BNY 8-K
Bank of New York Mellon Corp (BNY)
8-K
2021-04-16
For: 2021-04-16
View Original
Added on
April 09, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) – April 16, 2021
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code – (212 ) 495-1784
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
| (fully and unconditionally guaranteed by The Bank of New York Mellon Corporation) | ||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On April 16, 2021, The Bank of New York Mellon Corporation (“BNY Mellon”) released information on its financial results for the first quarter ended March 31, 2021. Copies of the Earnings Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
ITEM 7.01. REGULATION FD DISCLOSURE.
On April 16, 2021, BNY Mellon will hold a conference call and webcast to discuss its financial results for the first quarter ended March 31, 2021 and outlook. A copy of the Financial Highlights presentation for the conference call and webcast is attached hereto as Exhibit 99.3.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS.
| Exhibit | ||||||||
| Number | Description | |||||||
| 99.1 | ||||||||
| The quotation in Exhibit 99.1 (the “Excluded Section”) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. The information included in Exhibit 99.1, other than in the Excluded Section, shall be deemed “filed” for purposes of the Exchange Act. | ||||||||
| 99.2 | ||||||||
| The information included in Exhibit 99.2 shall be deemed “filed” for purposes of the Exchange Act. | ||||||||
| 99.3 | ||||||||
| The information included in Exhibit 99.3 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. | ||||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
The Bank of New York Mellon Corporation (Registrant) | |||||
| Date: April 16, 2021 | By: /s/ James J. Killerlane III | ||||
| Name: James J. Killerlane III Title: Secretary | |||||
3
| News Release |  | ||||
BNY MELLON REPORTS FIRST QUARTER 2021 EARNINGS OF
$858 MILLION OR $0.97 PER COMMON SHARE
Revenue down 5% | EPS down 8% | ROE 9% ROTCE 16% (a) | CET1 12.6% Tier 1 leverage 5.8% | |||||||||||||||||
NEW YORK, April 16, 2021 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
| 1Q21 vs. | |||||||||||||||||
| 1Q21 | 4Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||
Net income applicable to common shareholders (in millions) | $ | 858 | $ | 702 | $ | 944 | 22 | % | (9) | % | |||||||
| Diluted earnings per common share | $ | 0.97 | $ | 0.79 | $ | 1.05 | 23 | % | (8) | % | |||||||
| First Quarter Results | ||
Total revenue of $3.9 billion, decreased 5%
•Fee revenue increased 1%
•Fee revenue increased 6% excluding money market fee waivers (a)
•Other revenue includes a $39 million impairment for a renewable energy investment
•Net interest revenue decreased 20%
Provision for credit losses was a benefit of $83 million
Total noninterest expense of $2.9 billion, increased 5%
•Higher staff expense and weaker U.S. dollar
Investment Services
•Total revenue decreased 8%
•Income before taxes decreased 12%
•AUC/A of $41.7 trillion, increased 18%
Investment and Wealth Management
•Total revenue increased 10%
•Income before taxes increased 43%
•AUM of $2.2 trillion, increased 23%
Capital
•Repurchased 16.8 million common shares for $699 million
•Dividends of $277 million to common shareholders (including dividend-equivalents on share-based awards)
| CEO Commentary | ||
“We delivered a strong quarter and continue to see momentum across our businesses, despite the ongoing impact of low interest rates. In the first quarter of 2021, on a year-over-year basis, we delivered a 1% increase in fee revenue, or 6% excluding the impact of money market fee waivers. This included strong organic growth driven by new business and higher activity levels. Our business model has proven to be resilient and operating margin was essentially flat at 29%, compared to the first quarter of 2020 when we saw exceptional pandemic-related volumes and volatility,” Todd Gibbons, Chief Executive Officer, said.
Mr. Gibbons added, “Our Pershing, Asset Servicing and foreign exchange businesses benefited from healthy client activity and market levels. Investment and Wealth Management also benefited from market appreciation, as well as continued investment in our products and services. In addition, we gained traction in the data and analytics space, Clearing and Collateral Management and Treasury Services, driven by ongoing investments in innovation and digitization.”
“We were pleased to resume share repurchases in the first quarter, and look forward to the implementation of the stress capital buffer regime, which will provide more flexibility in returning our excess capital to our shareholders. As we move from a period of resilience to a period of recovery and growth, there is a confluence of factors that are encouraging indicators for economic momentum. This includes progress on vaccine deployment, extraordinary levels of consumer savings, and monetary stimulus and further government spending – all of which are likely to accelerate GDP growth,” Mr. Gibbons concluded.
Media Relations: Madelyn McHugh (212) 635-1376 | Investor Relations: Magda Palczynska (212) 635-8529 | ||||
| (a) For information on these Non-GAAP measures, see “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” on page 10. | |||||
| Note: Above comparisons are 1Q21 vs. 1Q20, unless otherwise noted. In 1Q21, we reclassified certain items within total revenue which impacted fee revenue and other revenue. Prior periods have been reclassified. See “Reporting Changes” beginning on page 9 for additional information. | |||||
| BNY Mellon 1Q21 Earnings Release | ||
CONSOLIDATED FINANCIAL HIGHLIGHTS
| (in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | 1Q21 vs. | ||||||||||||||||
| 1Q21 | 4Q20 (a) | 1Q20 | 4Q20 | 1Q20 | |||||||||||||
Fee revenue (b) | $ | 3,257 | $ | 3,114 | $ | 3,238 | 5 | % | 1 | % | |||||||
Other revenue (b) | 9 | 49 | 56 | N/M | N/M | ||||||||||||
Total fee and other revenue (b) | 3,266 | 3,163 | 3,294 | 3 | (1) | ||||||||||||
| Net interest revenue | 655 | 680 | 814 | (4) | (20) | ||||||||||||
| Total revenue | 3,921 | 3,843 | 4,108 | 2 | (5) | ||||||||||||
| Provision for credit losses | (83) | 15 | 169 | N/M | N/M | ||||||||||||
| Noninterest expense | 2,851 | 2,925 | 2,712 | (3) | 5 | ||||||||||||
| Income before income taxes | 1,153 | 903 | 1,227 | 28 | (6) | ||||||||||||
| Provision for income taxes | 221 | 148 | 265 | 49 | (17) | ||||||||||||
| Net income | $ | 932 | $ | 755 | $ | 962 | 23 | % | (3) | % | |||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 858 | $ | 702 | $ | 944 | 22 | % | (9) | % | |||||||
Operating leverage (c) | 456 | bps | (968) | bps | |||||||||||||
| Diluted earnings per common share | $ | 0.97 | $ | 0.79 | $ | 1.05 | 23 | % | (8) | % | |||||||
Average common shares and equivalents outstanding - diluted (in thousands) | 885,655 | 891,846 | 896,689 | ||||||||||||||
| Pre-tax operating margin | 29 | % | 24 | % | 30 | % | |||||||||||
(a) Includes a net charge of $159 million, or $0.18 per diluted common share, related to litigation expense, severance, losses on business sales and real estate charges.
(b) In 1Q21, we reclassified certain items within total revenue which impacted fee revenue, other revenue and total fee and other revenue. Prior periods have been reclassified. See “Reporting Changes” beginning on page 9 for additional information.
(c) 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 1Q21 vs. 1Q20, unless otherwise stated)
•Total revenue decreased 5%, primarily reflecting:
•Fee revenue increased 1% primarily reflecting the positive impact of higher markets, higher client volumes and balances and the favorable impact of a weaker U.S. dollar, partially offset by higher money market fee waivers. Excluding money market fee waivers, fee revenue increased 6% (a).
•Other revenue for 1Q21 includes a $39 million impairment related to a renewable energy investment.
•Net interest revenue decreased 20% primarily reflecting lower interest rates on interest-earning assets. This was partially offset by the benefit of lower deposit and funding rates, higher deposit balances and a larger securities portfolio.
•Provision for credit losses was a benefit of $83 million primarily driven by an improvement in the macroeconomic forecast.
•Noninterest expense increased 5% primarily reflecting higher staff expense, the unfavorable impact of a weaker U.S. dollar and technology-related expenses, partially offset by lower business development (travel and marketing) and distribution and servicing expenses. Staff expense includes the impact of an incentive reversal in 1Q20, the impact of a higher share price on share-based awards and increased expense for awards to retirement eligible employees.
•Effective tax rate of 19.2%.
Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•AUC/A of $41.7 trillion, increased 18%, primarily reflecting higher market values, net new business and the favorable impact of a weaker U.S. dollar.
•AUM of $2.2 trillion, increased 23%, primarily reflecting higher market values, the favorable impact of a weaker U.S. dollar (principally versus the British pound) and net inflows.
Capital and liquidity
•Repurchased 16.8 million common shares for $699 million; Dividends of $277 million to common shareholders (including dividend-equivalents on share-based awards).
•Return on common equity (“ROE”) of 9%; Return on tangible common equity (“ROTCE”) of 16% (a).
•Common Equity Tier 1 (“CET1”) ratio – 12.6%.
•Tier 1 leverage ratio – 5.8%.
•Supplementary leverage ratio (“SLR”) – 8.1% (b).
•Average liquidity coverage ratio (“LCR”) – 110%.
•Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
(a) See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
(b) See “Capital and Liquidity” on page 7 for additional information.
Note: Throughout this document, sequential growth rates are unannualized.
Page - 2 | ||
| BNY Mellon 1Q21 Earnings Release | ||
INVESTMENT SERVICES BUSINESS HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 1Q21 vs. | ||||||||||||||||
| 1Q21 | 4Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||
| Total revenue by line of business: | |||||||||||||||||
| Asset Servicing | $ | 1,424 | $ | 1,357 | $ | 1,531 | 5 | % | (7) | % | |||||||
| Pershing | 605 | 563 | 653 | 7 | (7) | ||||||||||||
| Issuer Services | 363 | 385 | 419 | (6) | (13) | ||||||||||||
| Treasury Services | 317 | 325 | 339 | (2) | (6) | ||||||||||||
| Clearance and Collateral Management | 281 | 275 | 300 | 2 | (6) | ||||||||||||
| Total revenue by line of business | 2,990 | 2,905 | 3,242 | 3 | (8) | ||||||||||||
| Provision for credit losses | (79) | 31 | 149 | N/M | N/M | ||||||||||||
| Noninterest expense | 2,101 | 2,174 | 1,987 | (3) | 6 | ||||||||||||
| Income before taxes | $ | 968 | $ | 700 | $ | 1,106 | 38 | % | (12) | % | |||||||
| Pre-tax operating margin | 32 | % | 24 | % | 34 | % | |||||||||||
Foreign exchange revenue (a) | $ | 193 | $ | 163 | $ | 228 | 18 | % | (15) | % | |||||||
| Securities lending revenue | $ | 41 | $ | 36 | $ | 46 | 14 | % | (11) | % | |||||||
| Net interest revenue | $ | 645 | $ | 670 | $ | 806 | (4) | % | (20) | % | |||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 43,468 | $ | 41,437 | $ | 41,789 | 5 | % | 4 | % | |||||||
| Average deposits | $ | 315,088 | $ | 292,631 | $ | 242,187 | 8 | % | 30 | % | |||||||
AUC/A at period end (in trillions) (current period is preliminary) (b) | $ | 41.7 | $ | 41.1 | $ | 35.2 | 1 | % | 18 | % | |||||||
Market value of securities on loan at period end (in billions) (c) | $ | 445 | $ | 435 | $ | 389 | 2 | % | 14 | % | |||||||
(a) In 1Q21, we reclassified certain items within total revenue which impacted fee revenue and other revenue. Prior periods have been reclassified. See “Reporting Changes” beginning on page 9 for additional information.
(b) Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth Management businesses. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.6 trillion at March 31, 2021, $1.5 trillion at Dec. 31, 2020 and $1.2 trillion at March 31, 2020.
(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 $64 billion at March 31, 2021, $68 billion at Dec. 31, 2020 and $59 billion at March 31, 2020.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below. Also see page 6 for information related to money market fee waivers.
•Asset Servicing – The year-over-year decrease includes lower interest rates and foreign exchange revenue and higher money market fee waivers, partially offset by higher client volumes and market values. Sequentially, higher client and foreign exchange volumes were partially offset by higher money market fee waivers.
•Pershing – The year-over-year decrease primarily reflects the impact of money market fee waivers and a one-time fee recorded in 1Q20, partially offset by higher market values and client volumes. The sequential increase primarily reflects higher clearance volumes and market values.
•Issuer Services – The year-over-year and sequential decreases primarily reflect lower interest rates and higher money market fee waivers in Corporate Trust and lower Depositary Receipts revenue.
•Treasury Services – The year-over-year and sequential decreases primarily reflect lower interest rates and higher money market fee waivers. The year-over-year decrease was partially offset by higher payment volumes and deposit levels.
•Clearance and Collateral Management – The year-over-year decrease primarily reflects lower interest rates and intraday credit fees. The sequential increase primarily reflects higher clearance volumes.
•Noninterest expense increased year-over-year primarily reflecting technology-related expense, higher staff, volume-related and litigation expenses and the unfavorable impact of a weaker U.S. dollar. Sequentially, noninterest expense decreased primarily reflecting lower litigation and severance expenses.
Page - 3 | ||
| BNY Mellon 1Q21 Earnings Release | ||
INVESTMENT AND WEALTH MANAGEMENT BUSINESS HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 1Q21 vs. | ||||||||||||||||
| 1Q21 | 4Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||
| Total revenue by line of business: | |||||||||||||||||
| Investment Management | $ | 698 | $ | 714 | $ | 620 | (2) | % | 13 | % | |||||||
| Wealth Management | 293 | 276 | 278 | 6 | 5 | ||||||||||||
| Total revenue by line of business | 991 | 990 | 898 | — | 10 | ||||||||||||
Provision for credit losses | 4 | (8) | 9 | N/M | N/M | ||||||||||||
Noninterest expense | 709 | 687 | 695 | 3 | 2 | ||||||||||||
| Income before taxes | $ | 278 | $ | 311 | $ | 194 | (11) | % | 43 | % | |||||||
| Pre-tax operating margin | 28 | % | 32 | % | 22 | % | |||||||||||
Adjusted pre-tax operating margin – Non-GAAP (a) | 30 | % | 34 | % | 24 | % | |||||||||||
| Net interest revenue | $ | 48 | $ | 50 | $ | 52 | (4) | % | (8) | % | |||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 11,610 | $ | 11,497 | $ | 12,124 | 1 | % | (4) | % | |||||||
| Average deposits | $ | 19,177 | $ | 18,144 | $ | 16,144 | 6 | % | 19 | % | |||||||
AUM (in billions) (current period is preliminary) (b) | $ | 2,214 | $ | 2,211 | $ | 1,796 | — | % | 23 | % | |||||||
Wealth Management client assets (in billions) (current period is preliminary) (c) | $ | 292 | $ | 286 | $ | 236 | 2 | % | 24 | % | |||||||
(a) Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 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. Also see page 6 for information related to money market fee waivers.
•Investment Management – The year-over-year increase primarily reflects the impact of higher market values, equity investment gains, including seed capital, and the favorable impact of a weaker U.S. dollar, partially offset by the impact of money market fee waivers. The sequential decrease primarily reflects the impact of money market fee waivers and lower equity investment gains, including seed capital, partially offset by higher market values and the favorable impact of a weaker U.S. dollar.
