BNY 8-K
Bank of New York Mellon Corp (BNY)
8-K
2024-04-16
For: 2024-04-16
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Added on
April 09, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) – April 16, 2024
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code – (212 ) 495-1784
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
| (fully and unconditionally guaranteed by The Bank of New York Mellon Corporation) | ||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 under the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On April 16, 2024, The Bank of New York Mellon Corporation (“BNY Mellon”) released information on its financial results for the first quarter ended March 31, 2024. Copies of the Earnings Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
ITEM 7.01. REGULATION FD DISCLOSURE.
On April 16, 2024, BNY Mellon will hold a conference call and webcast to discuss its financial results for the first quarter ended March 31, 2024 and outlook. A copy of the Financial Highlights presentation for the conference call and webcast is attached hereto as Exhibit 99.3.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS.
| Exhibit | ||||||||
| Number | Description | |||||||
| 99.1 | ||||||||
| The quotation in Exhibit 99.1 (the “Excluded Section”) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. The information included in Exhibit 99.1, other than in the Excluded Section, shall be deemed “filed” for purposes of the Exchange Act. | ||||||||
| 99.2 | ||||||||
| The information included in Exhibit 99.2 shall be deemed “filed” for purposes of the Exchange Act. | ||||||||
| 99.3 | ||||||||
| The information included in Exhibit 99.3 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. | ||||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
The Bank of New York Mellon Corporation (Registrant) | |||||||||||
| Date: April 16, 2024 | By: | /s/ Jean Weng | |||||||||
| Name: Title: | Jean Weng Secretary | ||||||||||
3
 | 1Q24 | FINANCIALRESULTS | ||||||||||||
BNY Mellon Reports First Quarter 2024
Earnings Per Common Share of $1.25, or $1.29 as Adjusted (a)
NEW YORK, April 16, 2024 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today has reported financial results for the first quarter of 2024.
| CEO COMMENTARY | ||||||||
 | BNY Mellon is off to an encouraging start for the year, with a solid financial performance, and all our businesses building on their momentum from last year. In the first quarter, we delivered double-digit EPS growth as well as pre-tax margin and ROTCE expansion on the back of positive operating leverage. | |||||||
| Total revenue of $4.5 billion was up 3% year-over-year, as 8% growth in investment services fees led by strength in Asset Servicing, Issuer Services and Clearance and Collateral Management more than offset revenue headwinds from muted volatility in foreign exchange markets and lower net interest income. We are starting to see our growth initiatives deliver results. Running our company better, inclusive of our focus on platforms, is enabling us to improve profitability and invest in our future. | ||||||||
Our performance this quarter provides a glimpse of BNY Mellon’s potential to deliver more for our clients. While we are pleased to see early signs of progress, we remain focused on the significant work ahead of us. |  | |||||||
– Robin Vince, President and Chief Executive Officer | ||||||||
| KEY FINANCIAL INFORMATION | |||||||||||
| (in millions, except per share amounts and unless otherwise noted) | 1Q24 vs. | ||||||||||
| 1Q24 | 4Q23 | 1Q23 | |||||||||
| Selected income statement data: | |||||||||||
| Total fee revenue | $ | 3,305 | 3 | % | 5 | % | |||||
| Investment and other revenue | 182 | N/M | N/M | ||||||||
| Net interest income | 1,040 | (6) | (8) | ||||||||
| Total revenue | $ | 4,527 | 4 | % | 3 | % | |||||
| Provision for credit losses | 27 | N/M | N/M | ||||||||
| Noninterest expense | $ | 3,176 | (21) | % | 2 | % | |||||
| Net income applicable to common shareholders | 953 | 488 | % | 5 | % | ||||||
| Diluted EPS | $ | 1.25 | 495 | % | 11 | % | |||||
| Selected metrics: | |||||||||||
AUC/A (in trillions) | $ | 48.8 | 2 | % | 5 | % | |||||
AUM (in trillions) | $ | 2.0 | 2 | % | 6 | % | |||||
| Financial ratios: | 1Q24 | 4Q23 | 1Q23 | ||||||||
| Pre-tax operating margin | 29 | % | 6 | % | 29 | % | |||||
| ROE | 10.7 | % | 1.8 | % | 10.4 | % | |||||
ROTCE (a) | 20.7 | % | 3.6 | % | 20.5 | % | |||||
| Capital ratios: | |||||||||||
| Tier 1 leverage ratio | 5.9 | % | 6.0 | % | 5.8 | % | |||||
| CET1 ratio | 10.8 | % | 11.5 | % | 10.9 | % | |||||
| HIGHLIGHTS | ||
Results
•Total revenue of $4.5 billion, increased 3%
•Noninterest expense of $3.2 billion, increased 2%; or 1% excluding notable items (a)
•Diluted EPS of $1.25, increased 11%; or 14% excluding notable items (a)
Profitability
•Pre-tax operating margin of 29%; or 30% excluding notable items (a)
•ROTCE of 20.7% (a); or 21.3% excluding notable items (a)
Balance sheet
•Average deposits of $279 billion, increased 2% year-over-year and 2% sequentially
•Tier 1 leverage ratio of 5.9%, increased 8 bps year-over-year and decreased 7 bps sequentially
Capital distribution
•Returned $1.3 billion of capital to common shareholders
•$324 million of dividends
•$988 million of share repurchases
•Total payout ratio of 138% year-to-date
•Board of Directors authorized a new common share repurchase program of $6 billion
$1.25 EPS | $1.29 (a) Adj. EPS | 29% Pre-tax margin | 30% (a) Adj. Pre-tax margin | 10.7% ROE | 21.3% (a) Adj. ROTCE | ||||||||||||||||||
| (a) For information on the Non-GAAP measures, see “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9. | |||||
| Note: Above comparisons are 1Q24 vs. 1Q23, unless otherwise noted. Prior period results have been restated to reflect the adoption of new accounting guidance for our investments in renewable energy projects, effective Jan. 1, 2024. Refer to Form 8-K dated March 26, 2024 for further information. | |||||
Investor Relations: Marius Merz (212) 298-1480 | Media Relations: Garrett Marquis (949) 683-1503 | ||||
BNY Mellon 1Q24 Financial Results | ||
CONSOLIDATED FINANCIAL HIGHLIGHTS
| (in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | 1Q24 vs. | ||||||||||||||||
| 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||
| Fee revenue | $ | 3,305 | $ | 3,214 | $ | 3,156 | 3 | % | 5 | % | |||||||
| Investment and other revenue | 182 | 43 | 131 | N/M | N/M | ||||||||||||
| Total fee and other revenue | 3,487 | 3,257 | 3,287 | 7 | 6 | ||||||||||||
| Net interest income | 1,040 | 1,101 | 1,128 | (6) | (8) | ||||||||||||
| Total revenue | 4,527 | 4,358 | 4,415 | 4 | 3 | ||||||||||||
| Provision for credit losses | 27 | 84 | 27 | N/M | N/M | ||||||||||||
| Noninterest expense | 3,176 | 3,995 | 3,100 | (21) | 2 | ||||||||||||
| Income before taxes | 1,324 | 279 | 1,288 | 375 | 3 | ||||||||||||
| Provision for income taxes | 297 | 73 | 306 | 307 | (3) | ||||||||||||
| Net income | $ | 1,027 | $ | 206 | $ | 982 | 399 | % | 5 | % | |||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 953 | $ | 162 | $ | 911 | 488 | % | 5 | % | |||||||
Operating leverage (a) | 2,438 | bps | 9 | bps | |||||||||||||
| Diluted earnings per common share | $ | 1.25 | $ | 0.21 | $ | 1.13 | 495 | % | 11 | % | |||||||
Average common shares and equivalents outstanding - diluted (in thousands) | 762,268 | 772,102 | 807,718 | ||||||||||||||
| Pre-tax operating margin | 29 | % | 6 | % | 29 | % | |||||||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 65,844 | $ | 65,677 | $ | 63,261 | — | % | 4 | % | |||||||
| Average deposits | 278,846 | 273,075 | 274,000 | 2 | 2 | ||||||||||||
AUC/A at period end (in trillions) (current period is preliminary) | 48.8 | 47.8 | 46.6 | 2 | 5 | ||||||||||||
AUM (in trillions) (current period is preliminary) | 2.02 | 1.97 | 1.91 | 2 | 6 | ||||||||||||
Non-GAAP measures, excluding notable items: (b) | |||||||||||||||||
| Adjusted total revenue | $ | 4,527 | $ | 4,508 | $ | 4,416 | — | % | 3 | % | |||||||
| Adjusted noninterest expense | $ | 3,138 | $ | 3,116 | $ | 3,094 | 1 | % | 1 | % | |||||||
Adjusted operating leverage (a) | (29) | bps | 109 | bps | |||||||||||||
| Adjusted diluted earnings per common share | $ | 1.29 | $ | 1.29 | $ | 1.13 | — | % | 14 | % | |||||||
| Adjusted pre-tax operating margin | 30 | % | 29 | % | 29 | % | |||||||||||
(a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
(b) See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9 for additional information.
bps – basis points.
KEY DRIVERS (comparisons are 1Q24 vs. 1Q23, unless otherwise noted)
•Total revenue increased 3%, primarily reflecting:
•Fee revenue increased 5%, primarily reflecting higher market values and higher client activity, partially offset by lower foreign exchange volatility, the mix of AUM flows and lower performance fees.
•Investment and other revenue increased primarily reflecting higher investment, other trading and seed capital results.
•Net interest income decreased 8%, primarily reflecting changes in balance sheet mix, partially offset by higher interest rates.
•Provision for credit losses was $27 million, primarily driven by reserve increases related to commercial real estate exposure.
•Noninterest expense increased 2%, primarily reflecting higher investments, severance expense and employee merit increases, partially offset by efficiency savings. Excluding notable items (a), noninterest expense increased 1%.
•Effective tax rate of 22.4%.
Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•AUC/A increased 5%, primarily reflecting higher market values, partially offset by lower collateral management balances.
•AUM increased 6%, primarily reflecting higher market values.
Capital and liquidity
•$324 million of dividends to common shareholders (b); $988 million of common share repurchases.
•Return on common equity (“ROE”) – 10.7%; Adjusted ROE – 11.0% (a).
•Return on tangible common equity (“ROTCE”) – 20.7% (a); Adjusted ROTCE - 21.3% (a).
•Common Equity Tier 1 (“CET1”) ratio – 10.8%.
•Tier 1 leverage ratio – 5.9%.
•Average liquidity coverage ratio (“LCR”) – 117%; Average net stable funding ratio (“NSFR”) – 136%.
•Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
(a) See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9 for additional information.
(b) Including dividend-equivalents on share-based awards.
Note: Throughout this document, sequential growth rates are unannualized.
2 | ||
BNY Mellon 1Q24 Financial Results | ||
SECURITIES SERVICES BUSINESS SEGMENT HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 1Q24 vs. | ||||||||||||||||
| 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||
| Investment services fees: | |||||||||||||||||
| Asset Servicing | $ | 1,013 | $ | 975 | $ | 941 | 4 | % | 8 | % | |||||||
| Issuer Services | 261 | 285 | 236 | (8) | 11 | ||||||||||||
| Total investment services fees | 1,274 | 1,260 | 1,177 | 1 | 8 | ||||||||||||
| Foreign exchange revenue | 124 | 118 | 139 | 5 | (11) | ||||||||||||
Other fees (a) | 59 | 54 | 55 | 9 | 7 | ||||||||||||
| Total fee revenue | 1,457 | 1,432 | 1,371 | 2 | 6 | ||||||||||||
| Investment and other revenue | 99 | 112 | 72 | N/M | N/M | ||||||||||||
| Total fee and other revenue | 1,556 | 1,544 | 1,443 | 1 | 8 | ||||||||||||
| Net interest income | 583 | 635 | 666 | (8) | (12) | ||||||||||||
| Total revenue | 2,139 | 2,179 | 2,109 | (2) | 1 | ||||||||||||
| Provision for credit losses | 11 | 64 | — | N/M | N/M | ||||||||||||
| Noninterest expense | 1,537 | 1,653 | 1,540 | (7) | — | ||||||||||||
| Income before taxes | $ | 591 | $ | 462 | $ | 569 | 28 | % | 4 | % | |||||||
| Total revenue by line of business: | |||||||||||||||||
| Asset Servicing | $ | 1,668 | $ | 1,675 | $ | 1,657 | — | % | 1 | % | |||||||
| Issuer Services | 471 | 504 | 452 | (7) | 4 | ||||||||||||
| Total revenue by line of business | $ | 2,139 | $ | 2,179 | $ | 2,109 | (2) | % | 1 | % | |||||||
| Pre-tax operating margin | 28 | % | 21 | % | 27 | % | |||||||||||
Securities lending revenue (b) | $ | 46 | $ | 48 | $ | 48 | (4) | % | (4) | % | |||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 11,204 | $ | 11,366 | $ | 10,939 | (1) | % | 2 | % | |||||||
| Average deposits | $ | 174,687 | $ | 171,086 | $ | 167,209 | 2 | % | 4 | % | |||||||
AUC/A at period end (in trillions) (current period is preliminary) (c) | $ | 35.4 | $ | 34.2 | $ | 32.6 | 4 | % | 9 | % | |||||||
Market value of securities on loan at period end (in billions) (d) | $ | 486 | $ | 450 | $ | 441 | 8 | % | 10 | % | |||||||
(a) Other fees primarily include financing-related fees.
(b) Included in investment services fees reported in the Asset Servicing line of business.
(c) Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of business. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.7 trillion at March 31, 2024 and Dec. 31, 2023 and $1.5 trillion at March 31, 2023.
(d) Represents the total amount of securities on loan in our agency securities lending program. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $64 billion at March 31, 2024, $63 billion at Dec. 31, 2023 and $69 billion at March 31, 2023.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Asset Servicing – The year-over-year increase primarily reflects higher market values, net new business and higher client activity, partially offset by lower net interest income and foreign exchange revenue. Total revenue was flat sequentially, primarily reflecting higher market values, client activity and foreign exchange revenue, offset by lower net interest income and a 4Q23 strategic equity investment gain.
•Issuer Services – The year-over-year increase primarily reflects higher Depositary Receipts revenue, partially offset by lower net interest income. The sequential decrease primarily reflects lower Depositary Receipts revenue and net interest income.
•Noninterest expense was flat year-over-year, reflecting higher investments and employee merit increases, offset by efficiency savings. The sequential decrease primarily reflects efficiency savings, lower severance expense and lower revenue-related expenses.
__________________
Note: Prior period segment results have been revised to reflect the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information on these revisions.
3 | ||
BNY Mellon 1Q24 Financial Results | ||
MARKET AND WEALTH SERVICES BUSINESS SEGMENT HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 1Q24 vs. | ||||||||||||||||
| 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||
| Investment services fees: | |||||||||||||||||
| Pershing | $ | 482 | $ | 472 | $ | 469 | 2 | % | 3 | % | |||||||
| Treasury Services | 184 | 179 | 175 | 3 | 5 | ||||||||||||
| Clearance and Collateral Management | 329 | 322 | 290 | 2 | 13 | ||||||||||||
| Total investment services fees | 995 | 973 | 934 | 2 | 7 | ||||||||||||
| Foreign exchange revenue | 24 | 21 | 18 | 14 | 33 | ||||||||||||
Other fees (a) | 58 | 50 | 51 | 16 | 14 | ||||||||||||
| Total fee revenue | 1,077 | 1,044 | 1,003 | 3 | 7 | ||||||||||||
| Investment and other revenue | 17 | 16 | 15 | N/M | N/M | ||||||||||||
| Total fee and other revenue | 1,094 | 1,060 | 1,018 | 3 | 7 | ||||||||||||
| Net interest income | 423 | 436 | 453 | (3) | (7) | ||||||||||||
| Total revenue | 1,517 | 1,496 | 1,471 | 1 | 3 | ||||||||||||
| Provision for credit losses | 5 | 28 | — | N/M | N/M | ||||||||||||
| Noninterest expense | 834 | 837 | 782 | — | 7 | ||||||||||||
| Income before taxes | $ | 678 | $ | 631 | $ | 689 | 7 | % | (2) | % | |||||||
| Total revenue by line of business: | |||||||||||||||||
| Pershing | $ | 670 | $ | 669 | $ | 649 | — | % | 3 | % | |||||||
| Treasury Services | 416 | 408 | 419 | 2 | (1) | ||||||||||||
| Clearance and Collateral Management | 431 | 419 | 403 | 3 | 7 | ||||||||||||
| Total revenue by line of business | $ | 1,517 | $ | 1,496 | $ | 1,471 | 1 | % | 3 | % | |||||||
| Pre-tax operating margin | 45 | % | 42 | % | 47 | % | |||||||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 39,271 | $ | 39,200 | $ | 36,854 | — | % | 7 | % | |||||||
| Average deposits | $ | 89,539 | $ | 87,695 | $ | 86,040 | 2 | % | 4 | % | |||||||
AUC/A at period end (in trillions) (current period is preliminary) (b) | $ | 13.1 | $ | 13.3 | $ | 13.7 | (2) | % | (4) | % | |||||||
(a) Other fees primarily include financing-related fees.
