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

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

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

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

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

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

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

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

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

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

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

Emerging growth company ☐

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


ITEM 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 15, 2020, The Bank of New York Mellon Corporation (“BNY Mellon”) released information on its financial results for the second quarter ended June 30, 2020. Copies of the Earnings Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.


ITEM 7.01.    REGULATION FD DISCLOSURE.

On July 15, 2020, BNY Mellon will hold a conference call and webcast to discuss its financial results for the second quarter ended June 30, 2020 and outlook. A copy of the Financial Highlights presentation for the conference call and webcast is attached hereto as Exhibit 99.3.


ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS.


(d)    EXHIBITS.
Exhibit
 
 
Number
 
Description
 
 
 
99.1

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

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

 
 
 
99.3

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

 
 
 
104

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

2

SIGNATURES

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

 
The Bank of New York Mellon Corporation
(Registrant)

Date: July 15, 2020
By: /s/ James J. Killerlane III    
 
Name: James J. Killerlane III
Title: Secretary




3
News Release
bnylogoa01b33.jpg

BNY MELLON REPORTS SECOND QUARTER 2020 EARNINGS OF
$901 MILLION OR $1.01 PER COMMON SHARE
Revenue up 2%
 
EPS flat
 
ROE 9%
ROTCE 19% (a)
 
CET1 12.6%
Tier 1 leverage 6.2%


NEW YORK, July 15, 2020 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
 
2Q20 vs.
 
2Q20

1Q20

2Q19

1Q20

2Q19

Net income applicable to common shareholders (in millions)
$
901

$
944

$
969

(5
)%
(7
)%
Diluted earnings per common share
$
1.01

$
1.05

$
1.01

(4
)%
—
 %
Second Quarter Results
Total revenue of $4.0 billion, increased 2%
•
Fee revenue increased 2%
•
Net interest revenue decreased 3%

Provision for credit losses of $143 million

Total noninterest expense of $2.7 billion, increased 1%
•
Continued investments in technology

Investment Services
•
Total revenue increased 3%
•
Fee revenue increased 5%
•
Income before taxes decreased 8%
•
AUC/A of $37.3 trillion, increased 5%

Investment and Wealth Management
•
Total revenue decreased 3%
•
Income before taxes decreased 15%
•
AUM of $2.0 trillion, increased 6%

Capital
•
CET1 ratio 12.6%; increased ~ 125 bps in 2Q20
•
Increased CET1 capital by $1.57 billion
•
Tier 1 capital increased $2.55 billion, including issuance of $1 billion of preferred stock
 
CEO Commentary
“For the second quarter, we delivered solid results, with all of our Investment Services businesses demonstrating resilient fee performance. Our EPS of $1.01 was flat year on year despite the impact of the lower interest rate environment and higher allowance for credit losses. We further bolstered our Common Equity Tier 1 ratio to 12.6 percent, and achieved a strong return on tangible common equity of 19 percent,” Todd Gibbons, Chief Executive Officer, said.

“We are seeing momentum across most of our businesses as we continue to drive improved performance and capabilities across the company, and as we benefit from higher volumes and volatility versus a year ago,” Mr. Gibbons added.

“As we look ahead to the remainder of 2020, downside risks remain from the economic uncertainty and the significant pressure from low interest rates. Despite this, our underlying business remains strong, benefiting from the improving quality and efficiency of our operations and the level of the client experience. This should provide opportunities to deepen our relationships with clients. I remain deeply proud of our 48,000+ employees and how they continue to adapt and deliver great client service during this challenging time,” Mr. Gibbons further noted.

“I would be remiss if I didn’t reflect on the first half of 2020—a period when we have been faced with the gravity of a global pandemic and with societal unrest spurred by racial injustice. Both have significant implications for how we operate as a business and as a corporate citizen. Our clients, communities and society at large can continue to rely on BNY Mellon to be a trusted steward. We have a relentless ambition to have a more profound impact on the world around us—helping us deliver sustainable long-term value to our shareholders,” Mr. Gibbons concluded.

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

Note: Above comparisons are 2Q20 vs. 2Q19.

BNY Mellon 2Q20 Earnings Release

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in millions, except per share amounts and unless otherwise noted; not
meaningful - N/M)
 
 
 
2Q20 vs.
2Q20

1Q20

2Q19

1Q20

2Q19
Fee revenue
$
3,167

$
3,323

$
3,105

(5
)%
2
 %
Net securities gains
9

9

7

N/M
N/M
Total fee and other revenue
3,176

3,332

3,112

(5
)
2

Income (loss) from consolidated investment management funds
54

(38
)
10

N/M
N/M
Net interest revenue
780

814

802

(4
)
(3
)
Total revenue
4,010

4,108

3,924

(2
)
2

Provision for credit losses
143

169

(8
)
N/M
N/M
Noninterest expense
2,686

2,712

2,647

(1
)
1

Income before income taxes
1,181

1,227

1,285

(4
)
(8
)
Provision for income taxes
216

265

264

(18
)
(18
)
Net income
$
965

$
962

$
1,021

—

(5
)%
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
901

$
944

$
969

(5
)%
(7
)%
Operating leverage (a)
 
 
 
(143
) bps
72
 bps
Diluted earnings per common share
$
1.01

$
1.05

$
1.01

(4
)%
—

Average common shares and equivalents outstanding - diluted (in thousands)
890,561

896,689

953,928

 
 
Pre-tax operating margin
29
%
30
%
33
%
 
 
(a)
Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps – basis points.


KEY DRIVERS (comparisons are 2Q20 vs. 2Q19, unless otherwise stated)
•
Total revenue increased 2% primarily reflecting:
•
Fee revenue increased 2% primarily reflecting higher fees in Pershing and Asset Servicing, partially offset by money market fee waivers, lower investment management fees and the unfavorable impact of a stronger U.S. dollar.
•
Net interest revenue decreased 3% primarily reflecting lower interest rates on interest-earning assets, partially offset by the benefit of lower deposit and funding rates and higher deposits, securities portfolio and loans.
•
Provision for credit losses of $143 million primarily reflecting increased downgrades and the continuation of the challenging macroeconomic outlook.
•
Noninterest expense increased 1% primarily reflecting the continued investments in technology and higher staff and pension expenses, partially offset by lower business development (travel and marketing) expense and the favorable impact of a stronger U.S. dollar.
•
Effective tax rate of 18.3%.

Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•
AUC/A of $37.3 trillion, increased 5%, primarily reflecting higher client inflows, market values and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar.
•
AUM of $2.0 trillion, increased 6%, primarily reflecting higher market values and net inflows, partially offset by the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).

Capital and liquidity
•
Open market share repurchases temporarily suspended for 2Q20 and 3Q20.
•
Paid $278 million in dividends to common shareholders.
•
Return on common equity (“ROE”) of 9%; Return on tangible common equity (“ROTCE”) of 19% (a).
•
Common Equity Tier 1 (“CET1”) ratio – 12.6%.
•
Tier 1 leverage ratio – 6.2%.
•
Supplementary leverage ratio (“SLR”) – 8.2% (b).
•
Average liquidity coverage ratio (“LCR”) – 112%.
•
Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
 
(a)
See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for additional information.
(b)
See “Capital and Liquidity” on page 6 for additional information.
Note: Throughout this document, sequential growth rates are unannualized.

Page - 2

BNY Mellon 2Q20 Earnings Release

INVESTMENT SERVICES BUSINESS HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)
 
 
 
2Q20 vs.
2Q20

1Q20

2Q19

1Q20

2Q19

Total revenue by line of business:

 
 
 
 
Asset Servicing
$
1,463

$
1,531

$
1,397

(4
)%
5
 %
Pershing
578

653

572

(11
)
1

Issuer Services
431

419

446

3

(3
)
Treasury Services
340

339

317

—

7

Clearance and Collateral Management
295

300

284

(2
)
4

Total revenue by line of business
3,107

3,242

3,016

(4
)
3

Provision for credit losses
145

149

(4
)
N/M
N/M
Noninterest expense
1,989

1,987

1,963

—

1

Income before taxes
$
973

$
1,106

$
1,057

(12
)%
(8
)%
 

 
 


Pre-tax operating margin
31
%
34
%
35
%


 
 
 
 
 
 
Foreign exchange and other trading revenue
$
178

$
261

$
153

(32
)%
16
 %
Securities lending revenue
$
51

$
46

$
40

11
 %
28
 %
 
 
 
 




Metrics:
 
 
 




Average loans
$
43,113

$
41,789

$
36,404

3
 %
18
 %
Average deposits
$
268,467

$
242,187

$
201,146

11
 %
33
 %



 
 


AUC/A at period end (in trillions) (current period is preliminary) (a)
$
37.3

$
35.2

$
35.5

6
 %
5
 %
Market value of securities on loan at period end (in billions) (b)
$
384

$
389

$
369

(1
)%
4
 %
(a)
Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020 and $1.4 trillion at June 30, 2019.
(b)
Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $62 billion at June 30, 2020, $59 billion at March 31, 2020 and $64 billion at June 30, 2019.


KEY DRIVERS

•
The drivers of the total revenue variances by line of business are indicated below.
•
Asset Servicing - The year-over-year increase reflects higher foreign exchange and other trading revenue, partially offset by lower net interest revenue. The sequential decrease reflects lower foreign exchange and other trading revenue and net interest revenue. Total revenue in 2Q20 also benefited from higher volumes from existing clients and a one-time fee.
•
Pershing - The year-over-year increase primarily reflects higher money market fund balances and clearing volumes, partially offset by the impact of rate-driven money market fee waivers. The sequential decrease primarily reflects the impact of rate-driven money market fee waivers, a one-time fee recorded in 1Q20 and lower clearing volumes, partially offset by higher money market fund balances.
•
Issuer Services - The year-over-year decrease reflects lower Depositary Receipts and Corporate Trust fees. The sequential increase primarily reflects higher Depositary Receipts fees.
•
Treasury Services - The year-over-year increase primarily reflects higher net interest revenue driven by deposit growth and higher fees.
•
Clearance and Collateral Management - The year-over-year increase primarily reflects higher net interest revenue and growth in collateral management and clearance volumes, mostly from non-U.S. clients. The sequential decrease primarily reflects lower collateral management fees.

•
Noninterest expense increased 1% year-over-year primarily driven by continued investments in technology, partially offset by lower business development and staff expenses. Sequentially, noninterest expense increased slightly reflecting continued investments in technology, offset by lower staff expense.

Page - 3

BNY Mellon 2Q20 Earnings Release

INVESTMENT AND WEALTH MANAGEMENT BUSINESS HIGHLIGHTS
(formerly Investment Management business)

(dollars in millions, unless otherwise noted; not meaningful - N/M)
 
 
 
2Q20 vs.
2Q20

1Q20

2Q19

1Q20

2Q19

Total revenue by line of business:

 
 
 
 
Investment Management (formerly Asset Management)
$
621

$
620

$
622

—

—

Wealth Management
265

278

291

(5
)
(9
)
Total revenue by line of business
886

898

913

(1
)
(3
)
Provision for credit losses
7

9

(2
)
N/M
N/M
Noninterest expense
658

695

655

(5
)
—

Income before taxes
$
221

$
194

$
260

14
 %
(15
)%


 
 
 
 
Pre-tax operating margin
25
%
22
%
29
%
 
 
Adjusted pre-tax operating margin – Non-GAAP (a)
28
%
24
%
32
%
 
 
 
 
 
 
 
 
Metrics:
 
 
 
 
 
Average loans
$
11,791

$
12,124

$
12,205

(3
)%
(3
)%
Average deposits
$
17,491

$
16,144

$
14,615

8
 %
20
 %
 

 
 


AUM (in billions) (current period is preliminary) (b)
$
1,961

$
1,796

$
1,843

9
 %
6
 %
Wealth Management client assets (in billions) (current period is preliminary) (c)
$
254

$
236

$
257

8
 %
(1
)%
(a)
Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for information on this Non-GAAP measure.
(b)
Excludes securities lending cash management assets and assets managed in the Investment Services business.
(c)
Includes AUM and AUC/A in the Wealth Management business.


