BNY 8-K
Bank of New York Mellon Corp (BNY)
8-K
2021-10-19
For: 2021-10-19
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) – October 19, 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 October 19, 2021, The Bank of New York Mellon Corporation (“BNY Mellon”) released information on its financial results for the third quarter ended Sept. 30, 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 October 19, 2021, BNY Mellon will hold a conference call and webcast to discuss its financial results for the third quarter ended Sept. 30, 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: October 19, 2021 | By: /s/ James J. Killerlane III | ||||
| Name: James J. Killerlane III Title: Secretary | |||||
3
| News Release |  | ||||
BNY MELLON REPORTS THIRD QUARTER 2021 EARNINGS OF
$881 MILLION OR $1.04 PER COMMON SHARE
Revenue up 5% | EPS up 6% | ROE 9% ROTCE 17% (a) | CET1 11.7% Tier 1 leverage 5.7% | |||||||||||||||||
NEW YORK, October 19, 2021 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
| 3Q21 vs. | |||||||||||||||||
| 3Q21 | 2Q21 | 3Q20 | 2Q21 | 3Q20 | |||||||||||||
Net income applicable to common shareholders (in millions) | $ | 881 | $ | 991 | $ | 876 | (11) | % | 1 | % | |||||||
| Diluted earnings per common share | $ | 1.04 | $ | 1.13 | $ | 0.98 | (8) | % | 6 | % | |||||||
| Third Quarter Results | ||
Total revenue of $4.0 billion, increased 5%
•Fee and other revenue increased 8%; fee revenue increased 6%
•Fee revenue increased 11% excluding money market fee waivers (a)
•Net interest revenue decreased 9%
Provision for credit losses was a benefit of $45 million
Total noninterest expense of $2.9 billion, increased 9%
•3% of the increase driven by litigation reserves
Investment Services
•Total revenue increased 3%
•Income before taxes decreased 9%
•AUC/A of $45.3 trillion, increased 17%
Investment and Wealth Management
•Total revenue increased 12%
•Income before taxes increased 42%
•AUM of $2.3 trillion, increased 13%
Capital
•Repurchased 38.1 million common shares for $2.0 billion
•Dividends of $296 million to common shareholders (including dividend-equivalents on share-based awards)
| CEO Commentary | ||
“Our financial performance this quarter reflects healthy and broad-based organic growth across our businesses as well as a supportive global markets backdrop. Revenue of over $4 billion was up 5 percent year-over-year, and fee revenue was up 6 percent, or 11 percent excluding the impact of money market fee waivers. Our operating margin of 29 percent was essentially flat compared to the third quarter of 2020 while we continued to make significant investments in our people, technology, efficiency and growth initiatives,” Todd Gibbons, Chief Executive Officer, said.
Mr. Gibbons added, “This quarter we announced several ground-breaking new solutions that will meaningfully improve the client experience and represent exciting growth opportunities for us. Our Treasury Services business announced a collaboration with Verizon enabling them to be the first company to send request-for-payment messages directly to consumers’ bank accounts using our new real-time e-bills and payments functionality which revolutionizes the bill pay experience for both billers and their customers. We also announced the launch of Pershing X, a new business unit within Pershing, to create the industry’s leading end-to-end platform in the wealth advisory space, offering a comprehensive set of capabilities, and helping financial services firms solve the challenge of managing multiple disconnected technology tools and data sets for their advisors.”
“During the quarter we returned $2.3 billion of capital to our shareholders, including almost $300 million of common dividends and $2 billion of share repurchases. We ended the quarter with a Tier 1 leverage ratio of 5.7 percent, which together with our continued capital generation, provides us meaningful capacity to continue investing in our businesses and returning excess capital to our shareholders,” Mr. Gibbons concluded.
Media Relations: Garrett Marquis (949) 683-1503 | Investor Relations: Marius Merz (212) 298-1480 | ||||
| (a) For information on these Non-GAAP measures, see “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” on page 9. | |||||
| Note: Above comparisons are 3Q21 vs. 3Q20, unless otherwise noted. | |||||
| BNY Mellon 3Q21 Earnings Release | ||
CONSOLIDATED FINANCIAL HIGHLIGHTS
| (in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | 3Q21 vs. | ||||||||||||||||
| 3Q21 | 2Q21 | 3Q20 | 2Q21 | 3Q20 | |||||||||||||
| Fee revenue | $ | 3,265 | $ | 3,224 | $ | 3,074 | 1 | % | 6 | % | |||||||
| Other revenue | 129 | 91 | 70 | N/M | N/M | ||||||||||||
| Total fee and other revenue | 3,394 | 3,315 | 3,144 | 2 | 8 | ||||||||||||
| Net interest revenue | 641 | 645 | 703 | (1) | (9) | ||||||||||||
| Total revenue | 4,035 | 3,960 | 3,847 | 2 | 5 | ||||||||||||
| Provision for credit losses | (45) | (86) | 9 | N/M | N/M | ||||||||||||
| Noninterest expense | 2,918 | 2,778 | 2,681 | 5 | 9 | ||||||||||||
| Income before income taxes | 1,162 | 1,268 | 1,157 | (8) | — | ||||||||||||
| Provision for income taxes | 219 | 241 | 213 | (9) | 3 | ||||||||||||
| Net income | $ | 943 | $ | 1,027 | $ | 944 | (8) | % | — | % | |||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 881 | $ | 991 | $ | 876 | (11) | % | 1 | % | |||||||
Operating leverage (a) | (315) | bps | (395) | bps | |||||||||||||
| Diluted earnings per common share | $ | 1.04 | $ | 1.13 | $ | 0.98 | (8) | % | 6 | % | |||||||
Average common shares and equivalents outstanding - diluted (in thousands) | 849,028 | 873,475 | 891,069 | ||||||||||||||
| Pre-tax operating margin | 29 | % | 32 | % | 30 | % | |||||||||||
(a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps – basis points.
KEY DRIVERS (comparisons are 3Q21 vs. 3Q20, unless otherwise stated)
•Total revenue increased 5%, primarily reflecting:
•Fee and other revenue increased 8%.
•Fee revenue increased 6% primarily reflecting the positive impact of higher markets, higher client volumes 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 11% (a).
•Other revenue increased primarily reflecting strategic equity investment gains.
•Net interest revenue decreased 9% primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in fee and other revenue). This was partially offset by the benefit of lower funding and deposit rates and higher deposit and loan balances.
•Provision for credit losses was a benefit of $45 million primarily driven by an improvement in the macroeconomic forecast.
•Noninterest expense increased 9%, 3% of which was due to higher litigation reserves. The remainder of the increase primarily reflects higher revenue-related expenses, investments in growth, infrastructure and efficiency initiatives and the unfavorable impact of a weaker U.S. dollar.
•Effective tax rate of 18.8%.
Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•AUC/A of $45.3 trillion, increased 17%, primarily reflecting higher market values, client inflows and net new business.
•AUM of $2.3 trillion, increased 13%, primarily reflecting higher market values, net inflows and the favorable impact of a weaker U.S. dollar.
Capital and liquidity
•Repurchased 38.1 million common shares for $2.0 billion; Dividends of $296 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 17% (a).
•Common Equity Tier 1 (“CET1”) ratio – 11.7%.
•Tier 1 leverage ratio – 5.7%.
•Average liquidity coverage ratio (“LCR”) – 111%.
•Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
(a) See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 9 for additional information.
Note: Throughout this document, sequential growth rates are unannualized.
Page - 2 | ||
| BNY Mellon 3Q21 Earnings Release | ||
INVESTMENT SERVICES BUSINESS HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 3Q21 vs. | ||||||||||||||||
| 3Q21 | 2Q21 | 3Q20 | 2Q21 | 3Q20 | |||||||||||||
| Total revenue by line of business: | |||||||||||||||||
| Asset Servicing | $ | 1,437 | $ | 1,382 | $ | 1,354 | 4 | % | 6 | % | |||||||
| Pershing | 566 | 590 | 538 | (4) | 5 | ||||||||||||
| Issuer Services | 400 | 405 | 435 | (1) | (8) | ||||||||||||
| Treasury Services | 326 | 319 | 323 | 2 | 1 | ||||||||||||
| Clearance and Collateral Management | 281 | 283 | 277 | (1) | 1 | ||||||||||||
| Total revenue by line of business | 3,010 | 2,979 | 2,927 | 1 | 3 | ||||||||||||
| Provision for credit losses | (35) | (77) | (10) | N/M | N/M | ||||||||||||
| Noninterest expense | 2,211 | 2,052 | 2,020 | 8 | 9 | ||||||||||||
| Income before taxes | $ | 834 | $ | 1,004 | $ | 917 | (17) | % | (9) | % | |||||||
| Pre-tax operating margin | 28 | % | 34 | % | 31 | % | |||||||||||
| Foreign exchange revenue | $ | 148 | $ | 152 | $ | 126 | (3) | % | 17 | % | |||||||
| Securities lending revenue | $ | 45 | $ | 42 | $ | 37 | 7 | % | 22 | % | |||||||
| Net interest revenue | $ | 632 | $ | 643 | $ | 681 | (2) | % | (7) | % | |||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 47,430 | $ | 46,845 | $ | 40,308 | 1 | % | 18 | % | |||||||
| Average deposits | $ | 308,645 | $ | 313,923 | $ | 263,621 | (2) | % | 17 | % | |||||||
AUC/A at period end (in trillions) (current period is preliminary) (a) | $ | 45.3 | $ | 45.0 | $ | 38.6 | 1 | % | 17 | % | |||||||
Market value of securities on loan at period end (in billions) (b) | $ | 443 | $ | 456 | $ | 378 | (3) | % | 17 | % | |||||||
(a) 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 $1.7 trillion at Sept. 30, 2021 and June 30, 2021 and $1.4 trillion at Sept. 30, 2020.
(b) Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $68 billion at Sept. 30, 2021, $63 billion at June 30, 2021 and $62 billion at Sept. 30, 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 increase primarily reflects higher market values, strategic equity investment gains, higher client activity and foreign exchange revenue, partially offset by higher money market fee waivers and lower net interest revenue. The sequential increase primarily reflects strategic equity investment gains and higher market levels and client activity.
•Pershing – The year-over-year increase primarily reflects higher market values, client balances and activity, partially offset by higher money market fee waivers. The sequential decrease reflects lower clearance volumes and net interest revenue, partially offset by higher market values.
•Issuer Services – The year-over-year decrease primarily reflects higher money market fee waivers and lower fees and net interest revenue in Corporate Trust, partially offset by higher Depositary Receipts revenue. The sequential decrease primarily reflects lower fees and net interest revenue in Corporate Trust, partially offset by seasonally higher Depositary Receipts revenue.
•Treasury Services – The year-over-year increase primarily reflects higher payment volumes and higher net interest revenue driven by higher deposit balances, partially offset by higher money market fee waivers. The sequential increase primarily reflects higher net interest revenue and payment volumes.
•Clearance and Collateral Management – The year-over-year increase primarily reflects higher non-U.S. collateral management fees driven by balances and higher clearance volumes, partially offset by lower intraday credit fees and net interest revenue.
•Noninterest expense increased year-over-year and sequentially primarily reflecting higher litigation reserves, higher revenue-related expenses and investments in growth, infrastructure and efficiency initiatives.
Page - 3 | ||
| BNY Mellon 3Q21 Earnings Release | ||
INVESTMENT AND WEALTH MANAGEMENT BUSINESS HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 3Q21 vs. | ||||||||||||||||
| 3Q21 | 2Q21 | 3Q20 | 2Q21 | 3Q20 | |||||||||||||
| Total revenue by line of business: | |||||||||||||||||
| Investment Management | $ | 727 | $ | 700 | $ | 641 | 4 | % | 13 | % | |||||||
| Wealth Management | 305 | 299 | 277 | 2 | 10 | ||||||||||||
| Total revenue by line of business | 1,032 | 999 | 918 | 3 | 12 | ||||||||||||
Provision for credit losses | (7) | (4) | 12 | N/M | N/M | ||||||||||||
Noninterest expense | 691 | 677 | 661 | 2 | 5 | ||||||||||||
| Income before taxes | $ | 348 | $ | 326 | $ | 245 | 7 | % | 42 | % | |||||||
| Pre-tax operating margin | 34 | % | 33 | % | 27 | % | |||||||||||
Adjusted pre-tax operating margin – Non-GAAP (a) | 36 | % | 35 | % | 29 | % | |||||||||||
| Net interest revenue | $ | 47 | $ | 47 | $ | 47 | — | % | — | % | |||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 12,248 | $ | 11,871 | $ | 11,503 | 3 | % | 6 | % | |||||||
| Average deposits | $ | 17,270 | $ | 17,466 | $ | 17,570 | (1) | % | (2) | % | |||||||
AUM (in billions) (current period is preliminary) (b) | $ | 2,310 | $ | 2,320 | $ | 2,041 | — | % | 13 | % | |||||||
Wealth Management client assets (in billions) (current period is preliminary) (c) | $ | 307 | $ | 305 | $ | 265 | 1 | % | 16 | % | |||||||
(a) Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 9 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 higher market values and equity income, strategic equity investment gains, the favorable impact of a weaker U.S. dollar and higher performance fees, partially offset by higher money market fee waivers. The sequential increase primarily reflects higher market values, lower money market fee waivers and higher performance fees.
•Wealth Management – The year-over-year and sequential increases primarily reflect higher market values.
•Noninterest expense increased year-over-year and sequentially primarily reflecting higher revenue-related expenses and investments in growth initiatives. The year-over-year increase also reflects the unfavorable impact of a weaker U.S. dollar, partially offset by lower distribution and servicing expense.