(b) Consists of AUC/A from the Clearance and Collateral Management and Pershing lines of business.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Pershing – The year-over-year increase primarily reflects higher market values and client activity, partially offset by lost business in the prior year. Total revenue was flat sequentially, reflecting higher client activity and market values, offset by lower net interest income and lost business in the prior year.
•Treasury Services – The year-over-year decrease primarily reflects lower net interest income, partially offset by net new business. The sequential increase primarily reflects higher client activity.
•Clearance and Collateral Management – The year-over-year increase primarily reflects higher collateral management fees and clearance volumes, partially offset by lower net interest income. The sequential increase primarily reflects higher collateral management fees and clearance volumes.
•Noninterest expense increased year-over-year, primarily reflecting higher investments and revenue-related expense, and employee merit increases, partially offset by efficiency savings.
__________________
Note: Prior period segment results have been revised to reflect the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information on these revisions.
4 | ||
BNY Mellon 1Q24 Financial Results | ||
INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 1Q24 vs. | ||||||||||||||||||||||||||||
| 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||||||
| Investment management fees | $ | 768 | $ | 725 | $ | 755 | 6 | % | 2 | % | |||||||||||||||||||
| Performance fees | 10 | 19 | 22 | N/M | N/M | ||||||||||||||||||||||||
| Investment management and performance fees | 778 | 744 | 777 | 5 | — | ||||||||||||||||||||||||
| Distribution and servicing fees | 70 | 66 | 55 | 6 | 27 | ||||||||||||||||||||||||
Other fees (a) | (60) | (55) | (53) | N/M | N/M | ||||||||||||||||||||||||
| Total fee revenue | 788 | 755 | 779 | 4 | 1 | ||||||||||||||||||||||||
Investment and other revenue (b) | 17 | (121) | 6 | N/M | N/M | ||||||||||||||||||||||||
Total fee and other revenue (b) | 805 | 634 | 785 | 27 | 3 | ||||||||||||||||||||||||
| Net interest income | 41 | 45 | 45 | (9) | (9) | ||||||||||||||||||||||||
| Total revenue | 846 | 679 | 830 | 25 | 2 | ||||||||||||||||||||||||
| Provision for credit losses | (1) | (2) | — | N/M | N/M | ||||||||||||||||||||||||
| Noninterest expense | 740 | 685 | 737 | 8 | — | ||||||||||||||||||||||||
| Income (loss) before taxes | $ | 107 | $ | (4) | $ | 93 | N/M | (c) | 15 | % | |||||||||||||||||||
| Total revenue by line of business: | |||||||||||||||||||||||||||||
| Investment Management | $ | 576 | $ | 415 | $ | 564 | 39 | % | 2 | % | |||||||||||||||||||
| Wealth Management | 270 | 264 | 266 | 2 | 2 | ||||||||||||||||||||||||
| Total revenue by line of business | $ | 846 | $ | 679 | $ | 830 | 25 | % | 2 | % | |||||||||||||||||||
| Pre-tax operating margin | 13 | % | (1) | % | 11 | % | |||||||||||||||||||||||
Adjusted pre-tax operating margin – Non-GAAP (d) | 14 | % | (1) | % | (e) | 13 | % | ||||||||||||||||||||||
| Metrics: | |||||||||||||||||||||||||||||
| Average loans | $ | 13,553 | $ | 13,405 | $ | 13,960 | 1 | % | (3) | % | |||||||||||||||||||
| Average deposits | $ | 11,364 | $ | 12,039 | $ | 16,144 | (6) | % | (30) | % | |||||||||||||||||||
AUM (in billions) (current period is preliminary) (f) | $ | 2,015 | $ | 1,974 | $ | 1,908 | 2 | % | 6 | % | |||||||||||||||||||
Wealth Management client assets (in billions) (current period is preliminary) (g) | $ | 309 | (h) | $ | 312 | $ | 279 | (1) | % | 11 | % | ||||||||||||||||||
(b) Investment and other revenue and total fee and other revenue are net of income (loss) attributable to noncontrolling interests related to consolidated investment management funds.
(c) Excluding notable items, income before taxes decreased 27% (Non-GAAP) compared with 4Q23. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9 for information on these Non-GAAP measures.
(d) Net of distribution and servicing expense. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9 for information on this Non-GAAP measure.
(e) Excluding notable items and net of distribution and servicing expense, the adjusted pre-tax operating margin was 21% (Non-GAAP) for 4Q23. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9 for information on this Non-GAAP measure.
(f) Excludes assets managed outside of the Investment and Wealth Management business segment.
(g) Includes AUM and AUC/A in the Wealth Management line of business.
(h) The realignment of similar products and services within our lines of business reduced client assets attributed to the Wealth Management business. Refer to Form 8-K dated March 26, 2024 for further information.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Investment Management – The year-over-year increase primarily reflects higher market values, partially offset by the mix of AUM flows and lower performance fees. The sequential increase primarily reflects the 4Q23 reduction in the fair value of a contingent consideration receivable and higher market values, partially offset by the timing of performance fees.
•Wealth Management – The year-over-year increase primarily reflects higher market values, partially offset by changes in product mix and lower net interest income. The sequential increase primarily reflects higher market values, partially offset by lower net interest income.
•Noninterest expense was flat year-over-year, reflecting higher investments and employee merit increases, offset by efficiency savings. The sequential increase primarily reflects higher revenue-related expense.
__________________
Note: Prior period segment results have been revised to reflect the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information on these revisions.
5 | ||
BNY Mellon 1Q24 Financial Results | ||
OTHER SEGMENT
The Other segment primarily includes the leasing portfolio, corporate treasury activities, including our securities portfolio, derivatives and other trading activity, renewable energy and other corporate investments, certain business exits and other corporate revenue and expense items.
| (in millions) | 1Q24 | 4Q23 | 1Q23 | ||||||||
| Fee revenue | $ | (17) | $ | (17) | $ | 3 | |||||
| Investment and other revenue | 47 | 38 | 38 | ||||||||
| Total fee and other revenue | 30 | 21 | 41 | ||||||||
| Net interest (expense) | (7) | (15) | (36) | ||||||||
| Total revenue | 23 | 6 | 5 | ||||||||
| Provision for credit losses | 12 | (6) | 27 | ||||||||
| Noninterest expense | 65 | 820 | 41 | ||||||||
| Income (loss) before taxes | $ | (54) | $ | (808) | $ | (63) | |||||
KEY DRIVERS
•Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense. Total revenue increased year-over-year primarily reflecting a 1Q23 strategic equity investment loss. Total revenue increased sequentially primarily reflecting net securities losses in 4Q23, partially offset by 4Q23 strategic equity investment gains.
•Noninterest expense increased year-over-year primarily driven by higher severance expense. The sequential decrease in noninterest expense primarily reflects the 4Q23 FDIC special assessment and lower severance expense and litigation reserves.
6 | ||
BNY Mellon 1Q24 Financial Results | ||
CAPITAL AND LIQUIDITY
| Capital and liquidity ratios | March 31, 2024 | Dec. 31, 2023 | ||||||
Consolidated regulatory capital ratios: (a) | ||||||||
| CET1 ratio | 10.8 | % | 11.5 | % | ||||
| Tier 1 capital ratio | 13.4 | 14.2 | ||||||
| Total capital ratio | 14.3 | 14.9 | ||||||
Tier 1 leverage ratio (a) | 5.9 | 6.0 | ||||||
Supplementary leverage ratio (a) | 7.0 | 7.3 | ||||||
| BNY Mellon shareholders’ equity to total assets ratio | 9.3 | % | 9.9 | % | ||||
| BNY Mellon common shareholders’ equity to total assets ratio | 8.3 | % | 8.9 | % | ||||
Average LCR (a) | 117 | % | 117 | % | ||||
Average NSFR (a) | 136 | % | 135 | % | ||||
| Book value per common share | $ | 48.44 | $ | 47.97 | ||||
Tangible book value per common share – Non-GAAP (b) | $ | 25.44 | $ | 25.25 | ||||
Common shares outstanding (in thousands) | 747,816 | 759,344 | ||||||
(a) Regulatory capital and liquidity ratios for March 31, 2024 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2024, was the Standardized Approach, and for Dec. 31, 2023 was the Advanced Approaches.
(b) Tangible book value per common share – Non-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9 for information on this Non-GAAP measure.
•CET1 capital totaled $18.4 billion and Tier 1 capital totaled $22.7 billion at March 31, 2024, both decreasing compared with Dec. 31, 2023, primarily reflecting capital returned through common stock repurchases and dividends, partially offset by capital generated through earnings. The CET1 ratio decreased compared with Dec. 31, 2023 reflecting higher period-end risk-weighted assets and the reduction in capital. The Tier 1 leverage ratio decreased compared with Dec. 31, 2023 reflecting the reduction in capital and higher average assets.
NET INTEREST INCOME
| Net interest income | 1Q24 vs. | ||||||||||||||||
| (dollars in millions; not meaningful - N/M) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | ||||||||||||
| Net interest income | $ | 1,040 | $ | 1,101 | $ | 1,128 | (6)% | (8)% | |||||||||
| Add: Tax equivalent adjustment | — | 1 | — | N/M | N/M | ||||||||||||
Net interest income, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a) | $ | 1,040 | $ | 1,102 | $ | 1,128 | (6)% | (8)% | |||||||||
| Net interest margin | 1.19 | % | 1.26 | % | 1.29 | % | (7) | bps | (10) | bps | |||||||
Net interest margin (FTE) – Non-GAAP (a) | 1.19 | % | 1.26 | % | 1.29 | % | (7) | bps | (10) | bps | |||||||
(a) Net interest income (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 9 for information on this Non-GAAP measure.
bps – basis points.
•Net interest income decreased year-over-year primarily reflecting changes in balance sheet mix, partially offset by higher interest rates.
•The sequential decrease in net interest income primarily reflects changes in balance sheet mix.
7 | ||
BNY Mellon 1Q24 Financial Results | ||
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement
| (in millions) | Quarter ended | ||||||||||
| March 31, 2024 | Dec. 31, 2023 | March 31, 2023 | |||||||||
| Fee and other revenue | |||||||||||
| Investment services fees | $ | 2,278 | $ | 2,242 | $ | 2,119 | |||||
| Investment management and performance fees | 776 | 743 | 776 | ||||||||
| Foreign exchange revenue | 152 | 143 | 176 | ||||||||
| Financing-related fees | 57 | 45 | 52 | ||||||||
| Distribution and servicing fees | 42 | 41 | 33 | ||||||||
| Total fee revenue | 3,305 | 3,214 | 3,156 | ||||||||
| Investment and other revenue | 182 | 43 | 131 | ||||||||
| Total fee and other revenue | 3,487 | 3,257 | 3,287 | ||||||||
| Net interest income | |||||||||||
| Interest income | 6,096 | 5,963 | 3,942 | ||||||||
| Interest expense | 5,056 | 4,862 | 2,814 | ||||||||
| Net interest income | 1,040 | 1,101 | 1,128 | ||||||||
| Total revenue | 4,527 | 4,358 | 4,415 | ||||||||
| Provision for credit losses | 27 | 84 | 27 | ||||||||
| Noninterest expense | |||||||||||
| Staff | 1,857 | 1,831 | 1,791 | ||||||||
| Software and equipment | 475 | 486 | 429 | ||||||||
| Professional, legal and other purchased services | 349 | 406 | 375 | ||||||||
| Net occupancy | 124 | 162 | 119 | ||||||||
| Sub-custodian and clearing | 119 | 117 | 118 | ||||||||
| Distribution and servicing | 96 | 88 | 85 | ||||||||
| Business development | 36 | 61 | 39 | ||||||||
| Bank assessment charges | 17 | 670 | 40 | ||||||||
| Amortization of intangible assets | 12 | 14 | 14 | ||||||||
| Other | 91 | 160 | 90 | ||||||||
| Total noninterest expense | 3,176 | 3,995 | 3,100 | ||||||||
| Income | |||||||||||
| Income before taxes | 1,324 | 279 | 1,288 | ||||||||
| Provision for income taxes | 297 | 73 | 306 | ||||||||
| Net income | 1,027 | 206 | 982 | ||||||||
| Net (income) loss attributable to noncontrolling interests related to consolidated investment management funds | (2) | 2 | — | ||||||||
| Net income applicable to shareholders of The Bank of New York Mellon Corporation | 1,025 | 208 | 982 | ||||||||
| Preferred stock dividends | (72) | (46) | (71) | ||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 953 | $ | 162 | $ | 911 | |||||
| Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation | Quarter ended | ||||||||||
| March 31, 2024 | Dec. 31, 2023 | March 31, 2023 | |||||||||
| (in dollars) | |||||||||||
| Basic | $ | 1.26 | $ | 0.21 | $ | 1.13 | |||||
| Diluted | $ | 1.25 | $ | 0.21 | $ | 1.13 | |||||
8 | ||
BNY Mellon 1Q24 Financial Results | ||
EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
BNY Mellon has included in this Earnings Release certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity – Non-GAAP is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share – Non-GAAP is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.
Net interest income, on a fully taxable equivalent (“FTE”) basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.
BNY Mellon has included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business segment, net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. We believe that this measure is useful when evaluating the performance of the Investment and Wealth Management business segment relative to industry competitors.
See “Explanation of GAAP and Non-GAAP Financial Measures” in the Financial Supplement available at www.bnymellon.com for additional reconciliations of Non-GAAP measures.
BNY Mellon has also included revenue measures excluding notable items, including the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture and disposal losses. Expense measures, excluding notable items, including FDIC special assessment, severance expense and litigation reserves, are also presented. Litigation reserves represent accruals for loss contingencies that are both probable and reasonably estimable, but exclude standard business-related legal fees. Net income applicable to common shareholders of The Bank of New York Mellon Corporation, diluted earnings per share, operating leverage, return on common equity, return on tangible common equity and pre-tax operating margin, excluding the notable items mentioned above, are also provided. These measures are provided to permit investors to view the financial measures on a basis consistent with how management views the businesses.