KEY DRIVERS

•
The drivers of the total revenue variances by line of business are indicated below.
•
Investment Management (formerly Asset Management) - The year-over-year decrease primarily reflects the unfavorable change in the mix of AUM since 2Q19 and the impact of money market fee waivers, partially offset by equity investment gains (net of hedges), including seed capital. The sequential increase primarily reflects equity investment gains (net of hedges), including seed capital, partially offset by the timing of performance fees and the impact of money market fee waivers.
•
Wealth Management - Both decreases primarily reflect lower net interest revenue and a shift within portfolios to lower fee asset classes.

•
Noninterest expense increased slightly year-over-year primarily reflecting higher continued investments in technology. The sequential decrease primarily reflects lower staff and other expenses.


Page - 4

BNY Mellon 2Q20 Earnings Release

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

 
 
 
 
(in millions)
2Q20

1Q20

2Q19

Fee revenue
$
29

$
21

$
24

Net securities gains
9

9

7

Total fee and other revenue
38

30

31

Net interest (expense)
(36
)
(44
)
(40
)
Total revenue (loss)
2

(14
)
(9
)
Provision for credit losses
(9
)
11

(2
)
Noninterest expense
39

30

29

(Loss) before taxes
$
(28
)
$
(55
)
$
(36
)


KEY DRIVERS

•
Fee revenue, net securities gains and net interest expense include corporate treasury and other investment activity, including hedging activity which offsets between fee revenue and net interest expense. Fee revenue increased year-over-year and sequentially primarily reflecting higher equity investment income, partially offset by sequentially lower foreign currency translation gains. Net interest expense decreased year-over-year and sequentially primarily reflecting corporate treasury activity.

•
Noninterest expense increased year-over-year and sequentially primarily reflecting higher staff expense.


Page - 5

BNY Mellon 2Q20 Earnings Release

CAPITAL AND LIQUIDITY

Capital and liquidity ratios
June 30, 2020

March 31, 2020

Dec. 31, 2019

Consolidated regulatory capital ratios: (a)
 
 
 
CET1 ratio
12.6
%
11.3
%
11.5
%
Tier 1 capital ratio
15.4

13.5

13.7

Total capital ratio
16.3

14.3

14.4

Tier 1 leverage ratio
6.2

6.0

6.6

SLR
8.2

5.6

6.1

BNY Mellon shareholders’ equity to total assets ratio
9.9
%
8.8
%
10.9
%
BNY Mellon common shareholders’ equity to total assets ratio
8.9
%
8.0
%
9.9
%
 
 
 
 
Average LCR
112
%
115
%
120
%

 
 
 
Book value per common share
$
44.21

$
42.47

$
42.12

Tangible book value per common share – Non-GAAP (b)
$
23.31

$
21.53

$
21.33

Common shares outstanding (in thousands)
885,862

885,443

900,683

(a)
Regulatory capital ratios for June 30, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for June 30, 2020 and Dec. 31, 2019, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio.
(b)
Tangible book value per common share – Non-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for information on this Non-GAAP measure.


•
CET1 capital totaled $20.0 billion at June 30, 2020, an increase of $1.57 billion compared with March 31, 2020. The increase primarily reflects capital generated through earnings and unrealized gains on securities available-for-sale, partially offset by capital deployed through dividend payments.

•
The SLR reflects the application of a new rule effective April 1, 2020 to exclude certain central bank placements as well as the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation. The temporary exclusion of U.S. Treasury securities from the SLR’s leverage exposure increased our SLR by 40 basis points.


NET INTEREST REVENUE

Net interest revenue
 
 
 
2Q20 vs.
(dollars in millions; not meaningful - N/M)
2Q20

1Q20

2Q19

1Q20

2Q19

Net interest revenue
$
780

$
814

$
802

(4
)%
(3
)%
Add: Tax equivalent adjustment
2

2

4

N/M
N/M
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a)
$
782

$
816

$
806

(4
)%
(3
)%
 
 
 
 
 
 
Net interest margin
0.88
%
1.01
%
1.12
%
(13
) bps
(24
) bps
Net interest margin (FTE) – Non-GAAP (a)
0.88
%
1.01
%
1.12
%
(13
) bps
(24
) bps
(a)
Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for information on this Non-GAAP measure.
bps – basis points.


Net interest revenue decreased year-over-year, primarily reflecting lower interest rates on interest-earning assets, partially offset by the benefit of lower deposit and funding rates and higher deposits, securities portfolio and loans.

Sequentially, the decrease was primarily driven by lower interest rates on interest-earning assets. This was partially offset by the benefit of lower deposit and funding rates, higher securities portfolio and the impact of hedging activities (primarily offset in foreign exchange and other trading revenue).


Page - 6

BNY Mellon 2Q20 Earnings Release

THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement

 
(in millions)
Quarter ended
 
Year-to-date
 
June 30, 2020

March 31, 2020

June 30, 2019

 
June 30, 2020

June 30, 2019

 
 
Fee and other revenue
 
 
 
 
 
 
 
Investment services fees:
 
 
 
 
 
 
 
Asset servicing fees
$
1,173

$
1,159

$
1,141

 
$
2,332

$
2,263

 
Clearing services fees
431

470

410

 
901

808

 
Issuer services fees
277

263

291

 
540

542

 
Treasury services fees
144

149

140

 
293

272

 
Total investment services fees
2,025

2,041

1,982


4,066

3,885

 
Investment management and performance fees
786

862

833

 
1,648

1,674

 
Foreign exchange and other trading revenue
166

319

166

 
485

336

 
Financing-related fees
58

59

50

 
117

101

 
Distribution and servicing
27

31

31

 
58

62

 
Investment and other income
105

11

43

 
116

78

 
Total fee revenue
3,167

3,323

3,105


6,490

6,136

 
Net securities gains
9

9

7

 
18

8

 
Total fee and other revenue
3,176

3,332

3,112


6,508

6,144

 
Operations of consolidated investment management funds
 
 
 
 
 
 
 
Investment income (loss)
54

(38
)
10

 
16

36

 
Interest of investment management fund note holders
—

—

—

 
—

—

 
Income (loss) from consolidated investment management funds
54

(38
)
10


16

36

 
Net interest revenue
 
 
 
 
 
 
 
Interest revenue
943

1,570

1,965

 
2,513

3,885

 
Interest expense
163

756

1,163

 
919

2,242

 
Net interest revenue
780

814

802


1,594

1,643

 
Total revenue
4,010

4,108

3,924


8,118

7,823

 
Provision for credit losses
143

169

(8
)
 
312

(1
)
 
Noninterest expense
 
 
 
 
 
 
 
Staff
1,464

1,482

1,421

 
2,946

2,945

 
Software and equipment
345

326

304

 
671

587

 
Professional, legal and other purchased services
337

330

337

 
667

662

 
Net occupancy
137

135

138

 
272

275

 
Sub-custodian and clearing
120

105

115

 
225

220

 
Distribution and servicing
85

91

94

 
176

185

 
Bank assessment charges
35

35

31

 
70

62

 
Business development
20

42

56

 
62

101

 
Amortization of intangible assets
26

26

30

 
52

59

 
Other
117

140

121

 
257

250

 
Total noninterest expense
2,686

2,712

2,647


5,398

5,346

 
Income
 
 
 
 
 
 
 
Income before income taxes
1,181

1,227

1,285


2,408

2,478

 
Provision for income taxes
216

265

264

 
481

501

 
Net income
965

962

1,021


1,927

1,977

 
Net (income) loss attributable to noncontrolling interests (includes $(15), $18, $(4), $3 and $(14) related to consolidated investment management funds, respectively)
(15
)
18

(4
)
 
3

(14
)
 
Net income applicable to shareholders of The Bank of New York Mellon Corporation
950

980

1,017


1,930

1,963

 
Preferred stock dividends
(49
)
(36
)
(48
)
 
(85
)
(84
)
 
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
901

$
944

$
969


$
1,845

$
1,879



Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
Quarter ended
 
Year-to-date
June 30, 2020

March 31, 2020

June 30, 2019

 
June 30, 2020

June 30, 2019

(in dollars)
Basic
$
1.01

$
1.05

$
1.01

 
$
2.06

$
1.95

Diluted
$
1.01

$
1.05

$
1.01

 
$
2.06

$
1.95


Page - 7

BNY Mellon 2Q20 Earnings Release

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

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

Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.

BNY Mellon has also included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business 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 relative to industry competitors.

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

CAUTIONARY STATEMENT

A number of statements (i) in this Earnings Release, (ii) in our Financial Supplement, (iii) in our presentations and (iv) in the responses to questions on our conference call discussing our quarterly results and other public events may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including statements about our capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, resiliency, capabilities, revenue, net interest revenue, fees, expenses, cost discipline, sustainable growth, company management, deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios and statements regarding our aspirations, as well as our overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities, focus and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “future” and words of similar meaning may signify forward-looking statements. These statements and other forward-looking statements contained in other public disclosures of BNY Mellon which make reference to the cautionary factors described in this Earnings Release are based upon current beliefs and expectations and are subject to significant risks and uncertainties (some of which are beyond BNY Mellon’s control). Actual results may differ materially from those expressed or implied as a result of a number of factors, including, but not limited to, the risk factors and other uncertainties set forth in BNY Mellon’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, the Annual Report on Form 10-K for the year ended Dec. 31, 2019 and BNY Mellon’s other filings with the Securities and Exchange Commission. Statements about the effects of the current and near-term market and macroeconomic outlook on BNY Mellon, including on its business, operations, financial performance and prospects, may constitute forward-looking statements, and are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond BNY Mellon’s control), including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on us, our clients, customers and third parties. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as BNY Mellon completes its Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. All forward-looking statements in this Earnings Release speak only as of July 15, 2020, and BNY Mellon undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.


Page - 8

BNY Mellon 2Q20 Earnings Release

ABOUT BNY MELLON

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment and wealth management and investment services in 35 countries. As of June 30, 2020, BNY Mellon had $37.3 trillion in assets under custody and/or administration, and $2.0 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

CONFERENCE CALL INFORMATION

Todd Gibbons, Chief Executive Officer, and Mike Santomassimo, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 8:00 a.m. EDT on July 15, 2020. This conference call and audio webcast will include forward-looking statements and may include other material information.

Investors and analysts wishing to access the conference call and audio webcast may do so by dialing (800) 390-5696 (U.S.) or (720) 452-9082 (International), and using the passcode: 807070, or by logging onto www.bnymellon.com/investorrelations. Earnings materials will be available at www.bnymellon.com/investorrelations beginning at approximately 6:30 a.m. EDT on July 15, 2020. Replays of the conference call and audio webcast will be available beginning July 15, 2020 at approximately 2:00 p.m. EDT through Aug. 14, 2020 by dialing (888) 203-1112 (U.S.) or (719) 457-0820 (International), and using the passcode: 5375940. The archived version of the conference call and audio webcast will also be available at www.bnymellon.com/investorrelations for the same time period.


Page - 9


bnylogoa01b33.jpg
    
The Bank of New York Mellon Corporation
 
Financial Supplement
 
Second Quarter 2020
 
 



Table of Contents
bnylogo01a14.jpg
 
 
 
 
 
 
 
 
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
 
 
Investment Services Business
 
Investment and Wealth Management Business
 
AUM by Product, AUM Flows 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
 




THE BANK OF NEW YORK MELLON CORPORATION
bnylogo01a14.jpg
 
CONSOLIDATED FINANCIAL HIGHLIGHTS
 
 
 
(dollars in millions, except per common share amounts, or unless otherwise noted)
 
 
 
 
 
 
2Q20 vs.
 