Page - 4 | ||
| BNY Mellon 3Q21 Earnings Release | ||
OTHER SEGMENT primarily includes leasing operations, certain corporate treasury activities, derivatives, business exits and other corporate revenue and expense items.
| (in millions) | 3Q21 | 2Q21 | 3Q20 | ||||||||
| Fee revenue | $ | 12 | $ | 13 | $ | 7 | |||||
| Other revenue | 23 | 9 | 13 | ||||||||
| Total fee and other revenue | 35 | 22 | 20 | ||||||||
| Net interest (expense) | (38) | (45) | (25) | ||||||||
| Total revenue | (3) | (23) | (5) | ||||||||
| Provision for credit losses | (3) | (5) | 7 | ||||||||
| Noninterest expense | 16 | 49 | — | ||||||||
| (Loss) before taxes | $ | (16) | $ | (67) | $ | (12) | |||||
KEY DRIVERS
•Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense. The increase in total revenue sequentially primarily reflects investment and disposal gains.
•Noninterest expense increased year-over-year primarily reflecting higher staff expense. The sequential decrease primarily reflects lower staff expense and professional, legal and other purchased services.
Page - 5 | ||
| BNY Mellon 3Q21 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 3Q21, the net impact of money market fee waivers was $233 million, down from $252 million in 2Q21, driven by slightly higher short-term interest rates.
| Money market fee waivers | |||||||||||||||||||||||
| (in millions) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | YTD21 | YTD20 | ||||||||||||||||
| Investment services fees: | |||||||||||||||||||||||
| Asset servicing fees | $ | (40) | $ | (42) | $ | (22) | $ | (13) | $ | (1) | $ | (104) | $ | (1) | |||||||||
| Clearing services fees | (84) | (88) | (74) | (64) | (57) | (246) | (116) | ||||||||||||||||
| Issuer services fees | (16) | (15) | (10) | (6) | (1) | (41) | (2) | ||||||||||||||||
| Treasury services fees | (2) | (3) | (3) | (2) | (3) | (8) | (5) | ||||||||||||||||
| Total investment services fees | (142) | (148) | (109) | (85) | (62) | (399) | (124) | ||||||||||||||||
| Investment management and performance fees | (109) | (115) | (89) | (56) | (42) | (313) | (86) | ||||||||||||||||
| Distribution and servicing revenue | (11) | (13) | (13) | (8) | (6) | (37) | (9) | ||||||||||||||||
| Total fee revenue | (262) | (276) | (211) | (149) | (110) | (749) | (219) | ||||||||||||||||
| Less: Distribution and servicing expense | 29 | 24 | 23 | 15 | 9 | 76 | 16 | ||||||||||||||||
| Net impact of money market fee waivers | $ | (233) | $ | (252) | $ | (188) | $ | (134) | $ | (101) | $ | (673) | $ | (203) | |||||||||
Impact to revenue by line of business (a): | |||||||||||||||||||||||
| Asset Servicing | $ | (47) | $ | (50) | $ | (29) | $ | (13) | $ | (4) | $ | (126) | $ | (5) | |||||||||
| Pershing | (102) | (99) | (94) | (85) | (73) | (295) | (142) | ||||||||||||||||
| Issuer Services | (22) | (22) | (15) | (10) | (2) | (59) | (3) | ||||||||||||||||
| Treasury Services | (13) | (16) | (9) | (5) | (1) | (38) | (1) | ||||||||||||||||
| Investment Management | (76) | (85) | (61) | (34) | (28) | (222) | (66) | ||||||||||||||||
| Wealth Management | (2) | (4) | (3) | (2) | (2) | (9) | (2) | ||||||||||||||||
| Total impact to revenue by line of business | $ | (262) | $ | (276) | $ | (211) | $ | (149) | $ | (110) | $ | (749) | $ | (219) | |||||||||
(a) The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses.
Page - 6 | ||
| BNY Mellon 3Q21 Earnings Release | ||
CAPITAL AND LIQUIDITY
| Capital and liquidity ratios | Sept. 30, 2021 | June 30, 2021 | Dec. 31, 2020 | |||||||||||
Consolidated regulatory capital ratios: (a) | ||||||||||||||
| CET1 ratio | 11.7 | % | 12.6 | % | 13.1 | % | ||||||||
| Tier 1 capital ratio | 14.4 | 15.2 | 15.8 | |||||||||||
| Total capital ratio | 15.3 | 16.0 | 16.7 | |||||||||||
| Tier 1 leverage ratio | 5.7 | 6.0 | 6.3 | |||||||||||
| SLR | 7.0 | 7.5 | 8.6 | (b) | ||||||||||
| BNY Mellon shareholders’ equity to total assets ratio | 9.3 | % | 9.7 | % | 9.8 | % | ||||||||
| BNY Mellon common shareholders’ equity to total assets ratio | 8.3 | % | 8.7 | % | 8.8 | % | ||||||||
| Average LCR | 111 | % | 110 | % | 110 | % | ||||||||
| Book value per common share | $ | 47.30 | $ | 47.20 | $ | 46.53 | ||||||||
Tangible book value per common share – Non-GAAP (c) | $ | 24.88 | $ | 25.64 | $ | 25.44 | ||||||||
Common shares outstanding (in thousands) | 825,821 | 863,174 | 886,764 | |||||||||||
(a) Regulatory capital ratios for Sept. 30, 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 Sept. 30, 2021 and June 30, 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 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 9 for information on this Non-GAAP measure.
•CET1 capital totaled $19.8 billion at Sept. 30, 2021, a decrease of $1.6 billion compared with June 30, 2021. The decrease primarily reflects capital deployed through common stock repurchases and dividends, partially offset by capital generated through earnings.
NET INTEREST REVENUE
| Net interest revenue | 3Q21 vs. | ||||||||||||||||
| (dollars in millions; not meaningful - N/M) | 3Q21 | 2Q21 | 3Q20 | 2Q21 | 3Q20 | ||||||||||||
| Net interest revenue | $ | 641 | $ | 645 | $ | 703 | (1) | % | (9) | % | |||||||
| Add: Tax equivalent adjustment | 3 | 3 | 2 | N/M | N/M | ||||||||||||
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a) | $ | 644 | $ | 648 | $ | 705 | (1) | % | (9) | % | |||||||
| Net interest margin | 0.67 | % | 0.67 | % | 0.79 | % | — | bps | (12) | bps | |||||||
Net interest margin (FTE) – Non-GAAP (a) | 0.68 | % | 0.67 | % | 0.79 | % | 1 | bps | (11) | 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 9 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 and the impact of hedging activities (primarily offset in fee and other revenue). This was partially offset by the benefit of lower funding and deposit rates and higher deposit and loan balances.
•Sequentially, the decrease primarily reflects a decline in interest-earning assets driven by lower deposits.
Page - 7 | ||
| BNY Mellon 3Q21 Earnings Release | ||
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement
| (in millions) | Quarter ended | Year-to-date | ||||||||||||||||||
| Sept. 30, 2021 | June 30, 2021 | Sept. 30, 2020 | Sept. 30, 2021 | Sept. 30, 2020 | ||||||||||||||||
| Fee and other revenue | ||||||||||||||||||||
| Investment services fees: | ||||||||||||||||||||
| Asset servicing fees | $ | 1,223 | $ | 1,200 | $ | 1,168 | $ | 3,622 | $ | 3,500 | ||||||||||
| Clearing services fees | 423 | 435 | 397 | 1,313 | 1,298 | |||||||||||||||
| Issuer services fees | 280 | 281 | 295 | 806 | 835 | |||||||||||||||
| Treasury services fees | 165 | 160 | 152 | 482 | 445 | |||||||||||||||
| Total investment services fees | 2,091 | 2,076 | 2,012 | 6,223 | 6,078 | |||||||||||||||
| Investment management and performance fees | 913 | 889 | 835 | 2,692 | 2,483 | |||||||||||||||
| Foreign exchange revenue | 185 | 184 | 149 | 600 | 587 | |||||||||||||||
| Financing-related fees | 48 | 48 | 49 | 147 | 166 | |||||||||||||||
| Distribution and servicing | 28 | 27 | 29 | 84 | 87 | |||||||||||||||
| Total fee revenue | 3,265 | 3,224 | 3,074 | 9,746 | 9,401 | |||||||||||||||
| Investment and other income | 127 | 89 | 61 | 225 | 240 | |||||||||||||||
| Net securities gains | 2 | 2 | 9 | 4 | 27 | |||||||||||||||
| Total other revenue | 129 | 91 | 70 | 229 | 267 | |||||||||||||||
| Total fee and other revenue | 3,394 | 3,315 | 3,144 | 9,975 | 9,668 | |||||||||||||||
| Net interest revenue | ||||||||||||||||||||
| Interest revenue | 693 | 685 | 820 | 2,116 | 3,333 | |||||||||||||||
| Interest expense | 52 | 40 | 117 | 175 | 1,036 | |||||||||||||||
| Net interest revenue | 641 | 645 | 703 | 1,941 | 2,297 | |||||||||||||||
| Total revenue | 4,035 | 3,960 | 3,847 | 11,916 | 11,965 | |||||||||||||||
| Provision for credit losses | (45) | (86) | 9 | (214) | 321 | |||||||||||||||
| Noninterest expense | ||||||||||||||||||||
| Staff | 1,584 | 1,518 | 1,466 | 4,704 | 4,412 | |||||||||||||||
| Software and equipment | 372 | 365 | 340 | 1,099 | 1,011 | |||||||||||||||
| Professional, legal and other purchased services | 363 | 363 | 355 | 1,069 | 1,022 | |||||||||||||||
| Sub-custodian and clearing | 129 | 132 | 119 | 385 | 344 | |||||||||||||||
| Net occupancy | 120 | 122 | 136 | 365 | 408 | |||||||||||||||
| Distribution and servicing | 76 | 73 | 85 | 223 | 261 | |||||||||||||||
| Bank assessment charges | 34 | 35 | 30 | 103 | 100 | |||||||||||||||
| Amortization of intangible assets | 19 | 20 | 26 | 63 | 78 | |||||||||||||||
| Business development | 22 | 22 | 17 | 63 | 79 | |||||||||||||||
| Other | 199 | 128 | 107 | 473 | 364 | |||||||||||||||
| Total noninterest expense | 2,918 | 2,778 | 2,681 | 8,547 | 8,079 | |||||||||||||||
| Income | ||||||||||||||||||||
| Income before income taxes | 1,162 | 1,268 | 1,157 | 3,583 | 3,565 | |||||||||||||||
| Provision for income taxes | 219 | 241 | 213 | 681 | 694 | |||||||||||||||
| Net income | 943 | 1,027 | 944 | 2,902 | 2,871 | |||||||||||||||
| Net loss (income) attributable to noncontrolling interests related to consolidated investment management funds | 4 | (5) | (7) | (6) | (4) | |||||||||||||||
| Net income applicable to shareholders of The Bank of New York Mellon Corporation | 947 | 1,022 | 937 | 2,896 | 2,867 | |||||||||||||||
| Preferred stock dividends | (66) | (31) | (61) | (166) | (146) | |||||||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 881 | $ | 991 | $ | 876 | $ | 2,730 | $ | 2,721 | ||||||||||
| Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation | Quarter ended | Year-to-date | ||||||||||||||||||
| Sept. 30, 2021 | June 30, 2021 | Sept. 30, 2020 | Sept. 30, 2021 | Sept. 30, 2020 | ||||||||||||||||
| (in dollars) | ||||||||||||||||||||
| Basic | $ | 1.04 | $ | 1.14 | $ | 0.98 | $ | 3.15 | $ | 3.05 | ||||||||||
| Diluted | $ | 1.04 | $ | 1.13 | $ | 0.98 | $ | 3.14 | $ | 3.04 | ||||||||||
Page - 8 | ||
| BNY Mellon 3Q21 Earnings Release | ||
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
BNY Mellon has included in this Earnings Release certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity – Non-GAAP is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share – Non-GAAP is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.
