Third Rent Credit Date
|
2.05(a)
|
Third Rent Period
|
3.01(a)(i)
|
Time
|
47.02(d)
|
|
xi
|
|
Total Rent
|
10.20(c)
|
Tower C Co.
|
1.01
|
Transfer Notice
|
10.09(a)
|
TRSCO
|
1.01
|
Unavoidable Delays
|
1.01
|
Untenantable
|
17.03(b)
|
Vertical Wiring
|
28.01(b)
|
Winter Garden Desk Sign
|
44.01
|
Winter Garden Lobby Desk
|
45.01
|
Work Allowance
|
7.01(a)
|
Zoning Resolution
|
1.01
|
|
xii
|
|
(A)
|
from the Rent Commencement Date to and including the last day of the month in which the day immediately preceding the 5th anniversary of the Rent Commencement Date occurs (the “
First Rent Period
”), at the rate of $18,716,778.00 per annum, payable in 12 equal monthly installments of $1,559,731.50;
|
(B)
|
from the day following the First Rent Period to and including the last day of the month in which the day immediately preceding the 10th anniversary of the Rent Commencement Date occurs (the “
Second Rent Period
”), at the rate of $20,449,813.00 per annum, payable in 12 equal monthly installments of $1,704,151.08;
|
(C)
|
from the day following the Second Rent Period to and including the last day of the month in which the day immediately preceding the 15th anniversary of the Rent Commencement Date occurs (the “
Third Rent Period
”), at the rate of $22,182,848.00 per annum, payable in 12 equal monthly installments of $1,848,570.67; and
|
(D)
|
from the day following the Third Rent Period to and including the Expiration Date (the “
Fourth Rent Period
)”, at the rate of $23,915,883.00 per annum, payable in 12 equal monthly installments of $1,992,990.25.
|
(A)
|
for the First Rent Period, at the rate of $5,600.00 per annum, payable in 12 equal monthly installments of $466.67;
|
(B)
|
for the Second Rent Period, at the rate of $6,400.00 per annum, payable in 12 equal monthly installments of $533.33;
|
(C)
|
for the Third Rent Period, at the rate of $7,200.00 per annum, payable in 12 equal monthly installments of $600.00; and
|
(D)
|
for the Fourth Rent Period, at the rate of $8,000.00 per annum, payable in 12 equal monthly installments of $666.67.
|
(i)
|
If to Landlord:
WFP Tower B Co. L.P. c/o Brookfield Financial Properties, L.P. 250 Vesey Street, 15th Floor New York, New York 10281-1023 Attention: Senior Vice President - Director of Leasing |
(ii)
|
If to Tenant:
The Bank of New York Mellon c/o Jones Lang LaSalle Americas, Inc. 525 William Penn Place, 20 th Floor Pittsburgh, Pennsylvania 15259 Attention: Leasing Administration |
(A)
|
for the First Rent Period, $1,739,610.00 per annum ($144,967.50 per month);
|
(B)
|
for the Second Rent Period, $1,900,685.00 per annum ($158,390.42 per month);
|
(C)
|
for the Third Rent Period, $2,061,760.00 per annum ($171,813.33 per month); and
|
(D)
|
for the Fourth Rent Period, $2,222,835.00 per annum ($185,236.25 per month).
|
(i)
|
for the First Rent Period, $1,185,246.00 per annum ($98,770.50 per month);
|
(ii)
|
for the Second Rent Period, $1,294,991.00 per annum ($107,915.92 per month);
|
(iii)
|
for the Third Rent Period, $1,404,736.00 per annum ($117,061.33 per month); and
|
(iii)
|
for the Fourth Rent Period, $1,514,481.00 per annum ($126,206.75 per month).
|
By:
|
WFP Tower B Co. G.P. LLC, its general partner
|
By:
|
/s/ Jeremiah B. Larkin
-------------------------------------------------- Name: Jeremiah B. Larkin Title: Executive Vice President Director of Leasing |
By
|
/s/ Carol Britton
-------------------------------------------------- Name: Carol Britton Title: Managing Director |
|
A - 1
|
|
|
A - 2
|
|
|
A - 3
|
|
|
A - 4
|
|
|
A - 5
|
|
|
A - 6
|
|
|
A - 7
|
|
|
A - 8
|
|
|
A - 9
|
|
|
A - 10
|
|
|
A - 11
|
|
|
A - 12
|
|
|
A - 13
|
|
|
A - 14
|
|
|
A - 15
|
|
|
A - 16
|
|
|
A - 17
|
|
|
A - 18
|
|
|
A - 19
|
|
|
A - 20
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
B - 1
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
B - 2
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
B - 3
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
B - 4
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
B - 5
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
B - 6
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
B - 7
|
|
|
C - 1
|
|
|
C - 2
|
|
|
C - 3
|
|
|
C - 4
|
|
|
C - 5
|
|
A.
|
General
|
1.
|
Tenant will make no Alterations in, to or about the Premises except in compliance with all of the applicable provisions of the Lease including, without limitation,
Article 14
of the Lease.
|
2.
|
Prior to the commencement of any Alterations, Tenant is responsible for obtaining, from the Building manager, a base Building pre-demolition/preconstruction status report noting the condition of the Premises, which shall include the condition of the windows, glass and any energy saving film on the windows.
|
3.
|
Prior to the commencement of any Alterations, Tenant shall submit for Landlord’s written approval all required items described in Paragraphs 1, 2 and 3 of
Section B
hereof.
|
4.
|
Tenant shall insure that the proposed Alterations comply with The Administrative Code of The City of New York and all other laws, ordinances, rules and regulations promulgated by all governmental agencies and bodies having jurisdiction over such Alterations, including, without limitation, the Americans With Disabilities Act.