 
 
 
YTD20 vs.
2Q20

1Q20

4Q19

3Q19

2Q19

 
1Q20
2Q19
 
YTD20

YTD19

 
YTD19

Selected income statement data
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee revenue
$
3,167

$
3,323

$
3,971

$
3,129

$
3,105

 
(5
)%
2
 %
 
$
6,490

$
6,136

 
6
 %
Net securities gains (losses)
9

9

(25
)
(1
)
7

 
N/M

N/M

 
18

8

 
N/M

Total fee and other revenue
3,176

3,332

3,946

3,128

3,112

 
(5
)
2

 
6,508

6,144

 
6

Income (loss) from consolidated investment management funds
54

(38
)
17

3

10

 
N/M

N/M

 
16

36

 
N/M

Net interest revenue
780

814

815

730

802

 
(4
)
(3
)
 
1,594

1,643

 
(3
)
Total revenue
4,010

4,108

4,778

3,861

3,924

 
(2
)
2

 
8,118

7,823

 
4

Provision for credit losses
143

169

(8
)
(16
)
(8
)
 
N/M

N/M

 
312

(1
)
 
N/M

Noninterest expense
2,686

2,712

2,964

2,590

2,647

 
(1
)
1

 
5,398

5,346

 
1

Income before income taxes
1,181

1,227

1,822

1,287

1,285

 
(4
)
(8
)
 
2,408

2,478

 
(3
)
Provision for income taxes
216

265

373

246

264

 
(18
)
(18
)
 
481

501

 
(4
)
Net income
$
965

$
962

$
1,449

$
1,041

$
1,021

 
—
 %
(5
)%
 
$
1,927

$
1,977

 
(3
)%
Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
901

$
944

$
1,391

$
1,002

$
969

 
(5
)%
(7
)%
 
$
1,845

$
1,879

 
(2
)%
Diluted earnings per common share
$
1.01

$
1.05

$
1.52

$
1.07

$
1.01

 
(4
)%
—
 %
 
$
2.06

$
1.95

 
6
 %
Average common shares and equivalents outstanding - diluted (in thousands)
890,561

896,689

914,739

935,677

953,928

 
(1
)%
(7
)%
 
893,603

959,957

 
(7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial ratios (Quarterly returns are annualized)
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating margin
29
%
30
%
38
%
33
%
33
%
 
 
 
 
30
%
32
%
 
 
Return on common equity
9.4
%
10.1
%
14.6
%
10.6
%
10.4
%
 
 
 
 
9.7
%
10.2
%
 
 
Return on tangible common equity – Non-GAAP (a)
18.5
%
20.4
%
29.3
%
21.4
%
21.2
%
 
 
 
 
19.4
%
20.9
%
 
 
Non-U.S. revenue as a percentage of total revenue
36
%
36
%
31
%
37
%
36
%
 
 
 
 
36
%
36
%
 
 
Period end
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets under custody and/or administration (“AUC/A”) (in trillions) (b)
$
37.3

$
35.2

$
37.1

$
35.8

$
35.5

 
6
 %
5
 %
 
 
 
 
 
Assets under management (“AUM”) (in trillions)
$
1.96

$
1.80

$
1.91

$
1.88

$
1.84

 
9
 %
6
 %
 
 
 
 
 
Full-time employees
48,300

47,900

48,400

48,700

49,100

 
1
 %
(2
)%
 
 
 
 
 
Book value per common share
$
44.21

$
42.47

$
42.12

$
40.75

$
40.30

 
 
 
 
 
 
 
 
Tangible book value per common share – Non-GAAP (a)
$
23.31

$
21.53

$
21.33

$
20.59

$
20.45

 
 
 
 
 
 
 
 
Cash dividends per common share
$
0.31

$
0.31

$
0.31

$
0.31

$
0.28

 
 
 
 
 
 
 
 
Common dividend payout ratio
31
%
30
%
20
%
29
%
28
%
 
 
 
 
 
 
 
 
Closing stock price per common share
$
38.65

$
33.68

$
50.33

$
45.21

$
44.15

 
 
 
 
 
 
 
 
Market capitalization
$
34,239

$
29,822

$
45,331

$
41,693

$
41,619

 
 
 
 
 
 
 
 
Common shares outstanding (in thousands)
885,862

885,443

900,683

922,199

942,662

 
 
 
 
 
 
 
 
Capital ratios at period end (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Equity Tier 1 ("CET1") ratio
12.6
%
11.3
%
11.5
%
11.1
%
11.1
%
 
 
 
 
 
 
 
 
Tier 1 capital ratio
15.4
%
13.5
%
13.7
%
13.2
%
13.2
%
 
 
 
 
 
 
 
 
Total capital ratio
16.3
%
14.3
%
14.4
%
14.0
%
14.0
%
 
 
 
 
 
 
 
 
Tier 1 leverage ratio
6.2
%
6.0
%
6.6
%
6.5
%
6.8
%
 
 
 
 
 
 
 
 
Supplementary leverage ratio ("SLR")
8.2
%
5.6
%
6.1
%
6.0
%
6.3
%
 
 
 
 
 
 
 
 
(a)    Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of Non-GAAP measures.
(b)    Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.4 trillion at Sept. 30, 2019 and June 30, 2019.
(c)    Regulatory capital ratios for June 30, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for June 30, 2020, Dec. 31, 2019, Sept. 30, 2019 and June 30, 2019, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio.
N/M - Not meaningful.

3



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
bnylogo01a14.jpg
 
CONDENSED CONSOLIDATED INCOME STATEMENT
 
 
 
(dollars in millions, except per share amounts; common shares in thousands)
 
 
 
 
 
 
2Q20 vs.
 
 
 
 
YTD20 vs.
2Q20

1Q20

4Q19

3Q19

2Q19

 
1Q20
2Q19
 
YTD20

YTD19

 
YTD19

Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment services fees:
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset servicing fees
$
1,173

$
1,159

$
1,148

$
1,152

$
1,141

 
1
 %
3
 %
 
$
2,332

$
2,263

 
3
 %
Clearing services fees
431

470

421

419

410

 
(8
)
5

 
901

808

 
12

Issuer services fees
277

263

264

324

291

 
5

(5
)
 
540

542

 
—

Treasury services fees
144

149

147

140

140

 
(3
)
3

 
293

272

 
8

Total investment services fees
2,025

2,041

1,980

2,035

1,982

 
(1
)
2

 
4,066

3,885

 
5

Investment management and performance fees
786

862

883

832

833

 
(9
)
(6
)
 
1,648

1,674

 
(2
)
Foreign exchange and other trading revenue
166

319

168

150

166

 
(48
)
—

 
485

336

 
44

Financing-related fees
58

59

46

49

50

 
(2
)
16

 
117

101

 
16

Distribution and servicing
27

31

34

33

31

 
(13
)
(13
)
 
58

62

 
(6
)
Investment and other income
105

11

860

30

43

 
N/M

N/M

 
116

78

 
N/M

Total fee revenue
3,167

3,323

3,971

3,129

3,105

 
(5
)
2

 
6,490

6,136

 
6

Net securities gains (losses)
9

9

(25
)
(1
)
7

 
N/M

N/M

 
18

8

 
N/M

Total fee and other revenue
3,176

3,332

3,946

3,128

3,112

 
(5
)
2

 
6,508

6,144

 
6

Income (loss) from consolidated investment management funds
54

(38
)
17

3

10

 
N/M

N/M

 
16

36

 
N/M

Net interest revenue
780

814

815

730

802

 
(4
)
(3
)
 
1,594

1,643

 
(3
)
Total revenue
4,010

4,108

4,778

3,861

3,924

 
(2
)
2

 
8,118

7,823

 
4

Provision for credit losses
143

169

(8
)
(16
)
(8
)
 
N/M

N/M

 
312

(1
)
 
N/M

Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
Staff
1,464

1,482

1,639

1,479

1,421

 
(1
)
3

 
2,946

2,945

 
—

Software and equipment
345

326

326

309

304

 
6

13

 
671

587

 
14

Professional, legal and other purchased services
337

330

367

316

337

 
2

—

 
667

662

 
1

Net occupancy
137

135

151

138

138

 
1

(1
)
 
272

275

 
(1
)
Sub-custodian and clearing
120

105

119

111

115

 
14

4

 
225

220

 
2

Distribution and servicing
85

91

92

97

94

 
(7
)
(10
)
 
176

185

 
(5
)
Bank assessment charges
35

35

32

31

31

 
—

13

 
70

62

 
13

Business development
20

42

65

47

56

 
(52
)
(64
)
 
62

101

 
(39
)
Amortization of intangible assets
26

26

28

30

30

 
—

(13
)
 
52

59

 
(12
)
Other
117

140

145

32

121

 
(16
)
(3
)
 
257

250

 
3

Total noninterest expense
2,686

2,712

2,964

2,590

2,647

 
(1
)
1

 
5,398

5,346

 
1

Income before income taxes
1,181

1,227

1,822

1,287

1,285

 
(4
)
(8
)
 
2,408

2,478

 
(3
)
Provision for income taxes
216

265

373

246

264

 
(18
)
(18
)
 
481

501

 
(4
)
Net income
965

962

1,449

1,041

1,021

 
—

(5
)
 
1,927

1,977

 
(3
)
Net (income) loss attributable to noncontrolling interests
(15
)
18

(9
)
(3
)
(4
)
 
N/M

N/M

 
3

(14
)
 
N/M

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

N/M

 
(85
)
(84
)
 
1

Net income applicable to common shareholders of The Bank of New York Mellon Corporation
$
901

$
944

$
1,391

$
1,002

$
969

 
(5
)%
(7
)%
 
$
1,845

$
1,879

 
(2
)%

 
 
 
 
 
 
 
 
 
 
 
 
 
Average common shares and equivalents outstanding: Basic
889,020

894,122

911,324

933,264

951,281

 
(1
)%
(7
)%
 
891,642

956,887

 
(7
)%
Diluted
890,561

896,689

914,739

935,677

953,928

 
(1
)%
(7
)%
 
893,603

959,957

 
(7
)%

 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per common share: Basic
$
1.01

$
1.05

$
1.52

$
1.07

$
1.01

 
(4
)%
—
 %
 
$
2.06

$
1.95

 
6
 %
Diluted
$
1.01

$
1.05

$
1.52

$
1.07

$
1.01

 
(4
)%
—
 %
 
$
2.06

$
1.95

 
6
 %
N/M - Not meaningful.