Net interest 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 | 3Q21 vs. | ||||||||||
| (dollars in millions) | 3Q21 | 3Q20 | 3Q20 | ||||||||
| Fee revenue | $ | 3,265 | $ | 3,074 | 6 | % | |||||
| Less: Money market fee waivers | (262) | (110) | |||||||||
| Fee revenue, excluding money market fee waivers – Non-GAAP | $ | 3,527 | $ | 3,184 | 11 | % | |||||
Page - 9 | ||
| BNY Mellon 3Q21 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 Sept. 30, 2021. All forward-looking statements in this Earnings Release speak only as of October 19, 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 Sept. 30, 2021, BNY Mellon had $45.3 trillion in assets under custody and/or administration, and $2.3 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 - 10 | ||
| BNY Mellon 3Q21 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 Oct. 19, 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 Oct. 19, 2021. Replays of the conference call and audio webcast will be available beginning Oct. 19, 2021 at approximately 2:00 p.m. ET through Nov. 19, 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 - 11 | ||
| The Bank of New York Mellon Corporation | ||
| Financial Supplement | ||
| Third 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 | 7 | |||||||
| Capital and Liquidity | ||||||||
| Business Segment Results | ||||||||
| Investment Services Business | ||||||||
| Investment and Wealth Management Business | ||||||||
| AUM by Product, AUM Flows and Wealth Management Client Assets | ||||||||
| Other Segment | ||||||||
| Other | ||||||||
| Securities Portfolio | ||||||||
| Allowance for Credit Losses and Nonperforming Assets | ||||||||
| Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures | ||||||||
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per common share amounts, or unless otherwise noted) | 3Q21 vs. | YTD21 vs. | |||||||||||||||||||||||||||||||||||||||
| 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | 2Q21 | 3Q20 | YTD21 | YTD20 | YTD20 | ||||||||||||||||||||||||||||||||
| Selected income statement data | |||||||||||||||||||||||||||||||||||||||||
| Fee revenue | $ | 3,265 | $ | 3,224 | $ | 3,257 | $ | 3,114 | $ | 3,074 | 1 | % | 6 | % | $ | 9,746 | $ | 9,401 | 4 | % | |||||||||||||||||||||
| Other revenue | 129 | 91 | 9 | 49 | 70 | N/M | N/M | 229 | 267 | N/M | |||||||||||||||||||||||||||||||
| Total fee and other revenue | 3,394 | 3,315 | 3,266 | 3,163 | 3,144 | 2 | 8 | 9,975 | 9,668 | 3 | |||||||||||||||||||||||||||||||
| Net interest revenue | 641 | 645 | 655 | 680 | 703 | (1) | (9) | 1,941 | 2,297 | (15) | |||||||||||||||||||||||||||||||
| Total revenue | 4,035 | 3,960 | 3,921 | 3,843 | 3,847 | 2 | 5 | 11,916 | 11,965 | — | |||||||||||||||||||||||||||||||
| Provision for credit losses | (45) | (86) | (83) | 15 | 9 | N/M | N/M | (214) | 321 | N/M | |||||||||||||||||||||||||||||||
| Noninterest expense | 2,918 | 2,778 | 2,851 | 2,925 | 2,681 | 5 | 9 | 8,547 | 8,079 | 6 | |||||||||||||||||||||||||||||||
| Income before income taxes | 1,162 | 1,268 | 1,153 | 903 | 1,157 | (8) | — | 3,583 | 3,565 | 1 | |||||||||||||||||||||||||||||||
| Provision for income taxes | 219 | 241 | 221 | 148 | 213 | (9) | 3 | 681 | 694 | (2) | |||||||||||||||||||||||||||||||
| Net income | $ | 943 | $ | 1,027 | $ | 932 | $ | 755 | $ | 944 | (8) | % | — | % | $ | 2,902 | $ | 2,871 | 1 | % | |||||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 881 | $ | 991 | $ | 858 | $ | 702 | $ | 876 | (11) | % | 1 | % | $ | 2,730 | $ | 2,721 | — | % | |||||||||||||||||||||
| Diluted earnings per common share | $ | 1.04 | $ | 1.13 | $ | 0.97 | $ | 0.79 | $ | 0.98 | (8) | % | 6 | % | $ | 3.14 | $ | 3.04 | 3 | % | |||||||||||||||||||||
Average common shares and equivalents outstanding – diluted (in thousands) | 849,028 | 873,475 | 885,655 | 891,846 | 891,069 | (3) | % | (5) | % | 869,324 | 892,793 | (3) | % | ||||||||||||||||||||||||||||
Financial ratios (Returns are annualized) | |||||||||||||||||||||||||||||||||||||||||
| Pre-tax operating margin | 29 | % | 32 | % | 29 | % | 24 | % | 30 | % | 30 | % | 30 | % | |||||||||||||||||||||||||||
| Return on common equity | 8.8 | % | 9.8 | % | 8.5 | % | 6.9 | % | 8.7 | % | 9.1 | % | 9.4 | % | |||||||||||||||||||||||||||
Return on tangible common equity – Non-GAAP (a) | 16.8 | % | 18.6 | % | 16.1 | % | 13.0 | % | 16.7 | % | 17.1 | % | 18.5 | % | |||||||||||||||||||||||||||
| Non-U.S. revenue as a percentage of total revenue | 38 | % | 38 | % | 37 | % | 38 | % | 37 | % | 38 | % | 37 | % | |||||||||||||||||||||||||||
| Period end | |||||||||||||||||||||||||||||||||||||||||
Assets under custody and/or administration (“AUC/A”) (in trillions) (b) | $ | 45.3 | $ | 45.0 | $ | 41.7 | $ | 41.1 | $ | 38.6 | 1 | % | 17 | % | |||||||||||||||||||||||||||
Assets under management (“AUM”) (in trillions) | $ | 2.31 | $ | 2.32 | $ | 2.21 | $ | 2.21 | $ | 2.04 | — | % | 13 | % | |||||||||||||||||||||||||||
| Full-time employees | 48,900 | 48,800 | 48,000 | 48,500 | 48,600 | — | % | 1 | % | ||||||||||||||||||||||||||||||||
| Book value per common share | $ | 47.30 | $ | 47.20 | $ | 46.16 | $ | 46.53 | $ | 45.58 | |||||||||||||||||||||||||||||||
Tangible book value per common share – Non-GAAP (a) | $ | 24.88 | $ | 25.64 | $ | 24.88 | $ | 25.44 | $ | 24.60 | |||||||||||||||||||||||||||||||
| Cash dividends per common share | $ | 0.34 | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | |||||||||||||||||||||||||||||||
| Common dividend payout ratio | 33 | % | 27 | % | 32 | % | 39 | % | 32 | % | |||||||||||||||||||||||||||||||
| Closing stock price per common share | $ | 51.84 | $ | 51.23 | $ | 47.29 | $ | 42.44 | $ | 34.34 | |||||||||||||||||||||||||||||||
| Market capitalization | $ | 42,811 | $ | 44,220 | $ | 41,401 | $ | 37,634 | $ | 30,430 | |||||||||||||||||||||||||||||||
Common shares outstanding (in thousands) | 825,821 | 863,174 | 875,481 | 886,764 | 886,136 | ||||||||||||||||||||||||||||||||||||
Capital ratios at period end (c) | |||||||||||||||||||||||||||||||||||||||||
| Common Equity Tier 1 ("CET1") ratio | 11.7 | % | 12.6 | % | 12.6 | % | 13.1 | % | 13.0 | % | |||||||||||||||||||||||||||||||
| Tier 1 capital ratio | 14.4 | % | 15.2 | % | 15.2 | % | 15.8 | % | 15.7 | % | |||||||||||||||||||||||||||||||
| Total capital ratio | 15.3 | % | 16.0 | % | 16.1 | % | 16.7 | % | 16.6 | % | |||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 5.7 | % | 6.0 | % | 5.8 | % | 6.3 | % | 6.5 | % | |||||||||||||||||||||||||||||||
| Supplementary leverage ratio ("SLR") | 7.0 | % | 7.5 | % | 8.1 | % | 8.6 | % | 8.5 | % | |||||||||||||||||||||||||||||||
(a) Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of Non-GAAP measures. | |||||||||||||||||||||||||||||||||||||||||
(b) Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.7 trillion at Sept. 30, 2021 and June 30, 2021, $1.6 trillion at March 31, 2021, $1.5 trillion at Dec. 31, 2020 and $1.4 trillion at Sept. 30, 2020. | |||||||||||||||||||||||||||||||||||||||||
(c) Regulatory capital ratios for Sept. 30, 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 Sept. 30, 2021, June 30, 2021 and 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 and Sept. 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) | 3Q21 vs. | YTD21 vs. | |||||||||||||||||||||||||||||||||||||||
| 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | 2Q21 | 3Q20 | YTD21 | YTD20 | YTD20 | ||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||
| Investment services fees: | |||||||||||||||||||||||||||||||||||||||||
| Asset servicing fees | $ | 1,223 | $ | 1,200 | $ | 1,199 | $ | 1,138 | $ | 1,168 | 2 | % | 5 | % | $ | 3,622 | $ | 3,500 | 3 | % | |||||||||||||||||||||
| Clearing services fees | 423 | 435 | 455 | 418 | 397 | (3) | 7 | 1,313 | 1,298 | 1 | |||||||||||||||||||||||||||||||
| Issuer services fees | 280 | 281 | 245 | 257 | 295 | — | (5) | 806 | 835 | (3) | |||||||||||||||||||||||||||||||
| Treasury services fees | 165 | 160 | 157 | 156 | 152 | 3 | 9 | 482 | 445 | 8 | |||||||||||||||||||||||||||||||
| Total investment services fees | 2,091 | 2,076 | 2,056 | 1,969 | 2,012 | 1 | 4 | 6,223 | 6,078 | 2 | |||||||||||||||||||||||||||||||
| Investment management and performance fees | 913 | 889 | 890 | 884 | 835 | 3 | 9 | 2,692 | 2,483 | 8 | |||||||||||||||||||||||||||||||
| Foreign exchange revenue | 185 | 184 | 231 | 187 | 149 | 1 | 24 | 600 | 587 | 2 | |||||||||||||||||||||||||||||||
| Financing-related fees | 48 | 48 | 51 | 46 | 49 | — | (2) | 147 | 166 | (11) | |||||||||||||||||||||||||||||||
| Distribution and servicing | 28 | 27 | 29 | 28 | 29 | 4 | (3) | 84 | 87 | (3) | |||||||||||||||||||||||||||||||
| Total fee revenue | 3,265 | 3,224 | 3,257 | 3,114 | 3,074 | 1 | 6 | 9,746 | 9,401 | 4 | |||||||||||||||||||||||||||||||
| Investment and other income | 127 | 89 | 9 | 43 | 61 | N/M | N/M | 225 | 240 | N/M | |||||||||||||||||||||||||||||||
| Net securities gains | 2 | 2 | — | 6 | 9 | N/M | N/M | 4 | 27 | N/M | |||||||||||||||||||||||||||||||
| Total other revenue | 129 | 91 | 9 | 49 | 70 | N/M | N/M | 229 | 267 | N/M | |||||||||||||||||||||||||||||||
| Total fee and other revenue | 3,394 | 3,315 | 3,266 | 3,163 | 3,144 | 2 | 8 | 9,975 | 9,668 | 3 | |||||||||||||||||||||||||||||||
| Net interest revenue | 641 | 645 | 655 | 680 | 703 | (1) | (9) | 1,941 | 2,297 | (15) | |||||||||||||||||||||||||||||||
| Total revenue | 4,035 | 3,960 | 3,921 | 3,843 | 3,847 | 2 | 5 | 11,916 | 11,965 | — | |||||||||||||||||||||||||||||||
| Provision for credit losses | (45) | (86) | (83) | 15 | 9 | N/M | N/M | (214) | 321 | N/M | |||||||||||||||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||||||||||||||
| Staff | 1,584 | 1,518 | 1,602 | 1,554 | 1,466 | 4 | 8 | 4,704 | 4,412 | 7 | |||||||||||||||||||||||||||||||
| Software and equipment | 372 | 365 | 362 | 359 | 340 | 2 | 9 | 1,099 | 1,011 | 9 | |||||||||||||||||||||||||||||||
| Professional, legal and other purchased services | 363 | 363 | 343 | 381 | 355 | — | 2 | 1,069 | 1,022 | 5 | |||||||||||||||||||||||||||||||
| Sub-custodian and clearing | 129 | 132 | 124 | 116 | 119 | (2) | 8 | 385 | 344 | 12 | |||||||||||||||||||||||||||||||
| Net occupancy | 120 | 122 | 123 | 173 | 136 | (2) | (12) | 365 | 408 | (11) | |||||||||||||||||||||||||||||||
| Distribution and servicing | 76 | 73 | 74 | 75 | 85 | 4 | (11) | 223 | 261 | (15) | |||||||||||||||||||||||||||||||
| Bank assessment charges | 34 | 35 | 34 | 24 | 30 | (3) | 13 | 103 | 100 | 3 | |||||||||||||||||||||||||||||||
| Amortization of intangible assets | 19 | 20 | 24 | 26 | 26 | (5) | (27) | 63 | 78 | (19) | |||||||||||||||||||||||||||||||
| Business development | 22 | 22 | 19 | 26 | 17 | — | 29 | 63 | 79 | (20) | |||||||||||||||||||||||||||||||
| Other | 199 | 128 | 146 | 191 | 107 | 55 | 86 | 473 | 364 | 30 | |||||||||||||||||||||||||||||||
| Total noninterest expense | 2,918 | 2,778 | 2,851 | 2,925 | 2,681 | 5 | 9 | 8,547 | 8,079 | 6 | |||||||||||||||||||||||||||||||
| Income before income taxes | 1,162 | 1,268 | 1,153 | 903 | 1,157 | (8) | — | 3,583 | 3,565 | 1 | |||||||||||||||||||||||||||||||
| Provision for income taxes | 219 | 241 | 221 | 148 | 213 | (9) | 3 | 681 | 694 | (2) | |||||||||||||||||||||||||||||||
| Net income | 943 | 1,027 | 932 | 755 | 944 | (8) | — | 2,902 | 2,871 | 1 | |||||||||||||||||||||||||||||||
| Net loss (income) attributable to noncontrolling interests | 4 | (5) | (5) | (5) | (7) | N/M | N/M | (6) | (4) | N/M | |||||||||||||||||||||||||||||||