9 | ||
BNY Mellon 1Q24 Financial Results | ||
| Reconciliation of Non-GAAP measures, excluding notable items | 1Q24 vs. | |||||||||||||||||||||||||
| (dollars in millions, except per share amounts) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||
| Total revenue – GAAP | $ | 4,527 | $ | 4,358 | $ | 4,415 | 4 | % | 3 | % | ||||||||||||||||
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | — | (144) | — | |||||||||||||||||||||||
Disposal (losses) (a) | — | (6) | (1) | |||||||||||||||||||||||
| Adjusted total revenue – Non-GAAP | $ | 4,527 | $ | 4,508 | $ | 4,416 | — | % | 3 | % | ||||||||||||||||
| Noninterest expense – GAAP | $ | 3,176 | $ | 3,995 | $ | 3,100 | (21) | % | 2 | % | ||||||||||||||||
Less: Severance (b) | 36 | 200 | — | |||||||||||||||||||||||
Litigation reserves (b) | 2 | 47 | 6 | |||||||||||||||||||||||
FDIC special assessment (b) | — | 632 | — | |||||||||||||||||||||||
| Adjusted noninterest expense – Non-GAAP | $ | 3,138 | $ | 3,116 | $ | 3,094 | 1 | % | 1 | % | ||||||||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 953 | $ | 162 | $ | 911 | 488 | % | 5 | % | ||||||||||||||||
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | — | (144) | — | |||||||||||||||||||||||
Disposal (losses) (a) | — | (5) | — | |||||||||||||||||||||||
Severance (b) | (27) | (153) | — | |||||||||||||||||||||||
Litigation reserves (b) | (2) | (47) | (4) | |||||||||||||||||||||||
FDIC special assessment (b) | — | (482) | — | |||||||||||||||||||||||
| Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP | $ | 982 | $ | 993 | $ | 915 | (1) | % | 7 | % | ||||||||||||||||
| Diluted earnings per common share – GAAP | $ | 1.25 | $ | 0.21 | $ | 1.13 | 495 | % | 11 | % | ||||||||||||||||
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | — | (0.19) | — | |||||||||||||||||||||||
Disposal (losses) (a) | — | (0.01) | — | |||||||||||||||||||||||
Severance (b) | (0.04) | (0.20) | — | |||||||||||||||||||||||
Litigation reserves (b) | — | (0.06) | (0.01) | |||||||||||||||||||||||
FDIC special assessment (b) | — | (0.62) | — | |||||||||||||||||||||||
| Total diluted earnings per common share impact of notable items | (0.04) | (1.08) | (0.01) | |||||||||||||||||||||||
| Adjusted diluted earnings per common share – Non-GAAP | $ | 1.29 | $ | 1.29 | $ | 1.13 | (c) | — | % | 14 | % | |||||||||||||||
Operating leverage – GAAP (d) | 2,438 | bps | 9 | bps | ||||||||||||||||||||||
Adjusted operating leverage – Non-GAAP (d) | (29) | bps | 109 | bps | ||||||||||||||||||||||
(a) Reflected in Investment and other revenue.
(b) Severance is reflected in Staff expense, Litigation reserves in Other expense, and FDIC special assessment in Bank assessment charges, respectively.
(c) Does not foot due to rounding.
(d) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps - basis points.
| Pre-tax operating margin reconciliation | |||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 1Q23 | ||||||||
| Income before taxes – GAAP | $ | 1,324 | $ | 279 | $ | 1,288 | |||||
Impact of notable items (a) | (38) | (1,029) | (7) | ||||||||
| Adjusted income before taxes, excluding notable items – Non-GAAP | $ | 1,362 | $ | 1,308 | $ | 1,295 | |||||
| Total revenue – GAAP | $ | 4,527 | $ | 4,358 | $ | 4,415 | |||||
Impact of notable items (a) | — | (150) | (1) | ||||||||
| Adjusted total revenue, excluding notable items – Non-GAAP | $ | 4,527 | $ | 4,508 | $ | 4,416 | |||||
Pre-tax operating margin – GAAP (b) | 29 | % | 6 | % | 29 | % | |||||
Adjusted pre-tax operating margin – Non-GAAP (b) | 30 | % | 29 | % | 29 | % | |||||
(a) See above for details of notable items and line items impacted.
(b) Income before taxes divided by total revenue.
10 | ||
BNY Mellon 1Q24 Financial Results | ||
| Return on common equity and return on tangible common equity reconciliation | |||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 1Q23 | ||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 953 | $ | 162 | $ | 911 | |||||
| Add: Amortization of intangible assets | 12 | 14 | 14 | ||||||||
| Less: Tax impact of amortization of intangible assets | 3 | 4 | 3 | ||||||||
| Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | $ | 962 | $ | 172 | $ | 922 | |||||
Impact of notable items (a) | (29) | (831) | (4) | ||||||||
| Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets and notable items – Non-GAAP | $ | 991 | $ | 1,003 | $ | 926 | |||||
| Average common shareholders’ equity | $ | 35,905 | $ | 36,050 | $ | 35,483 | |||||
| Less: Average goodwill | 16,238 | 16,199 | 16,160 | ||||||||
| Average intangible assets | 2,848 | 2,858 | 2,899 | ||||||||
| Add: Deferred tax liability – tax deductible goodwill | 1,209 | 1,205 | 1,187 | ||||||||
| Deferred tax liability – intangible assets | 655 | 657 | 660 | ||||||||
| Average tangible common shareholders’ equity – Non-GAAP | $ | 18,683 | $ | 18,855 | $ | 18,271 | |||||
Return on common equity – GAAP (b) | 10.7 | % | 1.8 | % | 10.4 | % | |||||
Adjusted return on common equity – Non-GAAP (b) | 11.0 | % | 10.9 | % | 10.5 | % | |||||
Return on tangible common equity – Non-GAAP (b) | 20.7 | % | 3.6 | % | 20.5 | % | |||||
Adjusted return on tangible common equity – Non-GAAP (b) | 21.3 | % | 21.1 | % | 20.6 | % | |||||
(a) See page 10 for details of notable items and line items impacted.
(b) Returns are annualized.
| Reconciliation of Non-GAAP measures, excluding notable items - Investment and Wealth Management | 1Q24 vs. | ||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 4Q23 | ||||||||
| Income (loss) before taxes – GAAP | $ | 107 | $ | (4) | N/M | ||||||
Impact of notable items (a) | (4) | (156) | |||||||||
| Adjusted income before taxes – Non-GAAP | $ | 111 | $ | 152 | (27) | % | |||||
| Total revenue – GAAP | $ | 846 | $ | 679 | 25 | % | |||||
Impact of notable items (a) | — | (144) | |||||||||
| Adjusted total revenue – Non-GAAP | $ | 846 | $ | 823 | 3 | % | |||||
| Less: Distribution and servicing expense | 89 | ||||||||||
| Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | $ | 734 | |||||||||
Pre-tax operating margin – GAAP (b) | (1) | % | |||||||||
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (b) | (1) | % | |||||||||
Adjusted pre-tax operating margin, net of distribution and servicing expense and excluding notable items – Non-GAAP (b) | 21 | % | |||||||||
(a) See page 10 for details of notable items and line items impacted. Notable items in 1Q24 include severance expense. Notable items in 4Q23 include the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (reflected in investment and other revenue) and severance expense.
(b) Income before taxes divided by total revenue.
11 | ||
BNY Mellon 1Q24 Financial Results | ||
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
A number of statements in this Earnings Release and in our Financial Supplement may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our strategic priorities, financial performance and financial targets. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as we complete our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Forward-looking statements are not guarantees of future results or occurrences, are inherently uncertain and are based upon current beliefs and expectations of future events, many of which are, by their nature, difficult to predict, outside of our control and subject to change.
By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results may differ, possibly materially, from the anticipated results expressed or implied in these forward-looking statements as a result of a number of important factors, including the risk factors and other uncertainties set forth in our Annual Report on Form 10-K for the year ended Dec. 31, 2023 and our other filings with the Securities and Exchange Commission.
You should not place undue reliance on any forward-looking statement. All forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.
ABOUT BNY MELLON
BNY Mellon is a global financial services company that helps make money work for the world – managing it, moving it and keeping it safe. For 240 years we have partnered alongside our clients, putting our expertise and platforms to work to help them achieve their ambitions. Today we help over 90% of Fortune 100 companies and nearly all the top 100 banks globally access the money they need. We support governments in funding local projects and work with over 90% of the top 100 pension plans to safeguard investments for millions of individuals, and so much more. As of March 31, 2024, we oversee $48.8 trillion in assets under custody and/or administration and $2.0 trillion in assets under management.
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). We are headquartered in New York City, employ over 50,000 people globally and have been named among Fortune’s World’s Most Admired Companies and Fast Company’s Best Workplaces for Innovators. Additional information is available on www.bnymellon.com. Follow us on LinkedIn or visit our Newsroom for the latest company news.
CONFERENCE CALL INFORMATION
Robin Vince, President and Chief Executive Officer, and Dermot McDonogh, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 11:00 a.m. ET on April 16, 2024. This conference call and audio webcast will include forward-looking statements and may include other material information.
Investors and analysts wishing to access the conference call and audio webcast may do so by dialing (800) 390-5696 (U.S.) or (720) 452-9082 (International), and using the passcode: 200200, or by logging onto www.bnymellon.com/investorrelations. Earnings materials will be available at www.bnymellon.com/investorrelations beginning at approximately 6:30 a.m. ET on April 16, 2024. An archived version of the first quarter conference call and audio webcast will be available beginning on April 16, 2024 at approximately 2:00 p.m. ET through May 16, 2024 at www.bnymellon.com/investorrelations.
12 | ||
| The Bank of New York Mellon Corporation | ||
| Financial Supplement | ||
| First Quarter 2024 | ||
| Table of Contents | | |||||||
| Consolidated Results | Page | |||||||
| Consolidated Financial Highlights | ||||||||
| Condensed Consolidated Income Statement | ||||||||
| Condensed Consolidated Balance Sheet | ||||||||
| Fee and Other Revenue | ||||||||
| Average Balances and Interest Rates | ||||||||
| Capital and Liquidity | ||||||||
| Business Segment Results | ||||||||
| Securities Services Business Segment | ||||||||
| Market and Wealth Services Business Segment | ||||||||
| Investment and Wealth Management Business Segment | ||||||||
| AUM by Product Type, Changes in AUM and Wealth Management Client Assets | ||||||||
| Other Segment | ||||||||
| Other | ||||||||
| Securities Portfolio | ||||||||
| Allowance for Credit Losses and Nonperforming Assets | ||||||||
| Supplemental Information | ||||||||
| Explanation of GAAP and Non-GAAP Financial Measures | ||||||||
| Note: Prior period results have been restated to reflect the adoption of new accounting guidance for our investments in renewable energy projects, effective Jan. 1, 2024. Prior period segment results have also been revised to reflect the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information on these revisions. | ||||||||
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per common share amounts, or unless otherwise noted) | 1Q24 vs. | |||||||||||||||||||||||||||||||||||||||||||
| 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | ||||||||||||||||||||||||||||||||||||||
| Selected income statement data | ||||||||||||||||||||||||||||||||||||||||||||
| Fee and other revenue | $ | 3,487 | $ | 3,257 | $ | 3,404 | $ | 3,404 | $ | 3,287 | 7 | % | 6 | % | ||||||||||||||||||||||||||||||
| Net interest income | 1,040 | 1,101 | 1,016 | 1,100 | 1,128 | (6) | (8) | |||||||||||||||||||||||||||||||||||||
| Total revenue | 4,527 | 4,358 | 4,420 | 4,504 | 4,415 | 4 | 3 | |||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 27 | 84 | 3 | 5 | 27 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Noninterest expense | 3,176 | 3,995 | 3,089 | 3,111 | 3,100 | (21) | 2 | |||||||||||||||||||||||||||||||||||||
| Income before income taxes | 1,324 | 279 | 1,328 | 1,388 | 1,288 | 375 | 3 | |||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 297 | 73 | 285 | 315 | 306 | 307 | (3) | |||||||||||||||||||||||||||||||||||||
| Net income | $ | 1,027 | $ | 206 | $ | 1,043 | $ | 1,073 | $ | 982 | 399 | % | 5 | % | ||||||||||||||||||||||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 953 | $ | 162 | $ | 958 | $ | 1,036 | $ | 911 | 488 | % | 5 | % | ||||||||||||||||||||||||||||||
| Diluted earnings per common share | $ | 1.25 | $ | 0.21 | $ | 1.23 | $ | 1.31 | $ | 1.13 | 495 | % | 11 | % | ||||||||||||||||||||||||||||||
Average common shares and equivalents outstanding – diluted (in thousands) | 762,268 | 772,102 | 781,781 | 790,725 | 807,718 | (1) | % | (6) | % | |||||||||||||||||||||||||||||||||||
Financial ratios (Returns are annualized) | ||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax operating margin | 29 | % | 6 | % | 30 | % | 31 | % | 29 | % | ||||||||||||||||||||||||||||||||||
| Return on common equity | 10.7 | % | 1.8 | % | 10.6 | % | 11.7 | % | 10.4 | % | ||||||||||||||||||||||||||||||||||
Return on tangible common equity – Non-GAAP (a) | 20.7 | % | 3.6 | % | 20.6 | % | 22.8 | % | 20.5 | % | ||||||||||||||||||||||||||||||||||
| Non-U.S. revenue as a percentage of total revenue | 34 | % | 36 | % | 36 | % | 36 | % | 34 | % | ||||||||||||||||||||||||||||||||||
| Period end | ||||||||||||||||||||||||||||||||||||||||||||
Assets under custody and/or administration (“AUC/A”) (in trillions) (b) | $ | 48.8 | $ | 47.8 | $ | 45.7 | $ | 46.9 | $ | 46.6 | 2 | % | 5 | % | ||||||||||||||||||||||||||||||
Assets under management (“AUM”) (in trillions) | $ | 2.02 | $ | 1.97 | $ | 1.82 | $ | 1.91 | $ | 1.91 | 2 | % | 6 | % | ||||||||||||||||||||||||||||||
| Full-time employees | 52,100 | 53,400 | 53,600 | 53,200 | 51,600 | (2) | % | 1 | % | |||||||||||||||||||||||||||||||||||
| Book value per common share | $ | 48.44 | $ | 47.97 | $ | 46.84 | $ | 46.21 | $ | 45.22 | ||||||||||||||||||||||||||||||||||
Tangible book value per common share – Non-GAAP (a) | $ | 25.44 | $ | 25.25 | $ | 24.52 | $ | 24.03 | $ | 23.38 | ||||||||||||||||||||||||||||||||||
| Cash dividends per common share | $ | 0.42 | $ | 0.42 | $ | 0.42 | $ | 0.37 | $ | 0.37 | ||||||||||||||||||||||||||||||||||
| Common dividend payout ratio | 34 | % | 202 | % | 35 | % | 29 | % | 33 | % | ||||||||||||||||||||||||||||||||||
| Closing stock price per common share | $ | 57.62 | $ | 52.05 | $ | 42.65 | $ | 44.52 | $ | 45.44 | ||||||||||||||||||||||||||||||||||
| Market capitalization | $ | 43,089 | $ | 39,524 | $ | 32,801 | $ | 34,671 | $ | 35,858 | ||||||||||||||||||||||||||||||||||
Common shares outstanding (in thousands) | 747,816 | 759,344 | 769,073 | 778,782 | 789,134 | |||||||||||||||||||||||||||||||||||||||