•Wealth Management – Total revenue increased year-over-year and sequentially, primarily reflecting the impact of higher market values. The sequential increase also reflects a loss on a business sale recorded in 4Q20.
•Noninterest expense increased year-over-year primarily reflecting higher staff expense and the unfavorable impact of a weaker U.S. dollar, partially offset by lower distribution and servicing and other expenses. Sequentially, the increase in noninterest expense primarily reflects timing of other staff expense, partially offset by lower severance expense.
Page - 4 | ||
| BNY Mellon 1Q21 Earnings Release | ||
OTHER SEGMENT primarily includes leasing operations, certain corporate treasury activities, derivatives, business exits and other corporate revenue and expense items.
| (in millions) | 1Q21 | 4Q20 | 1Q20 | ||||||||
Fee revenue (a) | $ | 9 | $ | 11 | $ | 6 | |||||
Other revenue (a) | (36) | (28) | 24 | ||||||||
| Total fee and other revenue | (27) | (17) | 30 | ||||||||
| Net interest (expense) | (38) | (40) | (44) | ||||||||
| Total revenue | (65) | (57) | (14) | ||||||||
| Provision for credit losses | (8) | (8) | 11 | ||||||||
| Noninterest expense | 41 | 64 | 30 | ||||||||
| (Loss) before taxes | $ | (98) | $ | (113) | $ | (55) | |||||
(a) In 1Q21, we reclassified certain items within total revenue which impacted fee revenue and other revenue. Prior periods have been reclassified. See “Reporting Changes” beginning on page 9 for additional information.
KEY DRIVERS
•Total revenue includes corporate treasury and other investment activity, including hedging activity which offsets between fee and other revenue and net interest expense. Other revenue decreased year-over-year and sequentially, primarily reflecting an impairment of a renewable energy investment. The sequential decrease in other revenue was partially offset by a loss on a sale of a business recorded in 4Q20.
•Noninterest expense increased year-over-year primarily reflecting higher staff expense. The sequential decrease primarily reflects real estate charges and severance expense both recorded in 4Q20, partially offset by higher other staff expense.
Page - 5 | ||
| BNY Mellon 1Q21 Earnings Release | ||
MONEY MARKET FEE WAIVERS
The following table presents the impact of money market fee waivers on our consolidated fee revenue, net of distribution and servicing expense. In 1Q21, the net impact of money market fee waivers was $188 million, up from $134 million in 4Q20, driven by low short-term interest rates and higher money market balances.
| Money market fee waivers | |||||||||||||||||
| (in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||||
| Investment services fees: | |||||||||||||||||
| Asset servicing fees | $ | (22) | $ | (13) | $ | (1) | $ | — | $ | — | |||||||
| Clearing services fees | (74) | (64) | (57) | (50) | (9) | ||||||||||||
| Issuer services fees | (10) | (6) | (1) | (1) | — | ||||||||||||
| Treasury services fees | (3) | (2) | (3) | (2) | — | ||||||||||||
| Total investment services fees | (109) | (85) | (62) | (53) | (9) | ||||||||||||
| Investment management and performance fees | (89) | (56) | (42) | (30) | (14) | ||||||||||||
| Distribution and servicing revenue | (13) | (8) | (6) | (3) | — | ||||||||||||
| Total fee revenue | (211) | (149) | (110) | (86) | (23) | ||||||||||||
| Less: Distribution and servicing expense | 23 | 15 | 9 | 7 | — | ||||||||||||
| Net impact of money market fee waivers | $ | (188) | $ | (134) | $ | (101) | $ | (79) | $ | (23) | |||||||
Impact to revenue by line of business (a): | |||||||||||||||||
| Asset Servicing | $ | (29) | $ | (13) | $ | (4) | $ | (1) | $ | — | |||||||
| Pershing | (94) | (85) | (73) | (60) | (9) | ||||||||||||
| Issuer Services | (15) | (10) | (2) | (1) | — | ||||||||||||
| Treasury Services | (9) | (5) | (1) | — | — | ||||||||||||
| Investment Management | (61) | (34) | (28) | (24) | (14) | ||||||||||||
| Wealth Management | (3) | (2) | (2) | — | — | ||||||||||||
| Total impact to revenue by line of business | $ | (211) | $ | (149) | $ | (110) | $ | (86) | $ | (23) | |||||||
(a) The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses.
Page - 6 | ||
| BNY Mellon 1Q21 Earnings Release | ||
CAPITAL AND LIQUIDITY
| Capital and liquidity ratios | March 31, 2021 | Dec. 31, 2020 | ||||||||||||
Consolidated regulatory capital ratios: (a) | ||||||||||||||
| CET1 ratio | 12.6 | % | 13.1 | % | ||||||||||
| Tier 1 capital ratio | 15.2 | 15.8 | ||||||||||||
| Total capital ratio | 16.1 | 16.7 | ||||||||||||
| Tier 1 leverage ratio | 5.8 | 6.3 | ||||||||||||
SLR (b) | 8.1 | 8.6 | ||||||||||||
| BNY Mellon shareholders’ equity to total assets ratio | 9.7 | % | 9.8 | % | ||||||||||
| BNY Mellon common shareholders’ equity to total assets ratio | 8.7 | % | 8.8 | % | ||||||||||
| Average LCR | 110 | % | 110 | % | ||||||||||
| Book value per common share | $ | 46.16 | $ | 46.53 | ||||||||||
Tangible book value per common share – Non-GAAP (c) | $ | 24.88 | $ | 25.44 | ||||||||||
Common shares outstanding (in thousands) | 875,481 | 886,764 | ||||||||||||
(a) Regulatory capital ratios for March 31, 2021 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2021, was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio, and for Dec. 31, 2020, was the Advanced Approaches.
(b) Reflects the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation which increased our consolidated SLR by 68 basis points at March 31, 2021 and 72 basis points at Dec. 31, 2020. The temporary exclusion ceased to apply beginning April 1, 2021.
(c) 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 10 for information on this Non-GAAP measure.
•CET1 capital totaled $21.1 billion at March 31, 2021, a decrease of $785 million compared with Dec. 31, 2020. The decrease primarily reflects unrealized losses on securities available-for-sale and capital deployed through common stock repurchases and dividends, partially offset by capital generated through earnings.
NET INTEREST REVENUE
| Net interest revenue | 1Q21 vs. | ||||||||||||||||
| (dollars in millions; not meaningful - N/M) | 1Q21 | 4Q20 | 1Q20 | 4Q20 | 1Q20 | ||||||||||||
| Net interest revenue | $ | 655 | $ | 680 | $ | 814 | (4) | % | (20) | % | |||||||
| Add: Tax equivalent adjustment | 3 | 3 | 2 | N/M | N/M | ||||||||||||
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a) | $ | 658 | $ | 683 | $ | 816 | (4) | % | (19) | % | |||||||
| Net interest margin | 0.66 | % | 0.72 | % | 1.01 | % | (6) | bps | (35) | bps | |||||||
Net interest margin (FTE) – Non-GAAP (a) | 0.67 | % | 0.72 | % | 1.01 | % | (5) | bps | (34) | 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 10 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. This was partially offset by the benefit of lower deposit and funding rates, higher deposit balances and a larger securities portfolio.
•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, and higher deposit and loan balances.
Page - 7 | ||
| BNY Mellon 1Q21 Earnings Release | ||
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement
| (in millions) | Quarter ended | ||||||||||
| March 31, 2021 | Dec. 31, 2020 | March 31, 2020 | |||||||||
| Fee and other revenue | |||||||||||
| Investment services fees: | |||||||||||
Asset servicing fees | $ | 1,199 | $ | 1,138 | $ | 1,159 | |||||
Clearing services fees | 455 | 418 | 470 | ||||||||
Issuer services fees | 245 | 257 | 263 | ||||||||
Treasury services fees | 157 | 156 | 149 | ||||||||
Total investment services fees | 2,056 | 1,969 | 2,041 | ||||||||
| Investment management and performance fees | 890 | 884 | 862 | ||||||||
Foreign exchange revenue (a) | 231 | 187 | 245 | ||||||||
| Financing-related fees | 51 | 46 | 59 | ||||||||
| Distribution and servicing | 29 | 28 | 31 | ||||||||
Total fee revenue (a) | 3,257 | 3,114 | 3,238 | ||||||||
Investment and other income (a) | 9 | 43 | 47 | ||||||||
| Net securities gains | — | 6 | 9 | ||||||||
Total other revenue (a) | 9 | 49 | 56 | ||||||||
Total fee and other revenue (a) | 3,266 | 3,163 | 3,294 | ||||||||
| Net interest revenue | |||||||||||
| Interest revenue | 738 | 776 | 1,570 | ||||||||
| Interest expense | 83 | 96 | 756 | ||||||||
Net interest revenue | 655 | 680 | 814 | ||||||||
Total revenue | 3,921 | 3,843 | 4,108 | ||||||||
| Provision for credit losses | (83) | 15 | 169 | ||||||||
| Noninterest expense | |||||||||||
| Staff | 1,602 | 1,554 | 1,482 | ||||||||
| Software and equipment | 362 | 359 | 326 | ||||||||
| Professional, legal and other purchased services | 343 | 381 | 330 | ||||||||
| Sub-custodian and clearing | 124 | 116 | 105 | ||||||||
| Net occupancy | 123 | 173 | 135 | ||||||||
| Distribution and servicing | 74 | 75 | 91 | ||||||||
| Bank assessment charges | 34 | 24 | 35 | ||||||||
| Amortization of intangible assets | 24 | 26 | 26 | ||||||||
| Business development | 19 | 26 | 42 | ||||||||
| Other | 146 | 191 | 140 | ||||||||
Total noninterest expense | 2,851 | 2,925 | 2,712 | ||||||||
| Income | |||||||||||
| Income before income taxes | 1,153 | 903 | 1,227 | ||||||||
| Provision for income taxes | 221 | 148 | 265 | ||||||||
Net income | 932 | 755 | 962 | ||||||||
| Net (income) loss attributable to noncontrolling interests related to consolidated investment management funds | (5) | (5) | 18 | ||||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation | 927 | 750 | 980 | ||||||||
Preferred stock dividends | (69) | (48) | (36) | ||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 858 | $ | 702 | $ | 944 | |||||
(a) In 1Q21, we made changes to the line items presented within total revenue on the consolidated income statement and reclassified prior periods to be comparable with the current period presentation. See “Reporting Changes” beginning on page 9 for additional information.
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation | Quarter ended | ||||||||||
| March 31, 2021 | Dec. 31, 2020 | March 31, 2020 | |||||||||
| (in dollars) | |||||||||||
| Basic | $ | 0.97 | $ | 0.79 | $ | 1.05 | |||||
Diluted | $ | 0.97 | $ | 0.79 | $ | 1.05 | |||||
Page - 8 | ||
| BNY Mellon 1Q21 Earnings Release | ||
REPORTING CHANGES
In order to combine items of a similar nature within total revenue and to simplify our income statement presentation, in 1Q21 we made the following reporting changes. The reclassifications had no impact on consolidated total revenue or total revenue for the business segments. Prior periods were reclassified to be comparable with the current period presentation.
•Other trading revenue was reclassified from foreign exchange and other trading revenue to investment and other income.
•Foreign exchange and other trading revenue was renamed foreign exchange revenue.
•The impact of foreign currency remeasurement was reclassified from investment and other income to foreign exchange revenue.
•Income (loss) from consolidated investment management funds was reclassified to investment and other income.
•Investment and other income was reclassified from fee revenue to other revenue. Other revenue includes investment and other income and net securities gains (losses).
In addition, the assets and liabilities of consolidated investment management funds were reclassified to other assets and other liabilities, respectively, on the consolidated balance sheet. The reclassifications had no impact on total assets or total liabilities. Prior periods were reclassified to be comparable with the current period presentation.
See “Reporting Changes” in the Financial Supplement available at www.bnymellon.com for additional information.
The table below summarizes the effects of the reclassifications on the consolidated financial statements.
| (in millions) | 4Q20 | 1Q20 | ||||||
| Consolidated income statement | ||||||||
| Before reclassifications | ||||||||
| Foreign exchange and other trading revenue | $ | 167 | $ | 319 | ||||
| Total fee revenue | $ | 3,116 | $ | 3,323 | ||||
| Investment and other income | $ | 22 | $ | 11 | ||||
| Income (loss) from consolidated investment management funds | $ | 41 | $ | (38) | ||||
| After reclassifications | ||||||||
| Foreign exchange revenue | $ | 187 | $ | 245 | ||||
| Total fee revenue | $ | 3,114 | $ | 3,238 | ||||
| Investment and other income | $ | 43 | $ | 47 | ||||
| Consolidated balance sheet | ||||||||
| Before reclassifications | ||||||||
| Other assets | $ | 20,468 | $ | 27,446 | ||||
| Assets of consolidated investment management funds, at fair value | $ | 487 | $ | 229 | ||||
| Other liabilities | $ | 7,514 | $ | 11,425 | ||||
| Liabilities of consolidated investment management funds, at fair value | $ | 3 | $ | 1 | ||||
| After reclassifications | ||||||||
| Other assets | $ | 20,955 | $ | 27,675 | ||||
| Other liabilities | $ | 7,517 | $ | 11,426 | ||||
Page - 9 | ||
| BNY Mellon 1Q21 Earnings Release | ||
The table below summarizes the effects of the reclassifications on the Investment Services business and the Other segment.
| (in millions) | 4Q20 | 1Q20 | ||||||
| Investment Services business | ||||||||
| Before reclassifications | ||||||||
| Foreign exchange and other trading revenue | $ | 180 | $ | 261 | ||||
| After reclassifications | ||||||||
| Foreign exchange revenue | $ | 163 | $ | 228 | ||||
| Other segment | ||||||||
| Before reclassifications | ||||||||
| Fee (loss) revenue | $ | (23) | $ | 21 | ||||
| Net securities gains | $ | 6 | $ | 9 | ||||
| After reclassifications | ||||||||
| Fee revenue | $ | 11 | $ | 6 | ||||
| Other (loss) revenue | $ | (28) | $ | 24 | ||||
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.
BNY Mellon has presented the measure of fee revenue, excluding money market fee waivers – Non-GAAP. We believe that this measure is useful information for investors on the impact of current interest rates and market conditions on fee revenue growth rates and the performance of our business.
| Fee revenue reconciliation | 1Q21 vs. | ||||||||||
| (dollars in millions) | 1Q21 | 1Q20 | 1Q20 | ||||||||
| Fee revenue | $ | 3,257 | $ | 3,238 | 1 | % | |||||
| Less: Money market fee waivers | (211) | (23) | |||||||||
| Fee revenue, excluding money market fee waivers – Non-GAAP | $ | 3,468 | $ | 3,261 | 6 | % | |||||
Page - 10 | ||
| BNY Mellon 1Q21 Earnings Release | ||
CAUTIONARY STATEMENT
A number of statements (i) in this Earnings Release, (ii) in our Financial Supplement, (iii) in our presentations and (iv) in the responses to questions on our conference call discussing our quarterly results and other public events may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, resiliency, capabilities, revenue, net interest revenue, money market fee waivers, fees, expenses, cost discipline, sustainable growth, company management, human capital management (including related ambitions, objectives, aims and goals), 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,” “ambition,” “objective,” “aim,” “future,” “potentially,” “outlook” 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 Annual Report on Form 10-K for the year ended Dec. 31, 2020 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 and other third parties in response to the pandemic, the availability, use and effectiveness of vaccines 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 March 31, 2021. All forward-looking statements in this Earnings Release speak only as of April 16, 2021, and BNY Mellon undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.