| Preferred stock dividends | (66) | (31) | (69) | (48) | (61) | N/M | N/M | (166) | (146) | N/M | |||||||||||||||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 881 | $ | 991 | $ | 858 | $ | 702 | $ | 876 | (11) | % | 1 | % | $ | 2,730 | $ | 2,721 | — | % | |||||||||||||||||||||
| Average common shares and equivalents outstanding: Basic | 844,088 | 869,460 | 882,558 | 889,928 | 889,499 | (3) | % | (5) | % | 865,374 | 891,050 | (3) | % | ||||||||||||||||||||||||||||
| Diluted | 849,028 | 873,475 | 885,655 | 891,846 | 891,069 | (3) | % | (5) | % | 869,324 | 892,793 | (3) | % | ||||||||||||||||||||||||||||
| Earnings per common share: Basic | $ | 1.04 | $ | 1.14 | $ | 0.97 | $ | 0.79 | $ | 0.98 | (9) | % | 6 | % | $ | 3.15 | $ | 3.05 | 3 | % | |||||||||||||||||||||
| Diluted | $ | 1.04 | $ | 1.13 | $ | 0.97 | $ | 0.79 | $ | 0.98 | (8) | % | 6 | % | $ | 3.14 | $ | 3.04 | 3 | % | |||||||||||||||||||||
N/M – Not meaningful. | |||||||||||||||||||||||||||||||||||||||||
4
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||
| (in millions) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 6,752 | $ | 5,154 | $ | 5,991 | $ | 6,252 | $ | 4,104 | ||||||||||
| Interest-bearing deposits with the Federal Reserve and other central banks | 126,959 | 126,355 | 125,524 | 141,775 | 106,185 | |||||||||||||||
| Interest-bearing deposits with banks | 20,057 | 21,270 | 23,763 | 17,300 | 19,027 | |||||||||||||||
| Federal funds sold and securities purchased under resale agreements | 28,497 | 29,762 | 28,263 | 30,907 | 29,647 | |||||||||||||||
| Securities | 157,274 | 155,906 | 155,844 | 156,441 | 155,339 | |||||||||||||||
| Trading assets | 17,854 | 15,520 | 16,884 | 15,272 | 13,074 | |||||||||||||||
| Loans | 64,328 | 63,547 | 60,732 | 56,469 | 55,491 | |||||||||||||||
| Allowance for loan losses | (233) | (269) | (327) | (358) | (325) | |||||||||||||||
Net loans | 64,095 | 63,278 | 60,405 | 56,111 | 55,166 | |||||||||||||||
| Premises and equipment | 3,422 | 3,442 | 3,521 | 3,602 | 3,617 | |||||||||||||||
| Accrued interest receivable | 464 | 492 | 485 | 510 | 489 | |||||||||||||||
| Goodwill | 17,420 | 17,487 | 17,469 | 17,496 | 17,357 | |||||||||||||||
| Intangible assets | 2,941 | 2,964 | 2,983 | 3,012 | 3,026 | |||||||||||||||
| Other assets | 24,798 | 25,333 | 23,852 | 20,955 | 21,367 | |||||||||||||||
Total assets | $ | 470,533 | $ | 466,963 | $ | 464,984 | $ | 469,633 | $ | 428,398 | ||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits | $ | 343,139 | $ | 338,670 | $ | 336,768 | $ | 341,545 | $ | 296,312 | ||||||||||
| Federal funds purchased and securities sold under repurchase agreements | 11,973 | 12,425 | 15,150 | 11,305 | 15,907 | |||||||||||||||
| Trading liabilities | 5,152 | 6,451 | 4,566 | 6,031 | 6,084 | |||||||||||||||
| Payables to customers and broker-dealers | 26,002 | 23,704 | 23,827 | 25,085 | 23,514 | |||||||||||||||
| Commercial paper | — | — | — | — | 671 | |||||||||||||||
| Other borrowed funds | 767 | 451 | 348 | 350 | 420 | |||||||||||||||
| Accrued taxes and other expenses | 5,609 | 5,213 | 4,916 | 5,696 | 5,347 | |||||||||||||||
| Other liabilities | 8,796 | 8,626 | 8,656 | 7,517 | 8,675 | |||||||||||||||
| Long-term debt | 25,043 | 25,629 | 25,350 | 25,984 | 26,121 | |||||||||||||||
Total liabilities | 426,481 | 421,169 | 419,581 | 423,513 | 383,051 | |||||||||||||||
| Temporary equity | ||||||||||||||||||||
| Redeemable noncontrolling interests | 178 | 169 | 187 | 176 | 179 | |||||||||||||||
| Permanent equity | ||||||||||||||||||||
Preferred stock | 4,541 | 4,541 | 4,541 | 4,541 | 4,532 | |||||||||||||||
Common stock | 14 | 14 | 14 | 14 | 14 | |||||||||||||||
| Additional paid-in capital | 28,075 | 28,006 | 27,928 | 27,823 | 27,741 | |||||||||||||||
| Retained earnings | 36,125 | 35,540 | 34,822 | 34,241 | 33,821 | |||||||||||||||
| Accumulated other comprehensive loss, net of tax | (2,003) | (1,670) | (1,819) | (985) | (1,359) | |||||||||||||||
Less: Treasury stock, at cost | (23,151) | (21,150) | (20,532) | (19,833) | (19,832) | |||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity | 43,601 | 45,281 | 44,954 | 45,801 | 44,917 | |||||||||||||||
Nonredeemable noncontrolling interests of consolidated investment management funds | 273 | 344 | 262 | 143 | 251 | |||||||||||||||
Total permanent equity | 43,874 | 45,625 | 45,216 | 45,944 | 45,168 | |||||||||||||||
Total liabilities, temporary equity and permanent equity | $ | 470,533 | $ | 466,963 | $ | 464,984 | $ | 469,633 | $ | 428,398 | ||||||||||
5
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||||||||
| FEE AND OTHER REVENUE | |||||||||||||||||||||||||||||||||||||||||
| 3Q21 vs. | YTD21 vs. | ||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | 2Q21 | 3Q20 | YTD21 | YTD20 | YTD20 | |||||||||||||||||||||||||||||||
| Investment services fees: | |||||||||||||||||||||||||||||||||||||||||
Asset servicing fees (a) | $ | 1,175 | $ | 1,155 | $ | 1,154 | $ | 1,099 | $ | 1,128 | 2 | % | 4 | % | $ | 3,484 | $ | 3,353 | 4 | % | |||||||||||||||||||||
| Securities lending revenue | 48 | 45 | 45 | 39 | 40 | 7 | 20 | 138 | 147 | (6) | |||||||||||||||||||||||||||||||
Clearing services fees (b) | 423 | 435 | 455 | 418 | 397 | (3) | 7 | 1,313 | 1,298 | 1 | |||||||||||||||||||||||||||||||
| Issuer services fees | 280 | 281 | 245 | 257 | 295 | — | (5) | 806 | 835 | (3) | |||||||||||||||||||||||||||||||
| Treasury services fees | 165 | 160 | 157 | 156 | 152 | 3 | 9 | 482 | 445 | 8 | |||||||||||||||||||||||||||||||
| Total investment services fees | 2,091 | 2,076 | 2,056 | 1,969 | 2,012 | 1 | 4 | 6,223 | 6,078 | 2 | |||||||||||||||||||||||||||||||
| Investment management and performance fees: | |||||||||||||||||||||||||||||||||||||||||
Investment management fees (c) | 892 | 875 | 850 | 839 | 828 | 2 | 8 | 2,617 | 2,421 | 8 | |||||||||||||||||||||||||||||||
| Performance fees | 21 | 14 | 40 | 45 | 7 | N/M | N/M | 75 | 62 | 21 | |||||||||||||||||||||||||||||||
Total investment management and performance fees (d) | 913 | 889 | 890 | 884 | 835 | 3 | 9 | 2,692 | 2,483 | 8 | |||||||||||||||||||||||||||||||
| Foreign exchange revenue | 185 | 184 | 231 | 187 | 149 | 1 | 24 | 600 | 587 | 2 | |||||||||||||||||||||||||||||||
| Financing-related fees | 48 | 48 | 51 | 46 | 49 | — | (2) | 147 | 166 | (11) | |||||||||||||||||||||||||||||||
| Distribution and servicing | 28 | 27 | 29 | 28 | 29 | 4 | (3) | 84 | 87 | (3) | |||||||||||||||||||||||||||||||
| Total fee revenue | 3,265 | 3,224 | 3,257 | 3,114 | 3,074 | 1 | 6 | 9,746 | 9,401 | 4 | |||||||||||||||||||||||||||||||
| Investment and other income: | |||||||||||||||||||||||||||||||||||||||||
| Income (loss) from consolidated investment management funds | (7) | 13 | 17 | 41 | 27 | N/M | N/M | 23 | 43 | N/M | |||||||||||||||||||||||||||||||
Seed capital gains (e) | 7 | 18 | 3 | 22 | 9 | N/M | N/M | 28 | 1 | N/M | |||||||||||||||||||||||||||||||
| Other trading revenue (loss) | 20 | (1) | (7) | (31) | (14) | N/M | N/M | 12 | 44 | N/M | |||||||||||||||||||||||||||||||
| Renewable energy investment (losses) | (42) | (41) | (81) | (27) | (34) | N/M | N/M | (164) | (102) | N/M | |||||||||||||||||||||||||||||||
| Corporate/bank-owned life insurance | 33 | 29 | 33 | 43 | 33 | N/M | N/M | 95 | 105 | N/M | |||||||||||||||||||||||||||||||
Other investments gains (f) | 70 | 23 | 11 | 18 | 11 | N/M | N/M | 104 | 17 | N/M | |||||||||||||||||||||||||||||||
| Disposal gains (losses) | 7 | 6 | — | (61) | — | N/M | N/M | 13 | — | N/M | |||||||||||||||||||||||||||||||
| Expense reimbursements from joint venture | 25 | 25 | 23 | 22 | 23 | N/M | N/M | 73 | 63 | N/M | |||||||||||||||||||||||||||||||
| Other income | 14 | 17 | 10 | 16 | 6 | N/M | N/M | 41 | 69 | N/M | |||||||||||||||||||||||||||||||
| Total investment and other income | 127 | 89 | 9 | 43 | 61 | N/M | N/M | 225 | 240 | N/M | |||||||||||||||||||||||||||||||
| Net securities gains | 2 | 2 | — | 6 | 9 | N/M | N/M | 4 | 27 | N/M | |||||||||||||||||||||||||||||||
| Total other revenue | 129 | 91 | 9 | 49 | 70 | N/M | N/M | 229 | 267 | N/M | |||||||||||||||||||||||||||||||
| Total fee and other revenue | $ | 3,394 | $ | 3,315 | $ | 3,266 | $ | 3,163 | $ | 3,144 | 2 | % | 8 | % | $ | 9,975 | $ | 9,668 | 3 | % | |||||||||||||||||||||
(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 7% compared with 3Q20. See "Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure. | |||||||||||||||||||||||||||||||||||||||||
| (e) Includes gains (losses) on investments in BNY Mellon funds which hedge deferred incentive awards. | |||||||||||||||||||||||||||||||||||||||||
| (f) 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 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | ||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 108,110 | (0.07) | % | $ | 114,564 | (0.09) | % | $ | 125,930 | (0.05) | % | $ | 112,274 | (0.04) | % | $ | 90,670 | (0.04) | % | ||||||||||||||||||||||||||||||
| Interest-bearing deposits with banks (primarily foreign banks) | 20,465 | 0.22 | 22,465 | 0.20 | 21,313 | 0.27 | 19,281 | 0.32 | 19,202 | 0.42 | ||||||||||||||||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements (a) | 29,304 | 0.44 | 27,857 | 0.36 | 29,186 | 0.44 | 28,389 | 0.55 | 30,342 | 0.63 | ||||||||||||||||||||||||||||||||||||||||
| Margin loans | 20,374 | 1.02 | 18,995 | 1.04 | 15,891 | 1.14 | 14,097 | 1.23 | 12,870 | 1.24 | ||||||||||||||||||||||||||||||||||||||||
| Non-margin loans: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Domestic offices | 36,872 | 1.90 | 36,455 | 1.90 | 31,218 | 2.02 | 30,855 | 2.08 | 30,053 | 2.12 | ||||||||||||||||||||||||||||||||||||||||
| Foreign offices | 3,960 | 1.11 | 5,070 | 1.14 | 9,680 | 1.18 | 9,776 | 1.31 | 10,693 | 1.45 | ||||||||||||||||||||||||||||||||||||||||
| Total non-margin loans | 40,832 | 1.82 | 41,525 | 1.81 | 40,898 | 1.82 | 40,631 | 1.90 | 40,746 | 1.94 | ||||||||||||||||||||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government obligations | 36,255 | 0.73 | 33,212 | 0.71 | 28,759 | 0.90 | 27,783 | 0.91 | (b) | 30,073 | 1.00 | (b) | ||||||||||||||||||||||||||||||||||||||
| U.S. government agency obligations | 70,199 | 1.34 | 72,809 | 1.34 | 77,623 | 1.40 | 79,712 | 1.46 | (b) | 78,300 | 1.58 | (b) | ||||||||||||||||||||||||||||||||||||||
State and political subdivisions (c) | 2,628 | 2.07 | 2,768 | 1.94 | 2,526 | 1.92 | 2,104 | 2.01 | (b) | 1,500 | 2.51 | (b) | ||||||||||||||||||||||||||||||||||||||
Other securities (c) | 47,334 | 0.94 | 47,451 | 0.95 | 47,030 | 0.99 | 46,280 | 0.98 | (b) | 46,719 | 0.98 | (b) | ||||||||||||||||||||||||||||||||||||||
Total investment securities (c) | 156,416 | 1.09 | 156,240 | 1.10 | 155,938 | 1.19 | 155,879 | 1.23 | 156,592 | 1.30 | ||||||||||||||||||||||||||||||||||||||||
Trading securities (c) | 5,564 | 0.53 | 6,639 | 0.72 | 8,141 | 0.95 | 8,123 | 0.95 | 7,212 | 0.91 | ||||||||||||||||||||||||||||||||||||||||
Total securities (c) | 161,980 | 1.07 | 162,879 | 1.08 | 164,079 | 1.18 | 164,002 | 1.22 | 163,804 | 1.28 | ||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets (c) | $ | 381,065 | 0.73 | % | $ | 388,285 | 0.71 | % | $ | 397,297 | 0.75 | % | $ | 378,674 | 0.82 | % | $ | 357,634 | 0.92 | % | ||||||||||||||||||||||||||||||
| Noninterest-earning assets | 65,696 | 64,044 | 63,082 | 58,814 | 57,231 | |||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 446,761 | $ | 452,329 | $ | 460,379 | $ | 437,488 | $ | 414,865 | ||||||||||||||||||||||||||||||||||||||||