Capital ratios at period end (c) | ||||||||||||||||||||||||||||||||||||||||||||
| Common Equity Tier 1 ("CET1") ratio | 10.8 | % | 11.5 | % | 11.3 | % | 11.0 | % | 10.9 | % | ||||||||||||||||||||||||||||||||||
| Tier 1 capital ratio | 13.4 | % | 14.2 | % | 14.3 | % | 14.0 | % | 13.9 | % | ||||||||||||||||||||||||||||||||||
| Total capital ratio | 14.3 | % | 14.9 | % | 15.2 | % | 14.8 | % | 14.7 | % | ||||||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 5.9 | % | 6.0 | % | 6.1 | % | 5.7 | % | 5.8 | % | ||||||||||||||||||||||||||||||||||
| Supplementary leverage ratio ("SLR") | 7.0 | % | 7.3 | % | 7.2 | % | 7.0 | % | 6.8 | % | ||||||||||||||||||||||||||||||||||
(a) Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of Non-GAAP measures. | ||||||||||||||||||||||||||||||||||||||||||||
(b) Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.7 trillion at March 31, 2024 and Dec. 31, 2023, $1.5 trillion at Sept. 30, 2023, $1.6 trillion at June 30, 2023 and $1.5 trillion at March 31, 2023. | ||||||||||||||||||||||||||||||||||||||||||||
(c) Regulatory capital ratios for March 31, 2024 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2024, was the Standardized Approach, and for Dec. 31, 2023, Sept. 30, 2023, June 30, 2023 and March 31, 2023, was the Advanced Approaches. | ||||||||||||||||||||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||
3
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per share amounts; common shares in thousands) | 1Q24 vs. | |||||||||||||||||||||||||||||||||||||||||||
| 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | ||||||||||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Investment services fees | $ | 2,278 | $ | 2,242 | $ | 2,230 | $ | 2,252 | $ | 2,119 | 2 | % | 8 | % | ||||||||||||||||||||||||||||||
| Investment management and performance fees | 776 | 743 | 777 | 762 | 776 | 4 | — | |||||||||||||||||||||||||||||||||||||
| Foreign exchange revenue | 152 | 143 | 154 | 158 | 176 | 6 | (14) | |||||||||||||||||||||||||||||||||||||
| Financing-related fees | 57 | 45 | 45 | 50 | 52 | 27 | 10 | |||||||||||||||||||||||||||||||||||||
| Distribution and servicing fees | 42 | 41 | 39 | 35 | 33 | 2 | 27 | |||||||||||||||||||||||||||||||||||||
| Total fee revenue | 3,305 | 3,214 | 3,245 | 3,257 | 3,156 | 3 | 5 | |||||||||||||||||||||||||||||||||||||
| Investment and other revenue | 182 | 43 | 159 | 147 | 131 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Total fee and other revenue | 3,487 | 3,257 | 3,404 | 3,404 | 3,287 | 7 | 6 | |||||||||||||||||||||||||||||||||||||
| Net interest income | 1,040 | 1,101 | 1,016 | 1,100 | 1,128 | (6) | (8) | |||||||||||||||||||||||||||||||||||||
| Total revenue | 4,527 | 4,358 | 4,420 | 4,504 | 4,415 | 4 | 3 | |||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 27 | 84 | 3 | 5 | 27 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||||||||||||||||||||
| Staff | 1,857 | 1,831 | 1,755 | 1,718 | 1,791 | 1 | 4 | |||||||||||||||||||||||||||||||||||||
| Software and equipment | 475 | 486 | 452 | 450 | 429 | (2) | 11 | |||||||||||||||||||||||||||||||||||||
| Professional, legal and other purchased services | 349 | 406 | 368 | 378 | 375 | (14) | (7) | |||||||||||||||||||||||||||||||||||||
| Net occupancy | 124 | 162 | 140 | 121 | 119 | (23) | 4 | |||||||||||||||||||||||||||||||||||||
| Sub-custodian and clearing | 119 | 117 | 121 | 119 | 118 | 2 | 1 | |||||||||||||||||||||||||||||||||||||
| Distribution and servicing | 96 | 88 | 87 | 93 | 85 | 9 | 13 | |||||||||||||||||||||||||||||||||||||
| Business development | 36 | 61 | 36 | 47 | 39 | (41) | (8) | |||||||||||||||||||||||||||||||||||||
| Bank assessment charges | 17 | 670 | 37 | 41 | 40 | (97) | (58) | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 12 | 14 | 15 | 14 | 14 | (14) | (14) | |||||||||||||||||||||||||||||||||||||
| Other | 91 | 160 | 78 | 130 | 90 | (43) | 1 | |||||||||||||||||||||||||||||||||||||
| Total noninterest expense | 3,176 | 3,995 | 3,089 | 3,111 | 3,100 | (21) | 2 | |||||||||||||||||||||||||||||||||||||
| Income before income taxes | 1,324 | 279 | 1,328 | 1,388 | 1,288 | 375 | 3 | |||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 297 | 73 | 285 | 315 | 306 | 307 | (3) | |||||||||||||||||||||||||||||||||||||
| Net income | 1,027 | 206 | 1,043 | 1,073 | 982 | 399 | 5 | |||||||||||||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | (2) | 2 | (3) | (1) | — | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | (72) | (46) | (82) | (36) | (71) | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 953 | $ | 162 | $ | 958 | $ | 1,036 | $ | 911 | 488 | % | 5 | % | ||||||||||||||||||||||||||||||
| Average common shares and equivalents outstanding: Basic | 756,937 | 767,146 | 777,813 | 787,718 | 803,340 | (1) | % | (6) | % | |||||||||||||||||||||||||||||||||||
| Diluted | 762,268 | 772,102 | 781,781 | 790,725 | 807,718 | (1) | % | (6) | % | |||||||||||||||||||||||||||||||||||
| Earnings per common share: Basic | $ | 1.26 | $ | 0.21 | $ | 1.23 | $ | 1.32 | $ | 1.13 | 500 | % | 12 | % | ||||||||||||||||||||||||||||||
| Diluted | $ | 1.25 | $ | 0.21 | $ | 1.23 | $ | 1.31 | $ | 1.13 | 495 | % | 11 | % | ||||||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||
4
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||
| (in millions) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 5,305 | $ | 4,922 | $ | 4,904 | $ | 5,720 | $ | 5,564 | ||||||||||||||||||||||
| Interest-bearing deposits with the Federal Reserve and other central banks | 119,197 | 111,550 | 107,419 | 118,908 | 117,042 | |||||||||||||||||||||||||||
| Interest-bearing deposits with banks | 10,636 | 12,139 | 12,999 | 12,316 | 15,114 | |||||||||||||||||||||||||||
| Federal funds sold and securities purchased under resale agreements | 29,661 | 28,900 | 26,299 | 35,378 | 26,894 | |||||||||||||||||||||||||||
| Securities | 138,909 | 126,395 | 128,225 | 134,233 | 138,678 | |||||||||||||||||||||||||||
| Trading assets | 10,078 | 10,058 | 10,699 | 10,562 | 9,024 | |||||||||||||||||||||||||||
| Loans | 73,615 | 66,879 | 66,290 | 64,469 | 62,323 | |||||||||||||||||||||||||||
| Allowance for loan losses | (322) | (303) | (211) | (191) | (170) | |||||||||||||||||||||||||||
Net loans | 73,293 | 66,576 | 66,079 | 64,278 | 62,153 | |||||||||||||||||||||||||||
| Premises and equipment | 3,136 | 3,163 | 3,234 | 3,241 | 3,248 | |||||||||||||||||||||||||||
| Accrued interest receivable | 1,343 | 1,150 | 1,141 | 963 | 978 | |||||||||||||||||||||||||||
| Goodwill | 16,228 | 16,261 | 16,159 | 16,246 | 16,192 | |||||||||||||||||||||||||||
| Intangible assets | 2,839 | 2,854 | 2,859 | 2,881 | 2,890 | |||||||||||||||||||||||||||
| Other assets | 24,103 | 25,909 | 25,035 | 25,455 | 27,122 | |||||||||||||||||||||||||||
Total assets | $ | 434,728 | $ | 409,877 | $ | 405,052 | $ | 430,181 | $ | 424,899 | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Deposits | $ | 309,020 | $ | 283,669 | $ | 277,467 | $ | 292,045 | $ | 281,294 | ||||||||||||||||||||||
| Federal funds purchased and securities sold under repurchase agreements | 15,112 | 14,507 | 14,771 | 21,285 | 26,540 | |||||||||||||||||||||||||||
| Trading liabilities | 3,100 | 6,226 | 7,358 | 6,319 | 5,705 | |||||||||||||||||||||||||||
| Payables to customers and broker-dealers | 19,392 | 18,395 | 17,441 | 21,084 | 22,598 | |||||||||||||||||||||||||||
| Other borrowed funds | 306 | 479 | 728 | 1,371 | 2,538 | |||||||||||||||||||||||||||
| Accrued taxes and other expenses | 4,395 | 5,411 | 5,225 | 4,986 | 4,548 | |||||||||||||||||||||||||||
| Other liabilities | 10,245 | 9,028 | 11,834 | 9,635 | 10,500 | |||||||||||||||||||||||||||
| Long-term debt | 32,396 | 31,257 | 29,205 | 32,463 | 30,489 | |||||||||||||||||||||||||||
Total liabilities | 393,966 | 368,972 | 364,029 | 389,188 | 384,212 | |||||||||||||||||||||||||||
| Temporary equity | ||||||||||||||||||||||||||||||||
| Redeemable noncontrolling interests | 82 | 85 | 109 | 104 | 96 | |||||||||||||||||||||||||||
| Permanent equity | ||||||||||||||||||||||||||||||||
| Preferred stock | 4,343 | 4,343 | 4,838 | 4,838 | 4,838 | |||||||||||||||||||||||||||
| Common stock | 14 | 14 | 14 | 14 | 14 | |||||||||||||||||||||||||||
| Additional paid-in capital | 29,055 | 28,908 | 28,793 | 28,726 | 28,650 | |||||||||||||||||||||||||||
| Retained earnings | 40,178 | 39,549 | 39,714 | 39,090 | 38,350 | |||||||||||||||||||||||||||
| Accumulated other comprehensive loss, net of tax | (4,876) | (4,893) | (5,805) | (5,602) | (5,543) | |||||||||||||||||||||||||||
Less: Treasury stock, at cost | (28,145) | (27,151) | (26,696) | (26,242) | (25,790) | |||||||||||||||||||||||||||
| Total The Bank of New York Mellon Corporation shareholders’ equity | 40,569 | 40,770 | 40,858 | 40,824 | 40,519 | |||||||||||||||||||||||||||
Nonredeemable noncontrolling interests of consolidated investment management funds | 111 | 50 | 56 | 65 | 72 | |||||||||||||||||||||||||||
Total permanent equity | 40,680 | 40,820 | 40,914 | 40,889 | 40,591 | |||||||||||||||||||||||||||
Total liabilities, temporary equity and permanent equity | $ | 434,728 | $ | 409,877 | $ | 405,052 | $ | 430,181 | $ | 424,899 | ||||||||||||||||||||||
5
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| FEE AND OTHER REVENUE | ||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 vs. | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||||||||||||||||||
| Investment services fees | $ | 2,278 | $ | 2,242 | $ | 2,230 | $ | 2,252 | $ | 2,119 | 2 | % | 8 | % | ||||||||||||||||||||||||||||||
| Investment management and performance fees: | ||||||||||||||||||||||||||||||||||||||||||||
Investment management fees (a) | 766 | 724 | 747 | 752 | 754 | 6 | 2 | |||||||||||||||||||||||||||||||||||||
| Performance fees | 10 | 19 | 30 | 10 | 22 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
Total investment management and performance fees (b) | 776 | 743 | 777 | 762 | 776 | 4 | — | |||||||||||||||||||||||||||||||||||||
| Foreign exchange revenue | 152 | 143 | 154 | 158 | 176 | 6 | (14) | |||||||||||||||||||||||||||||||||||||
| Financing-related fees | 57 | 45 | 45 | 50 | 52 | 27 | 10 | |||||||||||||||||||||||||||||||||||||
| Distribution and servicing fees | 42 | 41 | 39 | 35 | 33 | 2 | 27 | |||||||||||||||||||||||||||||||||||||
| Total fee revenue | 3,305 | 3,214 | 3,245 | 3,257 | 3,156 | 3 | 5 | |||||||||||||||||||||||||||||||||||||
| Investment and other revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from consolidated investment management funds | 15 | 26 | (11) | 10 | 5 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
Seed capital gains (losses) (c) | 14 | 18 | (4) | 7 | 8 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Other trading revenue | 69 | 47 | 86 | 53 | 45 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Renewable energy investment gains | 6 | 2 | 1 | 5 | 20 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Corporate/bank-owned life insurance | 28 | 39 | 29 | 23 | 27 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
Other investments gains (losses) (d) | 17 | 55 | (9) | 10 | (9) | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Disposal (losses) gains | — | (6) | 2 | (1) | (1) | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Expense reimbursements from joint venture | 27 | 28 | 29 | 31 | 29 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Other income (loss) | 7 | (118) | 55 | 9 | 8 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Net securities (losses) | (1) | (48) | (19) | — | (1) | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Total investment and other revenue | 182 | 43 | 159 | 147 | 131 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Total fee and other revenue | $ | 3,487 | $ | 3,257 | $ | 3,404 | $ | 3,404 | $ | 3,287 | 7 | % | 6 | % | ||||||||||||||||||||||||||||||
(a) Excludes seed capital gains (losses) related to consolidated investment management funds. | ||||||||||||||||||||||||||||||||||||||||||||
(b) On a constant currency basis (Non-GAAP), investment management and performance fees decreased 1% compared with 1Q23. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. | ||||||||||||||||||||||||||||||||||||||||||||
| (c) Includes gains (losses) on investments in BNY Mellon funds which hedge deferred incentive awards. | ||||||||||||||||||||||||||||||||||||||||||||
| (d) Includes strategic equity, private equity and other investments. | ||||||||||||||||||||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||
6
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCES AND INTEREST RATES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average balance | Average rate | Average balance | Average rate | Average balance | Average rate | Average balance | Average rate | Average balance | Average rate | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions; average rates are annualized) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits with the Federal Reserve and other central banks | $ | 102,795 | 4.69 | % | $ | 107,291 | 4.72 | % | $ | 98,767 | 4.57 | % | $ | 114,578 | 4.29 | % | $ | 94,899 | 3.59 | % | ||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits with banks | 11,724 | 4.16 | 12,110 | 4.26 | 12,287 | 4.04 | 13,919 | 3.68 | 16,225 | 3.51 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Federal funds sold and securities purchased under resale agreements | 27,019 | 36.22 | (a) | 25,753 | 35.55 | (a) | 26,915 | 30.47 | (a) | 26,989 | 26.38 | (a) | 24,631 | 16.32 | (a) | |||||||||||||||||||||||||||||||||||||||||||||||
| Loans | 65,844 | 6.48 | 65,677 | 6.43 | 63,962 | 6.39 | 63,459 | 6.05 | 63,261 | 5.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government obligations | 27,242 | 3.70 | 28,641 | 3.40 | 32,224 | 3.08 | 34,147 | 2.90 | 38,852 | 2.89 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government agency obligations | 63,135 | 3.22 | 59,067 | 2.95 | 59,481 | 2.87 | 61,565 | 2.78 | 62,280 | 2.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other securities (b) | 43,528 | 4.01 | 39,415 | 4.03 | 39,874 | 3.93 | 40,989 | 3.59 | 42,452 | 3.21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total investment securities (b) | 133,905 | 3.57 | 127,123 | 3.39 | 131,579 | 3.24 | 136,701 | 3.05 | 143,584 | 2.86 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading securities (b) | 4,846 | 5.75 | 6,220 | 5.59 | 5,534 | 5.49 | 6,403 | 5.02 | 5,778 | 4.97 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total securities (b) | 138,751 | 3.65 | 133,343 | 3.49 | 137,113 | 3.33 | 143,104 | 3.14 | 149,362 | 2.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets (b) | $ | 346,133 | 7.06 | % | $ | 344,174 | 6.86 | % | $ | 339,044 | 6.45 | % | $ | 362,049 | 5.77 | % | $ | 348,378 | 4.56 | % | ||||||||||||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 57,852 | 57,431 | 58,247 | 58,912 | 58,900 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 403,985 | $ | 401,605 | $ | 397,291 | $ | 420,961 | $ | 407,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 228,897 | 3.84 | % | $ | 220,408 | 3.79 | % | $ | 209,641 | 3.62 | % | $ | 215,057 | 3.24 | % | $ | 204,114 | 2.71 | % | ||||||||||||||||||||||||||||||||||||||||||