4



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
bnylogo01a14.jpg
 
CONDENSED CONSOLIDATED BALANCE SHEET
 
 
 
 
2020
 
2019
(in millions)
June 30

March 31

 
Dec. 31

Sept. 30

June 30

Assets
 
 
 
 
 
 
Cash and due from banks
$
4,776

$
5,091

 
$
4,830

$
6,718

$
5,556

Interest-bearing deposits with the Federal Reserve and other central banks
112,728

146,535

 
95,042

73,811

69,700

Interest-bearing deposits with banks
18,045

22,672

 
14,811

15,417

15,491

Federal funds sold and securities purchased under resale agreements
36,638

27,363

 
30,182

43,723

61,201

Securities
154,682

139,273

 
123,033

122,340

120,142

Trading assets
14,150

12,918

 
13,571

10,180

8,629

Loans
55,397

62,368

 
54,953

54,881

52,396

Allowance for loan losses
(302
)
(140
)
 
(122
)
(127
)
(146
)
Net loans
55,095

62,228

 
54,831

54,754

52,250

Premises and equipment
3,598

3,514

 
3,625

3,149

2,970

Accrued interest receivable
540

576

 
624

596

658

Goodwill
17,253

17,240

 
17,386

17,248

17,337

Intangible assets
3,045

3,070

 
3,107

3,124

3,160

Other assets 
21,306

27,446

 
20,221

21,727

23,737

Subtotal assets of operations 
441,856

467,926

 
381,263

372,787

380,831

Assets of consolidated investment management funds, at fair value
460

229

 
245

381

337

Total assets 
$
442,316

$
468,155

 
$
381,508

$
373,168

$
381,168

Liabilities
 
 
 
 
 
 
Deposits
$
305,470

$
336,717

 
$
259,466

$
249,660

$
252,877

Federal funds purchased and securities sold under repurchase agreements
14,512

13,128

 
11,401

11,796

11,757

Trading liabilities
5,595

6,625

 
4,841

4,756

3,768

Payables to customers and broker-dealers
25,012

24,016

 
18,758

18,364

18,946

Commercial paper
665

1,121

 
3,959

3,538

8,894

Other borrowed funds
1,628

1,544

 
599

820

1,921

Accrued taxes and other expenses
5,029

4,705

 
5,642

5,081

5,045

Other liabilities
12,869

11,425

 
7,612

9,796

7,916

Long-term debt
27,566

27,494

 
27,501

27,872

28,203

Subtotal liabilities of operations
398,346

426,775

 
339,779

331,683

339,327

Liabilities of consolidated investment management funds, at fair value
4

1

 
1

15

6

Total liabilities 
398,350

426,776

 
339,780

331,698

339,333

Temporary equity
 
 
 
 
 
 
Redeemable noncontrolling interests
157

140

 
143

147

136

Permanent equity
 
 
 
 
 
 
Preferred stock
4,532

3,542

 
3,542

3,542

3,542

Common stock
14

14

 
14

14

14

Additional paid-in capital
27,702

27,644

 
27,515

27,471

27,406

Retained earnings
33,224

32,601

 
31,894

30,789

30,081

Accumulated other comprehensive loss, net of tax
(1,943
)
(2,827
)
 
(2,638
)
(2,893
)
(2,688
)
Less: Treasury stock, at cost
(19,832
)
(19,829
)
 
(18,844
)
(17,803
)
(16,822
)
Total The Bank of New York Mellon Corporation shareholders’ equity
43,697

41,145

 
41,483

41,120

41,533

Nonredeemable noncontrolling interests of consolidated investment management funds 
112

94

 
102

203

166

Total permanent equity 
43,809

41,239

 
41,585

41,323

41,699

Total liabilities, temporary equity and permanent equity 
$
442,316

$
468,155

 
$
381,508

$
373,168

$
381,168


5



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
bnylogo01a14.jpg
 
FEE AND OTHER REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2Q20 vs.
 
 
 
 
YTD20 vs.
(dollars in millions)
2Q20

1Q20

4Q19

3Q19

2Q19

 
1Q20
2Q19
 
YTD20

YTD19

 
YTD19

Investment services fees:
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset servicing fees (a)
$
1,117

$
1,108

$
1,104

$
1,109

$
1,097

 
1
 %
2
 %
 
$
2,225

$
2,171

 
2
 %
Securities lending revenue
56

51

44

43

44

 
10

27

 
107

92

 
16

Clearing services fees (b)
431

470

421

419

410

 
(8
)
5

 
901

808

 
12

Issuer services fees
277

263

264

324

291

 
5

(5
)
 
540

542

 
—

Treasury services fees
144

149

147

140

140

 
(3
)
3

 
293

272

 
8

Total investment services fees
2,025

2,041

1,980

2,035

1,982

 
(1
)
2

 
4,066

3,885

 
5

Investment management and performance fees (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment management fees
781

812

835

830

831

 
(4
)
(6
)
 
1,593

1,641

 
(3
)
Performance fees
5

50

48

2

2

 
N/M
N/M
 
55

33

 
67

Total investment management and performance fees (d)
786

862

883

832

833

 
(9
)
(6
)
 
1,648

1,674

 
(2
)
Foreign exchange and other trading revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange
174

253

138

129

150

 
(31
)
16

 
427

310

 
38

Other trading revenue
(8
)
66

30

21

16

 
N/M

N/M

 
58

26

 
N/M

Total foreign exchange and other trading revenue
166

319

168

150

166

 
(48
)
—

 
485

336

 
44

Financing-related fees
58

59

46

49

50

 
(2
)
16

 
117

101

 
16

Distribution and servicing
27

31

34

33

31

 
(13
)
(13
)
 
58

62

 
(6
)
Investment and other income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate/bank-owned life insurance
36

36

43

33

32

 
N/M

N/M

 
72

62

 
N/M

Expense reimbursements from joint venture
19

21

20

21

19

 
N/M

N/M

 
40

38

 
N/M

Asset-related gains
3

4

815

2

1

 
N/M

N/M

 
7

2

 
N/M

Seed capital gains (losses) (c)
23

(31
)
4

—

8

 
N/M

N/M

 
(8
)
10

 
N/M

Other income (loss)
24

(19
)
(22
)
(26
)
(17
)
 
N/M

N/M

 
5

(34
)
 
N/M

Total investment and other income (c)
105

11

860

30

43

 
N/M

N/M

 
116

78

 
N/M

Total fee revenue
3,167

3,323

3,971

3,129

3,105

 
(5
)
2

 
6,490

6,136

 
6

Net securities gains (losses)
9

9

(25
)
(1
)
7

 
N/M

N/M

 
18

8

 
N/M

Total fee and other revenue
$
3,176

$
3,332

$
3,946

$
3,128

$
3,112

 
(5
)%
2
 %
 
$
6,508

$
6,144

 
6
 %
(a)    Asset servicing fees include the fees from the Clearance and Collateral Management business.
 
 
 
 
 
(b)    Clearing services fees are almost entirely earned by our Pershing business.
 
 
 
 
 
(c)    Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds.
(d)    On a constant currency basis (Non-GAAP), investment management and performance fees decreased 5% compared with 2Q19. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.
N/M - Not meaningful.


6



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
 
 
 
 
 
bnylogo01a14.jpg
 
AVERAGE BALANCES AND INTEREST RATES
 
 
 
 
 
 
 
 
 
 
2Q20
 
1Q20
 
4Q19
 
3Q19
 
 
2Q19
 
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
$
94,229

(0.03
)%
 
$
80,403

0.39
%
 
$
61,627

0.60
%
 
$
60,030

0.67
%
 
 
$
61,756

0.72
%
Interest-bearing deposits with banks (primarily foreign banks)
21,093

0.76

 
17,081

1.37

 
15,788

1.63

 
15,324

1.89

 
 
13,666

1.87

Federal funds sold and securities purchased under resale agreements (a)
30,265

0.82

 
34,109

4.67

 
38,846

4.62

 
40,816

6.42

 
 
38,038

5.99

Margin loans
12,791

1.28

 
12,984

2.69

 
11,609

3.25

 
10,303

4.02

 
 
10,920

4.36

Non-margin loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic offices
31,185

2.21

 
31,720

3.02

 
29,690

3.36

 
29,285

2.75

(b)
 
29,492

3.86

Foreign offices
12,743

1.84

 
11,170

2.55

 
11,418

2.70

 
11,247

2.97

 
 
9,961

3.29

Total non-margin loans
43,928

2.10

 
42,890

2.89

 
41,108

3.18

 
40,532

2.81

(b)
 
39,453

3.71

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government obligations
27,901

1.52

 
23,175

1.87

 
18,444

2.08

 
19,315

2.11

 
 
18,870

2.19

U.S. government agency obligations
74,583

1.92

 
69,046

2.32

 
67,494

2.36

 
67,235

2.49

 
 
66,445

2.58

State and political subdivisions (c)
1,025

2.98

 
1,033

3.06

 
1,134

3.03

 
1,217

3.05

 
 
1,735

2.89

Other securities (c)
45,511

0.82

 
36,375

0.95

 
35,242

1.64

 
33,729

1.75

 
 
30,770

2.04

Trading securities (c)
6,236

1.13

 
6,840

2.36

 
6,695

2.41

 
5,653

2.80

 
 
5,764

2.72

Total securities (c)
155,256

1.50

 
136,469

1.88

 
129,009

2.13

 
127,149

2.25

 
 
123,584

2.40

Total interest-earning assets (c)
$
357,562

1.06
 %
 
$
323,936

1.95
%
 
$
297,987

2.30
%
 
$
294,154

2.63
%
(b)
 
$
287,417

2.74
%
Noninterest-earning assets
57,797

 
 
61,342

 
 
56,354

 
 
56,525

 
 
 
54,967

 
Total assets
$
415,359

 
 
$
385,278

 
 
$
354,341

 
 
$
350,679

 
 
 
$
342,384

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic offices
$
102,135

0.06
 %
 
$
99,915

0.69
%
 
$
87,162

0.98
%
 
$
82,663

1.28
%
 
 
$
74,180

1.36
%
Foreign offices
108,508

(0.12
)
 
97,717

0.29

 
95,262

0.49

 
94,738

0.71

 
 
93,365

0.78

Total interest-bearing deposits
210,643

(0.03
)
 
197,632

0.49

 
182,424

0.73

 
177,401

0.98

 
 
167,545

1.04

Federal funds purchased and securities sold under repurchase
agreements (a)
14,209

0.03

 
13,919

7.96

 
12,668

9.11

 
13,432

13.08

 
 
11,809

12.64

Trading liabilities
1,974

0.39

 
1,626

1.61

 
1,504

2.25

 
1,371

2.33

 
 
1,735

2.47

Other borrowed funds
2,272

1.30

 
719

2.27

 
709

2.83

 
1,148

3.24

 
 
2,455

3.36

Commercial paper
191

1.02

 
1,581

1.56

 
1,792

1.66

 
3,796

2.26

 
 
2,957

2.43

Payables to customers and broker-dealers
18,742

(0.01
)
 
16,386

0.73

 
15,178

1.07

 
15,440

1.52

 
 
15,666

1.76

Long-term debt
28,122

2.42

 
27,231

2.83

 
28,117

3.09

 
28,386

3.24

 
 
27,681

3.45

Total interest-bearing liabilities
$
276,153

0.24
 %
 
$
259,094

1.17
%
 
$
242,392

1.48
%
 
$
240,974

1.99
%
 
 
$
229,848

2.03
%
Total noninterest-bearing deposits
72,411

 
 
60,577

 
 
49,632

 
 
49,027

 
 
 
52,956

 
Other noninterest-bearing liabilities
24,121

 
 
24,229

 
 
20,681

 
 
19,280

 
 
 
18,362

 
Total The Bank of New York Mellon Corporation shareholders’ equity
42,486

 
 
41,206

 
 
41,384

 
 
41,139

 
 
 
41,029

 
Noncontrolling interests
188

 
 
172

 
 
252

 
 
259

 
 
 
189

 
Total liabilities and equity
$
415,359

 
 
$
385,278

 
 
$
354,341

 
 
$
350,679

 
 
 
$
342,384

 
Net interest margin
 
0.88
 %
 
 
1.01
%
 
 
1.09
%
 
 
0.99
%
(b)
 
 
1.12
%
Net interest margin (FTE) – Non-GAAP (d)
 
0.88
 %
 
 
1.01
%
 
 
1.09
%
 
 
1.00
%
(b)
 
 
1.12
%
(a)    Includes the average impact of offsetting under enforceable netting agreements of approximately $67 billion for 2Q20, $80 billion for 1Q20, $60 billion for 4Q19, $68 billion for 3Q19 and $51 billion for 2Q19. 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 0.26% for 2Q20, 1.39% for 1Q20, 1.82% for 4Q19, 2.42% for 3Q19 and 2.57% for 2Q19.  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 0.00% for 2Q20, 1.18% for 1Q20, 1.59% for 4Q19, 2.17% for 3Q19 and 2.39% for 2Q19. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid.
(b)    Includes the impact of the lease-related impairment of $70 million in 3Q19. On a Non-GAAP basis, excluding the lease-related impairment, the yield on non-margin loans in domestic offices would have been 3.70%, the yield on total non-margin loans would have been 3.50%, the yield on total interest-earning assets would have been 2.72% and the net interest margin and the net interest margin (FTE) – Non-GAAP would have been 1.09% in 3Q19.
(c)    Average rates were calculated on an FTE basis, at tax rates of approximately 21%.
(d)    See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.