| Liabilities and equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Domestic offices | $ | 123,617 | (0.02) | % | $ | 126,953 | (0.02) | % | $ | 128,543 | (0.02) | % | $ | 119,012 | (0.02) | % | $ | 102,767 | (0.01) | % | ||||||||||||||||||||||||||||||
| Foreign offices | 109,746 | (0.14) | 112,513 | (0.15) | 116,572 | (0.10) | 112,306 | (0.10) | 108,733 | (0.09) | ||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 233,363 | (0.08) | 239,466 | (0.08) | 245,115 | (0.06) | 231,318 | (0.06) | 211,500 | (0.05) | ||||||||||||||||||||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements (a) | 13,415 | 0.08 | 13,773 | (0.17) | 15,288 | (0.07) | 14,452 | 0.01 | 16,850 | 0.13 | ||||||||||||||||||||||||||||||||||||||||
| Trading liabilities | 2,821 | 0.11 | 2,282 | 0.38 | 2,227 | 0.53 | 2,408 | 0.72 | 2,692 | 0.30 | ||||||||||||||||||||||||||||||||||||||||
| Other borrowed funds | 383 | 2.53 | 298 | 2.21 | 331 | 2.01 | 338 | 1.71 | 873 | 1.40 | ||||||||||||||||||||||||||||||||||||||||
| Commercial paper | 11 | 0.07 | — | — | — | — | 275 | 0.10 | 2,274 | 0.09 | ||||||||||||||||||||||||||||||||||||||||
| Payables to customers and broker-dealers | 16,648 | (0.01) | 16,811 | (0.01) | 17,691 | (0.01) | 17,521 | (0.01) | 18,501 | (0.01) | ||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 25,751 | 1.39 | 25,275 | 1.43 | 26,199 | 1.81 | 25,704 | 1.88 | 26,511 | 2.01 | ||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | $ | 292,392 | 0.07 | % | $ | 297,905 | 0.05 | % | $ | 306,851 | 0.11 | % | $ | 292,016 | 0.13 | % | $ | 279,201 | 0.16 | % | ||||||||||||||||||||||||||||||
| Total noninterest-bearing deposits | 85,581 | 85,802 | 83,429 | 75,840 | 67,610 | |||||||||||||||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 24,164 | 23,317 | 24,556 | 23,783 | 23,393 | |||||||||||||||||||||||||||||||||||||||||||||
| Total The Bank of New York Mellon Corporation shareholders’ equity | 44,296 | 44,934 | 45,261 | 45,539 | 44,456 | |||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | 328 | 371 | 282 | 310 | 205 | |||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 446,761 | $ | 452,329 | $ | 460,379 | $ | 437,488 | $ | 414,865 | ||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 0.67 | % | 0.67 | % | 0.66 | % | 0.72 | % | 0.79 | % | ||||||||||||||||||||||||||||||||||||||||
Net interest margin (FTE) – Non-GAAP (d) | 0.68 | % | 0.67 | % | 0.67 | % | 0.72 | % | 0.79 | % | ||||||||||||||||||||||||||||||||||||||||
(a) Includes the average impact of offsetting under enforceable netting agreements of approximately $47 billion for 3Q21, $41 billion for 2Q21, $37 billion for 1Q21, $41 billion for 4Q20 and $43 billion for 3Q20. 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 0.17% for 3Q21, 0.15% for 2Q21, 0.19% for 1Q21, 0.23% for 4Q20 and 0.26% for 3Q20. On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under repurchase agreements would have been 0.02% for 3Q21, (0.04)% for 2Q21, (0.02)% for 1Q21, 0.00% for 4Q20 and 0.04% for 3Q20. 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) In 2Q21, we reclassified the impact of hedging within the categories comprising total investment securities to align the impact of hedging with the securities being hedged and reclassified prior periods to be comparable. The change reduced the income and average rates previously reported for U.S. government obligations and U.S. government agency obligations and increased the income and average rates for Other securities. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (c) Average rates were calculated on an FTE basis, at tax rates of approximately 21%. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(d) See "Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure. | ||||||||||||||||||||||||||||||||||||||||||||||||||
7
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||
| CAPITAL AND LIQUIDITY | |||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||
| (dollars in millions) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | ||||||||||||||||||||||||
Consolidated regulatory capital ratios (a) | |||||||||||||||||||||||||||||
| Standardized Approach: | |||||||||||||||||||||||||||||
| CET1 capital | $ | 19,848 | $ | 21,456 | $ | 21,090 | $ | 21,875 | $ | 21,171 | |||||||||||||||||||
| Tier 1 capital | 24,296 | 25,896 | 25,534 | 26,310 | 25,611 | ||||||||||||||||||||||||
| Total capital | 25,820 | 27,464 | 27,190 | 28,038 | 27,327 | ||||||||||||||||||||||||
| Risk-weighted assets | 169,261 | 169,885 | 167,510 | 163,848 | 156,698 | ||||||||||||||||||||||||
| CET1 ratio | 11.7 | % | 12.6 | % | 12.6 | % | 13.4 | % | 13.5 | % | |||||||||||||||||||
| Tier 1 capital ratio | 14.4 | 15.2 | 15.2 | 16.1 | 16.3 | ||||||||||||||||||||||||
| Total capital ratio | 15.3 | 16.2 | 16.2 | 17.1 | 17.4 | ||||||||||||||||||||||||
| Advanced Approaches: | |||||||||||||||||||||||||||||
| CET1 capital | $ | 19,848 | $ | 21,456 | $ | 21,090 | $ | 21,875 | $ | 21,171 | |||||||||||||||||||
| Tier 1 capital | 24,296 | 25,896 | 25,534 | 26,310 | 25,611 | ||||||||||||||||||||||||
| Total capital | 25,538 | 27,183 | 26,908 | 27,795 | 27,081 | ||||||||||||||||||||||||
| Risk-weighted assets | 167,445 | 169,380 | 167,035 | 166,426 | 163,108 | ||||||||||||||||||||||||
| CET1 ratio | 11.9 | % | 12.7 | % | 12.6 | % | 13.1 | % | 13.0 | % | |||||||||||||||||||
| Tier 1 capital ratio | 14.5 | 15.3 | 15.3 | 15.8 | 15.7 | ||||||||||||||||||||||||
| Total capital ratio | 15.3 | 16.0 | 16.1 | 16.7 | 16.6 | ||||||||||||||||||||||||
| Tier 1 leverage ratio: | |||||||||||||||||||||||||||||
| Average assets for Tier 1 leverage ratio | $ | 427,465 | $ | 432,954 | $ | 440,968 | $ | 417,982 | $ | 394,945 | |||||||||||||||||||
| Tier 1 leverage ratio | 5.7 | % | 6.0 | % | 5.8 | % | 6.3 | % | 6.5 | % | |||||||||||||||||||
| SLR: | |||||||||||||||||||||||||||||
| Leverage exposure | $ | 347,457 | $ | 346,455 | $ | 314,334 | (b) | $ | 304,823 | (b) | $ | 300,265 | (b) | ||||||||||||||||
| SLR | 7.0 | % | 7.5 | % | 8.1 | % | (b) | 8.6 | % | (b) | 8.5 | % | (b) | ||||||||||||||||
| Average liquidity coverage ratio | 111 | % | 110 | % | 110 | % | 110 | % | 111 | % | |||||||||||||||||||
(a) Regulatory capital ratios for Sept. 30, 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 Sept. 30, 2021, June 30, 2021 and 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 and Sept. 30, 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, 72 basis points at Dec. 31, 2020 and 78 basis points at Sept. 30, 2020. The temporary exclusion ceased to apply beginning April 1, 2021. | |||||||||||||||||||||||||||||
8
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||||||||
| INVESTMENT SERVICES BUSINESS | |||||||||||||||||||||||||||||||||||||||||
| 3Q21 vs. | YTD21 vs. | ||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | 2Q21 | 3Q20 | YTD21 | YTD20 | YTD20 | |||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||
| Investment services fees: | |||||||||||||||||||||||||||||||||||||||||
Asset servicing fees (ex. securities lending revenue) (a) | $ | 1,171 | $ | 1,150 | $ | 1,150 | $ | 1,094 | $ | 1,119 | 2 | % | 5 | % | $ | 3,471 | $ | 3,333 | 4 | % | |||||||||||||||||||||
| Securities lending revenue | 45 | 42 | 41 | 36 | 37 | 7 | 22 | 128 | 134 | (4) | |||||||||||||||||||||||||||||||
Clearing services fees (b) | 423 | 435 | 455 | 418 | 397 | (3) | 7 | 1,313 | 1,298 | 1 | |||||||||||||||||||||||||||||||
| Issuer services fees | 280 | 281 | 245 | 257 | 295 | — | (5) | 806 | 835 | (3) | |||||||||||||||||||||||||||||||
| Treasury services fees | 164 | 160 | 157 | 156 | 152 | 3 | 8 | 481 | 445 | 8 | |||||||||||||||||||||||||||||||
| Total investment services fees | 2,083 | 2,068 | 2,048 | 1,961 | 2,000 | 1 | 4 | 6,199 | 6,045 | 3 | |||||||||||||||||||||||||||||||
| Foreign exchange revenue | 148 | 152 | 193 | 163 | 126 | (3) | 17 | 493 | 518 | (5) | |||||||||||||||||||||||||||||||
Other (c) | 147 | 116 | 104 | 111 | 120 | 27 | 23 | 367 | 458 | (20) | |||||||||||||||||||||||||||||||
| Total fee and other revenue | 2,378 | 2,336 | 2,345 | 2,235 | 2,246 | 2 | 6 | 7,059 | 7,021 | 1 | |||||||||||||||||||||||||||||||
| Net interest revenue | 632 | 643 | 645 | 670 | 681 | (2) | (7) | 1,920 | 2,255 | (15) | |||||||||||||||||||||||||||||||
| Total revenue | 3,010 | 2,979 | 2,990 | 2,905 | 2,927 | 1 | 3 | 8,979 | 9,276 | (3) | |||||||||||||||||||||||||||||||
| Provision for credit losses | (35) | (77) | (79) | 31 | (10) | N/M | N/M | (191) | 284 | N/M | |||||||||||||||||||||||||||||||
| Noninterest expense (ex. amortization of intangible assets) | 2,200 | 2,040 | 2,084 | 2,157 | 2,002 | 8 | 10 | 6,324 | 5,942 | 6 | |||||||||||||||||||||||||||||||
| Amortization of intangible assets | 11 | 12 | 17 | 17 | 18 | (8) | (39) | 40 | 54 | (26) | |||||||||||||||||||||||||||||||
| Total noninterest expense | 2,211 | 2,052 | 2,101 | 2,174 | 2,020 | 8 | 9 | 6,364 | 5,996 | 6 | |||||||||||||||||||||||||||||||
| Income before taxes | $ | 834 | $ | 1,004 | $ | 968 | $ | 700 | $ | 917 | (17) | % | (9) | % | $ | 2,806 | $ | 2,996 | (6) | % | |||||||||||||||||||||
| Pre-tax operating margin | 28 | % | 34 | % | 32 | % | 24 | % | 31 | % | 31 | % | 32 | % | |||||||||||||||||||||||||||
| Total revenue by line of business: | |||||||||||||||||||||||||||||||||||||||||
| Asset Servicing | $ | 1,437 | $ | 1,382 | $ | 1,424 | $ | 1,357 | $ | 1,354 | 4 | % | 6 | % | $ | 4,243 | $ | 4,348 | (2) | % | |||||||||||||||||||||
| Pershing | 566 | 590 | 605 | 563 | 538 | (4) | 5 | 1,761 | 1,769 | — | |||||||||||||||||||||||||||||||
| Issuer Services | 400 | 405 | 363 | 385 | 435 | (1) | (8) | 1,168 | 1,285 | (9) | |||||||||||||||||||||||||||||||
| Treasury Services | 326 | 319 | 317 | 325 | 323 | 2 | 1 | 962 | 1,002 | (4) | |||||||||||||||||||||||||||||||
| Clearance and Collateral Management | 281 | 283 | 281 | 275 | 277 | (1) | 1 | 845 | 872 | (3) | |||||||||||||||||||||||||||||||
| Total revenue by line of business | $ | 3,010 | $ | 2,979 | $ | 2,990 | $ | 2,905 | $ | 2,927 | 1 | % | 3 | % | $ | 8,979 | $ | 9,276 | (3) | % | |||||||||||||||||||||
(a) Asset servicing fees include the fees from the Clearance and Collateral Management business. | |||||||||||||||||||||||||||||||||||||||||
(b) Clearing services fees are almost entirely earned by our Pershing business. | |||||||||||||||||||||||||||||||||||||||||
| (c) Other revenue includes investment management and performance 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 | |||||||||||||||||||||||||||||||||||||||||
| 3Q21 vs. | YTD21 vs. | ||||||||||||||||||||||||||||||||||||||||
| (dollars in millions, unless otherwise noted) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | 2Q21 | 3Q20 | YTD21 | YTD20 | YTD20 | |||||||||||||||||||||||||||||||
| Average loans | $ | 47,430 | $ | 46,845 | $ | 43,468 | $ | 41,437 | $ | 40,308 | 1 | % | 18 | % | $ | 45,929 | $ | 41,731 | 10 | % | |||||||||||||||||||||
| Average assets | $ | 379,273 | $ | 383,330 | $ | 385,054 | $ | 358,270 | $ | 329,324 | (1) | % | 15 | % | $ | 382,531 | $ | 322,924 | 18 | % | |||||||||||||||||||||
| Average deposits | $ | 308,645 | $ | 313,923 | $ | 315,088 | $ | 292,631 | $ | 263,621 | (2) | % | 17 | % | $ | 312,528 | $ | 258,112 | 21 | % | |||||||||||||||||||||
AUC/A at period end (in trillions) (a)(b) | $ | 45.3 | $ | 45.0 | $ | 41.7 | $ | 41.1 | $ | 38.6 | 1 | % | 17 | % | |||||||||||||||||||||||||||
Market value of securities on loan at period end (in billions) (c) | $ | 443 | $ | 456 | $ | 445 | $ | 435 | $ | 378 | (3) | % | 17 | % | |||||||||||||||||||||||||||