| Federal funds purchased and securities sold under repurchase agreements | 16,133 | 55.91 | (a) | 16,065 | 52.41 | (a) | 21,512 | 36.07 | (a) | 26,282 | 26.39 | (a) | 18,316 | 19.75 | (a) | |||||||||||||||||||||||||||||||||||||||||||||||
| Trading liabilities | 1,649 | 5.11 | 2,857 | 4.83 | 3,959 | 4.80 | 3,893 | 4.46 | 3,025 | 4.05 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other borrowed funds | 502 | 3.47 | 465 | 5.56 | 540 | 4.47 | 2,702 | 4.60 | 711 | 1.75 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial paper | 8 | 5.42 | 5 | 5.40 | 7 | 4.13 | 5 | 5.11 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables to customers and broker-dealers | 12,420 | 4.74 | 12,586 | 4.67 | 13,515 | 4.30 | 14,801 | 3.85 | 16,954 | 3.08 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 31,087 | 5.82 | 30,702 | 5.70 | 31,161 | 5.52 | 31,970 | 5.45 | 30,246 | 5.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | $ | 290,696 | 6.99 | % | $ | 283,088 | 6.81 | % | $ | 280,335 | 6.37 | % | $ | 294,710 | 5.61 | % | $ | 273,366 | 4.17 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total noninterest-bearing deposits | 49,949 | 52,667 | 52,467 | 62,152 | 69,886 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 23,005 | 24,962 | 23,699 | 23,526 | 23,687 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total The Bank of New York Mellon Corporation shareholders’ equity | 40,248 | 40,823 | 40,711 | 40,493 | 40,321 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | 87 | 65 | 79 | 80 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 403,985 | $ | 401,605 | $ | 397,291 | $ | 420,961 | $ | 407,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 1.19 | % | 1.26 | % | 1.18 | % | 1.20 | % | 1.29 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin (FTE) – Non-GAAP (c) | 1.19 | % | 1.26 | % | 1.18 | % | 1.20 | % | 1.29 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) Includes the average impact of offsetting under enforceable netting agreements of approximately $151 billion for 1Q24, $141 billion for 4Q23, $126 billion for 3Q23, $113 billion for 2Q23 and $62 billion for 1Q23. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 5.49% for 1Q24, 5.48% for 4Q23, 5.36% for 3Q23, 5.10% for 2Q23 and 4.62% for 1Q23. On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under repurchase agreements would have been 5.38% for 1Q24, 5.35% for 4Q23, 5.26% for 3Q23, 4.99% for 2Q23 and 4.49% for 1Q23. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (b) Average rates were calculated on an FTE basis, at tax rates of approximately 21%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||
| CAPITAL AND LIQUIDITY | ||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||
| (dollars in millions) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||||||||||||||||
Consolidated regulatory capital ratios (a) | ||||||||||||||||||||||||||||||||
| Standardized Approach: | ||||||||||||||||||||||||||||||||
| CET1 capital | $ | 18,382 | $ | 18,534 | $ | 18,156 | $ | 18,018 | $ | 17,761 | ||||||||||||||||||||||
| Tier 1 capital | 22,722 | 22,863 | 22,985 | 22,848 | 22,595 | |||||||||||||||||||||||||||
| Total capital | 24,309 | 24,414 | 24,552 | 24,413 | 24,161 | |||||||||||||||||||||||||||
| Risk-weighted assets | 169,851 | 156,178 | 153,167 | 153,158 | 157,186 | |||||||||||||||||||||||||||
| CET1 ratio | 10.8 | % | 11.9 | % | 11.9 | % | 11.8 | % | 11.3 | % | ||||||||||||||||||||||
| Tier 1 capital ratio | 13.4 | 14.6 | 15.0 | 14.9 | 14.4 | |||||||||||||||||||||||||||
| Total capital ratio | 14.3 | 15.6 | 16.0 | 15.9 | 15.4 | |||||||||||||||||||||||||||
| Advanced Approaches: | ||||||||||||||||||||||||||||||||
| CET1 capital | $ | 18,382 | $ | 18,534 | $ | 18,156 | $ | 18,018 | $ | 17,761 | ||||||||||||||||||||||
| Tier 1 capital | 22,722 | 22,863 | 22,985 | 22,848 | 22,595 | |||||||||||||||||||||||||||
| Total capital | 23,977 | 24,085 | 24,305 | 24,151 | 23,890 | |||||||||||||||||||||||||||
| Risk-weighted assets | 165,180 | 161,528 | 160,262 | 163,335 | 162,692 | |||||||||||||||||||||||||||
| CET1 ratio | 11.1 | % | 11.5 | % | 11.3 | % | 11.0 | % | 10.9 | % | ||||||||||||||||||||||
| Tier 1 capital ratio | 13.8 | 14.2 | 14.3 | 14.0 | 13.9 | |||||||||||||||||||||||||||
| Total capital ratio | 14.5 | 14.9 | 15.2 | 14.8 | 14.7 | |||||||||||||||||||||||||||
Tier 1 leverage ratio (a): | ||||||||||||||||||||||||||||||||
| Average assets for Tier 1 leverage ratio | $ | 386,146 | $ | 383,705 | $ | 379,429 | $ | 402,993 | $ | 389,358 | ||||||||||||||||||||||
| Tier 1 leverage ratio | 5.9 | % | 6.0 | % | 6.1 | % | 5.7 | % | 5.8 | % | ||||||||||||||||||||||
SLR (a): | ||||||||||||||||||||||||||||||||
| Leverage exposure | $ | 325,656 | $ | 313,555 | $ | 318,664 | $ | 326,002 | $ | 330,278 | ||||||||||||||||||||||
| SLR | 7.0 | % | 7.3 | % | 7.2 | % | 7.0 | % | 6.8 | % | ||||||||||||||||||||||
Average liquidity coverage ratio (a) | 117 | % | 117 | % | 121 | % | 120 | % | 118 | % | ||||||||||||||||||||||
Average net stable funding ratio (a) | 136 | % | 135 | % | 136 | % | 136 | % | 132 | % | ||||||||||||||||||||||
(a) Regulatory capital and liquidity ratios for March 31, 2024 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2024, was the Standardized Approach, and for Dec. 31, 2023, Sept. 30, 2023, June 30, 2023 and March 31, 2023, was the Advanced Approaches. | ||||||||||||||||||||||||||||||||
8
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| SECURITIES SERVICES BUSINESS SEGMENT | ||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 vs. | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Investment services fees: | ||||||||||||||||||||||||||||||||||||||||||||
| Asset Servicing | $ | 1,013 | $ | 975 | $ | 976 | $ | 980 | $ | 941 | 4 | % | 8 | % | ||||||||||||||||||||||||||||||
| Issuer Services | 261 | 285 | 281 | 319 | 236 | (8) | 11 | |||||||||||||||||||||||||||||||||||||
| Total investment services fees | 1,274 | 1,260 | 1,257 | 1,299 | 1,177 | 1 | 8 | |||||||||||||||||||||||||||||||||||||
| Foreign exchange revenue | 124 | 118 | 107 | 124 | 139 | 5 | (11) | |||||||||||||||||||||||||||||||||||||
Other fees (a) | 59 | 54 | 52 | 54 | 55 | 9 | 7 | |||||||||||||||||||||||||||||||||||||
| Total fee revenue | 1,457 | 1,432 | 1,416 | 1,477 | 1,371 | 2 | 6 | |||||||||||||||||||||||||||||||||||||
| Investment and other revenue | 99 | 112 | 65 | 84 | 72 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Total fee and other revenue | 1,556 | 1,544 | 1,481 | 1,561 | 1,443 | 1 | 8 | |||||||||||||||||||||||||||||||||||||
| Net interest income | 583 | 635 | 600 | 668 | 666 | (8) | (12) | |||||||||||||||||||||||||||||||||||||
| Total revenue | 2,139 | 2,179 | 2,081 | 2,229 | 2,109 | (2) | 1 | |||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 11 | 64 | 19 | 16 | — | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Noninterest expense (ex. amortization of intangible assets) | 1,530 | 1,645 | 1,590 | 1,560 | 1,532 | (7) | — | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 7 | 8 | 8 | 7 | 8 | (13) | (13) | |||||||||||||||||||||||||||||||||||||
| Total noninterest expense | 1,537 | 1,653 | 1,598 | 1,567 | 1,540 | (7) | — | |||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 591 | $ | 462 | $ | 464 | $ | 646 | $ | 569 | 28 | % | 4 | % | ||||||||||||||||||||||||||||||
| Total revenue by line of business: | ||||||||||||||||||||||||||||||||||||||||||||
| Asset Servicing | $ | 1,668 | $ | 1,675 | $ | 1,585 | $ | 1,695 | $ | 1,657 | — | % | 1 | % | ||||||||||||||||||||||||||||||
| Issuer Services | 471 | 504 | 496 | 534 | 452 | (7) | 4 | |||||||||||||||||||||||||||||||||||||
| Total revenue by line of business | $ | 2,139 | $ | 2,179 | $ | 2,081 | $ | 2,229 | $ | 2,109 | (2) | % | 1 | % | ||||||||||||||||||||||||||||||
| Financial ratios: | ||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax operating margin | 28 | % | 21 | % | 22 | % | 29 | % | 27 | % | ||||||||||||||||||||||||||||||||||
Memo: Securities lending revenue (b) | $ | 46 | $ | 48 | $ | 46 | $ | 47 | $ | 48 | (4) | % | (4) | % | ||||||||||||||||||||||||||||||
| (a) Other fees primarily include financing-related fees. | ||||||||||||||||||||||||||||||||||||||||||||
| (b) Included in investment services fees reported in the Asset Servicing line of business. | ||||||||||||||||||||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||
9
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| SECURITIES SERVICES BUSINESS SEGMENT | ||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 vs. | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, unless otherwise noted) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||||||||||||||||||
| Selected balance sheet data: | ||||||||||||||||||||||||||||||||||||||||||||
| Average loans | $ | 11,204 | $ | 11,366 | $ | 11,236 | $ | 11,283 | $ | 10,939 | (1) | % | 2 | % | ||||||||||||||||||||||||||||||
Average assets (a) | $ | 191,544 | $ | 200,040 | $ | 190,964 | $ | 202,207 | $ | 196,560 | (4) | % | (3) | % | ||||||||||||||||||||||||||||||
| Average deposits | $ | 174,687 | $ | 171,086 | $ | 162,509 | $ | 172,863 | $ | 167,209 | 2 | % | 4 | % | ||||||||||||||||||||||||||||||
| Selected metrics: | ||||||||||||||||||||||||||||||||||||||||||||
AUC/A at period end (in trillions) (b)(c) | $ | 35.4 | $ | 34.2 | $ | 32.3 | $ | 33.2 | $ | 32.6 | 4 | % | 9 | % | ||||||||||||||||||||||||||||||
Market value of securities on loan at period end (in billions) (d) | $ | 486 | $ | 450 | $ | 406 | $ | 415 | $ | 441 | 8 | % | 10 | % | ||||||||||||||||||||||||||||||
| Issuer Services | ||||||||||||||||||||||||||||||||||||||||||||
Total debt serviced at period end (in trillions) (e) | $ | 14.0 | $ | 14.0 | $ | 13.8 | $ | 13.8 | $ | 13.6 | — | % | 3 | % | ||||||||||||||||||||||||||||||
| Number of sponsored Depositary Receipts programs at period end | 527 | 543 | 559 | 564 | 577 | (3) | % | (9) | % | |||||||||||||||||||||||||||||||||||
(a) In business segments where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference. | ||||||||||||||||||||||||||||||||||||||||||||
(b) March 31, 2024 information is preliminary. | ||||||||||||||||||||||||||||||||||||||||||||
(c) Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of business. Includes the AUC/A of CIBC Mellon of $1.7 trillion at March 31,2024 and Dec. 31, 2023, $1.5 trillion at Sept. 30, 2023, $1.6 trillion at June 30, 2023 and $1.5 trillion at March 31, 2023. | ||||||||||||||||||||||||||||||||||||||||||||
(d) Represents the total amount of securities on loan in our agency securities lending program. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $64 billion at March 31,2024, $63 billion at Dec. 31, 2023 and Sept. 30, 2023, $66 billion at June 30, 2023, and $69 billion at March 31, 2023. | ||||||||||||||||||||||||||||||||||||||||||||
| (e) Reported amounts have been revised from previously reported amounts. | ||||||||||||||||||||||||||||||||||||||||||||
10
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| MARKET AND WEALTH SERVICES BUSINESS SEGMENT | ||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 vs. | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Investment services fees: | ||||||||||||||||||||||||||||||||||||||||||||
| Pershing | $ | 482 | $ | 472 | $ | 478 | $ | 466 | $ | 469 | 2 | % | 3 | % | ||||||||||||||||||||||||||||||
| Treasury Services | 184 | 179 | 180 | 183 | 175 | 3 | 5 | |||||||||||||||||||||||||||||||||||||
| Clearance and Collateral Management | 329 | 322 | 305 | 295 | 290 | 2 | 13 | |||||||||||||||||||||||||||||||||||||
| Total investment services fees | 995 | 973 | 963 | 944 | 934 | 2 | 7 | |||||||||||||||||||||||||||||||||||||
| Foreign exchange revenue | 24 | 21 | 21 | 21 | 18 | 14 | 33 | |||||||||||||||||||||||||||||||||||||
Other fees (a) | 58 | 50 | 49 | 52 | 51 | 16 | 14 | |||||||||||||||||||||||||||||||||||||
| Total fee revenue | 1,077 | 1,044 | 1,033 | 1,017 | 1,003 | 3 | 7 | |||||||||||||||||||||||||||||||||||||
| Investment and other revenue | 17 | 16 | 16 | 16 | 15 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Total fee and other revenue | 1,094 | 1,060 | 1,049 | 1,033 | 1,018 | 3 | 7 | |||||||||||||||||||||||||||||||||||||
| Net interest income | 423 | 436 | 401 | 420 | 453 | (3) | (7) | |||||||||||||||||||||||||||||||||||||
| Total revenue | 1,517 | 1,496 | 1,450 | 1,453 | 1,471 | 1 | 3 | |||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 5 | 28 | 6 | 7 | — | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Noninterest expense (ex. amortization of intangible assets) | 833 | 836 | 790 | 792 | 781 | — | 7 | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 1 | 1 | 2 | 2 | 1 | — | — | |||||||||||||||||||||||||||||||||||||
| Total noninterest expense | 834 | 837 | 792 | 794 | 782 | — | 7 | |||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 678 | $ | 631 | $ | 652 | $ | 652 | $ | 689 | 7 | % | (2) | % | ||||||||||||||||||||||||||||||
| Total revenue by line of business: | ||||||||||||||||||||||||||||||||||||||||||||
| Pershing | $ | 670 | $ | 669 | $ | 657 | $ | 641 | $ | 649 | — | % | 3 | % | ||||||||||||||||||||||||||||||
| Treasury Services | 416 | 408 | 397 | 413 | 419 | 2 | (1) | |||||||||||||||||||||||||||||||||||||
| Clearance and Collateral Management | 431 | 419 | 396 | 399 | 403 | 3 | 7 | |||||||||||||||||||||||||||||||||||||
| Total revenue by line of business | $ | 1,517 | $ | 1,496 | $ | 1,450 | $ | 1,453 | $ | 1,471 | 1 | % | 3 | % | ||||||||||||||||||||||||||||||
| Financial ratios: | ||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax operating margin | 45 | % | 42 | % | 45 | % | 45 | % | 47 | % | ||||||||||||||||||||||||||||||||||
| (a) Other fees primarily include financing-related fees. | ||||||||||||||||||||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||
11
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| MARKET AND WEALTH SERVICES BUSINESS SEGMENT | ||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 vs. | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, unless otherwise noted) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||||||||||||||||||
| Selected balance sheet data: | ||||||||||||||||||||||||||||||||||||||||||||
| Average loans | $ | 39,271 | $ | 39,200 | $ | 37,496 | $ | 36,432 | $ | 36,854 | — | % | 7 | % | ||||||||||||||||||||||||||||||
Average assets (a) | $ | 123,552 | $ | 132,357 | $ | 129,665 | $ | 131,519 | $ | 132,005 | (7) | % | (6) | % | ||||||||||||||||||||||||||||||
| Average deposits | $ | 89,539 | $ | 87,695 | $ | 84,000 | $ | 85,407 | $ | 86,040 | 2 | % | 4 | % | ||||||||||||||||||||||||||||||