|
5.
|
Tenant shall ensure that all proposed Alterations comply with the Building standards listed in
Section C
hereof, and are adequately designed to serve Tenant’s needs while remaining in full conformity with, and not adversely affecting, any Building Systems.
|
6.
|
All (i) demolition or removal of construction materials, or (ii) moving of construction materials to or from the Building, or (iii) other categories of work which may, during Business Hours, disturb or interfere with other tenants of the Building or disturb or interfere with Building operations, must be scheduled and performed before or after Business Hours. Tenant shall provide the Building manager with written notice at least 24 hours prior to scheduling any Alteration, and shall pay Landlord’s standard charges for overtime porters, security, engineers and other costs incurred by Landlord in connection with such after-hours scheduling.
|
7.
|
All inquiries, Tenant plans, requests for approvals, and all other matters shall be processed through the Building manager.
|
8.
|
The fees charged by Landlord’s consultants for which Tenant is obligated to reimburse Landlord shall be reasonable and competitive with the fees charged by comparable consultants for similar work in The Borough of Manhattan, New York City.
|
|
D - 1
|
|
B.
|
Tenant Submittals
|
1.
|
Tenant shall submit, to Landlord, the following information for Landlord’s review and approval prior to commencement of any Alterations. Landlord’s review and approval period will not commence until the Building manager is in receipt of the following items, as one complete package, and Tenant shall pay Landlord’s consultant, referred to in
Section C1
below, directly or reimburse Landlord (at Landlord’s option) for the expenses referred to in
Section C1
below after demand.
|
b.
|
2 sets of design drawings and specifications noting full scope of work involved in performing such Alterations. All drawings must be signed and sealed by Tenant’s registered architect or professional engineer licensed to conduct business in the State of New York. Partial plan drawings will not be acceptable.
|
2.
|
Upon completion of Landlord’s review, the following will be returned to Tenant:
|
a.
|
A letter (i) granting approval to file drawings; or (ii) granting conditional approval, subject to Tenant incorporating Landlord’s comments and suggested revisions into a revised set of design drawings (no Alterations will commence or applications be filed until Landlord is in receipt of such revised set of drawings); or (iii) disapproving such Alterations; and
|
|
D - 2
|
|
3.
|
Prior to commencement of Alterations:
|
c.
|
A letter or revised drawings addressing Landlord’s comments, if any.
|
4.
|
Upon completion of Alterations:
|
g.
|
All
sign-off documents which pertain to work filed from all agencies having jurisdiction.
|
h.
|
As-built drawings.
|
i.
|
A properly executed air balancing report, signed by a professional engineer licensed to conduct business in the State of New York.
|
C.
|
Building Standard Requirements
|
2.
|
All demolition shall be supervised by Landlord’s representative at Tenant’s expense.
|
3.
|
Elevator service for construction work shall be charged to Tenant at standard Building rates. Prior arrangements for elevator use shall be made with the Building manager by Tenant. No material or equipment shall be carried under or on top of elevators. If workmen (including, without limitation, operating engineers and personnel carriers), are required by any union regulations for material or personnel hoisting, such workmen shall be paid for by Tenant.
|
|
D - 3
|
|
4.
|
If the shutdown of any mechanical or electrical risers is required and permitted by Landlord, such shutdown shall be performed by Landlord’s contractors at Tenant’s expense or, at Landlord’s option, supervised by Landlord’s representatives at Tenant’s expense.
|
5.
|
Tenant’s contractor shall:
|
b.
|
police the job at all times, continually keeping the Premises orderly (protection and maintenance will be Tenant’s responsibility);
|
c.
|
maintain cleanliness and protection of all areas, including elevators and lobbies;
|
d.
|
protect the front and top of all peripheral HVAC units and thoroughly clean them at the completion of work;
|
e.
|
block off supply and return grills, diffusers and ducts to keep dust from entering into the Building air conditioning system;
|
f.
|
protect all Class “E” fire alarm devices and wiring; and
|
g.
|
avoid the disturbance of other tenants.
|
6.
|
If any part of any Alteration is improperly performed, Tenant shall be charged for corrective work done by Landlord’s personnel or contractors engaged for such purpose by Landlord.
|
7.
|
All equipment and installations must be equal to the standards of the Building. Any deviation from Building standards will be permitted only if approved by Landlord in writing.
|
8.
|
Tenant shall pay Landlord for any amounts billed in connection with any Alteration within thirty (30) days after billing therefor.
|
9.
|
Landlord’s contract fire alarm service personnel shall be the only personnel permitted to purchase equipment from the fire alarm manufacturer related to the Class “E” System and make final connections to and program the Class “E” System.
|
10.
|
During such times that Alterations or demolition of the Premises require that fire protection afforded by the Class “E” System or sprinkler system be disabled, Tenant, at Tenant’s expense, shall maintain fire watch service deemed reasonably suitable by Landlord, and approved by any governmental authority having jurisdiction.
|
|
D - 4
|
|
11.
|
Landlord, at Tenant’s expense, shall repair or cause to have repaired, any and all defects, deficiencies or malfunctions of the Class “E” System caused by Alterations or related demolition. Such expense may include expenses of engineering, supervision and standby fire watch personnel that Landlord deems necessary to protect the Building during the time such defects, deficiencies and malfunctions are being corrected.
|
12.
|
Should Tenant desire to install its own internal fire alarm system, Tenant shall request Landlord to connect such system to the Class “E” System at Tenant’s expense in such reasonable manner as prescribed by Landlord. Tenant shall, at Tenant’s expense, have such internal fire alarm system approved by governmental agencies having jurisdiction, and shall submit to Landlord an approved copy of plans of such system before initiating any installation of such system. Tenant must demonstrate that such system is in working order prior to requesting tie-in.