7



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
bnylogo01a14.jpg
 
CAPITAL AND LIQUIDITY
 
 
 
 
 
2020
 
2019
(dollars in millions)
June 30

 
March 31

 
Dec. 31

Sept. 30

June 30

Consolidated regulatory capital ratios (a)
 
 
 
 
 
 
 
Standardized Approach:
 
 
 
 
 
 
 
CET1 capital
$
20,036

 
$
18,465

 
$
18,540

$
18,196

$
18,534

Tier 1 capital
24,487

 
21,933

 
21,996

21,677

22,015

Total capital
26,198

 
23,494

 
23,449

23,145

23,500

Risk-weighted assets
157,550

 
163,006

 
148,695

148,399

149,226

 
 
 
 
 
 
 
 
CET1 ratio
12.7
%
 
11.3
%
 
12.5
%
12.3
%
12.4
%
Tier 1 capital ratio
15.5

 
13.5

 
14.8

14.6

14.8

Total capital ratio
16.6

 
14.4

 
15.8

15.6

15.7

 
 
 
 
 
 
 
 
Advanced Approaches:
 
 
 
 
 
 
 
CET1 capital
$
20,036

 
$
18,465

 
$
18,540

$
18,196

$
18,534

Tier 1 capital
24,487

 
21,933

 
21,996

21,677

22,015

Total capital
25,948

 
23,281

 
23,233

22,921

23,300

Risk-weighted assets
159,191

 
162,561

 
160,898

164,172

166,570

 
 
 
 
 
 
 
 
CET1 ratio
12.6
%
 
11.4
%
 
11.5
%
11.1
%
11.1
%
Tier 1 capital ratio
15.4

 
13.5

 
13.7

13.2

13.2

Total capital ratio
16.3

 
14.3

 
14.4

14.0

14.0

 
 
 
 
 
 
 
 
Tier 1 leverage ratio
6.2
%
 
6.0
%
 
6.6
%
6.5
%
6.8
%
 
 
 
 
 
 
 
 
SLR:
 
 
 
 
 
 
 
Leverage exposure
$
297,281

(b)
$
392,807

 
$
362,452

$
359,023

$
350,747

SLR
8.2
%
(b)
5.6
%
 
6.1
%
6.0
%
6.3
%
 
 
 
 
 
 
 
 
Average liquidity coverage ratio
112
%
 
115
%
 
120
%
117
%
117
%
(a)    Regulatory capital ratios for June 30, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for June 30, 2020, Dec. 31, 2019, Sept. 30, 2019 and June 30, 2019, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio.
(b)    Reflects the application of a new rule effective April 1, 2020 to exclude certain central bank placements as well as the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation. The temporary exclusion of U.S. Treasury securities from the SLR’s leverage exposure increased our SLR by 40 basis points.
 


8



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
bnylogo01a14.jpg
 
INVESTMENT SERVICES BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2Q20 vs.
 
 
 
 
YTD20 vs.
(dollars in millions)
2Q20

1Q20

4Q19

3Q19

2Q19

 
1Q20
2Q19
 
YTD20

YTD19

 
YTD19

Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment services fees:
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset servicing fees (ex. securities lending revenue) (a)
$
1,113

$
1,101

$
1,098

$
1,099

$
1,086

 
1
 %
2
 %
 
$
2,214

$
2,153

 
3
 %
Securities lending revenue
51

46

40

39

40

 
11

28

 
97

84

 
15

Clearing services fees (b)
431

470

421

419

411

 
(8
)
5

 
901

809

 
11

Issuer services fees
277

263

264

324

291

 
5

(5
)
 
540

542

 
—

Treasury services fees
144

149

147

139

140

 
(3
)
3

 
293

272

 
8

Total investment services fees
2,016

2,029

1,970

2,020

1,968

 
(1
)
2

 
4,045

3,860

 
5

Foreign exchange and other trading revenue
178

261

151

160

153

 
(32
)
16

 
439

310

 
42

Other (c)
145

146

115

116

112

 
(1
)
29

 
291

224

 
30

Total fee and other revenue
2,339

2,436

2,236

2,296

2,233

 
(4
)
5

 
4,775

4,394

 
9

Net interest revenue
768

806

778

761

783

 
(5
)
(2
)
 
1,574

1,587

 
(1
)
Total revenue
3,107

3,242

3,014

3,057

3,016

 
(4
)
3

 
6,349

5,981

 
6

Provision for credit losses
145

149

(5
)
(15
)
(4
)
 
N/M

N/M

 
294

4

 
N/M

Noninterest expense (ex. amortization of intangible assets)
1,971

1,969

2,160

1,952

1,943

 
—

1

 
3,940

3,904

 
1

Amortization of intangible assets
18

18

19

21

20

 
—

(10
)
 
36

40

 
(10
)
Total noninterest expense
1,989

1,987

2,179

1,973

1,963

 
—

1

 
3,976

3,944

 
1

Income before taxes
$
973

$
1,106

$
840

$
1,099

$
1,057

 
(12
)%
(8
)%
 
$
2,079

$
2,033

 
2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating margin
31
%
34
%
28
%
36
%
35
%
 
 
 
 
33
%
34
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue by line of business:
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Servicing
$
1,463

$
1,531

$
1,411

$
1,411

$
1,397

 
(4
)%
5
 %
 
$
2,994

$
2,812

 
6
 %
Pershing
578

653

579

575

572

 
(11
)
1

 
1,231

1,133

 
9

Issuer Services
431

419

415

466

446

 
3

(3
)
 
850

842

 
1

Treasury Services
340

339

329

312

317

 
—

7

 
679

634

 
7

Clearance and Collateral Management
295

300

280

293

284

 
(2
)
4

 
595

560

 
6

Total revenue by line of business
$
3,107

$
3,242

$
3,014

$
3,057

$
3,016

 
(4
)%
3
 %
 
$
6,349

$
5,981

 
6
 %
(a)    Asset servicing fees include the fees from the Clearance and Collateral Management business.
(b)    Clearing services fees are almost entirely earned by our Pershing business.
(c)    Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue, securities gains and losses and investment and other income.
N/M - Not meaningful.


9



THE BANK OF NEW YORK MELLON CORPORATION
 
 
bnylogo01a14.jpg
 
INVESTMENT SERVICES BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2Q20 vs.
 
 
 
 
YTD20 vs.
(dollars in millions, unless otherwise noted)
2Q20

1Q20

4Q19

3Q19

2Q19

 
1Q20
2Q19
 
YTD20

YTD19

 
YTD19

Average loans
$
43,113

$
41,789

$
38,721

$
37,005

$
36,404

 
3
 %
18
 %
 
$
42,451

$
36,818

 
15
%
Average assets
$
335,288

$
304,089

$
278,098

$
269,926

$
264,781

 
10
 %
27
 %
 
$
319,689

$
260,432

 
23
%
Average deposits
$
268,467

$
242,187

$
215,388

$
208,044

$
201,146

 
11
 %
33
 %
 
$
255,327

$
198,131

 
29
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AUC/A at period end (in trillions) (a)(b)
$
37.3

$
35.2

$
37.1

$
35.8

$
35.5

 
6
 %
5
 %
 
 
 
 
 
Market value of securities on loan at period end (in billions) (c)
$
384

$
389

$
378

$
362

$
369

 
(1
)%
4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pershing
 
 
 
 
 
 
 
 
 
 
 
 
 
Net new assets (U.S. platform) (in billions) (d)
$
11

$
31

$
33

$
19

$
21

 
N/M

N/M

 
 
 
 
 
Average active clearing accounts (U.S. platform) (in thousands)
6,507

6,437

6,340

6,283

6,254

 
1
 %
4
 %
 
 
 
 
 
Average long-term mutual fund assets (U.S. platform)
$
547,579

$
549,206

$
573,475

$
547,522

$
532,384

 
—

3
 %
 
 
 
 
 
Average investor margin loans (U.S. platform)
$
9,235

$
9,419

$
9,420

$
9,222

$
9,440

 
(2
)%
(2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Clearance and Collateral Management
 
 
 
 
 
 
 
 
 
 
 
 
 
Average tri-party collateral management balances (in billions)
$
3,573

$
3,724

$
3,562

$
3,550

$
3,400

 
(4
)%
5
 %
 
 
 
 
 
(a)    June 30, 2020 information is preliminary.
(b)    Includes the AUC/A of CIBC Mellon of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.4 trillion at Sept. 30, 2019 and June 30, 2019.
(c)    Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $62 billion at June 30, 2020, $59 billion at March 31, 2020, $60 billion at Dec. 31, 2019, $66 billion at Sept. 30, 2019 and $64 billion at June 30, 2019.
(d)    Net new assets represents net flows of assets (e.g., net cash deposits and net securities transfers) in customer accounts in Pershing LLC, a U.S. broker-dealer.
N/M - Not meaningful.


10



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
bnylogo01a14.jpg
 
INVESTMENT AND WEALTH MANAGEMENT BUSINESS
(formerly Investment Management business)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2Q20 vs.
 
 
 
 
YTD20 vs.
(dollars in millions)
2Q20

1Q20

4Q19

3Q19

2Q19

 
1Q20
2Q19
 
YTD20

YTD19

 
YTD19

Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment management fees (a)
$
782

$
812

$
836

$
830

$
831

 
(4
)%
(6
)%
 
$
1,594

$
1,641

 
(3
)%
Performance fees
5

50

48

2

2

 
N/M

150

 
55

33

 
67

Investment management and performance fees (b)
787

862

884

832

833

 
(9
)
(6
)
 
1,649

1,674

 
(1
)
Distribution and servicing
34

43

44

45

44

 
(21
)
(23
)
 
77

89

 
(13
)
Other (a)
17

(59
)
(4
)
(39
)
(23
)
 
N/M

N/M

 
(42
)
(40
)
 
N/M

Total fee and other revenue (a)
838

846

924

838

854

 
(1
)
(2
)
 
1,684

1,723

 
(2
)
Net interest revenue
48

52

47

49

59

 
(8
)
(19
)
 
100

126

 
(21
)
Total revenue
886

898

971

887

913

 
(1
)
(3
)
 
1,784

1,849

 
(4
)
Provision for credit losses
7

9

—

—

(2
)
 
N/M

N/M

 
16

(1
)
 
N/M

Noninterest expense (ex. amortization of intangible assets)
650

687

722

582

646

 
(5
)
1

 
1,337

1,306

 
2

Amortization of intangible assets
8

8

9

10

9

 
—

(11
)
 
16

18

 
(11
)
Total noninterest expense
658

695

731

592

655

 
(5
)
—

 
1,353

1,324

 
2

Income before taxes
$
221

$
194

$
240

$
295

$
260

 
14
 %
(15
)%
 
$
415

$
526

 
(21
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating margin
25
%
22
%
25
%
33
%
29
%
 
 
 
 
23
%
28
%
 
 
Adjusted pre-tax operating margin – Non-GAAP (c)
28
%
24
%
27
%
37
%
32
%
 
 
 
 
26
%
32
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue by line of business:
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Management (formerly Asset Management)
$
621

$
620

$
692

$
608

$
622

 
—
 %
—
 %
 
$
1,241

$
1,262

 
(2
)%
Wealth Management
265

278

279

279

291

 
(5
)
(9
)
 
543

587

 
(7
)
Total revenue by line of business
$
886

$
898

$
971

$
887

$
913

 
(1
)%
(3
)%
 
$
1,784

$
1,849

 
(4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average loans
$
11,791

$
12,124

$
12,022

$
12,013

$
12,205

 
(3
)%
(3
)%
 
$
11,958

$
12,271

 
(3
)%
Average assets
$
30,327

$
30,543

$
28,481

$
27,840

$
29,793

 
(1
)%
2
 %
 
$
30,435

$
30,819

 
(1
)%
Average deposits
$
17,491

$
16,144

$
15,195

$
14,083

$
14,615

 
8
 %
20
 %
 
$
16,817

$
15,211

 
11
 %
(a)    Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. Additionally, other revenue includes asset servicing fees, treasury services fees, foreign exchange and other trading revenue and investment and other income.
(b)    On a constant currency basis (Non-GAAP), investment management and performance fees decreased 4% compared with 2Q19. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.
(c)    Net of distribution and servicing expense. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.
N/M - Not meaningful.