ABOUT BNY MELLON
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment and wealth management and investment services in 35 countries. As of March 31, 2021, BNY Mellon had $41.7 trillion in assets under custody and/or administration, and $2.2 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
Page - 11 | ||
| BNY Mellon 1Q21 Earnings Release | ||
CONFERENCE CALL INFORMATION
Todd Gibbons, Chief Executive Officer, and Emily Portney, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 8:00 a.m. ET on April 16, 2021. 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: 444308, or by logging onto www.bnymellon.com/investorrelations. Earnings materials will be available at www.bnymellon.com/investorrelations beginning at approximately 6:30 a.m. ET on April 16, 2021. Replays of the conference call and audio webcast will be available beginning April 16, 2021 at approximately 2:00 p.m. ET through May 16, 2021 by dialing (888) 203-1112 (U.S.) or (719) 457-0820 (International), and using the passcode: 3619155. 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 - 12 | ||
| The Bank of New York Mellon Corporation | ||
| Financial Supplement | ||
| First Quarter 2021 | ||
| Table of Contents |  | |||||||
| Consolidated Results | Page | |||||||
| Consolidated Financial Highlights | ||||||||
| Condensed Consolidated Income Statement | ||||||||
| Condensed Consolidated Balance Sheet | ||||||||
| Fee and Other Revenue | ||||||||
| Average Balances and Interest Rates | ||||||||
| Capital and Liquidity | ||||||||
| Business Segment Results | ||||||||
| 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 | ||||||||
| Reporting Changes | ||||||||
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||
| (dollars in millions, except per common share amounts, or unless otherwise noted) | 1Q21 vs. | |||||||||||||||||||||||||
| 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | 4Q20 | 1Q20 | ||||||||||||||||||||
| Selected income statement data | ||||||||||||||||||||||||||
Fee revenue (a) | $ | 3,257 | $ | 3,114 | $ | 3,074 | $ | 3,089 | $ | 3,238 | 5 | % | 1 | % | ||||||||||||
Other revenue (a) | 9 | 49 | 70 | 141 | 56 | N/M | N/M | |||||||||||||||||||
Total fee and other revenue (a) | 3,266 | 3,163 | 3,144 | 3,230 | 3,294 | 3 | (1) | |||||||||||||||||||
| Net interest revenue | 655 | 680 | 703 | 780 | 814 | (4) | (20) | |||||||||||||||||||
| Total revenue | 3,921 | 3,843 | 3,847 | 4,010 | 4,108 | 2 | (5) | |||||||||||||||||||
| Provision for credit losses | (83) | 15 | 9 | 143 | 169 | N/M | N/M | |||||||||||||||||||
| Noninterest expense | 2,851 | 2,925 | 2,681 | 2,686 | 2,712 | (3) | 5 | |||||||||||||||||||
| Income before income taxes | 1,153 | 903 | 1,157 | 1,181 | 1,227 | 28 | (6) | |||||||||||||||||||
| Provision for income taxes | 221 | 148 | 213 | 216 | 265 | 49 | (17) | |||||||||||||||||||
| Net income | $ | 932 | $ | 755 | $ | 944 | $ | 965 | $ | 962 | 23 | % | (3) | % | ||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 858 | $ | 702 | $ | 876 | $ | 901 | $ | 944 | 22 | % | (9) | % | ||||||||||||
| Diluted earnings per common share | $ | 0.97 | $ | 0.79 | $ | 0.98 | $ | 1.01 | $ | 1.05 | 23 | % | (8) | % | ||||||||||||
Average common shares and equivalents outstanding – diluted (in thousands) | 885,655 | 891,846 | 891,069 | 890,561 | 896,689 | (1) | % | (1) | % | |||||||||||||||||
Financial ratios (Returns are annualized) | ||||||||||||||||||||||||||
| Pre-tax operating margin | 29 | % | 24 | % | 30 | % | 29 | % | 30 | % | ||||||||||||||||
| Return on common equity | 8.5 | % | 6.9 | % | 8.7 | % | 9.4 | % | 10.1 | % | ||||||||||||||||
Return on tangible common equity – Non-GAAP (b) | 16.1 | % | 13.0 | % | 16.7 | % | 18.5 | % | 20.4 | % | ||||||||||||||||
| Non-U.S. revenue as a percentage of total revenue | 37 | % | 38 | % | 37 | % | 36 | % | 36 | % | ||||||||||||||||
| Period end | ||||||||||||||||||||||||||
Assets under custody and/or administration (“AUC/A”) (in trillions) (c) | $ | 41.7 | $ | 41.1 | $ | 38.6 | $ | 37.3 | $ | 35.2 | 1 | % | 18 | % | ||||||||||||
Assets under management (“AUM”) (in trillions) | $ | 2.21 | $ | 2.21 | $ | 2.04 | $ | 1.96 | $ | 1.80 | — | % | 23 | % | ||||||||||||
| Full-time employees | 48,000 | 48,500 | 48,600 | 48,300 | 47,900 | (1) | % | — | % | |||||||||||||||||
| Book value per common share | $ | 46.16 | $ | 46.53 | $ | 45.58 | $ | 44.21 | $ | 42.47 | ||||||||||||||||
Tangible book value per common share – Non-GAAP (b) | $ | 24.88 | $ | 25.44 | $ | 24.60 | $ | 23.31 | $ | 21.53 | ||||||||||||||||
| Cash dividends per common share | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | ||||||||||||||||
| Common dividend payout ratio | 32 | % | 39 | % | 32 | % | 31 | % | 30 | % | ||||||||||||||||
| Closing stock price per common share | $ | 47.29 | $ | 42.44 | $ | 34.34 | $ | 38.65 | $ | 33.68 | ||||||||||||||||
| Market capitalization | $ | 41,401 | $ | 37,634 | $ | 30,430 | $ | 34,239 | $ | 29,822 | ||||||||||||||||
Common shares outstanding (in thousands) | 875,481 | 886,764 | 886,136 | 885,862 | 885,443 | |||||||||||||||||||||
Capital ratios at period end (d) | ||||||||||||||||||||||||||
| Common Equity Tier 1 ("CET1") ratio | 12.6 | % | 13.1 | % | 13.0 | % | 12.6 | % | 11.3 | % | ||||||||||||||||
| Tier 1 capital ratio | 15.2 | % | 15.8 | % | 15.7 | % | 15.4 | % | 13.5 | % | ||||||||||||||||
| Total capital ratio | 16.1 | % | 16.7 | % | 16.6 | % | 16.3 | % | 14.3 | % | ||||||||||||||||
| Tier 1 leverage ratio | 5.8 | % | 6.3 | % | 6.5 | % | 6.2 | % | 6.0 | % | ||||||||||||||||
| Supplementary leverage ratio ("SLR") | 8.1 | % | 8.6 | % | 8.5 | % | 8.2 | % | 5.6 | % | ||||||||||||||||
| (a) In 1Q21, we reclassified certain items within total revenue which impacted fee revenue, other revenue and total fee and other revenue. Prior periods have been reclassified. See “Reporting Changes" beginning on page 19 for additional information. | ||||||||||||||||||||||||||
(b) 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. | ||||||||||||||||||||||||||
(c) Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.6 trillion at March 31, 2021, $1.5 trillion at Dec. 31, 2020, $1.4 trillion at Sept. 30, 2020, $1.3 trillion at June 30, 2020 and $1.2 trillion at March 31, 2020. | ||||||||||||||||||||||||||
(d) Regulatory capital ratios for March 31, 2021 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2021 and March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio, and for Dec. 31, 2020, Sept. 30, 2020 and June 30, 2020, was the Advanced Approaches. | ||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||
3
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||
| CONDENSED CONSOLIDATED INCOME STATEMENT | ||||||||||||||||||||||||||
(dollars in millions, except per share amounts; common shares in thousands) | 1Q21 vs. | |||||||||||||||||||||||||
| 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | 4Q20 | 1Q20 | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Investment services fees: | ||||||||||||||||||||||||||
| Asset servicing fees | $ | 1,199 | $ | 1,138 | $ | 1,168 | $ | 1,173 | $ | 1,159 | 5 | % | 3 | % | ||||||||||||
| Clearing services fees | 455 | 418 | 397 | 431 | 470 | 9 | (3) | |||||||||||||||||||
| Issuer services fees | 245 | 257 | 295 | 277 | 263 | (5) | (7) | |||||||||||||||||||
| Treasury services fees | 157 | 156 | 152 | 144 | 149 | 1 | 5 | |||||||||||||||||||
| Total investment services fees | 2,056 | 1,969 | 2,012 | 2,025 | 2,041 | 4 | 1 | |||||||||||||||||||
| Investment management and performance fees | 890 | 884 | 835 | 786 | 862 | 1 | 3 | |||||||||||||||||||
Foreign exchange revenue (a) | 231 | 187 | 149 | 193 | 245 | 24 | (6) | |||||||||||||||||||
| Financing-related fees | 51 | 46 | 49 | 58 | 59 | 11 | (14) | |||||||||||||||||||
| Distribution and servicing | 29 | 28 | 29 | 27 | 31 | 4 | (6) | |||||||||||||||||||
Total fee revenue (a) | 3,257 | 3,114 | 3,074 | 3,089 | 3,238 | 5 | 1 | |||||||||||||||||||
Investment and other income (a) | 9 | 43 | 61 | 132 | 47 | N/M | N/M | |||||||||||||||||||
| Net securities gains | — | 6 | 9 | 9 | 9 | N/M | N/M | |||||||||||||||||||
Total other revenue (a) | 9 | 49 | 70 | 141 | 56 | N/M | N/M | |||||||||||||||||||
Total fee and other revenue (a) | 3,266 | 3,163 | 3,144 | 3,230 | 3,294 | 3 | (1) | |||||||||||||||||||
| Net interest revenue | 655 | 680 | 703 | 780 | 814 | (4) | (20) | |||||||||||||||||||
| Total revenue | 3,921 | 3,843 | 3,847 | 4,010 | 4,108 | 2 | (5) | |||||||||||||||||||
| Provision for credit losses | (83) | 15 | 9 | 143 | 169 | N/M | N/M | |||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||
| Staff | 1,602 | 1,554 | 1,466 | 1,464 | 1,482 | 3 | 8 | |||||||||||||||||||
| Software and equipment | 362 | 359 | 340 | 345 | 326 | 1 | 11 | |||||||||||||||||||
| Professional, legal and other purchased services | 343 | 381 | 355 | 337 | 330 | (10) | 4 | |||||||||||||||||||
| Sub-custodian and clearing | 124 | 116 | 119 | 120 | 105 | 7 | 18 | |||||||||||||||||||
| Net occupancy | 123 | 173 | 136 | 137 | 135 | (29) | (9) | |||||||||||||||||||
| Distribution and servicing | 74 | 75 | 85 | 85 | 91 | (1) | (19) | |||||||||||||||||||
| Bank assessment charges | 34 | 24 | 30 | 35 | 35 | 42 | (3) | |||||||||||||||||||
| Amortization of intangible assets | 24 | 26 | 26 | 26 | 26 | (8) | (8) | |||||||||||||||||||
| Business development | 19 | 26 | 17 | 20 | 42 | (27) | (55) | |||||||||||||||||||
| Other | 146 | 191 | 107 | 117 | 140 | (24) | 4 | |||||||||||||||||||
| Total noninterest expense | 2,851 | 2,925 | 2,681 | 2,686 | 2,712 | (3) | 5 | |||||||||||||||||||
| Income before income taxes | 1,153 | 903 | 1,157 | 1,181 | 1,227 | 28 | (6) | |||||||||||||||||||
| Provision for income taxes | 221 | 148 | 213 | 216 | 265 | 49 | (17) | |||||||||||||||||||
| Net income | 932 | 755 | 944 | 965 | 962 | 23 | (3) | |||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | (5) | (5) | (7) | (15) | 18 | N/M | N/M | |||||||||||||||||||
| Preferred stock dividends | (69) | (48) | (61) | (49) | (36) | N/M | N/M | |||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 858 | $ | 702 | $ | 876 | $ | 901 | $ | 944 | 22 | % | (9) | % | ||||||||||||
| Average common shares and equivalents outstanding: Basic | 882,558 | 889,928 | 889,499 | 889,020 | 894,122 | (1) | % | (1) | % | |||||||||||||||||
| Diluted | 885,655 | 891,846 | 891,069 | 890,561 | 896,689 | (1) | % | (1) | % | |||||||||||||||||
| Earnings per common share: Basic | $ | 0.97 | $ | 0.79 | $ | 0.98 | $ | 1.01 | $ | 1.05 | 23 | % | (8) | % | ||||||||||||
| Diluted | $ | 0.97 | $ | 0.79 | $ | 0.98 | $ | 1.01 | $ | 1.05 | 23 | % | (8) | % | ||||||||||||
| (a) In 1Q21, we made changes to the line items presented within total revenue on the consolidated income statement and reclassified prior periods to be comparable with the current period presentation. See “Reporting Changes” beginning on page 19 for additional information. | ||||||||||||||||||||||||||
N/M – Not meaningful. | ||||||||||||||||||||||||||
4
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||
| (in millions) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 5,991 | $ | 6,252 | $ | 4,104 | $ | 4,776 | $ | 5,091 | ||||||||||
| Interest-bearing deposits with the Federal Reserve and other central banks | 125,524 | 141,775 | 106,185 | 112,728 | 146,535 | |||||||||||||||
| Interest-bearing deposits with banks | 23,763 | 17,300 | 19,027 | 18,045 | 22,672 | |||||||||||||||
| Federal funds sold and securities purchased under resale agreements | 28,263 | 30,907 | 29,647 | 36,638 | 27,363 | |||||||||||||||
| Securities | 155,844 | 156,441 | 155,339 | 154,682 | 139,273 | |||||||||||||||
| Trading assets | 16,884 | 15,272 | 13,074 | 14,150 | 12,918 | |||||||||||||||
| Loans | 60,732 | 56,469 | 55,491 | 55,397 | 62,368 | |||||||||||||||
| Allowance for loan losses | (327) | (358) | (325) | (302) | (140) | |||||||||||||||
Net loans | 60,405 | 56,111 | 55,166 | 55,095 | 62,228 | |||||||||||||||
| Premises and equipment | 3,521 | 3,602 | 3,617 | 3,598 | 3,514 | |||||||||||||||
| Accrued interest receivable | 485 | 510 | 489 | 540 | 576 | |||||||||||||||
| Goodwill | 17,469 | 17,496 | 17,357 | 17,253 | 17,240 | |||||||||||||||
| Intangible assets | 2,983 | 3,012 | 3,026 | 3,045 | 3,070 | |||||||||||||||
Other assets (a) | 23,852 | 20,955 | 21,367 | 21,766 | 27,675 | |||||||||||||||
Total assets | $ | 464,984 | $ | 469,633 | $ | 428,398 | $ | 442,316 | $ | 468,155 | ||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits | $ | 336,768 | $ | 341,545 | $ | 296,312 | $ | 305,470 | $ | 336,717 | ||||||||||
| Federal funds purchased and securities sold under repurchase agreements | 15,150 | 11,305 | 15,907 | 14,512 | 13,128 | |||||||||||||||
| Trading liabilities | 4,566 | 6,031 | 6,084 | 5,595 | 6,625 | |||||||||||||||
| Payables to customers and broker-dealers | 23,827 | 25,085 | 23,514 | 25,012 | 24,016 | |||||||||||||||
| Commercial paper | — | — | 671 | 665 | 1,121 | |||||||||||||||
| Other borrowed funds | 348 | 350 | 420 | 1,628 | 1,544 | |||||||||||||||
| Accrued taxes and other expenses | 4,916 | 5,696 | 5,347 | 5,029 | 4,705 | |||||||||||||||
Other liabilities (a) | 8,656 | 7,517 | 8,675 | 12,873 | 11,426 | |||||||||||||||
| Long-term debt | 25,350 | 25,984 | 26,121 | 27,566 | 27,494 | |||||||||||||||
Total liabilities | 419,581 | 423,513 | 383,051 | 398,350 | 426,776 | |||||||||||||||
| Temporary equity | ||||||||||||||||||||
| Redeemable noncontrolling interests | 187 | 176 | 179 | 157 | 140 | |||||||||||||||
| Permanent equity | ||||||||||||||||||||
Preferred stock | 4,541 | 4,541 | 4,532 | 4,532 | 3,542 | |||||||||||||||