|
13.
|
Tenant, at its expense, shall be responsible for the maintenance, proper operation and repair of all fire alarm sub-systems (i.e., pre-action sprinkler system) installed within the Premises.
|
14.
|
When Tenant’s use of any space requires a change permitted by Landlord in the Certificate of Occupancy, whether the Building has a final Certificate of Occupancy or temporary Certificate of Occupancy, or (as in the case of a new building with a temporary Certificate of Occupancy) involves the initial inclusion of the Premises on the Certificate of Occupancy, the Tenant must utilize the services of Landlord’s consultant. The Tenant shall be responsible for coordination with the consultant, and for all costs in connection with such consultant’s services.
|
15.
|
The Tenant will be responsible for keeping, on Premises, a copy of all required Building Department approved applications, drawings, permits, and sign-offs during and after completion of construction and shall deliver same to Landlord at the expiration of the Lease.
|
16.
|
Once an Alteration shall have been completed, Landlord shall not sign Building Department documents or permit work to commence on any new Alterations unless Landlord shall have received all required Building Department documents for the completed Alteration (or Tenant is making diligent efforts to obtain same), and all sign-off procedures with respect thereto have been completed (or Tenant is making diligent efforts to complete same).
|
17.
|
The attachment of any work to Building window mullions, HVAC enclosures, or window soffits, will not be permitted.
|
18.
|
Drywall partitions or installations abutting window mullions must allow for the operation of pivoting windows where applicable.
|
19.
|
Electrical wire mold will not be permitted without written approval from Landlord.
|
|
D - 5
|
|
20.
|
Chasing of structural slab or Building masonry walls will not be permitted unless special consent is given by Landlord.
|
21.
|
The attachment of drywall metal studs or track to mechanical, electrical, plumbing, sprinkler, or any Building Systems will not be permitted.
|
22.
|
All valves or equipment controlling Building Systems or Tenant systems must be tagged and identified.
|
23.
|
Access doors must be provided to all Building equipment and Tenant equipment.
|
24.
|
Tenant shall be responsible for alterations to any existing HVAC ductwork or system and shall ensure that such work is integrated so as not to adversely affect the Building system.
|
25.
|
All locking devices must be keyed and mastered to Building keying system. Two individual keys must be supplied to the Building manager for each such locking device.
|
26.
|
All hardware is to match Building standards.
|
27.
|
Tenant shall not install any outside louvers without Landlord’s prior written approval. Detailed sketches of all proposed louvers shall be submitted for Landlord’s approval.
|
28.
|
All unused wiring, conduit, equipment, materials, or previously installed work, no longer needed, must be removed.
|
29.
|
Any connections to Building Systems must be of the same materials as existing Building standards.
|
30.
|
No exposed piping of any kind will be permitted below a finished ceiling.
|
31.
|
Any signage, window dressing, or Tenant decor visible from outside the Tenant’s Premises must receive written approval from Landlord prior to installation.
|
32.
|
The modification of any elevator equipment must receive prior written approval from Landlord. All elevator devices must remain accessible for maintenance and must conform to Building standards.
|
33.
|
Tenant is not to mount any equipment in Building electrical closets, telephone closets, or mechanical equipment rooms without prior written approval from Landlord.
|
34.
|
Tenant is responsible to insure that all work is performed in a normal, acceptable, and safe manner
|
35.
|
BX is not to be used anywhere in the Building unless prior written approval is given by the Building manager, except that BX may be used within Tenant’s Premises.
|
|
D - 6
|
|
D.
|
Contractors Agreement; Insurance Requirements
|
2.
|
Contractor shall provide and maintain at its own expense, until completion of Work, the following insurance:
|
b.
|
Commercial General Liability Insurance Including Coverage for Completed Operations, Broad Form Property Damage “XCU” exclusion if any deleted, and Contractual Liability (to specifically include coverage for the indemnification clause of this Agreement) for not less than the following limits.
|
|
D - 7
|
|
Combined Single Limit Bodily Injury and Property Damage Liability:
|
$5,000,000 (written on a per occurrence basis)
|
c.
|
Commercial Automobile Liability Insurance (covering all owned, non- owned and/or hired motor vehicles to be used in connection with the Work) for not less than the following limits.
|
Bodily Injury:
|
$5,000,000 per person
|
|
$5,000,000 per occurrence
|
Property Damage:
|
$5,000,000 per occurrence
|
3.
|
Contractor shall require all of its subcontractors engaged in the Work to provide the following insurance:
|
b.
|
Commercial Automobile Liability Insurance (covering all owners, non- owned and/or hired motor vehicles to be used in connection with the Work) for not less than the following limits.
|
Bodily Injury:
|
$5,000,000 per person
|
|
$5,000,000 per occurrence
|
Property Damage:
|
$5,000,000 per occurrence
|
|
D - 8
|
|
|
|
Landlord:
|
Contractor:
|
|
|
|
|
|
D - 9
|
|
|
E - 1
|
|
|
F - 1
|
|
|
F - 2
|
|
|
F - 3
|
|
•
|
Washing non-carpeted flooring; spotting and shampooing carpeting.
|
•
|
The cleaning, maintaining and furnishing of lavatory supplies for private (non-core) lavatories.
|
•
|
Washing and re-lamping of all light fixtures.
|
•
|
Cleaning any interior glass other than windows, other than as expressly set forth above.
|
•
|
Exterminating in tenant’s premises (to be done by Landlord’s contractor).