11



THE BANK OF NEW YORK MELLON CORPORATION
 
 
bnylogo01a14.jpg
 
AUM BY PRODUCT, AUM FLOWS AND WEALTH MANAGEMENT CLIENT ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2Q20 vs.
(dollars in billions)
2Q20

1Q20

4Q19

3Q19

2Q19

 
1Q20
2Q19
AUM by product type (a)(b)
 
 
 
 
 
 
 
 
Equity
$
141

$
120

$
154

$
147

$
152

 
18
%
(7
)%
Fixed income
224

211

224

211

209

 
6

7

Index
333

274

339

321

322

 
22

3

Liability-driven investments
752

705

728

742

709

 
7

6

Multi-asset and alternative investments
185

171

192

182

184

 
8

1

Cash
326

315

273

278

267

 
3

22

Total AUM by product type
$
1,961

$
1,796

$
1,910

$
1,881

$
1,843

 
9
%
6
 %
 
 
 
 
 
 
 
 
 
Changes in AUM (a)(b)
 
 
 
 
 
 
 
 
Beginning balance of AUM
$
1,796

$
1,910

$
1,881

$
1,843

$
1,841

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

—

5

2

(4
)
 
 
 
Liability-driven investments
(2
)
(5
)
(3
)
(4
)
1

 
 
 
Multi-asset and alternative investments
—

(1
)
3

(1
)
1

 
 
 
Total long-term active strategies (outflows)
—

(8
)
(1
)
(7
)
(4
)
 
 
 
Index
9

3

(5
)
(3
)
(22
)
 
 
 
Total long-term strategies inflows (outflows)
9

(5
)
(6
)
(10
)
(26
)
 
 
 
Short-term strategies:
 
 
 
 
 
 
 
 
Cash
11

43

(7
)
11

2

 
 
 
Total net inflows (outflows)
20

38

(13
)
1

(24
)
 
 
 
Net market impact
143

(91
)
(20
)
66

42

 
 
 
Net currency impact
2

(61
)
62

(29
)
(16
)
 
 
 
Ending balance of AUM
$
1,961

$
1,796

$
1,910

$
1,881

$
1,843

 
9
%
6
 %
 
 
 
 
 
 
 
 
 
Wealth Management client assets (a)(c)
$
254

$
236

$
266

$
259

$
257

 
8
%
(1
)%
(a)    June 30, 2020 information is preliminary.
(b)    Excludes securities lending cash management assets and assets managed in the Investment Services business.
(c)    Includes AUM and AUC/A in the Wealth Management business.



12



THE BANK OF NEW YORK MELLON CORPORATION
 
 
bnylogo01a14.jpg
 
OTHER SEGMENT
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
2Q20

1Q20

4Q19

 
3Q19

2Q19

 
YTD20

YTD19

Fee revenue
$
29

$
21

$
817

(a)
$
(5
)
$
24

 
$
50

$
41

Net securities gains (losses)
9

9

(23
)
 
(1
)
7

 
18

8

Total fee and other revenue
38

30

794

 
(6
)
31

 
68

49

Net interest (expense)
(36
)
(44
)
(10
)
 
(80
)
(40
)
 
(80
)
(70
)
Total revenue (loss)
2

(14
)
784

 
(86
)
(9
)
 
(12
)
(21
)
Provision for credit losses
(9
)
11

(3
)
 
(1
)
(2
)
 
2

(4
)
Noninterest expense
39

30

54

 
25

29

 
69

78

(Loss) income before taxes
$
(28
)
$
(55
)
$
733

 
$
(110
)
$
(36
)
 
$
(83
)
$
(95
)
 
 
 
 
 
 
 
 
 
 
Average loans and leases
$
1,815

$
1,961

$
1,974

 
$
1,817

$
1,764

 
$
1,887

$
1,774

Average assets
$
49,744

$
50,646

$
47,762

 
$
52,913

$
47,810

 
$
50,194

$
48,041

(a)    Includes a gain on sale of an equity investment.


13



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
bnylogo01a14.jpg
 
SECURITIES PORTFOLIO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions)
March 31, 2020

 
2Q20
change in
unrealized
gain (loss)

June 30, 2020
 
Fair value
as a % of amortized
cost (a)

Unrealized
gain (loss)

 
Ratings (b)
Amortized
cost

Fair value

 
 
AAA/
AA-
A+/
A-
BBB+/
BBB-
BB+ and
lower
A1+/
A2 & SP-1+
Not
rated
 Fair value

 
 
Agency RMBS
$
57,074

 
$
455

$
58,874

$
60,401

 
103
%
$
1,527

 
100
%
—
%
—
%
—
%
—
%
—
%
U.S. Treasury
24,825

 
(31
)
28,224

28,651

 
102

427

 
100

—

—

—

—

—

Sovereign debt/sovereign guaranteed
13,833

 
47

16,698

16,868

 
101

170

 
75

6

18

1

—

—

Agency commercial MBS
11,416

 
159

11,339

11,731

 
103

392

 
100

—

—

—

—

—

Foreign covered bonds
5,349

 
62

5,548

5,598

 
101

50

 
100

—

—

—

—

—

Supranational
4,339

 
27

5,434

5,484

 
101

50

 
100

—

—

—

—

—

U.S. government agencies
3,346

 
29

4,984

5,056

 
101

72

 
100

—

—

—

—

—

CLOs
4,098

 
149

4,526

4,432

 
98

(94
)
 
99

—

—

—

—

1

Foreign government agencies
2,761

 
14

3,536

3,575

 
101

39

 
95

5

—

—

—

—

Commercial paper and certificates of deposits (c)(d)
3,465

 
5

3,386

3,392

 
100

6

 
—

—

—

—

100

—

Other asset-backed securities
2,220

 
56

2,724

2,743

 
101

19

 
99

—

1

—

—

—

Non-agency commercial MBS
2,446

 
140

2,517

2,602

 
103

85

 
100

—

—

—

—

—

Non-agency RMBS (e)
1,548

 
66

1,537

1,672

 
109

135

 
50

8

2

24

—

16

State and political subdivisions
1,001

 
12

1,166

1,196

 
103

30

 
76

22

—

—

1

1

Corporate bonds
818

 
28

789

831

 
105

42

 
19

68

13

—

—

—

Other
1

 
—

1

1

 
100

—

 
—

—

—

—

—

100

Total securities
$
138,540

(f)
$
1,218

$
151,283

$
154,233

(f)(g)
102
%
$
2,950

(f)(h)
94
%
2
%
2
%
—
%
2
%
—
%
(a)    Amortized cost reflects historical impairments.
(b)    Represents ratings by S&P, or the equivalent.
(c)    Includes amounts purchased from affiliated money market funds of $2,145 million at March 31, 2020 and $1,853 million at June 30, 2020.
(d)    Includes amounts funded by borrowings from the Federal Reserve Bank under its Money Market Mutual Fund Liquidity Facility (“MMLF”) program of $651 million at March 31, 2020 and $1,539 million at June 30, 2020.
(e)    Includes RMBS that were included in the former Grantor Trust of $535 million at March 31, 2020 and $538 million at June 30, 2020.
(f)    Includes net unrealized losses on derivatives hedging securities available-for-sale (including terminated hedges) of $1,846 million at March 31, 2020 and $1,817 million at June 30, 2020.
(g)    At June 30, 2020, the securities portfolio, including the impact of interest rate swap hedges, is 74% fixed rate and 26% floating rate.
(h)    Includes unrealized gains of $1,582 million at June 30, 2020 related to available-for-sale securities, net of hedges.


14



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
 
 
bnylogo01a14.jpg
ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
2020
 
2019
(dollars in millions)
June 30

 
March 31

 
 
Dec. 31

Sept. 30

June 30

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

 
$
122

 
 
$
127

$
146

$
146

 
Allowance for lending-related commitments
148

 
94

 
 
97

95

102

 
Allowance for other financial instruments
41

(a)
N/A

 
 
N/A

N/A

N/A

 
Allowance for credit losses - beginning of period
$
329

 
$
216

 
 
$
224

$
241

$
248

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


(55
)
(b)
 
N/A

N/A

N/A

 
 
 
 
 
 
 
 
 
 
 
Net recoveries (charge-offs):
 
 
 
 
 
 
 
 
 
Charge-offs
—

 
(1
)
 
 
(1
)
(1
)
(1
)
 
Recoveries
3

 
—

 
 
1

—

2

 
Total net recoveries (charge-offs)
3

 
(1
)
 
 
—

(1
)
1

 
Provision for credit losses
143

(b)
169

(b)
 
(8
)
(16
)
(8
)
 
Allowance for credit losses - end of period
$
475

 
$
329

 
 
$
216

$
224

$
241

 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses - end of period:
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
302

 
$
140

 
 
$
122

$
127

$
146

 
Allowance for lending-related commitments
152

 
148

 
 
94

97

95

 
Allowance for other financial instruments
21

(a)
41

(a)
 
N/A

N/A

N/A

 
Allowance for credit losses - end of period
$
475

 
$
329

 
 
$
216

$
224

$
241

 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses as a percentage of total loans
0.55
%
 
0.22
%
 
 
0.22
%
0.23
%
0.28
%
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
$
88

 
$
88

 
 
$
89

$
88

$
186

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


15



THE BANK OF NEW YORK MELLON CORPORATION
 
 
bnylogo01a14.jpg
 
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
 
 
 
 
 
 
BNY Mellon has included in this Financial Supplement certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.
 
 
 
 
 
 
Net interest revenue, on a fully taxable equivalent ("FTE") basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.
 
 
 
 
 
 
BNY Mellon has also included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business 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 relative to industry competitors.
 
 
 
 
 
 
The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. BNY Mellon believes that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates.
 
 
 
 
 
 
Notes:
 
 
 
 
 
Certain immaterial reclassifications/revisions have been made to prior periods to place them on a basis comparable with the current period's presentation.
 
 
 
 
 
 
In businesses where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference.
 