| Pershing | |||||||||||||||||||||||||||||||||||||||||
Net new assets (U.S. platform) (in billions) (d) | $ | 7 | $ | 40 | $ | 28 | $ | 28 | $ | 12 | N/M | N/M | |||||||||||||||||||||||||||||
Average active clearing accounts (U.S. platform) (in thousands) | 6,849 | 6,889 | 6,757 | 6,635 | 6,556 | (1) | % | 4 | % | ||||||||||||||||||||||||||||||||
Average long-term mutual fund assets (U.S. platform) | $ | 736,843 | $ | 730,954 | $ | 678,556 | $ | 630,086 | $ | 597,312 | 1 | % | 23 | % | |||||||||||||||||||||||||||
Average investor margin loans (U.S. platform) | $ | 13,050 | $ | 12,097 | $ | 10,937 | $ | 10,097 | $ | 9,350 | 8 | % | 40 | % | |||||||||||||||||||||||||||
| Clearance and Collateral Management | |||||||||||||||||||||||||||||||||||||||||
Average tri-party collateral management balances (in billions) | $ | 4,516 | $ | 3,898 | $ | 3,638 | $ | 3,555 | $ | 3,417 | 16 | % | 32 | % | |||||||||||||||||||||||||||
(a) Sept. 30, 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 $1.7 trillion at Sept. 30, 2021 and June 30, 2021, $1.6 trillion at March 31, 2021, $1.5 trillion at Dec. 31, 2020 and $1.4 trillion at Sept. 30, 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 $68 billion at Sept. 30, 2021, $63 billion at June 30, 2021, $64 billion at March 31, 2021, $68 billion at Dec. 31, 2020 and $62 billion at Sept. 30, 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 | |||||||||||||||||||||||||||||||||||||||||
| 3Q21 vs. | YTD21 vs. | ||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | 2Q21 | 3Q20 | YTD21 | YTD20 | YTD20 | |||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||
Investment management fees (a) | $ | 893 | $ | 876 | $ | 850 | $ | 839 | $ | 828 | 2 | % | 8 | % | $ | 2,619 | $ | 2,422 | 8 | % | |||||||||||||||||||||
| Performance fees | 21 | 14 | 40 | 45 | 7 | N/M | 200 | 75 | 62 | 21 | |||||||||||||||||||||||||||||||
Investment management and performance fees (b) | 914 | 890 | 890 | 884 | 835 | 3 | 9 | 2,694 | 2,484 | 8 | |||||||||||||||||||||||||||||||
| Distribution and servicing | 28 | 28 | 28 | 29 | 31 | — | (10) | 84 | 108 | (22) | |||||||||||||||||||||||||||||||
Other (a) | 43 | 34 | 25 | 27 | 5 | N/M | N/M | 102 | (37) | N/M | |||||||||||||||||||||||||||||||
Total fee and other revenue (a) | 985 | 952 | 943 | 940 | 871 | 3 | 13 | 2,880 | 2,555 | 13 | |||||||||||||||||||||||||||||||
| Net interest revenue | 47 | 47 | 48 | 50 | 47 | — | — | 142 | 147 | (3) | |||||||||||||||||||||||||||||||
| Total revenue | 1,032 | 999 | 991 | 990 | 918 | 3 | 12 | 3,022 | 2,702 | 12 | |||||||||||||||||||||||||||||||
| Provision for credit losses | (7) | (4) | 4 | (8) | 12 | N/M | N/M | (7) | 28 | N/M | |||||||||||||||||||||||||||||||
| Noninterest expense (ex. amortization of intangible assets) | 684 | 669 | 702 | 678 | 653 | 2 | 5 | 2,055 | 1,990 | 3 | |||||||||||||||||||||||||||||||
| Amortization of intangible assets | 7 | 8 | 7 | 9 | 8 | (13) | (13) | 22 | 24 | (8) | |||||||||||||||||||||||||||||||
| Total noninterest expense | 691 | 677 | 709 | 687 | 661 | 2 | 5 | 2,077 | 2,014 | 3 | |||||||||||||||||||||||||||||||
| Income before taxes | $ | 348 | $ | 326 | $ | 278 | $ | 311 | $ | 245 | 7 | % | 42 | % | $ | 952 | $ | 660 | 44 | % | |||||||||||||||||||||
| Pre-tax operating margin | 34 | % | 33 | % | 28 | % | 32 | % | 27 | % | 31 | % | 24 | % | |||||||||||||||||||||||||||
Adjusted pre-tax operating margin – Non-GAAP (c) | 36 | % | 35 | % | 30 | % | 34 | % | 29 | % | 34 | % | 27 | % | |||||||||||||||||||||||||||
| Total revenue by line of business: | |||||||||||||||||||||||||||||||||||||||||
| Investment Management | $ | 727 | $ | 700 | $ | 698 | $ | 714 | $ | 641 | 4 | % | 13 | % | $ | 2,125 | $ | 1,882 | 13 | % | |||||||||||||||||||||
| Wealth Management | 305 | 299 | 293 | 276 | 277 | 2 | 10 | 897 | 820 | 9 | |||||||||||||||||||||||||||||||
| Total revenue by line of business | $ | 1,032 | $ | 999 | $ | 991 | $ | 990 | $ | 918 | 3 | % | 12 | % | $ | 3,022 | $ | 2,702 | 12 | % | |||||||||||||||||||||
| Average loans | $ | 12,248 | $ | 11,871 | $ | 11,610 | $ | 11,497 | $ | 11,503 | 3 | % | 6 | % | $ | 11,912 | $ | 11,805 | 1 | % | |||||||||||||||||||||
| Average assets | $ | 30,195 | $ | 30,370 | $ | 32,066 | $ | 30,804 | $ | 30,160 | (1) | % | — | % | $ | 30,870 | $ | 30,343 | 2 | % | |||||||||||||||||||||
| Average deposits | $ | 17,270 | $ | 17,466 | $ | 19,177 | $ | 18,144 | $ | 17,570 | (1) | % | (2) | % | $ | 17,964 | $ | 17,070 | 5 | % | |||||||||||||||||||||
(a) Total fee and other revenue is net of income attributable to noncontrolling interests related to consolidated investment management funds. 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 8% compared with 3Q20. 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 | |||||||||||||||||||||||||||||||||||||||||
| 3Q21 vs. | YTD21 vs. | ||||||||||||||||||||||||||||||||||||||||
| (dollars in billions) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | 2Q21 | 3Q20 | YTD21 | YTD20 | YTD20 | |||||||||||||||||||||||||||||||
AUM by product type (a)(b) | |||||||||||||||||||||||||||||||||||||||||
| Equity | $ | 180 | $ | 187 | $ | 173 | $ | 170 | $ | 149 | (4) | % | 21 | % | |||||||||||||||||||||||||||
| Fixed income | 269 | 272 | 261 | 259 | 241 | (1) | 12 | ||||||||||||||||||||||||||||||||||
| Index | 436 | 440 | 419 | 393 | 350 | (1) | 25 | ||||||||||||||||||||||||||||||||||
| Liability-driven investments | 843 | 841 | 802 | 855 | 788 | — | 7 | ||||||||||||||||||||||||||||||||||
| Multi-asset and alternative investments | 218 | 222 | 214 | 209 | 193 | (2) | 13 | ||||||||||||||||||||||||||||||||||
| Cash | 364 | 358 | 345 | 325 | 320 | 2 | 14 | ||||||||||||||||||||||||||||||||||
| Total AUM by product type | $ | 2,310 | $ | 2,320 | $ | 2,214 | $ | 2,211 | $ | 2,041 | — | % | 13 | % | |||||||||||||||||||||||||||
Changes in AUM (a)(b) | |||||||||||||||||||||||||||||||||||||||||
| Beginning balance of AUM | $ | 2,320 | $ | 2,214 | $ | 2,211 | $ | 2,041 | $ | 1,961 | $ | 2,211 | $ | 1,910 | |||||||||||||||||||||||||||
| Net inflows (outflows): | |||||||||||||||||||||||||||||||||||||||||
| Long-term strategies: | |||||||||||||||||||||||||||||||||||||||||
| Equity | (5) | (3) | — | (2) | (4) | (8) | (8) | ||||||||||||||||||||||||||||||||||
| Fixed income | 1 | 8 | 8 | 5 | 1 | 17 | 5 | ||||||||||||||||||||||||||||||||||
| Liability-driven investments | 16 | 11 | 8 | 15 | 14 | 35 | 7 | ||||||||||||||||||||||||||||||||||
| Multi-asset and alternative investments | (2) | 1 | (2) | — | (3) | (3) | (4) | ||||||||||||||||||||||||||||||||||
| Total long-term active strategies inflows | 10 | 17 | 14 | 18 | 8 | 41 | — | ||||||||||||||||||||||||||||||||||
| Index | (3) | (5) | 3 | (3) | (3) | (5) | 9 | ||||||||||||||||||||||||||||||||||
| Total long-term strategies inflows | 7 | 12 | 17 | 15 | 5 | 36 | 9 | ||||||||||||||||||||||||||||||||||
| Short-term strategies: | |||||||||||||||||||||||||||||||||||||||||
| Cash | 7 | 13 | 19 | 5 | (10) | 39 | 44 | ||||||||||||||||||||||||||||||||||
| Total net inflows (outflows) | 14 | 25 | 36 | 20 | (5) | 75 | 53 | ||||||||||||||||||||||||||||||||||
| Net market impact | 4 | 79 | (36) | 93 | 41 | 47 | 93 | ||||||||||||||||||||||||||||||||||
| Net currency impact | (28) | 2 | 3 | 57 | 44 | (23) | (15) | ||||||||||||||||||||||||||||||||||
| Ending balance of AUM | $ | 2,310 | $ | 2,320 | $ | 2,214 | $ | 2,211 | $ | 2,041 | — | % | 13 | % | $ | 2,310 | $ | 2,041 | 13 | % | |||||||||||||||||||||
Wealth Management client assets (a)(c) | $ | 307 | $ | 305 | $ | 292 | $ | 286 | $ | 265 | 1 | % | 16 | % | |||||||||||||||||||||||||||
(a) Sept. 30, 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) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | YTD21 | YTD20 | |||||||||||||||||||
| Fee revenue | $ | 12 | $ | 13 | $ | 9 | $ | 11 | $ | 7 | $ | 34 | $ | 23 | ||||||||||||
| Other revenue | 23 | 9 | (36) | (28) | 13 | (4) | 65 | |||||||||||||||||||
| Total fee and other revenue | 35 | 22 | (27) | (17) | 20 | 30 | 88 | |||||||||||||||||||
| Net interest (expense) | (38) | (45) | (38) | (40) | (25) | (121) | (105) | |||||||||||||||||||
| Total revenue | (3) | (23) | (65) | (57) | (5) | (91) | (17) | |||||||||||||||||||
| Provision for credit losses | (3) | (5) | (8) | (8) | 7 | (16) | 9 | |||||||||||||||||||
| Noninterest expense | 16 | 49 | 41 | 64 | — | 106 | 69 | |||||||||||||||||||
| (Loss) before taxes | $ | (16) | $ | (67) | $ | (98) | $ | (113) | $ | (12) | $ | (181) | $ | (95) | ||||||||||||
| Average loans and leases | $ | 1,528 | $ | 1,804 | $ | 1,711 | $ | 1,794 | $ | 1,805 | $ | 1,680 | $ | 1,861 | ||||||||||||
| Average assets | $ | 37,293 | $ | 38,629 | $ | 43,259 | $ | 48,414 | $ | 55,381 | $ | 39,705 | $ | 51,936 | ||||||||||||
13
| THE BANK OF NEW YORK MELLON CORPORATION | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| SECURITIES PORTFOLIO | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | June 30, 2021 | 3Q21 change in unrealized gain (loss) | Sept. 30, 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 | $ | 53,944 | $ | (100) | $ | 52,223 | $ | 52,913 | 101 | % | $ | 690 | 13 | % | 100 | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||||||||||||||||
| U.S. Treasury | 34,267 | (31) | 35,920 | 36,044 | 100 | 124 | 53 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 14,209 | (34) | 13,968 | 14,045 | 101 | 77 | 15 | 77 | 5 | 17 | 1 | — | — | ||||||||||||||||||||||||||||||||||||||||
| Agency commercial MBS | 11,678 | (78) | 12,309 | 12,549 | 102 | 240 | 24 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Supranational | 8,157 | (17) | 7,985 | 8,004 | 100 | 19 | 56 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Foreign covered bonds | 6,793 | (12) | 6,917 | 6,946 | 100 | 29 | 37 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 5,460 | (8) | 5,420 | 5,426 | 100 | 6 | 25 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| CLOs | 5,139 | — | 5,202 | 5,204 | 100 | 2 | 100 | 99 | — | — | 1 | — | — | ||||||||||||||||||||||||||||||||||||||||
Non-agency commercial MBS | 3,263 | (23) | 3,108 | 3,167 | 102 | 59 | 25 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Foreign government agencies | 2,708 | (6) | 2,670 | 2,679 | 100 | 9 | 17 | 92 | 8 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | 2,621 | (17) | 2,665 | 2,659 | 100 | (6) | — | 87 | 10 | — | — | 2 | 1 | ||||||||||||||||||||||||||||||||||||||||
Non-agency RMBS (d) | 2,530 | (7) | 2,515 | 2,647 | 105 | 132 | 44 | 77 | 4 | — | 9 | — | 10 | ||||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | 2,456 | (5) | 2,307 | 2,312 | 100 | 5 | 16 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Corporate bonds | 2,347 | (17) | 2,395 | 2,377 | 99 | (18) | — | 15 | 67 | 18 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other | 1 | — | 1 | 1 | 100 | — | — | — | — | — | — | — | 100 | ||||||||||||||||||||||||||||||||||||||||
Total securities | $ | 155,573 | (e) | $ | (355) | $ | 155,605 | $ | 156,973 | (e)(f) | 101 | % | $ | 1,368 | (e)(g) | 30 | % | 96 | % | 2 | % | 2 | % | — | % | — | % | — | % | ||||||||||||||||||||||||