|
•
|
Any cleaning and related rubbish removal for computer rooms, training rooms, copy centers/rooms, cafeterias, kitchens, pantries or any other areas used for the preparation, distribution, or consumption of food, other than as expressly set forth above.
|
|
F - 4
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
G - 1
|
|
1.
|
All existing leasehold improvements in the Premises (including any previous tenants’ vertical cabling and all wiring under the raised flooring and in the ceiling) shall be demolished in accordance with the architectural, electrical, fire protection and plumbing demolition plans dated April 4, 2014 and prepared by Fogarty Finger Architecture, as marked by Gensler as set forth on
Annex 1
as and to the extent agreed by Landlord as set forth on
Annex 2
(collectively, the “
Demolition Plans
”) except for the following:
|
2.
|
All secondary windows, store fronts or temperature and humidity control panels will be removed from the Premises;
|
3.
|
Landlord is to provide temporary sprinkler loop at 7’-6” above finished floor (sprinkler heads at height necessitated by code) to allow tenant ceiling construction and to protect the Premises during the Initial Tenant Work, as required by Legal Requirements for a demolished space; Landlord shall coordinate the location of the temporary sprinkler loop with Tenant prior to installation, provided, however, that such coordination neither delays Landlord’s Work nor causes Landlord to incur any additional cost or expense;
|
4.
|
Provide standpipe/sprinkler riser with sufficient pressure and fire capacity for tenant occupancy; Landlord shall provide outside stem, yoke valve drain down rig; Landlord to provide connections at standpipes system, inclusive of sprinkler loop, as well as water flow switch, and tamper switch wired back to the Building fire alarm systems;
|
5.
|
Water pressure for bathrooms and pantry will be available on each floor on which the Premises is located;
|
6.
|
Landlord will demolish the existing restrooms (other than the 22
nd
Floor restrooms) and leave the plumbing roughing;
|
|
H - 1
|
|
7.
|
Landlord is to provide a fully operational life safety system with smoke detectors, fire alarm speakers, fire extinguishers and cabinets in common areas, exit lights and emergency circuitry in full compliance with all Legal Requirements for demolished space and Base Building Design;
|
8.
|
Devices shall be provided on each floor on which Premises is located as required by all Legal Requirements, including, but not limited to, pull stations, warden stations, and detectors in lobbies and other core areas in accordance with Legal Requirements for demolished space; provide sufficient connection point/panel for Tenant’s strobes and other fire alarm devices;
|
9.
|
Where the Premises is located on a multitenant floor(s) of the Building, Landlord shall be responsible for providing all construction requirements pertaining to public areas such as elevator lobbies, corridors, restrooms and demising walls at Landlord’s sole expense, except as otherwise provided in
Section 14.09
and
Section 14.10
of the Lease with respect to the 23rd floor public areas;
|
10.
|
Landlord shall provide temporary heat during construction for freeze protection so long as Tenant maintains perimeter fan power boxes as turned over by Landlord in working order;
|
11.
|
All ductwork that is provided by Landlord that penetrates a fire rated wall shall have the code required dampers and be connected to the fire alarm system where appropriate;
|
12.
|
A data gathering panel (the “
DGP
”) shall be available on not less than every third floor on which the Premises is located based on required code in adequate addressable points for Tenant’s devices; the DGP shall have the ability to power and synchronize all strobes on the floor without Tenant installing a booster panel or synchronization module;
|
13.
|
Landlord to provide Tenant a three inch (3”) valve capped outlet on each floor of the Building supplemental HVAC riser for Tenant to connect any Tenant installed supplemental HVAC equipment and three inch (3”) valves on the 10
th
floor plant risers;
|
14.
|
Landlord shall strip the interconnecting convenience stairwell structure of all tenant finishes (and Landlord shall endeavor not to damage the existing fire doors, their enclosure and all components as located on each landing between floors 17 and 22 in connection with such work); all structural steel, floor pans and landings to remain;
|
15.
|
All shafts, pipe penetrations, core drills and other openings will be fireproofed as required by applicable Legal Requirements; all enclosed steel will be fireproofed as required by Legal Requirements applicable to demolished space;
|
16.
|
All of the drywall column enclosures and perimeter drywall covering the exterior façade will be patched, taped, spackled and sanded ready to accept primer;
|
17.
|
All core walls will be patched, taped, spackled and sanded ready to accept primer;
|
18.
|
Remove kitchen exhaust on 22
nd
Floor back to enclosed riser shaft and close duct and
|
|
H - 2
|
|
19.
|
On each Floor, Landlord shall either replace the air handling unit (AHU) on the Floor to provide an equivalent of 85 tons, or refurbish the existing AHU to like new condition; for refurbished AHUs, Landlord shall:
|
|
H - 3
|
|
|
Annex 1 - 1
|
|
1)
|
Landlord to remove existing perimeter soffit, shade pocket, shades and linear diffusers.
|
2)
|
Remove existing wall finishes to substrate at all core wall and leave exposed core.
|
3)
|
Fire door at stair landings to remain; Landlord to confirm proper functionality of door.
|
4)
|
Remove all interior column enclosures and lease exposed fireproofed steel
|
5)
|
Cage in existing communications risers
|
6)
|
Radiator covers in good working condition; damaged covers to be replaced or repaired by Landlord.
|
7)
|
Security/ID finishes to be removed.
|
8)
|
Mechanical/Electrical Room to remain,
|
9)
|
Existing Mechanical unit to remain.
|
10)
|
Confirmed shaft to remain.
|
11)
|
Existing toilet exhaust shaft to remain.
|
12)
|
North tenant communication risers to be removed. Remaining risers to walled up tight with doors for Landlord access.
|
13)
|
Existing tenant electrical closets to be removed.
|
14)
|
Not applicable.