Common stock | 14 | 14 | 14 | 14 | 14 | |||||||||||||||
| Additional paid-in capital | 27,928 | 27,823 | 27,741 | 27,702 | 27,644 | |||||||||||||||
| Retained earnings | 34,822 | 34,241 | 33,821 | 33,224 | 32,601 | |||||||||||||||
| Accumulated other comprehensive loss, net of tax | (1,819) | (985) | (1,359) | (1,943) | (2,827) | |||||||||||||||
Less: Treasury stock, at cost | (20,532) | (19,833) | (19,832) | (19,832) | (19,829) | |||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity | 44,954 | 45,801 | 44,917 | 43,697 | 41,145 | |||||||||||||||
Nonredeemable noncontrolling interests of consolidated investment management funds | 262 | 143 | 251 | 112 | 94 | |||||||||||||||
Total permanent equity | 45,216 | 45,944 | 45,168 | 43,809 | 41,239 | |||||||||||||||
Total liabilities, temporary equity and permanent equity | $ | 464,984 | $ | 469,633 | $ | 428,398 | $ | 442,316 | $ | 468,155 | ||||||||||
| (a) In 1Q21, the assets and liabilities of consolidated investment management funds were reclassified to other assets and other liabilities, respectively. All prior periods have been reclassified. See “Reporting Changes” beginning on page 19 for additional information. | ||||||||||||||||||||
5
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||
| FEE AND OTHER REVENUE | ||||||||||||||||||||||||||
| 1Q21 vs. | ||||||||||||||||||||||||||
| (dollars in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||||||||
| Investment services fees: | ||||||||||||||||||||||||||
Asset servicing fees (a) | $ | 1,154 | $ | 1,099 | $ | 1,128 | $ | 1,117 | $ | 1,108 | 5 | % | 4 | % | ||||||||||||
| Securities lending revenue | 45 | 39 | 40 | 56 | 51 | 15 | (12) | |||||||||||||||||||
Clearing services fees (b) | 455 | 418 | 397 | 431 | 470 | 9 | (3) | |||||||||||||||||||
| Issuer services fees | 245 | 257 | 295 | 277 | 263 | (5) | (7) | |||||||||||||||||||
| Treasury services fees | 157 | 156 | 152 | 144 | 149 | 1 | 5 | |||||||||||||||||||
| Total investment services fees | 2,056 | 1,969 | 2,012 | 2,025 | 2,041 | 4 | 1 | |||||||||||||||||||
| Investment management and performance fees: | ||||||||||||||||||||||||||
Investment management fees (c) | 850 | 839 | 828 | 781 | 812 | 1 | 5 | |||||||||||||||||||
| Performance fees | 40 | 45 | 7 | 5 | 50 | N/M | (20) | |||||||||||||||||||
Total investment management and performance fees (d) | 890 | 884 | 835 | 786 | 862 | 1 | 3 | |||||||||||||||||||
Foreign exchange revenue (e) | 231 | 187 | 149 | 193 | 245 | 24 | (6) | |||||||||||||||||||
| Financing-related fees | 51 | 46 | 49 | 58 | 59 | 11 | (14) | |||||||||||||||||||
| Distribution and servicing | 29 | 28 | 29 | 27 | 31 | 4 | (6) | |||||||||||||||||||
Total fee revenue (e) | 3,257 | 3,114 | 3,074 | 3,089 | 3,238 | 5 | 1 | |||||||||||||||||||
Investment and other income (e): | ||||||||||||||||||||||||||
| Income (loss) from consolidated investment management funds | 17 | 41 | 27 | 54 | (38) | N/M | N/M | |||||||||||||||||||
Seed capital gains (losses) (f) | 3 | 22 | 9 | 23 | (31) | N/M | N/M | |||||||||||||||||||
| Other trading (loss) revenue | (7) | (31) | (14) | (8) | 66 | N/M | N/M | |||||||||||||||||||
| Renewable energy investment (losses) | (81) | (27) | (34) | (34) | (34) | N/M | N/M | |||||||||||||||||||
| Corporate/bank-owned life insurance | 33 | 43 | 33 | 36 | 36 | N/M | N/M | |||||||||||||||||||
Other investments gains (losses) (g) | 11 | 18 | 11 | 13 | (7) | N/M | N/M | |||||||||||||||||||
| Disposal (losses) | — | (61) | — | — | — | N/M | N/M | |||||||||||||||||||
| Expense reimbursements from joint venture | 23 | 22 | 23 | 19 | 21 | N/M | N/M | |||||||||||||||||||
| Other income | 10 | 16 | 6 | 29 | 34 | N/M | N/M | |||||||||||||||||||
| Total investment and other income | 9 | 43 | 61 | 132 | 47 | N/M | N/M | |||||||||||||||||||
| Net securities gains | — | 6 | 9 | 9 | 9 | N/M | N/M | |||||||||||||||||||
| Total other revenue | 9 | 49 | 70 | 141 | 56 | N/M | N/M | |||||||||||||||||||
Total fee and other revenue (e) | $ | 3,266 | $ | 3,163 | $ | 3,144 | $ | 3,230 | $ | 3,294 | 3 | % | (1) | % | ||||||||||||
(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 (losses) related to consolidated investment management funds. | ||||||||||||||||||||||||||
(d) On a constant currency basis (Non-GAAP), investment management and performance fees increased 1% compared with 1Q20. See "Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure. | ||||||||||||||||||||||||||
| (e) In 1Q21, we made changes to the line items presented within total revenue on the consolidated income statement and reclassified prior periods to be comparable with the current period presentation. See “Reporting Changes” beginning on page 19 for additional information. | ||||||||||||||||||||||||||
| (f) Includes gains (losses) on investments in BNY Mellon funds which hedge deferred incentive awards. | ||||||||||||||||||||||||||
| (g) Includes strategic equity, private equity and other investments. | ||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||
6
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCES AND INTEREST RATES | ||||||||||||||||||||||||||||||||||||||||||||
| 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 125,930 | (0.05) | % | $ | 112,274 | (0.04) | % | $ | 90,670 | (0.04) | % | $ | 94,229 | (0.03) | % | $ | 80,403 | 0.39 | % | ||||||||||||||||||||||||
| Interest-bearing deposits with banks (primarily foreign banks) | 21,313 | 0.27 | 19,281 | 0.32 | 19,202 | 0.42 | 21,093 | 0.76 | 17,081 | 1.37 | ||||||||||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements (a) | 29,186 | 0.44 | 28,389 | 0.55 | 30,342 | 0.63 | 30,265 | 0.82 | 34,109 | 4.67 | ||||||||||||||||||||||||||||||||||
| Margin loans | 15,891 | 1.14 | 14,097 | 1.23 | 12,870 | 1.24 | 12,791 | 1.28 | 12,984 | 2.69 | ||||||||||||||||||||||||||||||||||
| Non-margin loans: | ||||||||||||||||||||||||||||||||||||||||||||
| Domestic offices | 31,218 | 2.02 | 30,855 | 2.08 | 30,053 | 2.12 | 31,185 | 2.21 | 31,720 | 3.02 | ||||||||||||||||||||||||||||||||||
| Foreign offices | 9,680 | 1.18 | 9,776 | 1.31 | 10,693 | 1.45 | 12,743 | 1.84 | 11,170 | 2.55 | ||||||||||||||||||||||||||||||||||
| Total non-margin loans | 40,898 | 1.82 | 40,631 | 1.90 | 40,746 | 1.94 | 43,928 | 2.10 | 42,890 | 2.89 | ||||||||||||||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. government obligations | 28,759 | 1.43 | 27,783 | 1.46 | 30,073 | 1.36 | 27,901 | 1.52 | 23,175 | 1.87 | ||||||||||||||||||||||||||||||||||
| U.S. government agency obligations | 77,623 | 1.50 | 79,712 | 1.56 | 78,300 | 1.68 | 74,583 | 1.92 | 69,046 | 2.32 | ||||||||||||||||||||||||||||||||||
State and political subdivisions (b) | 2,526 | 1.92 | 2,104 | 2.01 | 1,500 | 2.51 | 1,025 | 2.98 | 1,033 | 3.06 | ||||||||||||||||||||||||||||||||||
Other securities (b) | 47,030 | 0.50 | 46,280 | 0.48 | 46,719 | 0.59 | 45,511 | 0.82 | 36,375 | 0.95 | ||||||||||||||||||||||||||||||||||
Total investment securities (b) | 155,938 | 1.19 | 155,879 | 1.23 | 156,592 | 1.30 | 149,020 | 1.51 | 129,629 | 1.86 | ||||||||||||||||||||||||||||||||||
Trading securities (b) | 8,141 | 0.95 | 8,123 | 0.95 | 7,212 | 0.91 | 6,236 | 1.13 | 6,840 | 2.36 | ||||||||||||||||||||||||||||||||||
Total securities (b) | 164,079 | 1.18 | 164,002 | 1.22 | 163,804 | 1.28 | 155,256 | 1.50 | 136,469 | 1.88 | ||||||||||||||||||||||||||||||||||
Total interest-earning assets (b) | $ | 397,297 | 0.75 | % | $ | 378,674 | 0.82 | % | $ | 357,634 | 0.92 | % | $ | 357,562 | 1.06 | % | $ | 323,936 | 1.95 | % | ||||||||||||||||||||||||
| Noninterest-earning assets | 63,082 | 58,814 | 57,231 | 57,797 | 61,342 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 460,379 | $ | 437,488 | $ | 414,865 | $ | 415,359 | $ | 385,278 | ||||||||||||||||||||||||||||||||||
| Liabilities and equity | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||
| Domestic offices | $ | 128,543 | (0.02) | % | $ | 119,012 | (0.02) | % | $ | 102,767 | (0.01) | % | $ | 102,135 | 0.06 | % | $ | 99,915 | 0.69 | % | ||||||||||||||||||||||||
| Foreign offices | 116,572 | (0.10) | 112,306 | (0.10) | 108,733 | (0.09) | 108,508 | (0.12) | 97,717 | 0.29 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 245,115 | (0.06) | 231,318 | (0.06) | 211,500 | (0.05) | 210,643 | (0.03) | 197,632 | 0.49 | ||||||||||||||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements (a) | 15,288 | (0.07) | 14,452 | 0.01 | 16,850 | 0.13 | 14,209 | 0.03 | 13,919 | 7.96 | ||||||||||||||||||||||||||||||||||
| Trading liabilities | 2,227 | 0.53 | 2,408 | 0.72 | 2,692 | 0.30 | 1,974 | 0.39 | 1,626 | 1.61 | ||||||||||||||||||||||||||||||||||
| Other borrowed funds | 331 | 2.01 | 338 | 1.71 | 873 | 1.40 | 2,272 | 1.30 | 719 | 2.27 | ||||||||||||||||||||||||||||||||||
| Commercial paper | — | — | 275 | 0.10 | 2,274 | 0.09 | 191 | 1.02 | 1,581 | 1.56 | ||||||||||||||||||||||||||||||||||
| Payables to customers and broker-dealers | 17,691 | (0.01) | 17,521 | (0.01) | 18,501 | (0.01) | 18,742 | (0.01) | 16,386 | 0.73 | ||||||||||||||||||||||||||||||||||
| Long-term debt | 26,199 | 1.81 | 25,704 | 1.88 | 26,511 | 2.01 | 28,122 | 2.42 | 27,231 | 2.83 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | $ | 306,851 | 0.11 | % | $ | 292,016 | 0.13 | % | $ | 279,201 | 0.16 | % | $ | 276,153 | 0.24 | % | $ | 259,094 | 1.17 | % | ||||||||||||||||||||||||
| Total noninterest-bearing deposits | 83,429 | 75,840 | 67,610 | 72,411 | 60,577 | |||||||||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 24,556 | 23,783 | 23,393 | 24,121 | 24,229 | |||||||||||||||||||||||||||||||||||||||
| Total The Bank of New York Mellon Corporation shareholders’ equity | 45,261 | 45,539 | 44,456 | 42,486 | 41,206 | |||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | 282 | 310 | 205 | 188 | 172 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 460,379 | $ | 437,488 | $ | 414,865 | $ | 415,359 | $ | 385,278 | ||||||||||||||||||||||||||||||||||
| Net interest margin | 0.66 | % | 0.72 | % | 0.79 | % | 0.88 | % | 1.01 | % | ||||||||||||||||||||||||||||||||||
Net interest margin (FTE) – Non-GAAP (c) | 0.67 | % | 0.72 | % | 0.79 | % | 0.88 | % | 1.01 | % | ||||||||||||||||||||||||||||||||||
(a) Includes the average impact of offsetting under enforceable netting agreements of approximately $37 billion for 1Q21, $41 billion for 4Q20, $43 billion for 3Q20, $67 billion for 2Q20 and $80 billion for 1Q20. 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 0.19% for 1Q21, 0.23% for 4Q20, 0.26% for 3Q20 and 2Q20 and 1.39% for 1Q20. On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under resale agreements would have been (0.02)% for 1Q21, 0.00% for 4Q20, 0.04% for 3Q20, 0.00% for 2Q20 and 1.18% for 1Q20. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid. | ||||||||||||||||||||||||||||||||||||||||||||
(b) Average rates were calculated on an FTE basis, at tax rates of approximately 21%. | ||||||||||||||||||||||||||||||||||||||||||||
(c) See "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 | | |||||||||||||||||||||||||||||||
| CAPITAL AND LIQUIDITY | ||||||||||||||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| (dollars in millions) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||||||||||||||||
Consolidated regulatory capital ratios (a) | ||||||||||||||||||||||||||||||||
| Standardized Approach: | ||||||||||||||||||||||||||||||||
| CET1 capital | $ | 21,090 | $ | 21,875 | $ | 21,171 | $ | 20,035 | $ | 18,465 | ||||||||||||||||||||||
| Tier 1 capital | 25,535 | 26,310 | 25,611 | 24,478 | 21,933 | |||||||||||||||||||||||||||
| Total capital | 27,191 | 28,038 | 27,327 | 26,183 | 23,494 | |||||||||||||||||||||||||||
| Risk-weighted assets | 167,546 | 163,848 | 156,698 | 157,290 | 163,006 | |||||||||||||||||||||||||||
| CET1 ratio | 12.6 | % | 13.4 | % | 13.5 | % | 12.7 | % | 11.3 | % | ||||||||||||||||||||||
| Tier 1 capital ratio | 15.2 | 16.1 | 16.3 | 15.6 | 13.5 | |||||||||||||||||||||||||||
| Total capital ratio | 16.2 | 17.1 | 17.4 | 16.6 | 14.4 | |||||||||||||||||||||||||||
| Advanced Approaches: | ||||||||||||||||||||||||||||||||
| CET1 capital | $ | 21,090 | $ | 21,875 | $ | 21,171 | $ | 20,035 | $ | 18,465 | ||||||||||||||||||||||
| Tier 1 capital | 25,535 | 26,310 | 25,611 | 24,478 | 21,933 | |||||||||||||||||||||||||||
| Total capital | 26,912 | 27,795 | 27,081 | 25,937 | 23,281 | |||||||||||||||||||||||||||
| Risk-weighted assets | 167,209 | 166,426 | 163,108 | 159,340 | 162,561 | |||||||||||||||||||||||||||
| CET1 ratio | 12.6 | % | 13.1 | % | 13.0 | % | 12.6 | % | 11.4 | % | ||||||||||||||||||||||
| Tier 1 capital ratio | 15.3 | 15.8 | 15.7 | 15.4 | 13.5 | |||||||||||||||||||||||||||
| Total capital ratio | 16.1 | 16.7 | 16.6 | 16.3 | 14.3 | |||||||||||||||||||||||||||
| Tier 1 leverage ratio: | ||||||||||||||||||||||||||||||||
| Average assets for Tier 1 leverage ratio | $ | 440,968 | $ | 417,982 | $ | 394,945 | $ | 394,394 | $ | 366,058 | ||||||||||||||||||||||
| Tier 1 leverage ratio | 5.8 | % | 6.3 | % | 6.5 | % | 6.2 | % | 6.0 | % | ||||||||||||||||||||||
| SLR: | ||||||||||||||||||||||||||||||||
| Leverage exposure | $ | 313,654 | (b) | $ | 304,823 | (b) | $ | 300,265 | (b) | $ | 297,300 | (b) | $ | 392,807 | ||||||||||||||||||
| SLR | 8.1 | % | (b) | 8.6 | % | (b) | 8.5 | % | (b) | 8.2 | % | (b) | 5.6 | % | ||||||||||||||||||
| Average liquidity coverage ratio | 110 | % | 110 | % | 111 | % | 112 | % | 115 | % | ||||||||||||||||||||||
(a) Regulatory capital ratios for March 31, 2021 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2021 and March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio, and for Dec. 31, 2020, Sept. 30, 2020 and June 30, 2020, was the Advanced Approaches. | ||||||||||||||||||||||||||||||||