| (a) Amortized cost reflects historical impairments, and is net of allowance for credit losses. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (b) Includes the impact of hedges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) Represents ratings by S&P, or the equivalent. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) Includes RMBS that were included in the former Grantor Trust of $416 million at June 30, 2021 and $387 million at Sept. 30, 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) Includes net unrealized losses on derivatives hedging securities available-for-sale (including terminated hedges) of $927 million at June 30, 2021 and $742 million at Sept. 30, 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(f) The fair value of available-for-sale securities totaled $100,265 million at Sept. 30, 2021, net of hedges, or 64% of the fair value of the securities portfolio, net of hedges. The fair value of the held-to-maturity securities totaled $56,708 million at Sept. 30, 2021, or 36% of the fair value of the securities portfolio, net of hedges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (g) At Sept. 30, 2021, unrealized gains of $927 million related to available-for-sale securities, net of hedges, and $441 million related to held-to-maturity securities. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note: The amortizable purchase premium (net of discount) relating to securities was $2,005 million at Sept. 30, 2021 and the amortization of that net purchase premium was $157 million in 3Q21. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
14
| THE BANK OF NEW YORK MELLON CORPORATION | | |||||||||||||||||||
| ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS | ||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||
| (dollars in millions) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | |||||||||||||||
| Allowance for credit losses – beginning of period: | ||||||||||||||||||||
| Allowance for loan losses | $ | 269 | $ | 327 | $ | 358 | $ | 325 | $ | 302 | ||||||||||
| Allowance for lending-related commitments | 50 | 73 | 121 | 135 | 152 | |||||||||||||||
Allowance for other financial instruments (a) | 16 | 19 | 22 | 26 | 21 | |||||||||||||||
| Allowance for credit losses – beginning of period | $ | 335 | $ | 419 | $ | 501 | $ | 486 | $ | 475 | ||||||||||
| Net (charge-offs) recoveries: | ||||||||||||||||||||
| Charge-offs | — | (1) | (1) | (1) | — | |||||||||||||||
| Recoveries | 1 | 3 | 2 | 1 | 2 | |||||||||||||||
| Total net recoveries | 1 | 2 | 1 | — | 2 | |||||||||||||||
Provision for credit losses (b) | (45) | (86) | (83) | 15 | 9 | |||||||||||||||
| Allowance for credit losses - end of period | $ | 291 | $ | 335 | $ | 419 | $ | 501 | $ | 486 | ||||||||||
| Allowance for credit losses – end of period: | ||||||||||||||||||||
| Allowance for loan losses | $ | 233 | $ | 269 | $ | 327 | $ | 358 | $ | 325 | ||||||||||
| Allowance for lending-related commitments | 40 | 50 | 73 | 121 | 135 | |||||||||||||||
Allowance for other financial instruments (a) | 18 | 16 | 19 | 22 | 26 | |||||||||||||||
| Allowance for credit losses – end of period | $ | 291 | $ | 335 | $ | 419 | $ | 501 | $ | 486 | ||||||||||
| Allowance for loan losses as a percentage of total loans | 0.36 | % | 0.42 | % | 0.54 | % | 0.63 | % | 0.59 | % | ||||||||||
| Nonperforming assets | $ | 108 | $ | 90 | $ | 112 | $ | 89 | $ | 84 | ||||||||||
(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 other instruments within the scope of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. | ||||||||||||||||||||
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 – Non-GAAP is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share – Non-GAAP is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding. | ||||||||||||||||||||||||||
| Net interest 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) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | YTD21 | YTD20 | |||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 881 | $ | 991 | $ | 858 | $ | 702 | $ | 876 | $ | 2,730 | $ | 2,721 | ||||||||||||
| Add: Amortization of intangible assets | 19 | 20 | 24 | 26 | 26 | 63 | 78 | |||||||||||||||||||
| Less: Tax impact of amortization of intangible assets | 4 | 5 | 6 | 6 | 7 | 15 | 19 | |||||||||||||||||||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | $ | 896 | $ | 1,006 | $ | 876 | $ | 722 | $ | 895 | $ | 2,778 | $ | 2,780 | ||||||||||||
| Average common shareholders’ equity | $ | 39,755 | $ | 40,393 | $ | 40,720 | $ | 40,712 | $ | 39,924 | $ | 40,286 | $ | 38,693 | ||||||||||||
| Less: Average goodwill | 17,474 | 17,517 | 17,494 | 17,411 | 17,357 | 17,495 | 17,304 | |||||||||||||||||||
| Average intangible assets | 2,953 | 2,975 | 3,000 | 3,019 | 3,039 | 2,976 | 3,062 | |||||||||||||||||||
| Add: Deferred tax liability – tax deductible goodwill | 1,173 | 1,163 | 1,153 | 1,144 | 1,132 | 1,173 | 1,132 | |||||||||||||||||||
| Deferred tax liability – intangible assets | 673 | 675 | 665 | 667 | 666 | 673 | 666 | |||||||||||||||||||
| Average tangible common shareholders’ equity – Non-GAAP | $ | 21,174 | $ | 21,739 | $ | 22,044 | $ | 22,093 | $ | 21,326 | $ | 21,661 | $ | 20,125 | ||||||||||||
| Return on common equity – GAAP | 8.8 | % | 9.8 | % | 8.5 | % | 6.9 | % | 8.7 | % | 9.1 | % | 9.4 | % | ||||||||||||
| Return on tangible common equity – Non-GAAP | 16.8 | % | 18.6 | % | 16.1 | % | 13.0 | % | 16.7 | % | 17.1 | % | 18.5 | % | ||||||||||||
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) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | |||||||||||||||
| BNY Mellon shareholders’ equity at period end – GAAP | $ | 43,601 | $ | 45,281 | $ | 44,954 | $ | 45,801 | $ | 44,917 | ||||||||||
| Less: Preferred stock | 4,541 | 4,541 | 4,541 | 4,541 | 4,532 | |||||||||||||||
| BNY Mellon common shareholders’ equity at period end – GAAP | 39,060 | 40,740 | 40,413 | 41,260 | 40,385 | |||||||||||||||
| Less: Goodwill | 17,420 | 17,487 | 17,469 | 17,496 | 17,357 | |||||||||||||||
| Intangible assets | 2,941 | 2,964 | 2,983 | 3,012 | 3,026 | |||||||||||||||
| Add: Deferred tax liability – tax deductible goodwill | 1,173 | 1,163 | 1,153 | 1,144 | 1,132 | |||||||||||||||
| Deferred tax liability – intangible assets | 673 | 675 | 665 | 667 | 666 | |||||||||||||||
| BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP | $ | 20,545 | $ | 22,127 | $ | 21,779 | $ | 22,563 | $ | 21,800 | ||||||||||
Period-end common shares outstanding (in thousands) | 825,821 | 863,174 | 875,481 | 886,764 | 886,136 | |||||||||||||||
| Book value per common share – GAAP | $ | 47.30 | $ | 47.20 | $ | 46.16 | $ | 46.53 | $ | 45.58 | ||||||||||
| Tangible book value per common share – Non-GAAP | $ | 24.88 | $ | 25.64 | $ | 24.88 | $ | 25.44 | $ | 24.60 | ||||||||||
| Net interest margin reconciliation | ||||||||||||||||||||
| (dollars in millions) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | |||||||||||||||
| Net interest revenue – GAAP | $ | 641 | $ | 645 | $ | 655 | $ | 680 | $ | 703 | ||||||||||
| Add: Tax equivalent adjustment | 3 | 3 | 3 | 3 | 2 | |||||||||||||||
| Net interest revenue (FTE) – Non-GAAP | $ | 644 | $ | 648 | $ | 658 | $ | 683 | $ | 705 | ||||||||||
| Average interest-earning assets | $ | 381,065 | $ | 388,285 | $ | 397,297 | $ | 378,674 | $ | 357,634 | ||||||||||
Net interest margin – GAAP (a) | 0.67 | % | 0.67 | % | 0.66 | % | 0.72 | % | 0.79 | % | ||||||||||
Net interest margin (FTE) – Non-GAAP (a) | 0.68 | % | 0.67 | % | 0.67 | % | 0.72 | % | 0.79 | % | ||||||||||
| (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) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | YTD21 | YTD20 | |||||||||||||||||||
| Income before income taxes – GAAP | $ | 348 | $ | 326 | $ | 278 | $ | 311 | $ | 245 | $ | 952 | $ | 660 | ||||||||||||
| Total revenue – GAAP | $ | 1,032 | $ | 999 | $ | 991 | $ | 990 | $ | 918 | $ | 3,022 | $ | 2,702 | ||||||||||||
| Less: Distribution and servicing expense | 76 | 74 | 75 | 76 | 85 | 225 | 262 | |||||||||||||||||||
| Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | $ | 956 | $ | 925 | $ | 916 | $ | 914 | $ | 833 | $ | 2,797 | $ | 2,440 | ||||||||||||
Pre-tax operating margin – GAAP (a) | 34 | % | 33 | % | 28 | % | 32 | % | 27 | % | 31 | % | 24 | % | ||||||||||||
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a) | 36 | % | 35 | % | 30 | % | 34 | % | 29 | % | 34 | % | 27 | % | ||||||||||||
| (a) Income before income taxes divided by total revenue. | ||||||||||||||||||||||||||
| Constant currency reconciliations | 3Q21 vs. | |||||||||||||||||||||||||
| (dollars in millions) | 3Q21 | 3Q20 | 3Q20 | |||||||||||||||||||||||
| Consolidated: | ||||||||||||||||||||||||||
| Investment management and performance fees – GAAP | $ | 913 | $ | 835 | 9 | % | ||||||||||||||||||||
| Impact of changes in foreign currency exchange rates | — | 15 | ||||||||||||||||||||||||
| Adjusted investment management and performance fees – Non-GAAP | $ | 913 | $ | 850 | 7 | % | ||||||||||||||||||||
| Investment and Wealth Management business: | ||||||||||||||||||||||||||
| Investment management and performance fees – GAAP | $ | 914 | $ | 835 | 9 | % | ||||||||||||||||||||
| Impact of changes in foreign currency exchange rates | — | 15 | ||||||||||||||||||||||||
| Adjusted investment management and performance fees – Non-GAAP | $ | 914 | $ | 850 | 8 | % | ||||||||||||||||||||
18
Third Quarter 2021 Financial Highlights O c t o b e r 1 9 , 2 0 2 1
2 Third Quarter 2021 – Financial Highlights 3Q21 Financial Highlights $1.04 EPS $1.16 bn Pre-tax income ROE: 8.8% ROTCE: 16.8% Returns CET1: 11.7% Tier 1 leverage: 5.7% Capital ratios Revenue up 5% year-over-year Fee revenue up 6%, excluding money market fee (“MMF”) waivers, up 11%(a) Net interest revenue down 9% Expense up 9% year-over-year, up 6%(a) excluding the impact of higher litigation reserves Provision for credit losses – benefit of $45 million Average deposits down 2% quarter-over-quarter Tier 1 leverage of 5.7% down ~30bps quarter-over- quarter Returned $2.3 billion to common shareholders, including $2.0 billion of share repurchases (a) $4.04 bn Revenue 29% Pre-tax margin (a) Represents a non-GAAP measure. See pages 15, 16, and 17 in the Appendix for the corresponding reconciliations of the non-GAAP measures of consolidated fee revenue growth excluding MMF waivers, ROTCE, and noninterest expense excluding the impact of higher litigation reserves, respectively.
3 Third Quarter 2021 – Financial Highlights 3 Q 2 1 2 Q 2 1 3 Q 2 0 T O T A L R E V E N U E $4,035 2% 5% Fee revenue 3,265 1 6 Other revenue 129 N/M N/M Net interest revenue 641 (1) (9) Provision for credit losses (45) N/M N/M Noninterest expense 2,918 5 9 Income before income taxes 1,162 (8) — Net income applicable to common shareholders $881 (11)% 1% E A R N I N G S P E R C O M M O N S H A R E $1.04 (8)% 6% Operating leverage(b) (315) bps (395) bps Pre-tax operating margin 29% (321) bps (128) bps Return on common equity (annualized) 9% (106) bps 6 bps Return on tangible common equity – non-GAAP (annualized)(a) 17% (181) bps 6 bps 3Q21 Financial Highlights ($ millions, except per share data) Note: See page 14 in the Appendix for corresponding footnote (b). N/M – not meaningful. Increase / (decrease) Revenue Expense EPS 3Q21 — 72 $(0.06) Notable items impacting the quarter 3Q21 includes the impact of higher litigation reserves 6% excluding impact of higher litigation reserves (a) 11% excluding impact of MMF waivers (a) (a) Represents a non-GAAP measure. See pages 15, 16, and 17 in the Appendix for the corresponding reconciliations of the non-GAAP measures of consolidated fee revenue growth excluding MMF waivers, ROTCE, and noninterest expense excluding the impact of higher litigation reserves, respectively.