|
15)
|
Risers penetrating the floor to be walled up tight with doors for Landlord access.
|
|
Annex 2 - 1
|
|
|
I - 1
|
|
|
I - 2
|
|
|
J - 1
|
|
|
J - 2
|
|
|
J - 3
|
|
|
J - 4
|
|
|
J - 5
|
|
|
J - 6
|
|
|
J - 7
|
|
|
J - 8
|
|
|
J - 9
|
|
|
J - 10
|
|
|
J - 11
|
|
1.
|
Mortgage made by Olympia & York Tower B Company to Bankers Trust Company, as collateral agent in the amount of $1,008,000.00 dated July 12, 1985 and recorded July 18, 1985 in Reel 938 page 237. (Mortgage Tax Paid: $22,680.00)
|
2.
|
Mortgage made by Olympia & York Tower B Company to Olympia & York World Financial Center Finance Corp. in the amount of $448,992,000.00 dated December 14, 1988 and recorded December 14, 1988 in Reel 1506 page 1706. (Mortgage Tax Paid: $10,102,320.00)
|
|
J - 12
|
|
3.
|
Mortgage made by Olympia & York Tower B Company to Olympia & York World Financial Center Corp. in the amount of $350,000,000.00 dated December 14, 1988 and recorded December 14, 1988 in Reel 1506 page 1879. (Mortgage Tax Paid: $7,875.00)
|
|
J - 13
|
|
4.
|
Mortgage made by WFP Tower B Co. L.P. to Boatmen’s National Mortgage, Inc. in the amount of $75,263,281.70 dated as of November 21, 1996 and recorded November 27, 1996 in Reel 2396 page 2227. (Mortgage Tax Paid: -0-)
|
5.
|
Mortgage made by WFP Tower B Co. L.P. to TBR Finance Inc. in the amount of $150,000,000.00 dated as of November 21, 1996 and recorded November 27, 1996 in Reel 2397 page 467. (Mortgage Tax Paid: -0-)
|
|
J - 14
|
|
1.
|
Mortgage and Security Agreement (Tower D) made by Olympia & York Tower D, Company to Bankers Trust Company, as Collateral Agent for the lenders listed on Schedule A (of the Mortgage) in the amount of $1,008,000.00 dated July 12, 1985 recorded July 18, 1985 in Reel 938 page 381. (Mortgage Tax Paid: $22,680.00)
|
|
J - 15
|
|
2.
|
Mortgage made by WFC Tower D Company to The Sumitomo Bank, Limited, New York Branch in the amount of $8,992,000.00 dated February 26, 1988 recorded March 9, 1988 in Reel 1375 page 1586. (Mortgage Tax Paid: $202,320.00)
|
3.
|
Tower D Obligations Mortgage and Consolidation Agreement made by WFC Tower D Company to The Sumitomo Bank, Limited, New York Branch in the amount of $240,000,000.00 dated April 9, 1992 recorded April 10, 1992 in Reel 1861 page 1788. (Mortgage Tax Paid: $6,600,000.00)
|
4.
|
Supplemental Mortgage (Leasehold) made by WFP Tower D Co. L.P. to Boatmen’s National Mortgage, Inc. in the amount of $184,346,000.00 dated as of November 21, 1996 recorded November 27, 1996 in Reel 2397 page 976. (Mortgage Tax Paid: None)
|
|
J - 16
|
|
5.
|
Gap Mortgage made by WFP Tower D Co. L.P. to Deutsche Bank Trust Company Americas, as Administrative Agent in the amount of $17,646,814.00 dated as of June 1, 2012 and recorded June 20, 2012 as CRFN 2012000243412. (Mortgage Tax Paid $494,110.40)
|
6.
|
Gap Mortgage made by WFP Tower D Co. L.P. to Deutsche Bank Trust Company Americas, as Administrative Agent in the amount of $180,000,000.00 dated as of June 6, 2012 and recorded June 20, 2012 as CRFN 2012000243418. (Mortgage Tax Paid $5,040,000.00)
|
7.
|
Gap Mortgage made by WFP Tower D Co. L.P. to Deutsche Bank Trust Company Americas, as Administrative Agent in the amount of $90,000,000.00 dated as of July 31, 2012 and recorded August 13, 2012 as CRFN 2012000318867. (Mortgage Tax Paid $2,520,000.00)
|
|
J - 17
|
|
3.
|
Gap Mortgage dated the date hereof made by WFP Tower B Co. L.P. and WFP Tower D Co. L.P to Deutsche Bank AG New York Branch, as Administrative Agent in the amount of $248,451,991.90 and recorded July 11, 2013 as CRFN 2013000273281.
|
4.
|
Leasehold Mortgage, Security Agreement, Finance Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits dated January 21, 2013 made by WFP Tower D Co. L.P. and WFP Tower B Co. L.P. to Deutsche Bank AG New York Branch in the amount of $50,000,000.00 and recorded January 30, 2014 as CRFN 2014000037720.