(b) Reflects the application of a rule effective April 1, 2020 to exclude certain central bank placements. Also effective on April 1, 2020 was the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation which increased our consolidated SLR by 68 basis points at March 31, 2021, 72 basis points at Dec. 31, 2020, 78 basis points at Sept. 30, 2020 and 40 basis points at June 30, 2020. The temporary exclusion ceased to apply beginning April 1, 2021. | ||||||||||||||||||||||||||||||||
8
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||
| INVESTMENT SERVICES BUSINESS | ||||||||||||||||||||||||||
| 1Q21 vs. | ||||||||||||||||||||||||||
| (dollars in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||
| Investment services fees: | ||||||||||||||||||||||||||
Asset servicing fees (ex. securities lending revenue) (a) | $ | 1,150 | $ | 1,094 | $ | 1,119 | $ | 1,113 | $ | 1,101 | 5 | % | 4 | % | ||||||||||||
| Securities lending revenue | 41 | 36 | 37 | 51 | 46 | 14 | (11) | |||||||||||||||||||
Clearing services fees (b) | 455 | 418 | 397 | 431 | 470 | 9 | (3) | |||||||||||||||||||
| Issuer services fees | 245 | 257 | 295 | 277 | 263 | (5) | (7) | |||||||||||||||||||
| Treasury services fees | 157 | 156 | 152 | 144 | 149 | 1 | 5 | |||||||||||||||||||
| Total investment services fees | 2,048 | 1,961 | 2,000 | 2,016 | 2,029 | 4 | 1 | |||||||||||||||||||
Foreign exchange revenue (c) | 193 | 163 | 126 | 164 | 228 | 18 | (15) | |||||||||||||||||||
Other (c)(d) | 104 | 111 | 120 | 159 | 179 | (6) | (42) | |||||||||||||||||||
| Total fee and other revenue | 2,345 | 2,235 | 2,246 | 2,339 | 2,436 | 5 | (4) | |||||||||||||||||||
| Net interest revenue | 645 | 670 | 681 | 768 | 806 | (4) | (20) | |||||||||||||||||||
| Total revenue | 2,990 | 2,905 | 2,927 | 3,107 | 3,242 | 3 | (8) | |||||||||||||||||||
| Provision for credit losses | (79) | 31 | (10) | 145 | 149 | N/M | N/M | |||||||||||||||||||
| Noninterest expense (ex. amortization of intangible assets) | 2,084 | 2,157 | 2,002 | 1,971 | 1,969 | (3) | 6 | |||||||||||||||||||
| Amortization of intangible assets | 17 | 17 | 18 | 18 | 18 | — | (6) | |||||||||||||||||||
| Total noninterest expense | 2,101 | 2,174 | 2,020 | 1,989 | 1,987 | (3) | 6 | |||||||||||||||||||
| Income before taxes | $ | 968 | $ | 700 | $ | 917 | $ | 973 | $ | 1,106 | 38 | % | (12) | % | ||||||||||||
| Pre-tax operating margin | 32 | % | 24 | % | 31 | % | 31 | % | 34 | % | ||||||||||||||||
| Total revenue by line of business: | ||||||||||||||||||||||||||
| Asset Servicing | $ | 1,424 | $ | 1,357 | $ | 1,354 | $ | 1,463 | $ | 1,531 | 5 | % | (7) | % | ||||||||||||
| Pershing | 605 | 563 | 538 | 578 | 653 | 7 | (7) | |||||||||||||||||||
| Issuer Services | 363 | 385 | 435 | 431 | 419 | (6) | (13) | |||||||||||||||||||
| Treasury Services | 317 | 325 | 323 | 340 | 339 | (2) | (6) | |||||||||||||||||||
| Clearance and Collateral Management | 281 | 275 | 277 | 295 | 300 | 2 | (6) | |||||||||||||||||||
| Total revenue by line of business | $ | 2,990 | $ | 2,905 | $ | 2,927 | $ | 3,107 | $ | 3,242 | 3 | % | (8) | % | ||||||||||||
(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) In 1Q21, we made changes to the line items presented within total revenue on the consolidated income statement and reclassified prior periods to be comparable with the current period presentation. See “Reporting Changes” beginning on page 19 for additional information. | ||||||||||||||||||||||||||
| (d) Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue, securities gains and losses and investment and other income. | ||||||||||||||||||||||||||
| N/M – Not meaningful. | ||||||||||||||||||||||||||
9
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||||||||
| INVESTMENT SERVICES BUSINESS | ||||||||||||||||||||||||||
| 1Q21 vs. | ||||||||||||||||||||||||||
| (dollars in millions, unless otherwise noted) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||||||||
| Average loans | $ | 43,468 | $ | 41,437 | $ | 40,308 | $ | 43,113 | $ | 41,789 | 5 | % | 4 | % | ||||||||||||
| Average assets | $ | 385,054 | $ | 358,270 | $ | 329,324 | $ | 335,288 | $ | 304,089 | 7 | % | 27 | % | ||||||||||||
| Average deposits | $ | 315,088 | $ | 292,631 | $ | 263,621 | $ | 268,467 | $ | 242,187 | 8 | % | 30 | % | ||||||||||||
AUC/A at period end (in trillions) (a)(b) | $ | 41.7 | $ | 41.1 | $ | 38.6 | $ | 37.3 | $ | 35.2 | 1 | % | 18 | % | ||||||||||||
Market value of securities on loan at period end (in billions) (c) | $ | 445 | $ | 435 | $ | 378 | $ | 384 | $ | 389 | 2 | % | 14 | % | ||||||||||||
| Pershing | ||||||||||||||||||||||||||
Net new assets (U.S. platform) (in billions) (d) | $ | 28 | $ | 28 | $ | 12 | $ | 11 | $ | 31 | N/M | N/M | ||||||||||||||
Average active clearing accounts (U.S. platform) (in thousands) | 6,757 | 6,635 | 6,556 | 6,507 | 6,437 | 2 | % | 5 | % | |||||||||||||||||
Average long-term mutual fund assets (U.S. platform) | $ | 678,556 | $ | 630,086 | $ | 597,312 | $ | 547,579 | $ | 549,206 | 8 | % | 24 | % | ||||||||||||
Average investor margin loans (U.S. platform) | $ | 10,937 | $ | 10,097 | $ | 9,350 | $ | 9,235 | $ | 9,419 | 8 | % | 16 | % | ||||||||||||
| Clearance and Collateral Management | ||||||||||||||||||||||||||
Average tri-party collateral management balances (in billions) | $ | 3,638 | $ | 3,555 | $ | 3,417 | $ | 3,573 | $ | 3,724 | 2 | % | (2) | % | ||||||||||||
(a) March 31, 2021 information is preliminary. | ||||||||||||||||||||||||||
(b) Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth Management businesses. Includes the AUC/A of CIBC Mellon of $1.6 trillion at March 31, 2021, $1.5 trillion at Dec. 31, 2020, $1.4 trillion at Sept. 30, 2020, $1.3 trillion at June 30, 2020 and $1.2 trillion at March 31, 2020. | ||||||||||||||||||||||||||
(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 $64 billion at March 31, 2021, $68 billion at Dec. 31, 2020, $62 billion at Sept. 30, 2020 and June 30, 2020 and $59 billion at March 31, 2020. | ||||||||||||||||||||||||||
(d) Net new assets represent net flows of assets excluding dividends and interest (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 | | |||||||||||||||||||||||||
| INVESTMENT AND WEALTH MANAGEMENT BUSINESS | ||||||||||||||||||||||||||
| 1Q21 vs. | ||||||||||||||||||||||||||
| (dollars in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||
Investment management fees (a) | $ | 850 | $ | 839 | $ | 828 | $ | 782 | $ | 812 | 1 | % | 5 | % | ||||||||||||
| Performance fees | 40 | 45 | 7 | 5 | 50 | N/M | (20) | |||||||||||||||||||
Investment management and performance fees (b) | 890 | 884 | 835 | 787 | 862 | 1 | 3 | |||||||||||||||||||
| Distribution and servicing | 28 | 29 | 31 | 34 | 43 | (3) | (35) | |||||||||||||||||||
Other (a) | 25 | 27 | 5 | 17 | (59) | N/M | N/M | |||||||||||||||||||
Total fee and other revenue (a) | 943 | 940 | 871 | 838 | 846 | — | 11 | |||||||||||||||||||
| Net interest revenue | 48 | 50 | 47 | 48 | 52 | (4) | (8) | |||||||||||||||||||
| Total revenue | 991 | 990 | 918 | 886 | 898 | — | 10 | |||||||||||||||||||
| Provision for credit losses | 4 | (8) | 12 | 7 | 9 | N/M | N/M | |||||||||||||||||||
| Noninterest expense (ex. amortization of intangible assets) | 702 | 678 | 653 | 650 | 687 | 4 | 2 | |||||||||||||||||||
| Amortization of intangible assets | 7 | 9 | 8 | 8 | 8 | (22) | (13) | |||||||||||||||||||
| Total noninterest expense | 709 | 687 | 661 | 658 | 695 | 3 | 2 | |||||||||||||||||||
| Income before taxes | $ | 278 | $ | 311 | $ | 245 | $ | 221 | $ | 194 | (11) | % | 43 | % | ||||||||||||
| Pre-tax operating margin | 28 | % | 32 | % | 27 | % | 25 | % | 22 | % | ||||||||||||||||
Adjusted pre-tax operating margin – Non-GAAP (c) | 30 | % | 34 | % | 29 | % | 28 | % | 24 | % | ||||||||||||||||
| Total revenue by line of business: | ||||||||||||||||||||||||||
| Investment Management | $ | 698 | $ | 714 | $ | 641 | $ | 621 | $ | 620 | (2) | % | 13 | % | ||||||||||||
| Wealth Management | 293 | 276 | 277 | 265 | 278 | 6 | 5 | |||||||||||||||||||
| Total revenue by line of business | $ | 991 | $ | 990 | $ | 918 | $ | 886 | $ | 898 | — | % | 10 | % | ||||||||||||
| Average loans | $ | 11,610 | $ | 11,497 | $ | 11,503 | $ | 11,791 | $ | 12,124 | 1 | % | (4 | %) | ||||||||||||
| Average assets | $ | 32,066 | $ | 30,804 | $ | 30,160 | $ | 30,327 | $ | 30,543 | 4 | % | 5 | % | ||||||||||||
| Average deposits | $ | 19,177 | $ | 18,144 | $ | 17,570 | $ | 17,491 | $ | 16,144 | 6 | % | 19 | % | ||||||||||||
(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 revenue and investment and other income. | ||||||||||||||||||||||||||
(b) On a constant currency basis (Non-GAAP), investment management and performance fees increased 1% compared with 1Q20. 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 | | |||||||||||||||||||||||||
| AUM BY PRODUCT, AUM FLOWS AND WEALTH MANAGEMENT CLIENT ASSETS | ||||||||||||||||||||||||||
| 1Q21 vs. | ||||||||||||||||||||||||||
| (dollars in billions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | 4Q20 | 1Q20 | |||||||||||||||||||
AUM by product type (a)(b) | ||||||||||||||||||||||||||
| Equity | $ | 173 | $ | 170 | $ | 149 | $ | 141 | $ | 120 | 2 | % | 44 | % | ||||||||||||
| Fixed income | 261 | 259 | 241 | 224 | 211 | 1 | 24 | |||||||||||||||||||
| Index | 419 | 393 | 350 | 333 | 274 | 7 | 53 | |||||||||||||||||||
| Liability-driven investments | 802 | 855 | 788 | 752 | 705 | (6) | 14 | |||||||||||||||||||
| Multi-asset and alternative investments | 214 | 209 | 193 | 185 | 171 | 2 | 25 | |||||||||||||||||||
| Cash | 345 | 325 | 320 | 326 | 315 | 6 | 10 | |||||||||||||||||||
| Total AUM by product type | $ | 2,214 | $ | 2,211 | $ | 2,041 | $ | 1,961 | $ | 1,796 | — | % | 23 | % | ||||||||||||
Changes in AUM (a)(b) | ||||||||||||||||||||||||||
| Beginning balance of AUM | $ | 2,211 | $ | 2,041 | $ | 1,961 | $ | 1,796 | $ | 1,910 | ||||||||||||||||
| Net inflows (outflows): | ||||||||||||||||||||||||||
| Long-term strategies: | ||||||||||||||||||||||||||
| Equity | — | (2) | (4) | (2) | (2) | |||||||||||||||||||||
| Fixed income | 8 | 5 | 1 | 4 | — | |||||||||||||||||||||
| Liability-driven investments | 8 | 15 | 14 | (2) | (5) | |||||||||||||||||||||
| Multi-asset and alternative investments | (2) | — | (3) | — | (1) | |||||||||||||||||||||
| Total long-term active strategies inflows (outflows) | 14 | 18 | 8 | — | (8) | |||||||||||||||||||||
| Index | 3 | (3) | (3) | 9 | 3 | |||||||||||||||||||||
| Total long-term strategies inflows (outflows) | 17 | 15 | 5 | 9 | (5) | |||||||||||||||||||||
| Short-term strategies: | ||||||||||||||||||||||||||
| Cash | 19 | 5 | (10) | 11 | 43 | |||||||||||||||||||||
| Total net inflows (outflows) | 36 | 20 | (5) | 20 | 38 | |||||||||||||||||||||
| Net market impact | (36) | 93 | 41 | 143 | (91) | |||||||||||||||||||||
| Net currency impact | 3 | 57 | 44 | 2 | (61) | |||||||||||||||||||||
| Ending balance of AUM | $ | 2,214 | $ | 2,211 | $ | 2,041 | $ | 1,961 | $ | 1,796 | — | % | 23 | % | ||||||||||||
Wealth Management client assets (a)(c) | $ | 292 | $ | 286 | $ | 265 | $ | 254 | $ | 236 | 2 | % | 24 | % | ||||||||||||
(a) March 31, 2021 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 | | ||||||||||||||||
| OTHER SEGMENT | |||||||||||||||||
| (in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||||
Fee revenue (a) | $ | 9 | $ | 11 | $ | 7 | $ | 10 | $ | 6 | |||||||
Other revenue (a) | (36) | (28) | 13 | 28 | 24 | ||||||||||||
| Total fee and other revenue | (27) | (17) | 20 | 38 | 30 | ||||||||||||
| Net interest (expense) | (38) | (40) | (25) | (36) | (44) | ||||||||||||
| Total revenue | (65) | (57) | (5) | 2 | (14) | ||||||||||||
| Provision for credit losses | (8) | (8) | 7 | (9) | 11 | ||||||||||||
| Noninterest expense | 41 | 64 | — | 39 | 30 | ||||||||||||
| (Loss) before taxes | $ | (98) | $ | (113) | $ | (12) | $ | (28) | $ | (55) | |||||||
| Average loans and leases | $ | 1,711 | $ | 1,794 | $ | 1,805 | $ | 1,815 | $ | 1,961 | |||||||
| Average assets | $ | 43,259 | $ | 48,414 | $ | 55,381 | $ | 49,744 | $ | 50,646 | |||||||
(a) In 1Q21, we made changes to the line items presented within total revenue on the consolidated income statement and reclassified prior periods to be comparable with the current period presentation. See “Reporting Changes” beginning on page 19 for additional information. | |||||||||||||||||
13
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| SECURITIES PORTFOLIO | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Dec. 31, 2020 | 1Q21 change in unrealized gain (loss) | March 31, 2021 | Fair value as a % of amortized cost (a) | Unrealized gain (loss) | % Floating rate | Ratings (c) | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortized cost | Fair value | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | A1+/ A2 & SP-1 | Not rated | ||||||||||||||||||||||||||||||||||||||||||||||
| Fair value | (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency RMBS | $ | 61,740 | $ | (742) | $ | 58,107 | $ | 58,831 | 101 | % | $ | 724 | 14 | % | 100 | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||||||||||||||||
| U.S. Treasury | 26,958 | (280) | 30,412 | 30,595 | 101 | 183 | 55 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 13,452 | (83) | 14,454 | 14,571 | 101 | 117 | 16 | 73 | 5 | 21 | 1 | — | — | ||||||||||||||||||||||||||||||||||||||||