| Selected metrics: | ||||||||||||||||||||||||||||||||||||||||||||
AUC/A at period end (in trillions) (b)(c) | $ | 13.1 | $ | 13.3 | $ | 13.1 | $ | 13.4 | $ | 13.7 | (2) | % | (4) | % | ||||||||||||||||||||||||||||||
| Pershing | ||||||||||||||||||||||||||||||||||||||||||||
AUC/A at period end (in trillions) (b) | $ | 2.6 | $ | 2.5 | $ | 2.4 | $ | 2.4 | $ | 2.4 | 4 | % | 8 | % | ||||||||||||||||||||||||||||||
Net new assets (U.S. platform) (in billions) (d) | $ | (2) | $ | (4) | $ | 23 | $ | (34) | $ | 37 | N/M | N/M | ||||||||||||||||||||||||||||||||
Daily average revenue trades ("DARTs") (U.S. platform) (in thousands) | 290 | 229 | 223 | 223 | 261 | 27 | % | 11 | % | |||||||||||||||||||||||||||||||||||
Average active clearing accounts (in thousands) | 7,991 | 8,012 | 7,979 | 7,946 | 7,849 | — | % | 2 | % | |||||||||||||||||||||||||||||||||||
| Treasury Services | ||||||||||||||||||||||||||||||||||||||||||||
| Average daily U.S. dollar payment volumes | 237,124 | 243,005 | 233,620 | 233,931 | 236,322 | (2) | % | — | % | |||||||||||||||||||||||||||||||||||
| Clearance and Collateral Management | ||||||||||||||||||||||||||||||||||||||||||||
Average tri-party collateral management balances (in billions) | $ | 5,157 | $ | 5,248 | $ | 5,706 | $ | 6,044 | $ | 5,626 | (2) | % | (8) | % | ||||||||||||||||||||||||||||||
(a) In business segments where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference. | ||||||||||||||||||||||||||||||||||||||||||||
(b) March 31, 2024 information is preliminary. | ||||||||||||||||||||||||||||||||||||||||||||
(c) Consists of AUC/A from the Clearance and Collateral Management and Pershing lines of business. | ||||||||||||||||||||||||||||||||||||||||||||
(d) Net new assets represent net flows of assets (e.g., net cash deposits and net securities transfers, including dividends and interest) in customer accounts in Pershing LLC, a U.S. broker-dealer. | ||||||||||||||||||||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||
12
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT | ||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 vs. | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Investment management fees | $ | 768 | $ | 725 | $ | 748 | $ | 753 | $ | 755 | 6 | % | 2 | % | ||||||||||||||||||||||||||||||
| Performance fees | 10 | 19 | 30 | 10 | 22 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
Investment management and performance fees (a) | 778 | 744 | 778 | 763 | 777 | 5 | — | |||||||||||||||||||||||||||||||||||||
| Distribution and servicing fees | 70 | 66 | 62 | 58 | 55 | 6 | 27 | |||||||||||||||||||||||||||||||||||||
Other fees (b) | (60) | (55) | (50) | (56) | (53) | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Total fee revenue | 788 | 755 | 790 | 765 | 779 | 4 | 1 | |||||||||||||||||||||||||||||||||||||
Investment and other revenue (c) | 17 | (121) | 1 | 12 | 6 | N/M | N/M | |||||||||||||||||||||||||||||||||||||
Total fee and other revenue (c) | 805 | 634 | 791 | 777 | 785 | 27 | 3 | |||||||||||||||||||||||||||||||||||||
| Net interest income | 41 | 45 | 39 | 39 | 45 | (9) | (9) | |||||||||||||||||||||||||||||||||||||
| Total revenue | 846 | 679 | 830 | 816 | 830 | 25 | 2 | |||||||||||||||||||||||||||||||||||||
| Provision for credit losses | (1) | (2) | (9) | 7 | — | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Noninterest expense (ex. amortization of intangible assets) | 736 | 680 | 670 | 674 | 732 | 8 | 1 | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 4 | 5 | 5 | 5 | 5 | (20) | (20) | |||||||||||||||||||||||||||||||||||||
| Total noninterest expense | 740 | 685 | 675 | 679 | 737 | 8 | — | |||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 107 | $ | (4) | $ | 164 | $ | 130 | $ | 93 | N/M | 15 | % | |||||||||||||||||||||||||||||||
| Total revenue by line of business: | ||||||||||||||||||||||||||||||||||||||||||||
| Investment Management | $ | 576 | $ | 415 | $ | 565 | $ | 553 | $ | 564 | 39 | % | 2 | % | ||||||||||||||||||||||||||||||
| Wealth Management | 270 | 264 | 265 | 263 | 266 | 2 | 2 | |||||||||||||||||||||||||||||||||||||
| Total revenue by line of business | $ | 846 | $ | 679 | $ | 830 | $ | 816 | $ | 830 | 25 | % | 2 | % | ||||||||||||||||||||||||||||||
| Financial ratios: | ||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax operating margin | 13 | % | (1) | % | 20 | % | 16 | % | 11 | % | ||||||||||||||||||||||||||||||||||
Adjusted pre-tax operating margin – Non-GAAP (d) | 14 | % | (1) | % | 22 | % | 18 | % | 13 | % | ||||||||||||||||||||||||||||||||||
| Selected balance sheet data: | ||||||||||||||||||||||||||||||||||||||||||||
| Average loans | $ | 13,553 | $ | 13,405 | $ | 13,519 | $ | 13,995 | $ | 13,960 | 1 | % | (3) | % | ||||||||||||||||||||||||||||||
Average assets (e) | $ | 26,272 | $ | 26,341 | $ | 26,654 | $ | 27,399 | $ | 28,370 | — | % | (7) | % | ||||||||||||||||||||||||||||||
| Average deposits | $ | 11,364 | $ | 12,039 | $ | 13,578 | $ | 15,410 | $ | 16,144 | (6) | % | (30) | % | ||||||||||||||||||||||||||||||
(a) On a constant currency basis, investment management and performance fees decreased 1% (Non-GAAP) compared with 1Q23. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. | ||||||||||||||||||||||||||||||||||||||||||||
| (b) Other fees primarily include investment services fees. | ||||||||||||||||||||||||||||||||||||||||||||
(c) Investment and other revenue and total fee and other revenue are net of income (loss) attributable to noncontrolling interests related to consolidated investment management funds. | ||||||||||||||||||||||||||||||||||||||||||||
(d) Net of distribution and servicing expense. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. | ||||||||||||||||||||||||||||||||||||||||||||
(e) In business segments where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference. | ||||||||||||||||||||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||
13
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||||||||||||||
| AUM BY PRODUCT TYPE, CHANGES IN AUM AND WEALTH MANAGEMENT CLIENT ASSETS | |||||||||||||||||||||||||||||||||||||||||||||||
| 1Q24 vs. | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in billions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 4Q23 | 1Q23 | ||||||||||||||||||||||||||||||||||||||||
AUM by product type (a)(b): | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity | $ | 168 | $ | 145 | $ | 133 | $ | 145 | $ | 142 | 16 | % | 18 | % | |||||||||||||||||||||||||||||||||
| Fixed income | 219 | 205 | 190 | 203 | 207 | 7 | 6 | ||||||||||||||||||||||||||||||||||||||||
| Index | 474 | 459 | 425 | 440 | 408 | 3 | 16 | ||||||||||||||||||||||||||||||||||||||||
| Liability-driven investments | 573 | 605 | 534 | 579 | 604 | (5) | (5) | ||||||||||||||||||||||||||||||||||||||||
| Multi-asset and alternative investments | 174 | 170 | 156 | 162 | 161 | 2 | 8 | ||||||||||||||||||||||||||||||||||||||||
| Cash | 407 | 390 | 383 | 377 | 386 | 4 | 5 | ||||||||||||||||||||||||||||||||||||||||
| Total AUM | $ | 2,015 | $ | 1,974 | $ | 1,821 | $ | 1,906 | $ | 1,908 | 2 | % | 6 | % | |||||||||||||||||||||||||||||||||
Changes in AUM (a)(b): | |||||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance of AUM | $ | 1,974 | $ | 1,821 | $ | 1,906 | $ | 1,908 | $ | 1,836 | |||||||||||||||||||||||||||||||||||||
| Net inflows (outflows): | |||||||||||||||||||||||||||||||||||||||||||||||
| Long-term strategies: | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity | (4) | (2) | (3) | (3) | (4) | ||||||||||||||||||||||||||||||||||||||||||
| Fixed income | 12 | 3 | (7) | (4) | 4 | ||||||||||||||||||||||||||||||||||||||||||
| Liability-driven investments | 13 | 4 | 1 | (3) | 10 | ||||||||||||||||||||||||||||||||||||||||||
| Multi-asset and alternative investments | (5) | (1) | (4) | (1) | (3) | ||||||||||||||||||||||||||||||||||||||||||
| Total long-term active strategies inflows (outflows) | 16 | 4 | (13) | (11) | 7 | ||||||||||||||||||||||||||||||||||||||||||
| Index | (15) | (10) | (2) | 2 | (2) | ||||||||||||||||||||||||||||||||||||||||||
| Total long-term strategies inflows (outflows) | 1 | (6) | (15) | (9) | 5 | ||||||||||||||||||||||||||||||||||||||||||
| Short-term strategies: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash | 16 | 7 | 7 | (9) | — | ||||||||||||||||||||||||||||||||||||||||||
| Total net inflows (outflows) | 17 | 1 | (8) | (18) | 5 | ||||||||||||||||||||||||||||||||||||||||||
| Net market impact | 16 | 122 | (50) | (3) | 52 | ||||||||||||||||||||||||||||||||||||||||||
| Net currency impact | (10) | 30 | (27) | 19 | 15 | ||||||||||||||||||||||||||||||||||||||||||
| Other | 18 | (c) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Ending balance of AUM | $ | 2,015 | $ | 1,974 | $ | 1,821 | $ | 1,906 | $ | 1,908 | 2 | % | 6 | % | |||||||||||||||||||||||||||||||||
Wealth Management client assets (a)(d) | $ | 309 | (e) | $ | 312 | $ | 292 | $ | 286 | $ | 279 | (1) | % | 11 | % | ||||||||||||||||||||||||||||||||
(a) March 31, 2024 information is preliminary. | |||||||||||||||||||||||||||||||||||||||||||||||
(b) Excludes assets managed outside of the Investment and Wealth Management business segment. | |||||||||||||||||||||||||||||||||||||||||||||||
(c) Reflects the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information. | |||||||||||||||||||||||||||||||||||||||||||||||
(d) Includes AUM and AUC/A in the Wealth Management line of business. | |||||||||||||||||||||||||||||||||||||||||||||||
| (e) The realignment of similar products and services within our lines of business reduced client assets attributed to the Wealth Management business. Refer to Form 8-K dated March 26, 2024 for further information. | |||||||||||||||||||||||||||||||||||||||||||||||
14
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||
| OTHER SEGMENT | |||||||||||||||||||||||||||||||||||
| (in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | ||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Fee revenue | $ | (17) | $ | (17) | $ | 6 | $ | (2) | $ | 3 | |||||||||||||||||||||||||
| Investment and other revenue | 47 | 38 | 74 | 34 | 38 | ||||||||||||||||||||||||||||||
| Total fee and other revenue | 30 | 21 | 80 | 32 | 41 | ||||||||||||||||||||||||||||||
| Net interest (expense) | (7) | (15) | (24) | (27) | (36) | ||||||||||||||||||||||||||||||
| Total revenue | 23 | 6 | 56 | 5 | 5 | ||||||||||||||||||||||||||||||
| Provision for credit losses | 12 | (6) | (13) | (25) | 27 | ||||||||||||||||||||||||||||||
| Noninterest expense | 65 | 820 | 24 | 71 | 41 | ||||||||||||||||||||||||||||||
| (Loss) income before income taxes | $ | (54) | $ | (808) | $ | 45 | $ | (41) | $ | (63) | |||||||||||||||||||||||||
| Selected balance sheet data: | |||||||||||||||||||||||||||||||||||
| Average loans and leases | $ | 1,816 | $ | 1,706 | $ | 1,711 | $ | 1,749 | $ | 1,508 | |||||||||||||||||||||||||
| Average assets | $ | 62,617 | $ | 42,867 | $ | 50,008 | $ | 59,836 | $ | 50,343 | |||||||||||||||||||||||||
15
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||||||||
| SECURITIES PORTFOLIO | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Dec. 31, 2023 | 1Q24 change in unrealized gain (loss) | March 31, 2024 | Fair value as a % of amortized cost (a) | Unrealized gain (loss) | % Floating rate (b) | Ratings (c) | |||||||||||||||||||||||||||||||||||||||||||
Amortized cost (a) | Fair value | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | Not rated | ||||||||||||||||||||||||||||||||||||||||||||
| Fair value | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency RMBS | $ | 39,333 | $ | (299) | $ | 45,805 | $ | 41,642 | 91 | % | $ | (4,163) | 23 | % | 100 | % | — | % | — | % | — | % | — | % | ||||||||||||||||||||||||||
| U.S. Treasury | 26,476 | 13 | 30,723 | 29,896 | 97 | (827) | 59 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Non-U.S. government (d) | 20,543 | 9 | 27,081 | 26,498 | 98 | (583) | 37 | 93 | 3 | 3 | 1 | — | ||||||||||||||||||||||||||||||||||||||
| Agency commercial MBS | 11,010 | 11 | 11,664 | 11,083 | 95 | (581) | 43 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| CLOs | 7,119 | 16 | 7,238 | 7,248 | 100 | 10 | 100 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 6,780 | (5) | 7,031 | 6,607 | 94 | (424) | 40 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Foreign covered bonds | 6,317 | 11 | 7,420 | 7,259 | 98 | (161) | 51 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Non-agency commercial MBS | 2,997 | 38 | 3,219 | 3,009 | 93 | (210) | 53 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Non-agency RMBS | 1,766 | (6) | 1,876 | 1,727 | 92 | (149) | 45 | 86 | 2 | — | 6 | 6 | ||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | 943 | 6 | 976 | 899 | 92 | (77) | 18 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Other debt securities | 11 | 1 | 12 | 11 | 90 | (1) | — | — | — | — | — | 100 | ||||||||||||||||||||||||||||||||||||||
| Total securities | $ | 123,295 | (e) | $ | (205) | $ | 143,045 | $ | 135,879 | (e)(f) | 95 | % | $ | (7,166) | (e)(g) | 42 | % | 98 | % | 1 | % | 1 | % | — | % | — | % | |||||||||||||||||||||||
| (a) Amortized cost reflects historical impairments, and is net of allowance for credit losses. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (b) Includes the impact of hedges. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(c) Represents ratings by S&P, or the equivalent. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (d) Includes supranational securities. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(e) Includes net unrealized gains on derivatives hedging securities available-for-sale (including terminated hedges) of $1,767 million at Dec. 31, 2023 and $2,161 million at March 31, 2024. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(f) The fair value of available-for-sale securities totaled $92,666 million at March 31, 2024, net of hedges, or 68% of the fair value of the securities portfolio, net of hedges. The fair value of the held-to-maturity securities totaled $43,213 million at March 31, 2024, or 32% of the fair value of the securities portfolio, net of hedges. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (g) At March 31, 2024, includes pre-tax net unrealized losses of $1,975 million related to available-for-sale securities, net of hedges, and $5,191 million related to held-to-maturity securities. The after-tax unrealized losses, net of hedges, related to available-for-sale securities was $1,490 million and the after-tax equivalent related to held-to-maturity securities was $3,958 million. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Note: The amortizable purchase premium (net of discount) relating to securities was $419 million at March 31, 2024 and the amortization of that net purchase premium was $19 million in 1Q24. | ||||||||||||||||||||||||||||||||||||||||||||||||||
16
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||
| ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS | ||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||
| (dollars in millions) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||||||||||||||||
| Allowance for credit losses – beginning of period: | ||||||||||||||||||||||||||||||||
| Allowance for loan losses | $ | 303 | $ | 211 | $ | 191 | $ | 170 | $ | 176 | ||||||||||||||||||||||
| Allowance for lending-related commitments | 87 | 85 | 91 | 83 | 78 | |||||||||||||||||||||||||||
Allowance for other financial instruments (a) | 24 | 29 | 41 | 67 | 38 | |||||||||||||||||||||||||||
| Allowance for credit losses – beginning of period | $ | 414 | $ | 325 | $ | 323 | $ | 320 | $ | 292 | ||||||||||||||||||||||
| Net (charge-offs) recoveries: | ||||||||||||||||||||||||||||||||
| Charge-offs | (1) | — | (1) | (4) | — | |||||||||||||||||||||||||||
| Recoveries | — | 5 | — | 2 | 1 | |||||||||||||||||||||||||||
| Total net (charge-offs) recoveries | (1) | 5 | (1) | (2) | 1 | |||||||||||||||||||||||||||
Provision for credit losses (b) | 27 | 84 | 3 | 5 | 27 | |||||||||||||||||||||||||||
| Allowance for credit losses – end of period | $ | 440 | $ | 414 | $ | 325 | $ | 323 | $ | 320 | ||||||||||||||||||||||
| Allowance for credit losses – end of period: | ||||||||||||||||||||||||||||||||
| Allowance for loan losses | $ | 322 | $ | 303 | $ | 211 | $ | 191 | $ | 170 | ||||||||||||||||||||||
| Allowance for lending-related commitments | 81 | 87 | 85 | 91 | 83 | |||||||||||||||||||||||||||
Allowance for other financial instruments (a) | 37 | 24 | 29 | 41 | 67 | |||||||||||||||||||||||||||
| Allowance for credit losses – end of period | $ | 440 | $ | 414 | $ | 325 | $ | 323 | $ | 320 | ||||||||||||||||||||||
| Allowance for loan losses as a percentage of total loans | 0.44 | % | 0.45 | % | 0.32 | % | 0.30 | % | 0.27 | % | ||||||||||||||||||||||
| Nonperforming assets | $ | 278 | $ | 237 | $ | 48 | $ | 88 | $ | 105 | ||||||||||||||||||||||
(a) Includes allowance for credit losses on federal funds sold and securities purchased under resale agreements, available-for-sale securities, held-to-maturity securities, accounts receivable, cash and due from banks and interest-bearing deposits with banks. | ||||||||||||||||||||||||||||||||
(b) Includes all other instruments within the scope of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. | ||||||||||||||||||||||||||||||||
17
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||
| EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||||
| BNY Mellon has included in this Financial Supplement certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity – Non-GAAP is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share – Non-GAAP is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding. | ||||||||||||||||||||||||||||||||
| Net interest income, on a fully taxable equivalent ("FTE") basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income. | ||||||||||||||||||||||||||||||||
| BNY Mellon has also included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business segment, net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. We believe that this measure is useful when evaluating the performance of the Investment and Wealth Management business segment relative to industry competitors. | ||||||||||||||||||||||||||||||||
| The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. We believe that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates. | ||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||
| Return on common and tangible common equity ratios are annualized. | ||||||||||||||||||||||||||||||||
| Return on common equity and tangible common equity reconciliation | ||||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | |||||||||||||||||||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 953 | $ | 162 | $ | 958 | $ | 1,036 | $ | 911 | ||||||||||||||||||||||
| Add: Amortization of intangible assets | 12 | 14 | 15 | 14 | 14 | |||||||||||||||||||||||||||
| Less: Tax impact of amortization of intangible assets | 3 | 4 | 3 | 4 | 3 | |||||||||||||||||||||||||||
| Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | $ | 962 | $ | 172 | $ | 970 | $ | 1,046 | $ | 922 | ||||||||||||||||||||||
| Average common shareholders’ equity | $ | 35,905 | $ | 36,050 | $ | 35,873 | $ | 35,655 | $ | 35,483 | ||||||||||||||||||||||
| Less: Average goodwill | 16,238 | 16,199 | 16,237 | 16,219 | 16,160 | |||||||||||||||||||||||||||
| Average intangible assets | 2,848 | 2,858 | 2,875 | 2,888 | 2,899 | |||||||||||||||||||||||||||
| Add: Deferred tax liability – tax deductible goodwill | 1,209 | 1,205 | 1,197 | 1,193 | 1,187 | |||||||||||||||||||||||||||
| Deferred tax liability – intangible assets | 655 | 657 | 657 | 660 | 660 | |||||||||||||||||||||||||||
| Average tangible common shareholders’ equity – Non-GAAP | $ | 18,683 | $ | 18,855 | $ | 18,615 | $ | 18,401 | $ | 18,271 | ||||||||||||||||||||||
| Return on common equity – GAAP | 10.7 | % | 1.8 | % | 10.6 | % | 11.7 | % | 10.4 | % | ||||||||||||||||||||||
| Return on tangible common equity – Non-GAAP | 20.7 | % | 3.6 | % | 20.6 | % | 22.8 | % | 20.5 | % | ||||||||||||||||||||||
18
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||
| EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||||
| Book value and tangible book value per common share reconciliation | 2024 | 2023 | ||||||||||||||||||||||||||||||
| (dollars in millions, except common shares and unless otherwise noted) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||||||||||||||||
| BNY Mellon shareholders’ equity at period end – GAAP | $ | 40,569 | $ | 40,770 | $ | 40,858 | $ | 40,824 | $ | 40,519 | ||||||||||||||||||||||
| Less: Preferred stock | 4,343 | 4,343 | 4,838 | 4,838 | 4,838 | |||||||||||||||||||||||||||
| BNY Mellon common shareholders’ equity at period end – GAAP | 36,226 | 36,427 | 36,020 | 35,986 | 35,681 | |||||||||||||||||||||||||||
| Less: Goodwill | 16,228 | 16,261 | 16,159 | 16,246 | 16,192 | |||||||||||||||||||||||||||
| Intangible assets | 2,839 | 2,854 | 2,859 | 2,881 | 2,890 | |||||||||||||||||||||||||||
| Add: Deferred tax liability – tax deductible goodwill | 1,209 | 1,205 | 1,197 | 1,193 | 1,187 | |||||||||||||||||||||||||||
| Deferred tax liability – intangible assets | 655 | 657 | 657 | 660 | 660 | |||||||||||||||||||||||||||
| BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP | $ | 19,023 | $ | 19,174 | $ | 18,856 | $ | 18,712 | $ | 18,446 | ||||||||||||||||||||||
Period-end common shares outstanding (in thousands) | 747,816 | 759,344 | 769,073 | 778,782 | 789,134 | |||||||||||||||||||||||||||
| Book value per common share – GAAP | $ | 48.44 | $ | 47.97 | $ | 46.84 | $ | 46.21 | $ | 45.22 | ||||||||||||||||||||||
| Tangible book value per common share – Non-GAAP | $ | 25.44 | $ | 25.25 | $ | 24.52 | $ | 24.03 | $ | 23.38 | ||||||||||||||||||||||
| Net interest margin reconciliation | ||||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | |||||||||||||||||||||||||||
| Net interest income – GAAP | $ | 1,040 | $ | 1,101 | $ | 1,016 | $ | 1,100 | $ | 1,128 | ||||||||||||||||||||||
| Add: Tax equivalent adjustment | — | 1 | — | 1 | — | |||||||||||||||||||||||||||
| Net interest income (FTE) – Non-GAAP | $ | 1,040 | $ | 1,102 | $ | 1,016 | $ | 1,101 | $ | 1,128 | ||||||||||||||||||||||
| Average interest-earning assets | $ | 346,133 | $ | 344,174 | $ | 339,044 | $ | 362,049 | $ | 348,378 | ||||||||||||||||||||||
Net interest margin – GAAP (a) | 1.19 | % | 1.26 | % | 1.18 | % | 1.20 | % | 1.29 | % | ||||||||||||||||||||||
Net interest margin (FTE) – Non-GAAP (a) | 1.19 | % | 1.26 | % | 1.18 | % | 1.20 | % | 1.29 | % | ||||||||||||||||||||||
| (a) Net interest margin is annualized. | ||||||||||||||||||||||||||||||||
19
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||
| EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||||
| Pre-tax operating margin reconciliation - Investment and Wealth Management business segment | ||||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | |||||||||||||||||||||||||||
| Income (loss) before income taxes – GAAP | $ | 107 | $ | (4) | $ | 164 | $ | 130 | $ | 93 | ||||||||||||||||||||||
| Total revenue – GAAP | $ | 846 | $ | 679 | $ | 830 | $ | 816 | $ | 830 | ||||||||||||||||||||||
| Less: Distribution and servicing expense | 96 | 89 | 87 | 93 | 86 | |||||||||||||||||||||||||||
| Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | $ | 750 | $ | 590 | $ | 743 | $ | 723 | $ | 744 | ||||||||||||||||||||||
Pre-tax operating margin – GAAP (a) | 13 | % | (1) | % | 20 | % | 16 | % | 11 | % | ||||||||||||||||||||||
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a) | 14 | % | (1) | % | 22 | % | 18 | % | 13 | % | ||||||||||||||||||||||
| (a) Income before income taxes divided by total revenue. | ||||||||||||||||||||||||||||||||
| Constant currency reconciliations | 1Q24 vs. | |||||||||||||||||||||||||||||||
| (dollars in millions) | 1Q24 | 1Q23 | 1Q23 | |||||||||||||||||||||||||||||
| Consolidated: | ||||||||||||||||||||||||||||||||
| Investment management and performance fees – GAAP | $ | 776 | $ | 776 | — | % | ||||||||||||||||||||||||||
| Impact of changes in foreign currency exchange rates | — | 5 | ||||||||||||||||||||||||||||||
| Adjusted investment management and performance fees – Non-GAAP | $ | 776 | $ | 781 | (1) | % | ||||||||||||||||||||||||||
| Investment and Wealth Management business segment: | ||||||||||||||||||||||||||||||||
| Investment management and performance fees – GAAP | $ | 778 | $ | 777 | — | % | ||||||||||||||||||||||||||
| Impact of changes in foreign currency exchange rates | — | 5 | ||||||||||||||||||||||||||||||
| Adjusted investment management and performance fees – Non-GAAP | $ | 778 | $ | 782 | (1) | % | ||||||||||||||||||||||||||
20
1Q 24 FINANCIAL April 16, 2024 HIGHLIGHTS
2 +11% Revenue Growth: Pre-tax Margin: EPS Growth: • Revenue Growth: Revenue of $4.5bn up 3% YoY – Investment services fees up 8% YoY – Investment management and performance fees flat YoY – Foreign exchange revenue down 14% YoY – Net interest income down 8% YoY • Expense Discipline: Expense of $3.2bn up 2% YoY; up 1%(b) excluding notable items • Balance Sheet Strength: – Average total deposits of $279bn up 2% YoY and QoQ – Tier 1 leverage ratio of 5.9% and CET1 ratio of 10.8% – LCR of 117% and NSFR of 136% • Profitability: – ROE of 10.7% and ROTCE(a) of 20.7% • Capital Returns: Returned $1.3bn to common shareholders, including $324mm of dividends and $988mm of share repurchases – Board of Directors authorized new $6bn share repurchase program – 138% total payout ratio year-to-date +3% 29% 1Q24 Financial Highlights ROTCE(a): 20.7% Tier 1 Leverage: 5.9% Expense Growth: +2% (a) Represents a non-GAAP measure. See page 13 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE. (b) Represents a non-GAAP measure. See page 12 in the Appendix for the corresponding reconciliation of the non-GAAP measure of expense excluding notable items. Note: Above comparisons are 1Q24 vs. 1Q23, unless otherwise noted. Prior period results have been restated to reflect the adoption of new accounting guidance for our investments in renewable energy projects, effective Jan. 1, 2024. Refer to Form 8-K dated March 26, 2024 for further information.
3 1Q24 vs. $mm, except per share data or unless otherwise noted 1Q24 4Q23 1Q23 4Q23 1Q23 Income Statement Investment services fees $2,278 $2,242 $2,119 2% 8% Investment management and performance fees 776 743 776 4 — Foreign exchange revenue 152 143 176 6 (14) Other fee revenue 99 86 85 15 16 Total fee revenue $3,305 $3,214 $3,156 3% 5% Investment and other revenue 182 43 131 N/M N/M Net interest income 1,040 1,101 1,128 (6) (8) Total revenue $4,527 $4,358 $4,415 4% 3% Provision for credit losses 27 84 27 N/M N/M Noninterest expense 3,176 3,995 3,100 (21) 2 Income before income taxes $1,324 $279 $1,288 375% 3% Net income applicable to common shareholders $953 $162 $911 488% 5% Avg. common shares and equivalents outstanding (mm) - diluted 762 772 808 (1)% (6)% EPS $1.25 $0.21 $1.13 495% 11% Key Performance Indicators Operating leverage(a) 2,438 bps 9 bps Pre-tax margin 29% 6% 29% ROE 10.7% 1.8% 10.4% ROTCE(b) 20.7% 3.6% 20.5% Non-GAAP measures, excluding notable items(c) Adjusted total revenue $4,527 $4,508 $4,416 —% 3% Adjusted noninterest expense 3,138 3,116 3,094 1 1 Adjusted EPS 1.29 1.29 1.13 — 14 Adjusted operating leverage (29) bps 109 bps Adjusted pre-tax margin 30% 29% 29% Adjusted ROTCE 21.3% 21.1% 20.6% 1Q24 Financial Results (a) Note: See page 11 in the Appendix for corresponding footnotes. (b) Represents a non-GAAP measure. See page 13 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE. (c) Each of the below line items represents a non-GAAP measure. See pages 12 and 13 in the Appendix for the corresponding reconciliations of these non-GAAP measures excluding notable items. N/M – not meaningful.
4 1Q24 4Q23 1Q23 Consolidated regulatory capital ratios:(a) Tier 1 capital ($mm) $22,722 $22,863 $22,595 Average assets for Tier 1 leverage ratio ($mm) 386,146 383,705 389,358 Tier 1 leverage ratio 5.9% 6.0% 5.8% Common Equity Tier 1 ("CET1") capital ($mm) $18,382 $18,534 $17,761 Risk-weighted assets ($mm) 169,851 161,528 162,692 CET1 ratio 10.8% 11.5% 10.9% Supplementary leverage ratio ("SLR") 7.0% 7.3% 6.8% Consolidated regulatory liquidity ratios:(a) Liquidity coverage ratio ("LCR") 117% 117% 118% Net stable funding ratio ("NSFR") 136% 135% 132% Capital returns: Cash dividends per common share $0.42 $0.42 $0.37 Common stock dividends ($mm) $324 $328 $304 Common stock repurchases ($mm) 988 450 1,256 Total capital return ($mm) $1,312 $778 $1,560 Total payout ratio 138% 480% 171% Profitability ROE 10.7% 1.8% 10.4% ROTCE(b) 20.7% 3.6% 20.5% Adjusted ROTCE(c) 21.3% 21.1% 20.6% Capital and Liquidity Capital • Tier 1 leverage ratio of 5.9%, down 7 bps QoQ – Tier 1 capital of $22.7bn decreased $141mm QoQ, primarily reflecting capital returned through common stock repurchases and dividends, partially offset by capital generated through earnings – Average assets for Tier 1 leverage ratio of $386bn increased $2.4bn QoQ • CET1 ratio of 10.8%, down 65 bps QoQ – CET1 capital of $18.4bn decreased $152mm QoQ, primarily reflecting capital returned through common stock repurchases and dividends, partially offset by capital generated through earnings – RWA of $169.9bn increased by $8bn QoQ, primarily reflecting higher agency securities lending balances and client overdraft balances at period-end Liquidity • LCR of 117%, flat QoQ • NSFR of 136%, up 1%-pt QoQ (a) Note: See page 11 in the Appendix for corresponding footnotes. (b) Represents a non-GAAP measure. See page 13 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE. (c) Represents a non-GAAP measure. See page 13 in the Appendix for the corresponding reconciliations of the non-GAAP measure of ROTCE excluding notable items.