|
|
J - 18
|
|
|
J - 19
|
|
|
J - 20
|
|
|
J - 21
|
|
|
J - 22
|
|
|
J - 23
|
|
|
J - 24
|
|
|
J - 25
|
|
|
J - 26
|
|
|
J - 27
|
|
|
J - 28
|
|
|
J - 29
|
|
|
J - 30
|
|
|
J - 31
|
|
|
K - 1
|
|
|
K - 2
|
|
|
K - 3
|
|
|
K - 4
|
|
|
K - 5
|
|
|
K - 6
|
|
|
K - 7
|
|
|
K - 8
|
|
|
K - 9
|
|
|
K - 10
|
|
Flr
|
RSF
|
USF
|
44
|
29,423
|
21,479
|
43
|
39,745
|
29,014
|
42
|
39,894
|
29,123
|
41
|
39,894
|
29,123
|
40
|
43,596
|
31,825
|
39
|
42,716
|
31,183
|
38
|
42,716
|
31,183
|
37
|
42,716
|
31,183
|
36
|
42,716
|
31,183
|
35
|
42,675
|
31,153
|
34
|
42,705
|
31,175
|
33
|
42,702
|
31,172
|
32
|
42,705
|
31,175
|
31
|
42,660
|
31,142
|
30
|
42,660
|
31,142
|
29
|
42,660
|
31,142
|
28
|
42,660
|
31,142
|
27
|
42,660
|
31,142
|
26
|
41,513
|
30,304
|
25
|
54,150
|
39,530
|
24
|
54,150
|
39,530
|
23
|
54,164
|
39,540
|
22
|
54,150
|
39,530
|
21
|
54,158
|
39,535
|
20
|
54,122
|
39,509
|
19
|
53,622
|
39,144
|
18
|
54,303
|
39,641
|
|
L - 1
|
|
|
L - 2
|
|
|
M - 1
|
|
NAME AND ADDRESS OF LANDLORD:
|
WFP Tower B Co. L.P.
c/o Brookfield Financial Properties, L.P. 250 Vesey Street, 15th Floor New York, New York 10281-1023 |
NAME AND ADDRESS OF TENANT:
|
The Bank of New York Mellon
101 Barclay Street – 15E
New York, New York 10286
|
DATE OF EXECUTION OF LEASE:
|
As of _____ ____, 2014
|
|
M - 2
|
|
|
M - 3
|
|
|
M - 4
|
|
|
M - 5
|
|
|
M - 6
|
|
|
N - 1
|
|
|
O - 1
|
|
|
O - 2
|
|
(1)
|
liable for any act, omission or default of any prior sublandlord (including, without limitation, the then defaulting sublandlord); provided, however, (x) the foregoing shall not relieve Landlord from and after the date of its succeeding as the sublandlord under the Sublease of liability for any of its own acts or omissions which may have constituted acts or omissions of the prior defaulting sublandlord, provided that Landlord shall have a reasonable period of time to remedy the same and (y) if any act or omission is of a continuing nature, Landlord, as the successor to such sublandlord, shall be bound to Subtenant in accordance with the Sublease for the period of time from and after the date of such succession provided that Landlord shall have a reasonable period of time to remedy the same;
|
(2)
|
subject to any offsets, claims or defenses which the Subtenant may have against any prior sublandlord (including, without limitation, the then defaulting sublandlord) under the Sublease; provided that nothing contained in this clause (2) shall relieve Landlord of any of its obligations under the then executory terms, conditions and covenants as are set forth in the Sublease (except as modified hereby) and which shall be applicable after such attornment or this Agreement;
|
|
O - 3
|
|
(3)
|
bound by any payment of any base or fixed annual rent or additional rent which the Subtenant might have paid to any prior sublandlord for more than one month in advance except to the extent received by Landlord (provided that the payment when due under the Sublease of any estimates on account of operating expenses, real estate taxes or similar escalations shall not be deemed to be a prepayment for more than one month for the purposes hereof) and all such prepaid rent and additional rent shall remain due and owing without regard to such prepayment;
|
(4)
|
liable for or required to account for any security deposit other than any security deposit actually delivered to the Landlord;
|
(5)
|
bound by any waiver or forbearance under, or any amendment, modification or cancellation of, the Sublease which is made without the written consent of Landlord, but the foregoing shall not prevent or prohibit the sublandlord under the Sublease from canceling the Sublease or agreeing to accept a surrender of the Subleased Premises if such cancellation is for a good business purpose and provided that Tenant shall not then be in default under the Lease, and provided further that the foregoing shall not be deemed to prohibit any amendment, modification, cancellation or termination provided for in the Sublease;
|
(6)
|
bound by any covenant to undertake or complete any construction of the Premises or any portion thereof demised by the Sublease or to pay any sums to Subtenant or to provide any work allowance or contribution in connection therewith;
|
(7)
|
bound by any obligation to make any payment to the Subtenant;
|
(8)
|
bound by or required to recognize any free rent period under the Sublease or subject to any credits, offsets, setoffs, abatements or other deductions which may have accrued against Tenant under the Sublease;
|
(9)
|
in the event of a casualty or condemnation, obligated to repair or restore the Building or any portion thereof, except to the extent, if any, otherwise provided in the Lease which alone shall govern the obligations of the parties in the event of a casualty or condemnation;
|
|
O - 4
|
|
(10)
|
subject to any right of cancellation or surrender or termination which requires the payment by Tenant, as sublandlord, under the Sublease of a charge, fee or penalty for such cancellation or surrender or termination, unless Subtenant waives the right to receive any such charge, fee or penalty; or
|
(11)
|
liable for any representation, warranty, or indemnity made or given by Tenant.
|
|
O - 5
|
|
|
O - 6
|
|
(i)
|
If to Landlord:
WFP Tower B Co. L.P. c/o Brookfield Financial Properties, L.P. 250 Vesey Street, 15th Floor New York, New York 10281-1023 Attention: Senior Vice President – Director of Leasing |
(ii)
|
If to Tenant:
The Bank of New York Mellon c/o Jones Lang LaSalle Americas, Inc. 525 William Penn Place, 20 th Floor Pittsburgh, Pennsylvania 15259 Attention: Leasing Administration |
|
O - 7
|
|
(iii)
|
If to Subtenant:
[_____________________] [_____________________] [_____________________] [_____________________] |
|
O - 8
|
|
|
O - 9
|
|
LANDLORD:
WFP TOWER B CO. L.P. By: WFP Tower B Co. G.P. LLC, its general partner
By:
Name: Title: |
TENANT:
THE BANK OF NEW YORK MELLON By: Name: Title: |
SUBTENANT
[______________________] By: Name: Title: |
|
O - 10
|
|
Elevator Passenger Car Numbers
|
B1-B7
|
Performance
Range
|
Capacity (Lbs)
|
4,000
|
|
Speed (Fpm)
|
700
|
|
|
|
|
Operating Time Up (Sec.)