| Agency commercial MBS | 11,685 | (175) | 11,484 | 11,730 | 102 | 246 | 33 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Supranational | 7,208 | (31) | 7,469 | 7,505 | 100 | 36 | 56 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Foreign covered bonds | 6,725 | (16) | 6,491 | 6,542 | 101 | 51 | 34 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 6,577 | (110) | 5,498 | 5,469 | 99 | (29) | 25 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| CLOs | 4,703 | 6 | 4,751 | 4,754 | 100 | 3 | 100 | 99 | — | — | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||
Non-agency commercial MBS | 2,992 | (87) | 2,907 | 2,948 | 101 | 41 | 24 | 99 | 1 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Foreign government agencies | 4,132 | (27) | 2,678 | 2,697 | 101 | 19 | 14 | 92 | 8 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | 2,324 | (55) | 2,665 | 2,649 | 99 | (16) | — | 74 | 8 | 1 | — | 17 | — | ||||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | 3,164 | (18) | 2,617 | 2,628 | 100 | 11 | 19 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Non-agency RMBS (d) | 2,387 | (7) | 2,365 | 2,509 | 106 | 144 | 53 | 71 | 4 | 1 | 13 | — | 11 | ||||||||||||||||||||||||||||||||||||||||
| Corporate bonds | 1,994 | (100) | 2,289 | 2,238 | 98 | (51) | — | 15 | 68 | 17 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Commercial paper and certificates of deposits (e) | 249 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other | 1 | — | 1 | 1 | 100 | — | — | — | — | — | — | — | 100 | ||||||||||||||||||||||||||||||||||||||||
Total securities | $ | 156,291 | (f) | $ | (1,725) | $ | 154,188 | $ | 155,667 | (f)(g) | 101 | % | $ | 1,479 | (f)(h) | 30 | % | 95 | % | 2 | % | 3 | % | — | % | — | % | — | % | ||||||||||||||||||||||||
| (a) Amortized cost reflects historical impairments. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (b) Includes the impact of hedges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) Represents ratings by S&P, or the equivalent. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) Includes RMBS that were included in the former Grantor Trust of $487 million at Dec. 31, 2020 and $451 million at March 31, 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) Includes amounts purchased from affiliated money market funds of $249 million at Dec. 31, 2020 and $- million at March 31, 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(f) Includes net unrealized losses on derivatives hedging securities available-for-sale (including terminated hedges) of $1,428 million at Dec. 31, 2020 and $634 million at March 31, 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(g) The fair value of available-for-sale securities totaled $107,178 million at March 31, 2021, net of hedges, or 69% of the fair value of the securities portfolio, net of hedges. The fair value of the held-to-maturity securities totaled $48,489 million at March 31, 2021, or 31% of the fair value of the securities portfolio, net of hedges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (h) Includes unrealized gains of $1,022 million at March 31, 2021 related to available-for-sale securities, net of hedges, and $457 million related to held-to-maturity securities. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note: The amortizable purchase premium (net of discount) relating to securities was $2,074 million at March 31, 2021 and the amortization of that net purchase premium was $177 million in 1Q21. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
14
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||
| ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS | |||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||
| (dollars in millions) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||||
| Allowance for credit losses – beginning of period: | |||||||||||||||||||||||||||||||||||
| Allowance for loan losses | $ | 358 | $ | 325 | $ | 302 | $ | 140 | $ | 122 | |||||||||||||||||||||||||
| Allowance for lending-related commitments | 121 | 135 | 152 | 148 | 94 | ||||||||||||||||||||||||||||||
| Allowance for other financial instruments | 22 | (a) | 26 | (a) | 21 | (a) | 41 | (a) | N/A | ||||||||||||||||||||||||||
| Allowance for credit losses – beginning of period | $ | 501 | $ | 486 | $ | 475 | $ | 329 | $ | 216 | |||||||||||||||||||||||||
Impact of adopting ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, effective Jan. 1, 2020 | N/A | N/A | N/A | N/A | (55) | (b) | |||||||||||||||||||||||||||||
| Net (charge-offs) recoveries: | |||||||||||||||||||||||||||||||||||
| Charge-offs | (1) | (1) | — | — | (1) | ||||||||||||||||||||||||||||||
| Recoveries | 2 | 1 | 2 | 3 | — | ||||||||||||||||||||||||||||||
| Total net recoveries (charge-offs) | 1 | — | 2 | 3 | (1) | ||||||||||||||||||||||||||||||
Provision for credit losses (b) | (83) | 15 | 9 | 143 | 169 | ||||||||||||||||||||||||||||||
| Allowance for credit losses - end of period | $ | 419 | $ | 501 | $ | 486 | $ | 475 | $ | 329 | |||||||||||||||||||||||||
| Allowance for credit losses – end of period: | |||||||||||||||||||||||||||||||||||
| Allowance for loan losses | $ | 327 | $ | 358 | $ | 325 | $ | 302 | $ | 140 | |||||||||||||||||||||||||
| Allowance for lending-related commitments | 73 | 121 | 135 | 152 | 148 | ||||||||||||||||||||||||||||||
Allowance for other financial instruments (a) | 19 | 22 | 26 | 21 | 41 | ||||||||||||||||||||||||||||||
| Allowance for credit losses – end of period | $ | 419 | $ | 501 | $ | 486 | $ | 475 | $ | 329 | |||||||||||||||||||||||||
| Allowance for loan losses as a percentage of total loans | 0.54 | % | 0.63 | % | 0.59 | % | 0.55 | % | 0.22 | % | |||||||||||||||||||||||||
| Nonperforming assets | $ | 112 | $ | 89 | $ | 84 | $ | 88 | $ | 88 | |||||||||||||||||||||||||
(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. | |||||||||||||||||||||||||||||||||||
| N/A – Not applicable. | |||||||||||||||||||||||||||||||||||
15
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||
| 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. We believe that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates. | |||||||||||||||||
| Notes: | |||||||||||||||||
| 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. | |||||||||||||||||
| Return on common and tangible common equity ratios are annualized. | |||||||||||||||||
| Return on common equity and tangible common equity reconciliation | |||||||||||||||||
| (dollars in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 858 | $ | 702 | $ | 876 | $ | 901 | $ | 944 | |||||||
| Add: Amortization of intangible assets | 24 | 26 | 26 | 26 | 26 | ||||||||||||
| Less: Tax impact of amortization of intangible assets | 6 | 6 | 7 | 6 | 6 | ||||||||||||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | $ | 876 | $ | 722 | $ | 895 | $ | 921 | $ | 964 | |||||||
| Average common shareholders’ equity | $ | 40,720 | $ | 40,712 | $ | 39,924 | $ | 38,476 | $ | 37,664 | |||||||
| Less: Average goodwill | 17,494 | 17,411 | 17,357 | 17,243 | 17,311 | ||||||||||||
| Average intangible assets | 3,000 | 3,019 | 3,039 | 3,058 | 3,089 | ||||||||||||
| Add: Deferred tax liability – tax deductible goodwill | 1,153 | 1,144 | 1,132 | 1,119 | 1,109 | ||||||||||||
| Deferred tax liability – intangible assets | 665 | 667 | 666 | 664 | 666 | ||||||||||||
| Average tangible common shareholders’ equity – Non-GAAP | $ | 22,044 | $ | 22,093 | $ | 21,326 | $ | 19,958 | $ | 19,039 | |||||||
| Return on common equity – GAAP | 8.5 | % | 6.9 | % | 8.7 | % | 9.4 | % | 10.1 | % | |||||||
| Return on tangible common equity – Non-GAAP | 16.1 | % | 13.0 | % | 16.7 | % | 18.5 | % | 20.4 | % | |||||||
16
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||
| SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
| Book value and tangible book value per common share reconciliation | 2021 | 2020 | ||||||||||||||||||
| (dollars in millions, except common shares) | March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||||
| BNY Mellon shareholders’ equity at period end – GAAP | $ | 44,954 | $ | 45,801 | $ | 44,917 | $ | 43,697 | $ | 41,145 | ||||||||||
| Less: Preferred stock | 4,541 | 4,541 | 4,532 | 4,532 | 3,542 | |||||||||||||||
| BNY Mellon common shareholders’ equity at period end – GAAP | 40,413 | 41,260 | 40,385 | 39,165 | 37,603 | |||||||||||||||
| Less: Goodwill | 17,469 | 17,496 | 17,357 | 17,253 | 17,240 | |||||||||||||||
| Intangible assets | 2,983 | 3,012 | 3,026 | 3,045 | 3,070 | |||||||||||||||
| Add: Deferred tax liability – tax deductible goodwill | 1,153 | 1,144 | 1,132 | 1,119 | 1,109 | |||||||||||||||
| Deferred tax liability – intangible assets | 665 | 667 | 666 | 664 | 666 | |||||||||||||||
| BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP | $ | 21,779 | $ | 22,563 | $ | 21,800 | $ | 20,650 | $ | 19,068 | ||||||||||
Period-end common shares outstanding (in thousands) | 875,481 | 886,764 | 886,136 | 885,862 | 885,443 | |||||||||||||||
| Book value per common share – GAAP | $ | 46.16 | $ | 46.53 | $ | 45.58 | $ | 44.21 | $ | 42.47 | ||||||||||
| Tangible book value per common share – Non-GAAP | $ | 24.88 | $ | 25.44 | $ | 24.60 | $ | 23.31 | $ | 21.53 | ||||||||||
| Net interest margin reconciliation | ||||||||||||||||||||
| (dollars in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | |||||||||||||||
| Net interest revenue – GAAP | $ | 655 | $ | 680 | $ | 703 | $ | 780 | $ | 814 | ||||||||||
| Add: Tax equivalent adjustment | 3 | 3 | 2 | 2 | 2 | |||||||||||||||
| Net interest revenue (FTE) – Non-GAAP | $ | 658 | $ | 683 | $ | 705 | $ | 782 | $ | 816 | ||||||||||
| Average interest-earning assets | $ | 397,297 | $ | 378,674 | $ | 357,634 | $ | 357,562 | $ | 323,936 | ||||||||||
Net interest margin – GAAP (a) | 0.66 | % | 0.72 | % | 0.79 | % | 0.88 | % | 1.01 | % | ||||||||||
Net interest margin (FTE) – Non-GAAP (a) | 0.67 | % | 0.72 | % | 0.79 | % | 0.88 | % | 1.01 | % | ||||||||||
| (a) Net interest margin is annualized. | ||||||||||||||||||||
17
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||
| SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | |||||||||||||||||
| Pre-tax operating margin reconciliation - Investment and Wealth Management business | |||||||||||||||||
| (dollars in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||||
| Income before income taxes – GAAP | $ | 278 | $ | 311 | $ | 245 | $ | 221 | $ | 194 | |||||||
| Total revenue – GAAP | $ | 991 | $ | 990 | $ | 918 | $ | 886 | $ | 898 | |||||||
| Less: Distribution and servicing expense | 75 | 76 | 85 | 86 | 91 | ||||||||||||
| Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | $ | 916 | $ | 914 | $ | 833 | $ | 800 | $ | 807 | |||||||
Pre-tax operating margin – GAAP (a) | 28 | % | 32 | % | 27 | % | 25 | % | 22 | % | |||||||
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a) | 30 | % | 34 | % | 29 | % | 28 | % | 24 | % | |||||||
| (a) Income before income taxes divided by total revenue. | |||||||||||||||||
| Constant currency reconciliations | 1Q21 vs. | ||||||||||||||||
| (dollars in millions) | 1Q21 | 1Q20 | 1Q20 | ||||||||||||||
| Consolidated: | |||||||||||||||||
| Investment management and performance fees – GAAP | $ | 890 | $ | 862 | 3 | % | |||||||||||
| Impact of changes in foreign currency exchange rates | — | 23 | |||||||||||||||
| Adjusted investment management and performance fees – Non-GAAP | $ | 890 | $ | 885 | 1 | % | |||||||||||
| Investment and Wealth Management business: | |||||||||||||||||
| Investment management and performance fees – GAAP | $ | 890 | $ | 862 | 3 | % | |||||||||||
| Impact of changes in foreign currency exchange rates | — | 23 | |||||||||||||||
| Adjusted investment management and performance fees – Non-GAAP | $ | 890 | $ | 885 | 1 | % | |||||||||||
18
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||
| REPORTING CHANGES | ||||||||||||||
| In order to combine items of a similar nature within total revenue and to simplify our income statement presentation, in the first quarter of 2021 we made the following reporting changes. The reclassifications had no impact on consolidated total revenue or total revenue for the business segments. Prior periods were reclassified to be comparable with the current period presentation. | ||||||||||||||
| • Other trading revenue was reclassified from foreign exchange and other trading revenue to investment and other income. | ||||||||||||||
| • Foreign exchange and other trading revenue was renamed foreign exchange revenue. | ||||||||||||||
| • The impact of foreign currency remeasurement was reclassified from investment and other income to foreign exchange revenue. | ||||||||||||||
| • Income (loss) from consolidated investment management funds was reclassified to investment and other income. | ||||||||||||||
| • Investment and other income was reclassified from fee revenue to other revenue. Other revenue includes investment and other income and net securities gains (losses). | ||||||||||||||
| In addition, the assets and liabilities of consolidated investment management funds were reclassified to other assets and other liabilities, respectively, on the consolidated balance sheet. The reclassifications had no impact on total assets or total liabilities. Prior periods were reclassified to be comparable with the current period presentation. | ||||||||||||||
| (in millions) | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||
| Consolidated income statement reclassifications | ||||||||||||||
| Foreign exchange and other trading revenue – previously reported | $ | 167 | $ | 137 | $ | 166 | $ | 319 | ||||||
| Less: Other trading (loss) revenue | (31) | (14) | (8) | 66 | ||||||||||