 
 
 
 
 
Quarterly return on common and tangible common equity ratios are annualized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on common equity and tangible common equity reconciliation
 
 
 
 
 
 
 
 
(dollars in millions)
2Q20

1Q20

4Q19

3Q19

2Q19

 
YTD20

YTD19

Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP
$
901

$
944

$
1,391

$
1,002

$
969

 
$
1,845

$
1,879

Add: Amortization of intangible assets
26

26

28

30

30

 
52

59

Less: Tax impact of amortization of intangible assets
6

6

7

7

7

 
12

14

Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP
$
921

$
964

$
1,412

$
1,025

$
992

 
$
1,885

$
1,924

 
 
 
 
 
 
 
 
 
Average common shareholders’ equity
$
38,476

$
37,664

$
37,842

$
37,597

$
37,487

 
$
38,070

$
37,287

Less: Average goodwill
17,243

17,311

17,332

17,267

17,343

 
17,277

17,360

 Average intangible assets
3,058

3,089

3,119

3,141

3,178

 
3,073

3,193

Add: Deferred tax liability – tax deductible goodwill
1,119

1,109

1,098

1,103

1,094

 
1,119

1,094

 Deferred tax liability – intangible assets
664

666

670

679

687

 
664

687

Average tangible common shareholders’ equity – Non-GAAP
$
19,958

$
19,039

$
19,159

$
18,971

$
18,747

 
$
19,503

$
18,515

 
 
 
 
 
 
 
 
 
Return on common equity – GAAP
9.4
%
10.1
%
14.6
%
10.6
%
10.4
%
 
9.7
%
10.2
%
Return on tangible common equity – Non-GAAP
18.5
%
20.4
%
29.3
%
21.4
%
21.2
%
 
19.4
%
20.9
%


16



THE BANK OF NEW YORK MELLON CORPORATION
 
 
 
bnylogo01a14.jpg
 
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

 
 
Book value and tangible book value per common share reconciliation
2020
 
2019
(dollars in millions, except common shares)
June 30

March 31

 
Dec. 31

Sept. 30

June 30

BNY Mellon shareholders’ equity at period end – GAAP
$
43,697

$
41,145

 
$
41,483

$
41,120

$
41,533

Less: Preferred stock
4,532

3,542

 
3,542

3,542

3,542

BNY Mellon common shareholders’ equity at period end – GAAP
39,165

37,603

 
37,941

37,578

37,991

Less: Goodwill
17,253

17,240

 
17,386

17,248

17,337

Intangible assets
3,045

3,070

 
3,107

3,124

3,160

Add: Deferred tax liability – tax deductible goodwill
1,119

1,109

 
1,098

1,103

1,094

Deferred tax liability – intangible assets
664

666

 
670

679

687

BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP
$
20,650

$
19,068

 
$
19,216

$
18,988

$
19,275

 
 
 
 
 
 
 
Period-end common shares outstanding (in thousands)
885,862

885,443

 
900,683

922,199

942,662

 
 
 
 
 
 
 
Book value per common share – GAAP
$
44.21

$
42.47

 
$
42.12

$
40.75

$
40.30

Tangible book value per common share – Non-GAAP
$
23.31

$
21.53

 
$
21.33

$
20.59

$
20.45

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin reconciliation
 
 
 
 
 
 
(dollars in millions)
2Q20

1Q20

 
4Q19

3Q19

2Q19

Net interest revenue – GAAP
$
780

$
814

 
$
815

$
730

$
802

Add: Tax equivalent adjustment
2

2

 
2

3

4

Net interest revenue (FTE) – Non-GAAP
$
782

$
816

 
$
817

$
733

$
806

 
 
 
 
 
 
 
Average interest-earning assets
$
357,562

$
323,936

 
$
297,987

$
294,154

$
287,417

 
 
 
 
 
 
 
Net interest margin – GAAP (a)
0.88
%
1.01
%
 
1.09
%
0.99
%
1.12
%
Net interest margin (FTE) – Non-GAAP (a)
0.88
%
1.01
%
 
1.09
%
1.00
%
1.12
%
(a)    Net interest margin is annualized.


17



THE BANK OF NEW YORK MELLON CORPORATION
 
 
bnylogo01a14.jpg
 
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
Pre-tax operating margin reconciliation - Investment and Wealth Management business
 
 
 
 
 
 
 
 
(dollars in millions)
2Q20

1Q20

4Q19

3Q19

2Q19

 
YTD20

YTD19

Income before income taxes – GAAP
$
221

$
194

$
240

$
295

$
260

 
$
415

$
526

 
 
 
 
 
 
 
 
 
Total revenue – GAAP
$
886

$
898

$
971

$
887

$
913

 
$
1,784

$
1,849

Less: Distribution and servicing expense
86

91

93

98

94

 
177

185

Adjusted total revenue, net of distribution and servicing expense – Non-GAAP
$
800

$
807

$
878

$
789

$
819

 
$
1,607

$
1,664

 
 
 
 
 
 
 
 
 
Pre-tax operating margin – GAAP (a)
25
%
22
%
25
 %
33
%
29
%
 
23
%
28
%
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a)
28
%
24
%
27
 %
37
%
32
%
 
26
%
32
%
(a)    Income before income taxes divided by total revenue.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Constant currency reconciliations
 
 
2Q20 vs.

 
 
 
 
 
(dollars in millions)
2Q20

2Q19

2Q19

 
 
 
 
 
Consolidated:
 
 
 
 
 
 
 
 
Investment management and performance fees – GAAP
$
786

$
833

(6
)%
 
 
 
 
 
Impact of changes in foreign currency exchange rates
—

(9
)
 
 
 
 
 
 
Adjusted investment management and performance fees – Non-GAAP
$
786

$
824

(5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment and Wealth Management business:
 
 
 
 
 
 
 
 
Investment management and performance fees – GAAP
$
787

$
833

(6
)%
 
 
 
 
 
Impact of changes in foreign currency exchange rates
—

(9
)
 
 
 
 
 
 
Adjusted investment management and performance fees – Non-GAAP
$
787

$
824

(4
)%
 
 
 
 
 


18

Second Quarter 2020 Financial Highlights July 15, 2020

 
2Q20 Financial Results PROFITS RETURNS BALANCE SHEET › Net Income: $901 million › ROE: 9.4% › CET1: 12.6% › Diluted EPS: $1.01 › ROTCE: 18.5% (a) › Tier 1 Leverage: 6.2% › Returned $0.3 billion to shareholders in dividends (b) › Average LCR: 112% PRE - T A X I N C O M E TOTAL REVENUE ($ millions) ($ millions) › Investment Services revenue up due to higher fee and other revenue, offset by MMF (c) fee (8)% waivers and lower net interest revenue 3,016 › Investment and Wealth Management revenue 3,242 +3% 1,285 1,227 50 primarily impacted by change in AUM mix, MMF 1,181 fee waivers and lower net interest revenue 45 Services 3,107 40 Investment 33% › Provision for credit losses of $143 million; no 30% 29% 35 30 charge-offs and stable nonperforming assets 25 20 913 › Expenses slightly higher 15 898 (3)% › CCAR and DFAST results 10 5 886 › Maintaining quarterly cash dividend of $0.31 Investment Investment andWealth 0 Management No share buybacks in 3Q20 2Q19 1Q20 2Q20 › › Stress capital buffer of 2.5% from October 1(d) Pre-tax operating margin 2Q19 1Q20 2Q20 (a) Represents a non-GAAP measure. See page 14 for corresponding reconciliation of ROTCE (b) Share buybacks temporarily suspended for 2Q as announced jointly with the Financial Services Forum on March 15, 2020 (c) Money market fund (d) Final SCB expected to be confirmed by the Federal Reserve later in 2020 2 Second Quarter 2020 – Financial Highlights

 
2Q20 Financial Highlights ($ millions, except per share data) 2 Q 2 0 1 Q 2 0 2 Q 1 9 TOTAL REVENUE $4,010 (2)% 2% Fee revenue 3,167 (5) 2 Net interest revenue 780 (4) (3) Provision for credit losses 143 N/M N/M Noninterest expense 2,686 (1) 1 Income before income taxes 1,181 (4) (8) Net income applicable to common shareholders $901 (5)% (7)% EARNINGS PER COMMON SHARE $1.01 (4)% - % Operating leverage (a) (143) bps 72 bps Pre-tax operating margin 29% (44) bps (334) bps Return on common equity (annualized) 9.4% (67) bps (95) bps Return on tangible common equity (annualized) (b) 18.5% (182) bps (266) bps Note: See page 13 in the Appendix for corresponding footnotes. 3 Second Quarter 2020 – Financial Highlights

 
Capital and Liquidity 2 Q 20 1 Q 20 2 Q 19 Consolidated regulatory capital ratios: (a) Common Equity Tier 1 (“CET1”) ratio 12.6% 11.3% 11.1% Tier 1 capital ratio 15.4 13.5 13.2 Total capital ratio 16.3 14.3 14.0 Tier 1 leverage ratio 6.2 6.0 6.8 Supplementary leverage ratio (“SLR“) (b) 8.2 5.6 6.3 Average liquidity coverage ratio (“LCR“) 112% 115% 117% Book value per common share $44.21 $42.47 $40.30 Tangible book value per common share – non-GAAP (c) $23.31 $21.53 $20.45 Cash dividends per common share $0.31 $0.31 $0.28 Common shares outstanding (thousands) 885,862 885,443 942,662 Note: See page 13 in the Appendix for corresponding footnotes. 4 Second Quarter 2020 – Financial Highlights

 
Net Interest Revenue DRIVERS OF SEQUENTIAL NIR CHANGE ($ millions) 814 780 › Client-driven deposit growth more than offset by + Average + Securities + Hedging – Rate impact impact of lower interest rates across the yield curve deposit and loan and other (i.e. lower balances balances (largely yields partly up ~$25bn up ~$20bn offset in FX offset by lower › Strong growth in average deposit balances and Other deposit and sequentially and year-over-year trading) funding costs) › Broad-based across all business lines and linked 1Q20 2Q20 to operational and fee-generating activities AVERAGE DEPOSITS › Negative interest-bearing deposits rate a result of ($ billions) significant growth in low rate USD deposits and +28% negative rates on Euro denominated deposits +10% 283 258 › Incrementally deploying increasing deposits into 221 investment securities 1.04% 198 211 Interest-bearing 0.49% deposits 168 Interest-bearing (0.03)% deposits rate Noninterest-bearing 72 deposits 53 61 2Q19 1Q20 2Q20 5 Second Quarter 2020 – Financial Highlights

 
Credit Risk Profile AVERAGE INTEREST - › Well collateralized with assets under custody EARNING ASSETS ( $ 3 5 8 b n ) › $1.1bn manufacturing; $1.1bn services and other; $0.1bn energy and utilities +24% +10% › 92% investment grade 358 › 74% secured, predominantly office and residential LOANS ( a ) 324 › 95% of unsecured consist of predominantly investment 57 ( $ 5 5 b n ) grade REITS and real estate operating companies 287 56 › Concentrated in NY Metro area Overdrafts and other 12% Loans 50 Commercial 4% CRE › Mostly secured, 95% investment grade; 94% due <1 year 155 11% 136 › $7.0bn banks; $1.6bn securities industry Securities 124 Financial institutions 19% › Collateralized with marketable securities in excess of 100% Margin loans 23% of loan value Cash/ 132 146 113 Wealth management & › Secured by marketable securities and/or residential property Reverse repo 30% Other Residential Mtges › High quality mortgages; limited forbearance requests 2Q19 1Q20 2Q20 2Q20 (a) Preliminary data as of 6/30/20. May not foot due to rounding. 6 Second Quarter 2020 – Financial Highlights

 
Noninterest Expense ($ millions) 2 Q 2 0 1 Q 20 2 Q 19 › Noninterest expenses up year-over-year $1,464 Staff (1)% 3% › Primarily reflecting continued investments in Software and equipment 345 6 13 technology and higher staff and pension expenses, Professional, legal and other purchased services 337 2 - partially offset by lower business development (travel and marketing) expense and the favorable Net occupancy 137 1 (1) impact of a stronger U.S. dollar Sub-custodian and clearing 120 14 4 Distribution and servicing 85 (7) (10) › Technology expenses are included in staff, software and .equipment and professional, legal and other 35 - 13 Bank assessment charges purchased services Business development 20 (52) (64) Amortization of intangible assets 26 - (13) Other 117 (16) (3) Total noninterest expense $2,686 (1)% 1% 7 Second Quarter 2020 – Financial Highlights