4 Third Quarter 2021 – Financial Highlights 16.7 18.6 16.8 8.7 9.8 8.8 3Q20 2Q21 3Q21 1,157 1,268 1,162 30% 32% 29% 3Q20 2Q21 3Q21 2,681 2,778 2,918 3Q20 2Q21 3Q21 3Q21 Key Financial Trends +12% I & W M r e v e n u e ($ millions) +6 bps I S r e v e n u e ($ millions) 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 (%) Pre-tax operating margin P r e - t a x i n c o m e ($ millions) E P S ($) ROE +3% (a) Represents a non-GAAP measure. See pages 16 and 17 for the corresponding reconciliations of the non-GAAP measures of ROTCE and noninterest expense excluding the impact of higher litigation reserves, respectively. +6% 918 999 1,032 871 952 985 47 47 47 3Q20 2Q21 3Q21 Net interest revenue Total fee and other revenue 2,927 2,979 3,010 2,246 2,336 2,378 681 643 632 3Q20 2Q21 3Q21 Net interest revenue Total fee and other revenue —% +9% 0.98 1.13 1.04 3Q20 2Q21 3Q21 (a) (a) 6% excluding impact of higher litigation reserves
5 Third Quarter 2021 – Financial Highlights Capital and Liquidity Note: See page 14 in the Appendix for corresponding footnotes. 3 Q 2 1 2 Q 2 1 3 Q 2 0 Consolidated regulatory capital ratios:(a) Common Equity Tier 1 (“CET1”) ratio 11.7% 12.6% 13.0% Tier 1 capital ratio 14.4 15.2 15.7 Total capital ratio 15.3 16.0 16.6 Tier 1 leverage ratio 5.7 6.0 6.5 Supplementary leverage ratio (“SLR“) 7.0 7.5 8.5 Average liquidity coverage ratio (“LCR“) 111% 110% 111% Book value per common share $47.30 $47.20 $45.58 Tangible book value per common share – non-GAAP(c) $24.88 $25.64 $24.60 Cash dividends per common share $0.34 $0.31 $0.31 Common shares outstanding (thousands) 825,821 863,174 886,136 (b)
6 Third Quarter 2021 – Financial Highlights 645 641 2Q21 3Q21 Net Interest Revenue ($ millions) USD LIBOR AVERAGE US TREASURY AVERAGE (%) (%) 0.09 0.13 0.10 0.16 0.01 0.17 0.83 1.58 0.04 0.22 0.8 1.32 2Q21 3Q21 1m 2y 5y 10y 1m 3m (1)% 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 Lower interest earning- asset balances driven by lower deposit balances + Lower deposit and funding costs - Lower securities portfolio yields, partially offset by higher IOER - + Other 0
7 Third Quarter 2021 – Financial Highlights 358 388 381 140 165 158 157 156 156 7 7 6 54 61 61 3Q20 2Q21 3Q21 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-HQLA -% - % Note: May not foot due to rounding. (a) Average rates were calculated on an FTE basis, at tax rates of approximately 21%. (a) Interest-bearing deposits +14% Noninterest-bearing deposits (2)% A V 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 (2)% +6% ($ billions) Trading 279 325 319 68 86 86 212 239 233 3Q20 2Q21 3Q21 (0.05)% (0.08)% (0.08)% 131 127 127 26 30 30 3Q20 2Q21 3Q21 1.30% 1.10% 1.09% Growth rates are all manual. HQLA/ Non-HQLA sourced from EMR. Manually adjust Avg. Sec Portfolio totals to match left 157 156 156
8 Third Quarter 2021 – Financial Highlights Noninterest Expense Noninterest expense up 9% year-over-year, up 6%(a) excluding the impact of higher litigation reserves 3 Q 2 1 2 Q 2 1 3 Q 2 0 Staff $1,584 4% 8% Software and equipment 372 2 9 Professional, legal and other purchased services 363 — 2 Sub-custodian and clearing 129 (2) 8 Net occupancy 120 (2) (12) Distribution and servicing 76 4 (11) Bank assessment charges 34 (3) 13 Amortization of intangible assets 19 (5) (27) Business development 22 — 29 Other 199 55 86 Total noninterest expense $2,918 5% 9% ($ millions) Excluding the impact of litigation reserves, the increase primarily reflects higher revenue-related expenses, investments in growth, infrastructure and efficiency initiatives and the unfavorable impact of a weaker U.S. dollar (a) Represents a non-GAAP measure. See page 17 in the Appendix for the corresponding reconciliation of the non-GAAP measure of noninterest expense excluding the impact of higher litigation reserves. 6% excluding impact of higher litigation reserves (a)
9 Third Quarter 2021 – Financial Highlights Investment Services Note: See page 14 in the Appendix for corresponding footnotes. N/M – not meaningful. F I N A N C I A L H I G H L I G H T S ($ millions unless otherwise noted) 3 Q 2 1 2 Q 2 1 3 Q 2 0 Total revenue by line of business: Asset Servicing $1,437 4% 6% Pershing 566 (4) 5 Issuer Services 400 (1) (8) Treasury Services 326 2 1 Clearance and Collateral Management 281 (1) 1 Total revenue 3,010 1 3 Provision for credit losses (35) N/M N/M Noninterest expense 2,211 8 9 Income before taxes $834 (17)% (9)% Pre-tax operating margin 28% (598) bps (362) bps K E Y M E T R I C S Net interest revenue $632 (2)% (7)% Foreign exchange revenue 148 (3) 17 Securities lending revenue 45 7 22 Average loans 47,430 1 18 Average deposits 308,645 (2) 17 AUC/A at period end (tr)(a) 45.3 1 17 Market value of securities on loan at period end (bn)(b) 443 (3) 17 Pershing Net new assets (U.S. platform) (bn)(c) $7 N/M N/M Average active clearing accounts (U.S. platform) (thousands) 6,849 (1) 4 Clearance and Collateral Management Average tri-party collateral mgmt. balances (tr) $4.5 16% 32% Asset Servicing up year-over-year primarily on higher market values, strategic equity investment gains, higher client activity and foreign exchange revenue, partially offset by higher MMF waivers and lower net interest revenue Pershing up primarily on higher market values, client balances and activity, partially offset by higher MMF waivers Issuer Services down primarily on higher MMF waivers and lower fees and net interest revenue in Corporate Trust, partially offset by higher Depositary Receipts revenue Treasury Services up primarily on higher payment volumes and higher net interest revenue, partially offset by higher MMF waivers Clearance and Collateral Management up primarily on higher non-U.S. collateral management fees and higher clearance volumes, partially offset by lower intraday credit fees and lower net interest revenue Noninterest expense up primarily on higher litigation reserves, higher revenue-related expenses and investments in growth, infrastructure and efficiency initiatives AUC/A up primarily on higher market values, client inflows, and net new business
10 Third Quarter 2021 – Financial Highlights 277 281 3Q20 3Q21 323 326 3Q20 3Q21 435 400 3Q20 3Q21 Note: Graphs not to scale. Investment Services - Revenue Drivers A S S E T S E R V I C I N G I S S U E R S E R V I C E SP E R S H I N G T R E A S U R Y S E R V I C E S C L E A R A N C E A N D C O L L A T E R A L + Market levels + Gain on investments + Client activity - MMF waivers - Interest rates + Market levels + + Payment volumes + Product mix - MMF waivers + Non-U.S. average tri-party repo balances + Clearing volumes - Intraday credit fees - Interest rates +6% (8)% +1% ($ millions) - MMF waivers - Interest rates - Corporate Trust fees + Depositary Receipts fees +1% 1,354 1,437 3Q20 3Q21 538 566 3Q20 3Q21 +5% Client assets and accounts - MMF waivers
11 Third Quarter 2021 – Financial Highlights (a) Net of distribution and servicing expense. See page 17 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 and Wealth Management Investment Management up year-over-year primarily on higher market values and equity income, strategic equity investment gains, the favorable impact of a weaker U.S. dollar and higher performance fees, partially offset by higher MMF waivers Wealth Management up primarily on higher market values Noninterest expense up primarily on higher revenue- related expenses, investments in growth initiatives and the unfavorable impact of a weaker U.S. dollar, partially offset by lower distribution and servicing expense AUM up primarily on higher market values and continued 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) 3 Q 2 1 2 Q 2 1 3 Q 2 0 Total revenue by line of business: Investment Management $727 4% 13% Wealth Management 305 2 10 Total revenue 1,032 3 12 Provision for credit losses (7) N/M N/M Noninterest expense 691 2 5 Income before taxes $348 7% 42% Pre-tax operating margin 34% 105 bps 713 bps Adjusted pre-tax operating margin – non-GAAP(a) 36% 114 bps 711 bps K E Y M E T R I C S Net interest revenue $47 —% —% Average loans 12,248 3 6 Average deposits 17,270 (1) (2) Wealth Management client assets (bn)(b) 307 1 16 C H A N G E S I N A U M (bn)(C) 3 Q 2 1 2 Q 2 1 3 Q 2 0 Beginning balance $2,320 $2,214 $1,961 Equity (5) (3) (4) Fixed income 1 8 1 Liability-driven investments 16 11 14 Multi-asset and alternatives investments (2) 1 (3) Index (3) (5) (3) Cash 7 13 (10) Total net inflows 14 25 (5) Net market impact 4 79 41 Net currency impact (28) 2 44 Ending balance $2,310 $2,320 $2,041
12 Third Quarter 2021 – Financial Highlights Other Segment Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense Noninterest expense increased year-over-year primarily reflecting higher staff expense F I N A N C I A L H I G H L I G H T S ($ millions) 3 Q 2 1 2 Q 2 1 3 Q 2 0 Fee revenue $12 $13 $7 Other revenue 23 9 13 Total fee and other revenue 35 22 20 Net interest (expense) (38) (45) (25) Total revenue (3) (23) (5) Provision for credit losses (3) (5) 7 Noninterest expense 16 49 — (Loss) before taxes $(16) $(67) $(12)
Appendix
14 Third Quarter 2021 – Financial Highlights Footnotes 3Q21 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. Capital and Liquidity, Page 5 a. Regulatory capital ratios for Sept. 30, 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 Sept. 30, 2021 and June 30, 2021 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio, and for Sept. 30, 2020, was the Advanced Approach. 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 78 basis points at Sept. 30, 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 16 for corresponding reconciliation of this non-GAAP measure. Investment Services, Page 9 a. 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 $1.7 trillion at Sept. 30, 2021 and June 30, 2021 and $1.4 trillion at Sept. 30, 2020. b. Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $68 billion at Sept. 30, 2021, $63 billion at June 30, 2021 and $62 billion at Sept. 30, 2020. c. 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 Third Quarter 2021 – Financial Highlights Money Market Fee Waiver Impact 3 Q 2 1 2 Q 2 1 1 Q 2 1 4 Q 2 0 3 Q 2 0 Investment services fees: Asset servicing fees $(40) $(42) $(22) $(13) $(1) Clearing services fees (84) (88) (74) (64) (57) Issuer services fees (16) (15) (10) (6) (1) Treasury services fees (2) (3) (3) (2) (3) Total investment services fees (142) (148) (109) (85) (62) Investment management and performance fees (109) (115) (89) (56) (42) Distribution and servicing revenue (11) (13) (13) (8) (6) Total fee revenue (262) (276) (211) (149) (110) Less: Distribution and servicing expense 29 24 23 15 9 Net impact of money market fee waivers $(233) $(252) $(188) $(134) $(101) Impact to revenue by line of business: (a) Asset Servicing $(47) $(50) $(29) $(13) $(4) Pershing (102) (99) (94) (85) (73) Issuer Services (22) (22) (15) (10) (2) Treasury Services (13) (16) (9) (5) (1) Total Investment Services (184) (187) (147) (113) (80) Investment Management (76) (85) (61) (34) (28) Wealth Management (2) (4) (3) (2) (2) Total Investment and Wealth Management (78) (89) (64) (36) (30) Total impact to revenue by line of business $(262) $(276) $(211) $(149) $(110) (a) The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses. Fee revenue, Excluding MMF Waivers Reconciliation 3 Q 2 1 v s ($ millions) 3 Q 2 1 3 Q 2 0 3 Q 2 0 I&WM business, total fee and other revenue – GAAP $985 $871 13% Less: MMF waivers (78) (30) I&WM business, total fee and other revenue, ex-MMF waivers – non-GAAP $1,063 $901 18% Investment Services business, total fee and other revenue – GAAP $2,378 $2,246 6% Less: MMF waivers (184) (80) Investment Services business, total fee and other revenue, ex-MMF waivers – non-GAAP $2,562 $2,326 10% Fee revenue – GAAP $3,265 $3,074 6% Less: MMF waivers (262) (110) Fee revenue, ex-MMF waivers – non-GAAP $3,527 $3,184 11% Note: Reported I&WM total fee and other revenue up 13% year-over-year. Reported Investment Services total fee and other revenue up 6% year-over-year. ($ millions)
16 Third Quarter 2021 – Financial Highlights Return on Common Equity and Tangible Common Equity Reconciliation 3 Q 2 1 2 Q 2 1 3 Q 2 0 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $881 $991 $876 Add: Amortization of intangible assets 19 20 26 Less: Tax impact of amortization of intangible assets 4 5 7 Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP $896 $1,006 $895 Average common shareholders’ equity $39,755 $40,393 $39,924 Less: Average goodwill 17,474 17,517 17,357 Average intangible assets 2,953 2,975 3,039 Add: Deferred tax liability – tax deductible goodwill 1,173 1,163 1,132 Deferred tax liability – intangible assets 673 675 666 Average tangible common shareholders’ equity – Non-GAAP $21,174 $21,739 $21,326 Return on common equity (annualized) – GAAP 8.8% 9.8% 8.7% Return on tangible common equity (annualized) – non-GAAP 16.8% 18.6% 16.7% Book Value and Tangible Book Value Per Common Share Reconciliation ($ millions, except common shares) September 30, 2021 June 30, 2021 September 30, 2020 BNY Mellon shareholders’ equity at period end – GAAP $43,601 $45,281 $44,917 Less: Preferred stock 4,541 4,541 4,532 BNY Mellon common shareholders’ equity at period end – GAAP 39,060 40,740 40,385 Less: Goodwill 17,420 17,487 17,357 Intangible assets 2,941 2,964 3,026 Add: Deferred tax liability – tax deductible goodwill 1,173 1,163 1,132 Deferred tax liability – intangible assets 673 675 666 BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP $20,545 $22,127 $21,800 Period-end common shares outstanding (in thousands) 825,821 863,174 886,136 Book value per common share – GAAP $47.30 $47.20 $45.58 Tangible book value per common share – Non-GAAP $24.88 $25.64 $24.60 ($ millions)
17 Third Quarter 2021 – Financial Highlights Pre-tax Operating Margin Reconciliation – Investment and Wealth Management Business (a) Income before income taxes divided by total revenue. 3 Q 2 1 2 Q 2 1 3 Q 2 0 Income before income taxes – GAAP $348 $326 $245 Total revenue – GAAP $1,032 $999 $918 Less: Distribution and servicing expense 76 74 85 Adjusted total revenue, net of distribution and servicing expense – non-GAAP $956 $925 $833 Pre-tax operating margin – GAAP (a) 34% 33% 27% Adjusted pre-tax operating margin, net of distribution and servicing expense – non-GAAP (a) 36% 35% 29% ($ millions) Noninterest Expense Reconciliation – Impact of Notable Items 3 Q 2 1 3 Q 2 0 3 Q 2 1 v s 3 Q 2 1 v s R e s u l t s — G A A P N o t a b l e i t e m s (b) R e s u l t s — N o n - G A A P R e s u l t s — G A A P N o t a b l e i t e m s(b) R e s u l t s — N o n - G A A P 3 Q 2 0 R e s u l t s — G A A P 3 Q 2 0 R e s u l t s — N o n - G A A P Noninterest expense $2,918 $72 $2,846 $2,681 $1 $2,680 9% 6% ($ millions) (b) Non-GAAP Results exclude litigation reserves in 3Q21 and 3Q20 to show the impact of higher litigation reserves.
18 Third Quarter 2021 – Financial Highlights Cautionary Statement A number of statements in this discussion and the responses to your questions may contain “forward-looking statements,” including statements about The Bank of New York Mellon Corporation’s (the “Corporation”) 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 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 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 September 30, 2021. All forward-looking statements speak only as of October 19, 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, the third quarter 2021 earnings release and the third quarter 2021 financial supplement, and are available at www.bnymellon.com/ investorrelations.