5 1,128 1,100 1,016 1,101 1,040 1Q23 2Q23 3Q23 4Q23 1Q24 1Q24 vs. 1Q24 4Q23 1Q23 Total assets $404 1% (1)% Total interest-earning assets $346 1% (1)% Cash and reverse repo 142 (2) 4 Loans 66 — 4 Investment securities 134 5 (7) Noninterest-bearing $50 (5)% (29)% Interest-bearing 229 4 12 Total deposits $279 2% 2% Net Interest Income and Balance Sheet Trends Net Interest Income ($mm) 1.29% 1.20% 1.18% 1.26% 1.19% 1Q23 2Q23 3Q23 4Q23 1Q24 Net Interest Margin Balance Sheet Trends ($bn, average) • Net interest income of $1,040mm down 8% YoY and down 6% QoQ – QoQ decrease primarily driven by changes in balance sheet mix • Net interest margin of 1.19% down 10 bps YoY and down 7 bps QoQ – QoQ decrease primarily driven by changes in balance sheet mix • Avg. total deposits of $279bn up 2% YoY and QoQ
6 1Q24 vs. $mm, unless otherwise noted 1Q24 4Q23 1Q23 Asset Servicing $1,013 4% 8% Issuer Services 261 (8) 11 Total investment services fees $1,274 1% 8% Foreign exchange revenue 124 5 (11) Other fees 59 9 7 Investment and other revenue 99 N/M N/M Net interest income 583 (8) (12) Total revenue $2,139 (2)% 1% Provision for credit losses 11 N/M N/M Noninterest expense 1,537 (7) — Income before income taxes $591 28% 4% $bn, unless otherwise noted 1Q24 4Q23 1Q23 Pre-tax margin 28% 21% 27% AUC/A (trn)(a)(b) $35.4 $34.2 $32.6 Deposits (average) $175 $171 $167 Issuer Services Total debt serviced (trn)(c) $14.0 $14.0 $13.6 Number of sponsored Depositary Receipts programs 527 543 577 Securities Services Select Income Statement Data • Total revenue of $2,139mm up 1% YoY – Investment services fees up 8% YoY > Asset Servicing up 8% YoY, primarily reflecting higher market values, net new business and higher client activity > Issuer Services up 11% YoY, primarily reflecting higher Depositary Receipts revenue – Foreign exchange revenue down 11% YoY – Net interest income down 12% YoY • Noninterest expense of $1,537mm flat YoY, primarily reflecting higher investments and employee merit increases, offset by efficiency savings • Income before income taxes of $591mm up 4% YoY Key Performance Indicators Select Income Statement Data Note: See page 11 in the Appendix for corresponding footnotes. Prior period segment results have been revised to reflect the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information on these revisions. N/M – not meaningful.
7 1Q24 vs. $mm, unless otherwise noted 1Q24 4Q23 1Q23 Pershing $482 2% 3% Treasury Services 184 3 5 Clearance and Collateral Management 329 2 13 Total investment services fees $995 2% 7% Foreign exchange revenue 24 14 33 Other fees 58 16 14 Investment and other revenue 17 N/M N/M Net interest income 423 (3) (7) Total revenue $1,517 1% 3% Provision for credit losses 5 N/M N/M Noninterest expense 834 — 7 Income before income taxes $678 7% (2)% $bn, unless otherwise noted 1Q24 4Q23 1Q23 Pre-tax margin 45% 42% 47% AUC/A (trn)(a)(b) $13.1 $13.3 $13.7 Deposits (average) $90 $88 $86 Pershing AUC/A (trn)(a) $2.6 $2.5 $2.4 Net new assets (U.S. platform)(c) (2) (4) 37 Daily average revenue trades (DARTs) (U.S. platform) ('000) 290 229 261 Average active clearing accounts ('000) 7,991 8,012 7,849 Treasury Services U.S. dollar payment volumes (daily average) 237,124 243,005 236,322 Clearance and Collateral Management Tri-party collateral management balances (average) $5,157 $5,248 $5,626 Market and Wealth Services Select Income Statement Data Key Performance Indicators Select Income Statement Data • Total revenue of $1,517mm up 3% YoY – Investment services fees up 7% YoY > Pershing up 3% YoY, primarily reflecting higher market values and client activity, partially offset by lost business in the prior year > Treasury Services up 5% YoY, primarily reflecting net new business > Clearance and Collateral Management up 13% YoY, primarily reflecting higher collateral management fees and clearance volumes – Foreign exchange revenue up 33% YoY – Net interest income down 7% YoY • Noninterest expense of $834mm up 7% YoY, primarily reflecting higher investments and revenue- related expense, and employee merit increases, partially offset by efficiency savings • Income before income taxes of $678mm down 2% YoY Note: See page 11 in the Appendix for corresponding footnotes. Prior period segment results have been revised to reflect the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information on these revisions. N/M – not meaningful.
8 1Q24 vs. $mm, unless otherwise noted 1Q24 4Q23 1Q23 Investment management fees $768 6% 2% Performance fees 10 N/M N/M Distribution and servicing fees 70 6 27 Other fees (60) N/M N/M Investment and other revenue 17 N/M N/M Net interest income 41 (9) (9) Total revenue $846 25% 2% Provision for credit losses (1) N/M N/M Noninterest expense 740 8 — Income (loss) before income taxes $107 N/M (d) 15% Total revenue by line of business: Investment Management $576 39% 2% Wealth Management 270 2 2 Total revenue $846 25% 2% $bn, unless otherwise noted 1Q24 4Q23 1Q23 Pre-tax margin 13% (1)% 11% Deposits $11 $12 $16 Assets under management ("AUM")(a) $2,015 $1,974 $1,908 Long-term active strategies net flows $16 $4 $7 Index net flows (15) (10) (2) Short-term strategies net flows 16 7 — Total net flows $17 1 5 Wealth Management Client assets(b) $309 (c) $312 $279 Investment and Wealth Management Select Income Statement Data Key Performance Indicators Select Income Statement Data • Total revenue of $846mm up 2% YoY – Investment Management up 2% YoY, primarily reflecting higher market values, partially offset by the mix of AUM flows and lower performance fees – Wealth Management up 2% YoY, primarily reflecting higher market values, partially offset by changes in product mix and lower net interest income • Noninterest expense of $740mm flat YoY, primarily reflecting higher investments and employee merit increases, offset by efficiency savings • Income before income taxes of $107mm up 15% YoY • AUM of $2.0trn up 6% YoY, primarily reflecting higher market values • Wealth Management client assets of $309bn up 11% YoY, primarily reflecting higher market values and cumulative net inflows Note: See page 11 in the Appendix for corresponding footnotes. Prior period segment results have been revised to reflect the realignment of similar products and services within our lines of business. Refer to Form 8-K dated March 26, 2024 for further information on these revisions. N/M – not meaningful.
9 $mm, unless otherwise noted 1Q24 4Q23 1Q23 Fee revenue $(17) $(17) $3 Investment and other revenue 47 38 38 Net interest (expense) (7) (15) (36) Total revenue $23 $6 $5 Provision for credit losses 12 (6) 27 Noninterest expense 65 820 41 Income (loss) before income taxes $(54) $(808) $(63) Other Segment Select Income Statement Data Select Income Statement Data • Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense – YoY improvement primarily reflects a 1Q23 strategic equity investment loss • Noninterest expense increased YoY, primarily driven by higher severance expense
APPENDIX
11 Footnotes Page 3 – 1Q24 Financial Results (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. Page 4 – Capital and Liquidity (a) Regulatory capital and liquidity ratios for March 31, 2024 are preliminary. For our CET1 ratio, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2024 was the Standardized Approach, and for December 31, 2023 and March 31, 2023 was the Advanced Approaches. Page 6 – Securities Services (a) March 31, 2024 information is preliminary. (b) Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of business. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.7 trillion at March 31, 2024 and December 31, 2023 and $1.5 trillion at March 31, 2023. (c) Reported amounts have been revised from previously reported amounts. Page 7 – Market and Wealth Services (a) March 31, 2024 information is preliminary. (b) Consists of AUC/A from the Clearance and Collateral Management and Pershing lines of business. (c) Net new assets represent net flows of assets (e.g., net cash deposits and net securities transfers, including dividends and interest) in customer accounts in Pershing LLC, a U.S. broker-dealer. Page 8 – Investment and Wealth Management (a) March 31, 2024 information is preliminary. Excludes assets managed outside of the Investment and Wealth Management business segment. (b) March 31, 2024 information is preliminary. Includes AUM and AUC/A in the Wealth Management line of business. (c) The realignment of similar products and services within our lines of business reduced client assets attributed to the Wealth Management business. Refer to Form 8-K dated March 26, 2024 for further information. (d) Excluding notable items, income before taxes decreased 27% (non-GAAP) compared with 4Q23. See page 13 in the Appendix for the corresponding reconciliation of this non-GAAP measure.
12 Select Income Statement Data Reconciliation of Non-GAAP Measures – Impact of Notable Items 1Q24 vs. $mm, except per share amounts 1Q24 4Q23 1Q23 4Q23 1Q23 Total revenue – GAAP $4,527 $4,358 $4,415 4% 3% Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture(a) — (144) — Disposal (losses)(a) — (6) (1) Adjusted total revenue, ex-notables — Non-GAAP $4,527 $4,508 $4,416 —% 3% Noninterest expense – GAAP $3,176 $3,995 $3,100 (21)% 2% Less: Severance(b) 36 200 — Litigation reserves(b) 2 47 6 FDIC special assessment(b) — 632 — Adjusted noninterest expense, ex-notables — Non-GAAP $3,138 $3,116 $3,094 1% 1% Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $953 $162 $911 488% 5% Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture(a) — (144) — Disposal (losses)(a) — (5) — Severance(b) (27) (153) — Litigation reserves(b) (2) (47) (4) FDIC special assessment(b) — (482) — Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation — Non- GAAP $982 $993 $915 (1)% 7% Diluted earnings per share – GAAP $1.25 $0.21 $1.13 495% 11% Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture(a) — (0.19) — Disposal (losses)(a) — (0.01) — Severance(b) (0.04) (0.20) — Litigation reserves(b) — (0.06) (0.01) FDIC special assessment(b) — (0.62) — Adjusted diluted earnings per share — Non-GAAP (c) $1.29 $1.29 $1.13 —% 14% Operating leverage – GAAP(d) 2,438 bps 9 bps Adjusted operating leverage — Non-GAAP(d) (29) bps 109 bps Pre-tax operating margin – GAAP 29% 6% 29% Adjusted pre-tax operating margin — Non-GAAP 30% 29% 29% (a) Reflected in Investment and other revenue. (b) Severance is reflected in Staff expense, Litigation reserves in Other expense, and FDIC special assessment in Bank assessment charges, respectively. (c) 1Q23 does not foot due to rounding. (d) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
13 $mm 1Q24 4Q23 1Q23 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $953 $162 $911 Add: Amortization of intangible assets 12 14 14 Less: Tax impact of amortization of intangible assets 3 4 3 Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets — Non-GAAP $962 $172 $922 Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture — (144) — Disposal (losses) — (5) — Severance (27) (153) — Litigation reserves (2) (47) (4) FDIC special assessment — (482) — Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets and notable items — Non-GAAP $991 $1,003 $926 Average common shareholders’ equity $35,905 $36,050 $35,483 Less: Average goodwill 16,238 16,199 16,160 Average intangible assets 2,848 2,858 2,899 Add: Deferred tax liability – tax deductible goodwill 1,209 1,205 1,187 Deferred tax liability – intangible assets 655 657 660 Average tangible common shareholders’ equity – Non-GAAP $18,683 $18,855 $18,271 Return on common equity(a) – GAAP 10.7% 1.8% 10.4% Adjusted return on common equity(a) – Non-GAAP 11.0% 10.9% 10.5% Return on tangible common equity(a) – Non-GAAP 20.7% 3.6% 20.5% Adjusted return on tangible common equity(a) – Non-GAAP 21.3% 21.1% 20.6% Return on Common Equity and Tangible Common Equity Reconciliation (a) Quarterly results are annualized. 1Q24 vs. $mm 1Q24 4Q23 4Q23 Income (loss) before income taxes – GAAP $107 $(4) N/M Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture — (144) Severance (4) (12) Adjusted income before taxes — Non-GAAP $111 $152 (27)% Impact of Notable Items – Investment and Wealth Management Segment
14 A number of statements in our presentations, the accompanying slides and the responses to questions on our conference call discussing our quarterly results may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about The Bank of New York Mellon Corporation’s (the “Corporation,” “we,” “us,” or “our”) capital plans including dividends and repurchases, total payout ratio, financial performance, fee revenue, net interest revenue, expenses, cost discipline, efficiency savings, operating leverage, pre-tax margin, capital ratios, organic growth, pipeline, deposits, interest rates and yield curves, securities portfolio, taxes, investments, including in technology and product development, innovation in products and services, artificial intelligence, client experience, strategic priorities and initiatives, transition to a platforms operating model, capabilities, resiliency, risk profile, human capital management and the effects of the current and near-term market and macroeconomic outlook on us, including on our business, operations, financial performance and prospects. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially as we complete our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Forward-looking statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “momentum,” “ambition,” “aspiration,” “objective,” “aim,” “future,” “potentially,” “outlook” and words of similar meaning may signify forward-looking statements. These statements are not guarantees of future results or occurrences, are inherently uncertain and are based upon current beliefs and expectations of future events, many of which are, by their nature, difficult to predict, outside of our control and subject to change. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results may differ, possibly materially, from the anticipated results expressed or implied in these forward-looking statements as a result of a number of important factors. These factors include: continued elevated levels of inflation and interest rates and the corresponding impacts on macroeconomic conditions, client behavior and our funding costs; liquidity and interest rate volatility; potential recessions or slowing of growth in the US, Europe and other regions; the impacts of continued hostilities in the Middle East; our ability to execute against our strategic initiatives, including our transition to a platforms operating model; potential increased regulatory requirements and costs; and the risk factors and other uncertainties set forth in our Annual Report on Form 10-K for the year ended Dec. 31, 2023 (the “2023 Annual Report”) and our other filings with the Securities and Exchange Commission (the “SEC”). Forward-looking statements about the timing, profitability, benefits and other prospective aspects of business and expense initiatives, our financial outlook and our medium-term financial targets, and how they can be achieved, are based on our current expectations regarding our ability to execute against our strategic initiatives, as well as our balance sheet size and composition, and may change, possibly materially, from what is currently expected. Statements about our outlook on fee revenue are subject to various factors, including market levels, client activity, our ability to win and onboard new business, lost business, pricing pressure and our ability to launch new products to, and expand relationships with, existing clients. Statements about our outlook on net interest revenue are subject to various factors, including interest rates, continued quantitative tightening, re-investment yields and the size, mix and duration of our balance sheet size, including with respect to deposits, loan balances and the securities portfolio. Statements about our outlook on expenses are subject to various factors, including investments, revenue-related expenses, efficiency savings, merit increases, inflation and currency fluctuations. Statements about our target Tier 1 leverage ratio and CET1 ratio are subject to various factors, including capital requirements, interest rates, capital-levels, risk-weighted assets and the size of our balance sheet, including deposit levels. Statements about the timing, manner and amount of any future common stock dividends or repurchases, as well as our outlook on total payout ratio, are subject to various factors, including our capital position, capital deployment opportunities, prevailing market conditions, legal and regulatory considerations and our outlook for the economic environment. Statements about our future effective tax rate are subject to various factors including, changes in the tax rates applicable to us, changes in our earnings mix, our profitability, the assumptions we have made in forecasting our expected tax rate, the interpretation or application of existing tax statutes and regulations, as well as any corporate tax legislation that may be enacted or any guidance that may be issued by the U.S. Internal Revenue Service. You should not place undue reliance on any forward-looking statement. All forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events. Non-GAAP Measures. In this presentation, the accompanying slides and our responses to questions, we may discuss certain non-GAAP measures in detailing our performance, which exclude certain items or otherwise include components that differ from GAAP. We believe these measures are useful to the investment community in analyzing the financial results and trends of ongoing operations. We believe they facilitate comparisons with prior periods and reflect the principal basis on which our management monitors financial performance. Additional disclosures relating to non-GAAP measures are contained in our reports filed with the SEC, including the 2023 Annual Report, the first quarter 2024 earnings release and the first quarter 2024 financial supplement, which are available at www.bnymellon.com/investorrelations. Forward-Looking Non-GAAP Financial Measures. From time to time we may discuss forward-looking non-GAAP financial measures, such as forward-looking estimates or targets for expenses excluding notable items. We are unable to provide a reconciliation of forward- looking non-GAAP financial measures to their most directly comparable GAAP financial measures because we are unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant to future results. Cautionary Statement