 
Investment Services FINANCIAL HIGHLIGHTS 2 Q 2 0 ($ millions unless otherwise noted) 1 Q 2 0 2 Q 1 9 › Asset Servicing up year-over-year on higher foreign Total revenue by line of business: exchange and other trading revenue, higher client Asset Servicing $1,463 (4)% 5% volumes and a one-time fee, partially offset by lower net Pershing 578 (11) 1 interest revenue Issuer Services 431 3 (3) Treasury Services 340 - 7 › Pershing up due to higher MMF balances and clearing Clearance and Collateral Management 295 (2) 4 volumes, partially offset by the impact of rate-driven MMF Total revenue 3,107 (4) 3 fee waivers Provision for credit losses 145 N/M N/M Noninterest expense 1,989 - 1 › Issuer Services down due to lower Depositary Receipts Income before taxes $973 (12)% (8)% Pre-tax operating margin 31% (279) bps (370) bps and Corporate Trust fees KEY METRICS › Treasury Services up on higher net interest revenue and fees Foreign exchange and other trading revenue $178 (32)% 16% Securities lending revenue 51 11 28 › Clearance and Collateral Management up due to higher Average loans 43,113 3 18 net interest revenue and growth in collateral management Average deposits 268,467 11 33 and clearance volumes, mostly from non-U.S. clients AUC/A at period end (tr) (a) 37.3 6 5 Market value of securities on loan at period end (bn) (b) $384 (1)% 4% › AUC/A of $37.3 trillion up primarily reflecting higher client Pershing inflows, market values and new business, partially offset Net new assets (U.S. platform) (bn) (c) $11 N/M N/M by the unfavorable impact of a stronger U.S. dollar Average active clearing accounts (U.S. platform) (thousands) 6,507 1 4 Clearance and Collateral Management Average tri-party collateral mgmt. balances (tr) $3.6 (4)% 5% Note: See page 13 in the Appendix for corresponding footnotes. 8 Second Quarter 2020 – Financial Highlights

 
Investment Services - Revenue Drivers ($ millions) (3)% +5% +7% +4% +1% 446 431 340 295 1,397 1,463 317 284 572 578 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 A S S E T I S S U E R T R E A S U R Y CLEARANCE AND SERVICING PERSHING SERVICES SERVICES COLLATERAL + FX and other trading + Money market fund + Depositary Receipts + Deposit and loan + Clearance volumes revenue balances cross border volumes balances + Average tri-party balances + Liquidity services + Clearing volumes + Corporate Trust new + Liquidity services + NIB deposits + Client volumes - Money market fund fee business - Payment volumes + AUC/A waivers - Corporate Trust volumes + Deposit and loan - Depositary Receipts balances dividend fees - Interest rates 9 Second Quarter 2020 – Financial Highlights

 
Investment and Wealth Management FINANCIAL HIGHLIGHTS 2 Q 2 0 ($ millions unless otherwise noted) 1 Q 2 0 2 Q 1 9 › Investment Management (formerly Asset Management) decreased year-over-year primarily reflecting the Total revenue by line of business: Investment Management (formerly Asset Management) $621 - % - % unfavorable change in the mix of AUM since 2Q19 and Wealth Management 265 (5) (9) the impact of MMF fee waivers, partially offset by equity Total revenue 886 (1) (3) Provision for credit losses 7 N/M N/M investment gains (net of hedges), including seed capital Noninterest expense 658 (5) - Income before taxes $221 14% (15)% › Wealth Management down primarily reflecting lower net Pre-tax operating margin 25% 324 bps (371) bps interest revenue and a shift within portfolios to lower fee Adjusted pre-tax operating margin – non-GAAP (a) 28% 345 bps (433) bps asset classes KEY METRICS › Noninterest expense increased slightly primarily Average loans $11,791 (3)% (3)% reflecting higher continued investments in technology Average deposits 17,491 8 20 Wealth Management client assets (bn) (b) $254 8% (1)% › AUM of $2.0 trillion up primarily reflecting higher market CHANGES IN AUM (bn)(C) 2 Q 2 0 1 Q 2 0 2 Q 1 9 values and net inflows, partially offset by the Beginning balance $1,796 $1,910 $1,841 unfavorable impact of a stronger U.S. dollar Equity (2) (2) (2) Fixed income 4 - (4) Liability-driven investments (2) (5) 1 Multi-asset and alternatives investments - (1) 1 Index 9 3 (22) Cash 11 43 2 Total net inflows (outflows) 20 38 (24) Net market impact 143 (91) 42 Net currency impact 2 (61) (16) Ending balance $1,961 $1,796 $1,843 Note: See page 13 in the Appendix for corresponding footnotes. 10 Second Quarter 2020 – Financial Highlights

 
Other Segment FINANCIAL HIGHLIGHTS 2 Q 2 0 › Fee revenue increased year-over-year primarily ($ millions unless otherwise noted) 1 Q 2 0 2 Q 1 9 reflecting higher equity investment income, partially Fee revenue $29 $21 $24 Net securities gains 9 9 7 offset by sequentially lower foreign currency translation Total fee and other revenue 38 30 31 gains Net interest (expense) (36) (44) (40) Total revenue (loss) 2 (14) (9) › Net interest expense decreased year-over-year primarily Provision for credit losses (9) 11 (2) reflecting corporate treasury activity Noninterest expense 39 30 29 (Loss) before taxes $(28) $(55) $(36) › Noninterest expense increased year-over-year reflecting higher staff expense 11 Second Quarter 2020 – Financial Highlights

 
Appendix

 
Footnotes 2Q20 Financial Highlights, Page 3 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (b) See page 14 for corresponding reconciliation of this non-GAAP measure. Capital and Liquidity, Page 4 (a) Regulatory capital ratios for June 30, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for June 30, 2020 and June 30, 2019 was the Advanced Approaches, and for March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio. (b) Reflects the application of a new rule effective April 1, 2020 to exclude certain central bank placements as well as the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation. The temporary exclusion of U.S. Treasury securities from the SLR’s leverage exposure increased our SLR by 40 basis points. (c) Tangible book value per common share – non-GAAP – excludes goodwill and intangible assets, net of deferred tax liabilities. See page 14 for corresponding reconciliation of this non-GAAP measure. Investment Services, Page 8 (a) Current period is preliminary. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020 and $1.4 trillion at June 30, 2019. (b) Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $62 billion at June 30, 2020, $59 billion at March 31, 2020 and $64 billion at June 30, 2019. (c) Net new assets represents net flows of assets (e.g., net cash deposits and net securities transfers) in customer accounts in Pershing LLC, a U.S. broker-dealer. Investment and Wealth Management, Page 10 (a) Net of distribution and servicing expense. See page 15 for corresponding reconciliation of this non-GAAP measure. (b) Current period is preliminary. Includes AUM and AUC/A in the Wealth Management business. (c) Current period is preliminary. Excludes securities lending cash management assets and assets managed in the Investment Services business. 13 Second Quarter 2020 – Financial Highlights

 
Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 2 Q 20 1 Q 20 2 Q19 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $901 $944 $969 Add: Amortization of intangible assets 26 26 30 Less: Tax impact of amortization of intangible assets 6 6 7 Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding $921 $964 $992 amortization of intangible assets – non-GAAP Average common shareholders’ equity $38,476 $37,664 $37,487 Less: Average goodwill 17,243 17,311 17,343 Average intangible assets 3,058 3,089 3,178 Add: Deferred tax liability – tax deductible goodwill 1,119 1,109 1,094 Deferred tax liability – intangible assets 664 666 687 Average tangible common shareholders’ equity – non-GAAP $19,958 $19,039 $18,747 Return on common equity (annualized) – GAAP 9.4% 10.1% 10.4% Return on tangible common equity (annualized) – non-GAAP 18.5% 20.4% 21.2% Book Value and Tangible Book Value Per Common Share Reconciliation ($ millions, except common shares) June 30, 2020 March 31, 2020 June 30, 2019 BNY Mellon shareholders’ equity at period end – GAAP $43,697 $41,145 $41,533 Less: Preferred stock 4,532 3,542 3,542 BNY Mellon common shareholders’ equity at period end – GAAP 39,165 37,603 37,991 Less: Goodwill 17,253 17,240 17,337 Intangible assets 3,045 3,070 3,160 Add: Deferred tax liability – tax deductible goodwill 1,119 1,109 1,094 Deferred tax liability – intangible assets 664 666 687 BNY Mellon tangible common shareholders’ equity at period end – non-GAAP $20,650 $19,068 $19,275 Period-end common shares outstanding (in thousands) 885,862 885,443 942,662 Book value per common share – GAAP $44.21 $42.47 $40.30 Tangible book value per common share – non-GAAP $23.31 $21.53 $20.45 14 Second Quarter 2020 – Financial Highlights

 
Pre-tax Operating Margin Reconciliation – Investment and Wealth Management Business ($ millions) 2 Q 20 1 Q 20 2 Q19 Income before income taxes – GAAP $221 $194 $260 Total revenue – GAAP $886 $898 $913 Less: Distribution and servicing expense 86 91 94 Adjusted total revenue, net of distribution and servicing expense – non-GAAP $800 $807 $819 Pre-tax operating margin – GAAP (a) 25% 22% 29% Adjusted pre-tax operating margin, net of distribution and servicing expense – non-GAAP (a) 28% 24% 32% (a) Income before income taxes divided by total revenue. 15 Second Quarter 2020 – Financial Highlights

 
Cautionary Statement A number of statements in The Bank of New York Mellon Corporation’s (the “Corporation”) presentations, the accompanying slides and the responses to your questions are “forward-looking statements.” Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “future” and words of similar meaning may signify forward-looking statements. These statements relate to, among other things, the Corporation’s expectations regarding: capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, capabilities, resiliency, revenue, net interest revenue, fees, expenses, cost discipline, sustainable growth, company management, deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios and statements regarding the Corporation's aspirations, as well as the Corporation’s overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These forward-looking statements are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond the Corporation’s control). Actual outcomes may differ materially from those expressed or implied as a result of a number of factors, including, but not limited to, those discussed in “Risk Factors” in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (the “First Quarter 2020 Form 10-Q”) and the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”) and in other filings of the Corporation with the Securities and Exchange Commission (the “SEC”). Statements about the effects of the current and near-term market and macroeconomic outlook on the Corporation, including on its business, operations, financial performance and prospects, may constitute forward-looking statements, and are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond the Corporation's control), including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on the Corporation, its clients, customers and third parties. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as the Corporation completes its Form 10-Q for the second quarter of 2020. All forward- looking statements speak only as of July 15, 2020, and the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events. For additional information regarding the Corporation, please refer to the Corporation's SEC filings available at www.bnymellon.com/investorrelations. Non-GAAP Measures: In this presentation we discuss some non-GAAP measures in detailing the Corporation’s performance, which exclude certain items or otherwise include components that differ from GAAP. We believe these measures are useful to the investment community in analyzing the financial results and trends of ongoing operations. We believe they facilitate comparisons with prior periods and reflect the principal basis on which the Corporation’s management monitors financial performance. Additional disclosures relating to non-GAAP measures are contained in the Corporation’s reports filed with the SEC, including the First Quarter 2020 Form 10-Q and the 2019 Annual Report, and are available at www.bnymellon.com/investorrelations. 16 Second Quarter 2020 – Financial Highlights