| Add: Foreign currency remeasurement (loss) gain | (11) | (2) | 19 | (8) | ||||||||||
| Foreign exchange revenue | $ | 187 | $ | 149 | $ | 193 | $ | 245 | ||||||
| Total fee revenue – previously reported | $ | 3,116 | $ | 3,108 | $ | 3,167 | $ | 3,323 | ||||||
| Less: Other trading (loss) revenue | (31) | (14) | (8) | 66 | ||||||||||
| Less: Investment and other income | 22 | 46 | 105 | 11 | ||||||||||
| Add: Foreign currency remeasurement (loss) gain | (11) | (2) | 19 | (8) | ||||||||||
| Total fee revenue – revised | $ | 3,114 | $ | 3,074 | $ | 3,089 | $ | 3,238 | ||||||
| Investment and other income – previously reported | $ | 22 | $ | 46 | $ | 105 | $ | 11 | ||||||
| Add: Other trading (loss) revenue | (31) | (14) | (8) | 66 | ||||||||||
| Add: Income (loss) from consolidated investment management funds | 41 | 27 | 54 | (38) | ||||||||||
| Less: Foreign currency remeasurement (loss) gain | (11) | (2) | 19 | (8) | ||||||||||
| Investment and other income – revised | $ | 43 | $ | 61 | $ | 132 | $ | 47 | ||||||
| Fee and other revenue – previously reported | $ | 3,122 | $ | 3,117 | $ | 3,176 | $ | 3,332 | ||||||
| Add: Income (loss) from consolidated investment management funds | 41 | 27 | 54 | (38) | ||||||||||
| Fee and other revenue – revised | $ | 3,163 | $ | 3,144 | $ | 3,230 | $ | 3,294 | ||||||
| Consolidated balance sheet reclassifications | ||||||||||||||
| Other assets – previously reported | $ | 20,468 | $ | 20,779 | $ | 21,306 | $ | 27,446 | ||||||
| Add: Assets of consolidated investment management funds, at fair value | 487 | 588 | 460 | 229 | ||||||||||
| Other assets – revised | $ | 20,955 | $ | 21,367 | $ | 21,766 | $ | 27,675 | ||||||
| Other liabilities – previously reported | $ | 7,514 | $ | 8,671 | $ | 12,869 | $ | 11,425 | ||||||
| Add: Liabilities of consolidated investment management funds, at fair value | 3 | 4 | 4 | 1 | ||||||||||
| Other liabilities – revised | $ | 7,517 | $ | 8,675 | $ | 12,873 | $ | 11,426 | ||||||
19
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||
| REPORTING CHANGES | ||||||||||||||
| (in millions) | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||
| Investment Services business | ||||||||||||||
| Foreign exchange and other trading revenue – previously reported | $ | 180 | $ | 146 | $ | 178 | $ | 261 | ||||||
| Less: Other trading revenue | 4 | 9 | 19 | 31 | ||||||||||
| Add: Foreign currency remeasurement (loss) gain | (13) | (11) | 5 | (2) | ||||||||||
| Foreign exchange revenue | $ | 163 | $ | 126 | $ | 164 | $ | 228 | ||||||
| Other revenue – previously reported | $ | 94 | $ | 100 | $ | 145 | $ | 146 | ||||||
| Add: Other trading revenue | 4 | 9 | 19 | 31 | ||||||||||
| Less: Foreign currency remeasurement (loss) gain | (13) | (11) | 5 | (2) | ||||||||||
| Other revenue – revised | $ | 111 | $ | 120 | $ | 159 | $ | 179 | ||||||
| Other segment | ||||||||||||||
| Fee (loss) revenue – previously reported | $ | (23) | $ | 11 | $ | 29 | $ | 21 | ||||||
| Less: Other trading (loss) revenue | (7) | (4) | 2 | 21 | ||||||||||
| Less: Investment and other (loss) income | (21) | 17 | 30 | (12) | ||||||||||
| Add: Foreign currency remeasurement gain (loss) | 6 | 9 | 13 | (6) | ||||||||||
| Fee revenue – revised | $ | 11 | $ | 7 | $ | 10 | $ | 6 | ||||||
| Net securities gains – previously reported | $ | 6 | $ | 9 | $ | 9 | $ | 9 | ||||||
| Add: Other trading (loss) revenue | (7) | (4) | 2 | 21 | ||||||||||
| Add: Investment and other (loss) income | (21) | 17 | 30 | (12) | ||||||||||
| Less: Foreign currency remeasurement gain (loss) | 6 | 9 | 13 | (6) | ||||||||||
| Other revenue | $ | (28) | $ | 13 | $ | 28 | $ | 24 | ||||||
20
First Quarter 2021 Financial Highlights A p r i l 1 6 , 2 0 2 1
2 First Quarter 2021 – Financial Highlights 1Q21 Financial Highlights $0.97 EPS $1.15 bn Pre-tax income ROE: 8.5% ROTCE: 16.1% Returns CET1: 12.6% Tier 1 Leverage: 5.8% Capital ratios › Revenue, down 5% year-over-year due to lower interest rates, money market fee (“MMF”) waivers and an impairment, partially offset by higher markets, net new business and a favorable currency impact › Fee revenue, excluding MMF waivers, up 6% (a) › Net interest revenue, down 20% › Investment Services (“IS”) down mainly on lower interest rates, lower foreign exchange revenue versus an exceptional prior year quarter, and MMF waivers › Investment and Wealth Management (“I&WM”) growth from higher market values and equity investment gains › Provision for credit losses – benefit of $83 million › Returned approximately $1.0 billion to common shareholders in share repurchases and dividends (a) $3.92 bn Revenue 29% Pre-tax margin (a) Represents a non-GAAP measure. See pages 16 and 18 in the Appendix for the corresponding reconciliations of non-GAAP measures, consolidated fee revenue excluding MMF waivers and ROTCE, respectively. Reported fee revenue up 1% year-over-year.
3 First Quarter 2021 – Financial Highlights 1 Q 2 1 4 Q 2 0 1 Q 2 0 T O T A L R E V E N U E $3,921 2% (5)% Fee revenue(a) 3,257 5 1 Other revenue(a) 9 N/M N/M Net interest revenue 655 (4) (20) Provision for credit losses (83) N/M N/M Noninterest expense 2,851 (3) 5 Income before income taxes 1,153 28 (6) Net income applicable to common shareholders $858 22% (9)% E A R N I N G S P E R C O M M O N S H A R E $0.97 23% (8)% Operating leverage(b) 456 bps (968) bps Pre-tax operating margin 29% 591 bps (46) bps Return on common equity (annualized) 8.5% 168 bps (154) bps Return on tangible common equity – non-GAAP (annualized)(c) 16.1% 310 bps (426) bps 1Q21 Financial Highlights ($ millions, except per share data) (a) In 1Q21, we reclassified certain items within total revenue which impacted fee revenue and other revenue. Prior periods have been reclassified. See page 15 in the Appendix for corresponding details regarding reporting changes. See page 14 in the Appendix for corresponding footnotes (b) and (c). N/M - not meaningful Increase / (decrease) Pre-tax Revenue Pre-tax Expense Net income applicable to common shareholders EPS 4Q20 (61) 165 (159) $(0.18) Notable items impacting 4Q20 › 4Q20 includes a net charge of $159 million, or $0.18 per diluted common share, related to litigation expense, severance, losses on business sales and real estate charges
4 First Quarter 2021 – Financial Highlights 10.1 6.9 8.5 0 5 10 15 20 25 1Q21 Key Financial Trends 846 945 943 52 50 48 991 898 1Q20 4Q20 1Q21 995 +10% Ad j . I & W M r e v e n u e ($ millions) 2,8512,712 1Q20 4Q20 1Q21 2,760 +5% 16.1 20.4 1Q20 4Q20 1Q21 13.0 (426) bps I S r e v e n u e ($ millions) Ad j . n o n i n t e r e s t e x p e n s e ($ millions) R O T C E / R O E (%) 10 15 20 25 30 35 40 45 501,1531,227 1Q20 4Q20 1Q21 30% 29% 1,129 Adj. pre-tax operating margin Ad j . p r e - t a x i n c o m e ($ millions) (6)% 0.97 1.05 1Q20 4Q20 1Q21 0.96 Ad j . E P S ($) ROE Adj. I&WM total fee and other revenue Net interest revenue 2,436 2,235 2,345 806 670 645 2,990 3,242 1Q20 4Q20 1Q21 2,905 (8)% Total fee and other revenue Net interest revenue (b) 29% (a) Represents a non-GAAP measure, excluding notable items. Adj. I&WM revenue, Adj. I&WM total fee and other revenue, Adj. noninterest expense, Adj. pre-tax income, Adj. pre-tax operating margin and Adj. EPS exclude notable items in 4Q20; there were no notable items in 1Q21 and 1Q20. See pages 14 and 17 in the Appendix for the corresponding footnote of these non-GAAP measures and the corresponding reconciliation of these non-GAAP measures. (b) Represents a non-GAAP measure. See page 18 for the corresponding reconciliation of ROTCE. (8)% (a) (a) (a) (a) (a) (a)
5 First Quarter 2021 – Financial Highlights Capital and Liquidity Note: See page 14 in the Appendix for corresponding footnotes. 1 Q 2 1 4 Q 2 0 1 Q 2 0 Consolidated regulatory capital ratios: (a) Common Equity Tier 1 (“CET1”) ratio 12.6% 13.1% 11.3% Tier 1 capital ratio 15.2 15.8 13.5 Total capital ratio 16.1 16.7 14.3 Tier 1 leverage ratio 5.8 6.3 6.0 Supplementary leverage ratio (“SLR“) 8.1 8.6 5.6 Average liquidity coverage ratio (“LCR“) 110% 110% 115% Book value per common share $46.16 $46.53 $42.47 Tangible book value per common share – non-GAAP (c) $24.88 $25.44 $21.53 Cash dividends per common share $0.31 $0.31 $0.31 Common shares outstanding (thousands) 875,481 886,764 885,443 (b) (b) (b)
6 First Quarter 2021 – Financial Highlights Net Interest Revenue ($ millions) - Lower interest rates on interest- earning assets - Other, including hedging + Benefit of lower funding and deposit rates D R I V E R S O F S E Q U E N T I A L N I R C H A N G E 1Q214Q20 680 655 + Volume mix (higher deposits and loans) 1Q214Q20 (4)% 0.07 0.15 0.37 0.86 0.03 0.13 0.61 1.32 0.15 0.22 0.12 0.20 USD LIBOR AVERAGE 1m 3m 5Y2Y 10Y US TREASURY AVERAGE (%) (%) 1m
7 First Quarter 2021 – Financial Highlights 109 128 126 21 28 30 1.86% 1.23% 1.19% 0.00 2.00 4.00 0.0 50.0 100.0 150.0 200.0 Balance Sheet Trends A V E R A G E D E P O S I T S Interest-bearing deposits rate A V E R A G E S E C U R I T I E S P O R T F O L I O Average securities portfolio rate High Quality Liquid Assets (“HQLA”) Non-HQLA130 156 156 4Q201Q20 1Q21 +20% - % Note: May not foot due to rounding. (a) Average rates were calculated on an FTE basis, at tax rates of approximately 21%. (a) 61 76 83 198 231 245 0.49% (0.06)% (0.06)% 4Q201Q20 1Q21 307 258 329 Interest-bearing deposits +27% Noninterest-bearing deposits +7% 132 160 176 130 156 156 7 8 8 56 55 57 AV E R A G E I N T E R E S T - E A R N I N G A S S E T S Securities Loans Cash/ Reverse repo 1Q214Q201Q20 397 324 379 +5% +23% ($ billions) Trading
8 First Quarter 2021 – Financial Highlights Noninterest Expense › Noninterest expenses up 5% year-over-year, primarily reflecting higher staff expense, the unfavorable impact of a weaker U.S. dollar and technology-related expenses, partially offset by lower business development and distribution and servicing expenses › Staff expense includes the impact of an incentive reversal in 1Q20, the impact of a higher share price on share-based awards and increased expense for awards to retirement eligible employees › Technology expenses are included in staff, software and .equipment, and professional, legal and other purchased services 1 Q 2 1 4 Q 2 0 1 Q 2 0 Staff $1,602 3% 8% Software and equipment 362 1 11 Professional, legal and other purchased services 343 (10) 4 Sub-custodian and clearing 124 7 18 Net occupancy 123 (29) (9) Distribution and servicing 74 (1) (19) Bank assessment charges 34 42 (3) Amortization of intangible assets 24 (8) (8) Business development 19 (27) (55) Other 146 (24) 4 Total noninterest expense $2,851 (3)% 5% ($ millions)
9 First Quarter 2021 – Financial Highlights Investment Services (a) In 1Q21, we reclassified certain items within total revenue which impacted fee revenue, foreign exchange revenue and other revenue. Prior periods have been reclassified. See page 15 in the Appendix for corresponding details regarding reporting changes. See page 14 in the Appendix for corresponding footnotes (b), (c) and (d). N/M – not meaningful › Asset Servicing down year-over-year primarily on lower interest rates, foreign exchange revenue and higher MMF waivers, partially offset by higher client volumes and market values › Pershing down primarily due to MMF waivers and a one- time fee recorded in 1Q20, partially offset by higher market values and client volumes › Issuer Services down primarily on lower interest rates and higher MMF waivers in Corporate Trust and lower Depositary Receipts revenue › Treasury Services down primarily on lower interest rates and higher MMF waivers, partially offset by higher payment volumes and deposit levels › Clearance and Collateral Management down primarily on lower interest rates and intraday credit fees › AUC/A up primarily on higher market values, net new business and the favorable impact of a weaker U.S. dollar F I N A N C I A L H I G H L I G H T S ($ millions unless otherwise noted) 1 Q 2 1 4 Q 2 0 1 Q 2 0 Total revenue by line of business: Asset Servicing $1,424 5% (7)% Pershing 605 7 (7) Issuer Services 363 (6) (13) Treasury Services 317 (2) (6) Clearance and Collateral Management 281 2 (6) Total revenue 2,990 3 (8) Provision for credit losses (79) N/M N/M Noninterest expense 2,101 (3) 6 Income before taxes $968 38% (12)% Pre-tax operating margin 32% 827 bps (175) bps K E Y M E T R I C S Net interest revenue $645 (4)% (20)% Foreign exchange revenue(a) 193 18 (15) Securities lending revenue 41 14 (11) Average loans 43,468 5 4 Average deposits 315,088 8 30 AUC/A at period end (tr)(b) 41.7 1 18 Market value of securities on loan at period end (bn)(c) 445 2 14 Pershing Net new assets (U.S. platform) (bn)(d) $28 N/M N/M Average active clearing accounts (U.S. platform) (thousands) 6,757 2 5 Clearance and Collateral Management Average tri-party collateral mgmt. balances (tr) $3.6 2% (2)%
10 First Quarter 2021 – Financial Highlights Investment Services - Revenue Drivers A S S E T S E R V I C I N G I S S U E R S E R V I C E SP E R S H I N G T R E A S U R Y S E R V I C E S C L E A R A N C E A N D C O L L A T E R A L - Interest rates - FX volatility - MMF waivers + Market levels + Client volumes - MMF waivers + MMF balances + Market levels + Client volumes - Interest rates - MMF waivers + Deposit balances + Payment volumes - Interest rates - Clearing volumes - U.S. average tri-party repo balances + Non-U.S. average tri-party repo balances 1,531 1,424 1Q20 1Q21 653 605 419 363 339 317 300 281 (7)% (7)% (13)% (6)% (6)% ($ millions) 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 - Interest rates - MMF waivers + Deposit balances Note: Graphs not to scale.