|
|
≤ 9.5
|
Operating Time Down (Sec.)
|
|
≤ 9.5
|
Door Opening Time (Sec.)
|
|
≤ 2.0
|
Door Closing Time (Sec.)
|
|
≤ 3.0
|
Car Call Dwell Time (Sec.)
|
|
3.0
|
Hall Call Dwell Time (Sec.)
|
|
5.0
|
Door Nudging Time (Sec.)
|
|
20-30
|
Leveling Accuracy (Inch)
|
|
± 1/4
|
Door Closing Force (Ft-Lbs)
|
|
< 30
|
Ride Quality (Mg) (Front to Back)
|
|
< 25mg P-P
|
Ride Quality (Mg) (Side to Side)
|
|
< 25mg P-P
|
|
P - 1
|
|
Elevator Passenger Car Numbers
|
A1-A7
|
Performance
Range
|
Capacity (Lbs)
|
4,000
|
|
Speed (Fpm)
|
700
|
|
|
|
|
Operating Time Up (Sec.)
|
|
≤ 9.5
|
Operating Time Down (Sec.)
|
|
≤ 9.5
|
Door Opening Time (Sec.)
|
|
≤ 2.0
|
Door Closing Time (Sec.)
|
|
≤ 3.0
|
Car Call Dwell Time (Sec.)
|
|
3.0
|
Hall Call Dwell Time (Sec.)
|
|
5.0
|
Door Nudging Time (Sec.)
|
|
20-30
|
Leveling Accuracy (Inch)
|
|
± 1/4
|
Door Closing Force (Ft-Lbs)
|
|
< 30
|
Ride Quality (Mg) (Front to Back)
|
|
< 25mg P-P
|
Ride Quality (Mg) (Side to Side)
|
|
< 25mg P-P
|
|
P - 2
|
|
Elevator Passenger Car Numbers
|
C1-C7
|
Performance
Range
|
Capacity (Lbs)
|
4,000
|
|
Speed (Fpm)
|
1,000
|
|
|
|
|
Operating Time Up (Sec.)
|
|
≤ 9.5
|
Operating Time Down (Sec.)
|
|
≤ 9.5
|
Door Opening Time (Sec.)
|
|
≤ 2.0
|
Door Closing Time (Sec.)
|
|
≤ 3.0
|
Car Call Dwell Time (Sec.)
|
|
3.0
|
Hall Call Dwell Time (Sec.)
|
|
5.0
|
Door Nudging Time (Sec.)
|
|
20-30
|
Leveling Accuracy (Inch)
|
|
± 1/4
|
Door Closing Force (Ft-Lbs)
|
|
< 30
|
Ride Quality (Mg) (Front to Back)
|
|
< 25mg P-P
|
Ride Quality (Mg) (Side to Side)
|
|
< 25mg P-P
|
|
P - 3
|
|
|
Q - 1
|
|
|
R - 1
|
|
|
S - 1
|
|
|
T-1 - 1
|
|
|
T-2 - 1
|
|
|
T-3 - 1
|
|
|
T-4 - 1
|
|
Payroll & Related Expenses
|
$
|
Porter Services
|
$
|
Electric Services
|
$
|
Steam & Water
|
$
|
Chilled Water
|
$
|
Repairs & Maintenance
|
$
|
Insurance
|
$
|
Other Expenses
|
$
|
Management Fees
|
$
|
Shared Expense Area
|
$
|
Depreciation for Items Capitalized
|
$_________
|
|
$
_________
|
|
U - 1
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
V-1 - 1
|
|
|
V-2 - 1
|
|
|
W - 1
|
|
|
X - 1
|
|
|
X - 2
|
|
|
X - 3
|
|
|
X - 4
|
|
|
X - 5
|
|
|
X - 6
|
|
|
LANDLORD:
|
|
WFP TOWER B CO. L.P.
By: WFP Tower B Co. G.P. LLC, its general partner
By:_____________________________
Name: Title: |
|
|
|
TENANT:
|
|
THE BANK OF NEW YORK MELLON
By: _________________________________
Name: Title: |
|
|
|
SUBTENANT:
|
|
[____________________________]
By: _________________________________
Name: Title: |
|
X - 7
|
|
|
X - 8
|
|
|
Y - 1
|
|
|
Z - 1
|
|
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE
|
||
|
AA - 1
|
|
|
BB - 1
|
|
|
BB - 2
|
|
|
BB - 3
|
|
|
CC - 1
|
|
|
CC-1 - 1
|
|
|
CC-2 - 1
|
|
|
DD - 1
|
|
|
EE - 1
|
|
|
FF - 1
|
|
|
GG - 1
|
|
•
|
Did the Grantee’s score/rating reflect poor risk behavior by the Grantee in a prior year?
|
•
|
Did the Grantee receive an award in that year?
|
•
|
Financial Impact: How much did/will the issue cost the Company?
|
•
|
Reputational Impact: How much of a regulatory impact did/will it have on the Company?
|
Criteria
|
Metric
|
None
|
Low
|
Medium
|
High
|
Financial Impact
|
|
|
|
|
|
Reputational Impact
|
|
|
|
|
|
Criteria
|
None
|
Indirect
|
Direct
|
The Grantee’s role
& responsibility |
|
|
|
•
|
[Definition of applicable metrics]
|
•
|
[Describe interpolation]
|
•
|
HRCC certifies performance for each tranche following each performance period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Did the Grantee’s score/rating reflect poor risk behavior by the Grantee in a prior year?
|
•
|
Did the Grantee receive an award in that year?
|
•
|
Financial Impact: How much did/will the issue cost the Company?
|
•
|
Reputational Impact: How much of a regulatory impact did/will it have on the Company?
|
Criteria
|
Metric
|
None
|
Low
|
Medium
|
High
|
Financial Impact
|
|
|
|
|
|
Reputational Impact
|
|
|
|
|
|
Criteria
|
None
|
Indirect
|
Direct
|
Grantee’s role
& responsibility |
|
|
|
|
Quarter ended
|
|
Year-to-date
|
|||||||||||||
(dollar amounts in millions)
|
June 30,
2014 |
|
March 31,
2014 |
|
June 30,
2013 |
|
|
June 30,
2014 |
|
June 30,
2013 |
|
|||||
Earnings
|
|
|
|
|
|
|
||||||||||
Income before income taxes
(a)
|
$
|
811
|
|
$
|
926
|
|
$
|
1,222
|
|
|
$
|
1,737
|
|
$
|
2,047
|
|
Net (income) attributable to noncontrolling interests
|
(17
|
)
|
(20
|
)
|
(40
|
)
|
|
(37
|
)
|
(56
|
)
|
|||||
Income before income taxes attributable to shareholders of The Bank of New York Mellon Corporation
(a)
|
794
|
|
906
|
|
1,182
|
|
|
1,700
|
|
1,991
|
|
|||||
Fixed charges, excluding interest on deposits
|
97
|
|
88
|
|
80
|
|
|
185
|
|
174
|
|
|||||
Income before income taxes and fixed charges, excluding interest on deposits applicable to the shareholders of The Bank of New York Mellon Corporation
(a)
|
891
|
|
994
|
|
1,262
|
|
|
1,885
|
|
2,165
|
|
|||||
Interest on deposits
|
24
|
|
22
|
|
27
|
|
|
46
|
|
57
|
|
|||||
Income before income taxes and fixed charges, including interest on deposits applicable to shareholders of The Bank of New York Mellon Corporation
(a)
|
$
|
915
|
|
$
|
1,016
|
|
$
|
1,289
|
|
|
$
|
1,931
|
|
$
|
2,222
|
|
Fixed charges
|
|
|
|
|
|
|
||||||||||
Interest expense, excluding interest on deposits
|
$
|
68
|
|
$
|
62
|
|
$
|
52
|
|
|
$
|
130
|
|
$
|
118
|
|
One-third net rental expense
(b)
|
29
|
|
26
|
|
28
|
|
|
55
|
|
56
|
|
|||||
Total fixed charges, excluding interest on deposits
|
97
|
|
88
|
|
80
|
|
|
185
|
|
174
|
|
|||||
Interest on deposits
|
24
|
|
22
|
|
27
|
|
|
46
|
|
57
|
|
|||||
Total fixed charges, including interests on deposits
|
$
|
121
|
|
$
|
110
|
|
$
|
107
|
|
|
$
|
231
|
|
$
|
231
|
|
Preferred stock dividends
|
$
|
23
|
|
$
|
13
|
|
$
|
12
|
|
|
$
|
36
|
|
$
|
25
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges and preferred stock dividends, excluding interest on deposits
|
$
|
120
|
|
$
|
101
|
|
$
|
92
|
|
|
$
|
221
|
|
$
|
199
|
|
Total fixed charges and preferred stock dividends, including interest on deposits
|
$
|
144
|
|
$
|
123
|
|
$
|
119
|
|
|
$
|
267
|
|
$
|
256
|
|
|
|
|
|
|
|
|
||||||||||
Earnings to fixed charges ratios
(a)
|
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
9.19
|
|
11.30
|
|
15.78
|
|
|
10.19
|
|
12.44
|
|
|||||
Including interest on deposits
|
7.56
|
|
9.24
|
|
12.05
|
|
|
8.36
|
|
9.62
|
|
|||||
|
|
|
|
|
|
|
||||||||||
Earnings to fixed charges and preferred stock dividends ratios
(a)
|
|
|
|
|
|
|
||||||||||
Excluding interest on deposits
|
7.43
|
|
9.84
|
|
13.72
|
|
|
8.53
|
|
10.88
|
|
|||||
Including interest on deposits
|
6.35
|
|
8.26
|
|
10.83
|
|
|
7.23
|
|
8.68
|
|
(a)
|
Results for the second quarter of 2013 and the first six months of 2013 were restated to reflect the retrospective application of adopting new accounting guidance in the first quarter of 2014 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 2 of the Notes to Consolidated Financial Statements for additional information.
|
(b)
|
The proportion deemed representative of the interest factor.
|
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/ Gerald L. Hassell
|
|
|
Name:
|
Gerald L. Hassell
|
|
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/ Thomas P. Gibbons
|
|
|
Name:
|
Thomas P. Gibbons
|
|
Title:
|
Chief Financial Officer
|
|
Dated: August 11, 2014
|
|
/s/ Gerald L. Hassell
|
|
|
|
|
Name:
|
Gerald L. Hassell
|
|
|
|
Title:
|
Chief Executive Officer
|
|
Dated: August 11, 2014
|
|
/s/ Thomas P. Gibbons
|
|
|
|
|
Name:
|
Thomas P. Gibbons
|
|
|
|
Title:
|
Chief Financial Officer
|
|