11 First Quarter 2021 – Financial Highlights Investment and Wealth Management (a) Net of distribution and servicing expense. See page 19 in the Appendix for the reconciliation of this non-GAAP measure. Note: see page 14 in the Appendix for corresponding footnotes (b) and (c). N/M – not meaningful › Investment Management up year-over-year primarily due to higher market values, equity investment gains, including seed capital, and the favorable impact of a weaker U.S. dollar, partially offset by MMF waivers › Wealth Management up primarily due to the impact of higher market values › Noninterest expense up on higher staff expense and the unfavorable impact of a weaker U.S. dollar, partially offset by lower distribution and servicing and other expenses › AUM up primarily on higher market values, the favorable impact of a weaker U.S. dollar and net inflows F I N A N C I A L H I G H L I G H T S ($ millions unless otherwise noted) 1 Q 2 1 4 Q 2 0 1 Q 2 0 Total revenue by line of business: Investment Management $698 (2)% 13% Wealth Management 293 6 5 Total revenue 991 - 10 Provision for credit losses 4 N/M N/M Noninterest expense 709 3 2 Income before taxes $278 (11)% 43% Pre-tax operating margin 28% (349) bps 640 bps Adjusted pre-tax operating margin – non-GAAP(a) 30% (380) bps 624 bps K E Y M E T R I C S Net interest revenue $48 (4)% (8)% Average loans 11,610 1 (4) Average deposits 19,177 6 19 Wealth Management client assets (bn)(b) 292 2 24 C H A N G E S I N A U M ( b n ) ( C ) 1 Q 2 1 4 Q 2 0 1 Q 2 0 Beginning balance $2,211 $2,041 $1,910 Equity - (2) (2) Fixed income 8 5 - Liability-driven investments 8 15 (5) Multi-asset and alternatives investments (2) - (1) Index 3 (3) 3 Cash 19 5 43 Total net inflows (outflows) 36 20 38 Net market impact (36) 93 (91) Net currency impact 3 57 (61) Ending balance $2,214 $2,211 $1,796
12 First Quarter 2021 – Financial Highlights Other Segment › Total revenue includes corporate treasury and other investment activity, including hedging activity which offsets between fee and other revenue and net interest expense › Other revenue decreased year-over-year and sequentially primarily reflecting an impairment of a renewable energy investment › Noninterest expense up year-over-year primarily reflecting higher staff expense F I N A N C I A L H I G H L I G H T S ($ millions unless otherwise noted) 1 Q 2 1 4 Q 2 0 1 Q 2 0 Fee revenue(a) $9 $11 $6 Other revenue(a) (36) (28) 24 Total fee and other revenue (27) (17) 30 Net interest (expense) (38) (40) (44) Total revenue (65) (57) (14) Provision for credit losses (8) (8) 11 Noninterest expense 41 64 30 (Loss) before taxes $(98) $(113) $(55) (a) In 1Q21, we reclassified certain items within total revenue which impacted fee revenue and other revenue. Prior periods have been reclassified. See page 15 in the Appendix for corresponding details regarding reporting changes.
Appendix
14 First Quarter 2021 – Financial Highlights Footnotes 1Q21 Financial Highlights, Page 3 b) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. c) See page 18 for corresponding reconciliation of this non-GAAP measure. 1Q21 Key Financial Trends, Page 4 a) Notable items in 4Q20 include litigation expense, severance, losses on business sales and real estate charges. 4Q20 reported results: I&WM total revenue of $990 million and I&WM total fee and other revenue of $940 million, noninterest expense of $2,925 million, pre-tax income of $903 million, pre-tax operating margin of 24% and EPS of $0.79. Capital and Liquidity, Page 5 a) Regulatory capital ratios for March 31, 2021 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for March 31, 2021 and March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio, and for December 31, 2020, was the Advanced Approaches. b) On April 1, 2020, a rule to exclude certain central bank placements became effective. Also effective on April 1, 2020 was the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation which increased our consolidated SLR by 68 basis points at March 31, 2021 and 72 basis points at December 31, 2020. The temporary exclusion ceased to apply beginning April 1, 2021 c) Tangible book value per common share – non-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See page 18 for corresponding reconciliation of this non-GAAP measure. Investment Services, Page 9 b) Current period is preliminary. Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth Management businesses. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.6 trillion at March 31, 2021, $1.5 trillion at December 31, 2020 and $1.2 trillion at March 31, 2020. 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 $64 billion at March 31, 2021, $68 billion at December 31, 2020 and $59 billion at March 31, 2020. d) Net new assets represent net flows of assets excluding dividends and interest (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 11 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.
15 First Quarter 2021 – Financial Highlights Reporting Changes - Effects of Reclassifications 4 Q 2 0 1 Q 2 0 Consolidated Income Statement Before reclassification Foreign exchange and other trading revenue $167 $319 Total fee revenue $3,116 $3,323 Investment and other income $22 $11 Income (loss) from consolidated investment management funds $41 $(38) After reclassification Foreign exchange revenue $187 $245 Total fee revenue $3,114 $3,238 Investment and other income $43 $47 Investment Services business Before reclassifications Foreign exchange and other trading revenue $180 $261 After reclassifications Foreign exchange revenue $163 $228 Other segment Before reclassifications Fee (loss) revenue $(23) $21 Net securities gains (losses) $6 $9 After reclassifications Fee (loss) revenue $11 $6 Net securities gains (losses) $(28) $24 ($ millions) In order to combine items of a similar nature within total revenue and to simplify our income statement presentation, in 1Q21 we made the following reporting changes. The reclassifications had no impact on consolidated total revenue or total revenue for the business segments. Prior periods were reclassified to be comparable with the current period presentation. • Other trading revenue was reclassified from foreign exchange and other trading revenue to investment and other income. • Foreign exchange and other trading revenue was renamed foreign exchange revenue. • The impact of foreign currency remeasurement was reclassified from investment and other income to foreign exchange revenue. • Income (loss) from consolidated investment management funds was reclassified to investment and other income. • Investment and other income was reclassified from fee revenue to other revenue. Other revenue includes investment and other income and net securities gains (losses). In addition, the assets and liabilities of consolidated investment management funds were reclassified to other assets and other liabilities, respectively, on the consolidated balance sheet. The reclassifications had no impact on total assets or total liabilities. Prior periods were reclassified to be comparable with the current period presentation. See “Reporting Changes” in the Financial Supplement available at www.bnymellon.com for additional information.
16 First Quarter 2021 – Financial Highlights Money Market Fee Waiver Impact ($ millions) 1 Q 2 1 4 Q 2 0 3 Q 2 0 2 Q 2 0 1 Q 2 0 Investment services fees: Asset servicing fees $(22) $(13) $(1) $ - $ - Clearing services fees (74) (64) (57) (50) (9) Issuer services fees (10) (6) (1) (1) - Treasury services fees (3) (2) (3) (2) - Total investment services fees (109) (85) (62) (53) (9) Investment management and performance fees (89) (56) (42) (30) (14) Distribution and servicing revenue (13) (8) (6) (3) - Total fee and other revenue (211) (149) (110) (86) (23) Less: Distribution and servicing expense 23 15 9 7 - Net impact of money market fee waivers $(188) $(134) $(101) $(79) $(23) Impact to revenue by line of business: (a) Asset Servicing $(29) $(13) $(4) $(1) $ - Pershing (94) (85) (73) (60) (9) Issuer Services (15) (10) (2) (1) - Treasury Services (9) (5) (1) - - Total Investment Services (147) (113) (80) (62) (9) Investment Management (61) (34) (28) (24) (14) Wealth Management (3) (2) (2) - - Total Investment and Wealth Management (64) (36) (30) (24) (14) Total impact to revenue by line of business $(211) $(149) $(110) $(86) $(23) (a) The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses. Fee revenue, Excluding MMF Waivers Reconciliation 1 Q 2 1 v s ($ millions) 1 Q 2 1 1 Q 2 0 1 Q 2 0 Investment Services business, total fee and other revenue – GAAP $2,345 $2,436 (4)% Less: MMF waivers (147) (9) n/m Investment Services business, total fee and other revenue, ex-MMF waivers – non-GAAP $2,492 $2,445 2% Fee revenue – GAAP $3,257 $3,238 1% Less: MMF waivers (211) (23) n/m Fee revenue, ex-MMF waivers – non-GAAP $3,468 $3,261 6% Note: Reported Investment Services total fee and other revenue decreased 4% year-over-year.
17 First Quarter 2021 – Financial Highlights 4 Q 2 0 ($ millions, except per share amounts and unless otherwise noted) R e s u l t s – G A A P N o t a b l e i t e m s R e s u l t s N o n - G A A P Total revenue 3,843 (61) 3,904 Noninterest expense 2,925 165 2,760 Income before income taxes 903 (226) 1,129 Provision for income taxes 148 (67) 215 Net income applicable to common shareholders 702 (159) 861 Diluted earnings per common share $0.79 $(0.18) $0.96 Average common shares and equivalents outstanding – diluted (in thousands) 891,846 Pre-tax operating margin 24% 29% 4Q20 ($ millions) IS IWM Other Total Fee and other revenue $ - $(5) $(56) $(61) Net interest revenue - - - - Total revenue - (5) (56) (61) Total noninterest expense 107 11 47 165 (Loss) income before taxes $(107) $(16) $(103) $(226) Fourth Quarter – Impact of Notable Items (a) Notable Items by Business Segment The tables above reconcile adj. I&WM revenue, adj. I&WM total fee and other revenue, adj. noninterest expense, adj. pre-tax income, adj. pre-tax operating margin and adj. EPS to the corresponding GAAP measure. Note: May not foot due to rounding. (a) Notable items in 4Q20 include litigation expense, severance, losses on business sales (reflected in fee revenue) and real estate charges. (b) Notable items in 4Q20 includes a loss on business sale. (by business segment) I&WM total fee and other revenue $940 $(5) $945 I&WM total revenue 990 (5) 995(b) (b) (a)
18 First Quarter 2021 – Financial Highlights Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 1 Q 2 1 4 Q 2 0 1 Q 2 0 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $858 $702 $944 Add: Amortization of intangible assets 24 26 26 Less: Tax impact of amortization of intangible assets 6 6 6 Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – non-GAAP $876 $722 $964 Average common shareholders’ equity $40,720 $40,712 $37,664 Less: Average goodwill 17,494 17,411 17,311 Average intangible assets 3,000 3,019 3,089 Add: Deferred tax liability – tax deductible goodwill 1,153 1,144 1,109 Deferred tax liability – intangible assets 665 667 666 Average tangible common shareholders’ equity – non-GAAP $22,044 $22,093 $19,039 Return on common equity (annualized) – GAAP 8.5% 6.9% 10.1% Return on tangible common equity (annualized) – non-GAAP 16.1% 13.0% 20.4% Book Value and Tangible Book Value Per Common Share Reconciliation ($ millions, except common shares) March 31, 2021 December 31, 2020 March 31, 2020 BNY Mellon shareholders’ equity at period end – GAAP $44,954 $45,801 $41,145 Less: Preferred stock 4,541 4,541 3,542 BNY Mellon common shareholders’ equity at period end – GAAP 40,413 41,260 37,603 Less: Goodwill 17,469 17,496 17,240 Intangible assets 2,983 3,012 3,070 Add: Deferred tax liability – tax deductible goodwill 1,153 1,144 1,109 Deferred tax liability – intangible assets 665 667 666 BNY Mellon tangible common shareholders’ equity at period end – non-GAAP $21,779 $22,563 $19,068 Period-end common shares outstanding (in thousands) 875,481 886,764 885,443 Book value per common share – GAAP $46.16 $46.53 $42.47 Tangible book value per common share – non-GAAP $24.88 $25.44 $21.53
19 First Quarter 2021 – Financial Highlights Pre-tax Operating Margin Reconciliation – Investment and Wealth Management Business (a) Income before income taxes divided by total revenue. 1 Q 2 1 4 Q 2 0 1 Q 2 0 Income before income taxes – GAAP $278 $311 $194 Total revenue – GAAP $991 $990 $898 Less: Distribution and servicing expense 75 76 91 Adjusted total revenue, net of distribution and servicing expense – non-GAAP $916 $914 $807 Pre-tax operating margin – GAAP (a) 28% 32% 22% Adjusted pre-tax operating margin, net of distribution and servicing expense – non-GAAP (a) 30% 34% 24% ($ millions)
20 First Quarter 2021 – Financial Highlights Cautionary Statement A number of statements in The Bank of New York Mellon Corporation’s (the “Corporation”) presentation, 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,” “ambition”, “objective”, “aim”, “future”, “potentially”, “outlook” 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, resiliency, capabilities, revenue, net interest revenue, money market fee waivers, fees, expenses, cost discipline, sustainable growth, company management, human capital management (including related ambitions, objectives, aims and goals), 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, focus and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These forward-looking statements are based upon current beliefs and expectations and are subject to significant risks and uncertainties (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 Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 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 and other third parties in response to the pandemic, the availability, use and effectiveness of vaccines, 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. All forward-looking statements speak only as of April 16, 2021, 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 certain 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 2020 Annual Report and the first quarter 2021 earnings release, and are available at www.bnymellon.com/investorrelations.
