Jul 21, 2016
NEW YORK, July 21, 2016 /PRNewswire/ --
CONTINUED FOCUS ON EXPENSE CONTROL
TOTAL REVENUE OF $3.78 BILLION
EXECUTING ON CAPITAL PLAN AND RETURNING VALUE TO COMMON SHAREHOLDERS
BOARD APPROVED PREVIOUSLY ANNOUNCED COMMON STOCK DIVIDEND INCREASE OF 12% AND THE REPURCHASE OF UP TO APPROXIMATELY $2.7 BILLION OF COMMON STOCK
The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE: BK) today reported second quarter net income applicable to common shareholders of $825 million, or $0.75 per diluted common share, or $830 million, or $0.76 per diluted common share, adjusted for M&I, litigation and restructuring charges (Non-GAAP). In the second quarter of 2015, net income applicable to common shareholders was $830 million, or $0.73 per diluted common share, or $868 million, or $0.77 per diluted common share, adjusted for M&I, litigation and restructuring charges (Non-GAAP). In the first quarter of 2016, net income applicable to common shareholders was $804 million, or $0.73 per diluted common share (a).
"Our success in aggressively controlling expenses and executing on our business improvement process helped sustain earnings momentum in a period of market uncertainty. We continue to believe our distinctive capabilities in areas such as collateral management and liquidity services, middle-office outsourcing and liability-driven investments, as well as our efforts to build a digital enterprise, will drive revenue growth in the future. Our diversified, lower-risk business model positions us to deliver consistent results and solid risk-adjusted returns for our shareholders," Gerald L. Hassell, chairman and chief executive officer, said.
"Our digital transformation is simplifying how clients connect with us and creating services for the future. We are partnering with third-party developers to create a wider variety of new applications and, through our Innovation Centers, are collaborating with clients to develop scalable, enterprise solutions to meet their evolving needs," Mr. Hassell added.
"Our status as a strong, safe, trusted counterparty is increasingly important to clients in times like this, and was proven by the results of the 2016 annual stress test. The earnings power and strength of our business model enabled us to announce a capital plan that includes share repurchases of up to $2.7 billion, and an approximately 12 percent increase in the quarterly dividend," Mr. Hassell concluded.
(a) These measures are considered to be Non-GAAP. See the "Financial Summary" on page 4 for the Non-GAAP adjustments and additional information related to revenue and expense growth rates. See "Supplemental information – Explanation of GAAP and Non-GAAP financial measures" beginning on page 24 for the adjusted earnings and earnings per common share reconciliation and tangible common equity ratio reconciliation.
CONFERENCE CALL INFORMATION
Gerald L. Hassell, chairman and chief executive officer, and Thomas P. Gibbons, vice chairman and chief financial officer, along with other members of executive management from BNY Mellon, will host a conference call and simultaneous live audio webcast at 8:00 a.m. EDT on July 21, 2016. 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 (888) 898-7224 (U.S.) or (913) 312-9027 (International), and using the passcode: 619690, or by logging on to www.bnymellon.com. Earnings materials will be available at www.bnymellon.com beginning at approximately 6:30 a.m. EDT on July 21, 2016. Replays of the conference call and audio webcast will be available beginning July 21, 2016 at approximately 2 p.m. EDT through Aug. 20, 2016 by dialing (888) 203-1112 (U.S.) or (719) 457-0820 (International), and using the passcode: 2620345. The archived version of the conference call and audio webcast will also be available at www.bnymellon.com for the same time period.
SECOND QUARTER 2016 FINANCIAL HIGHLIGHTS (a)
(comparisons are 2Q16 vs. 2Q15, unless otherwise stated)
Earnings per share |
Net income applicable to common | ||||||||||||||||||||
(in millions, except per share amounts) |
2Q16 |
2Q15 |
Inc/(Dec) |
2Q16 |
2Q15 |
Inc/(Dec) | |||||||||||||||
GAAP results |
$ |
0.75 |
$ |
0.73 |
3 |
% |
$ |
825 |
$ |
830 |
(1) |
% | |||||||||
Add: M&I, litigation and restructuring charges |
— |
0.03 |
5 |
38 |
|||||||||||||||||
Non-GAAP results |
$ |
0.76 |
(b) |
$ |
0.77 |
(b) |
(1) |
% |
$ |
830 |
$ |
868 |
(4) |
% |
(a) See "Supplemental information – Explanation of GAAP and Non-GAAP financial measures" beginning on page 24 for the reconciliation of Non-GAAP measures. In all periods presented, Non-GAAP information excludes the net income (loss) attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for 4Q15 also excludes the impairment charge related to a court decision regarding Sentinel Management Group, Inc ("Sentinel").
(b) Does not foot due to rounding.
Note: Throughout this document, sequential growth rates are unannualized.
FINANCIAL SUMMARY
(dollars in millions, except per share amounts; common shares in |
2Q16 vs. | ||||||||||||||||||
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | |||||||||||||
Revenue: |
|||||||||||||||||||
Fee and other revenue |
$ |
2,999 |
$ |
2,970 |
$ |
2,950 |
$ |
3,053 |
$ |
3,067 |
1 |
% |
(2) |
% | |||||
Income (loss) from consolidated investment management funds |
10 |
(6) |
16 |
(22) |
40 |
||||||||||||||
Net interest revenue |
767 |
766 |
760 |
759 |
779 |
— |
(2) |
||||||||||||
Total revenue – GAAP |
3,776 |
3,730 |
3,726 |
3,790 |
3,886 |
1 |
(3) |
||||||||||||
Less: Net income (loss) attributable to noncontrolling interests related to consolidated investment management funds |
4 |
(7) |
5 |
(5) |
37 |
||||||||||||||
Total revenue – Non-GAAP |
3,772 |
3,737 |
3,721 |
3,795 |
3,849 |
1 |
(2) |
||||||||||||
Provision for credit losses |
(9) |
10 |
163 |
1 |
(6) |
||||||||||||||
Expense: |
|||||||||||||||||||
Noninterest expense – GAAP |
2,620 |
2,629 |
2,692 |
2,680 |
2,727 |
— |
(4) |
||||||||||||
Less: Amortization of intangible assets |
59 |
57 |
64 |
66 |
65 |
||||||||||||||
M&I, litigation and restructuring charges |
7 |
17 |
18 |
11 |
59 |
||||||||||||||
Total noninterest expense – Non-GAAP |
2,554 |
2,555 |
2,610 |
2,603 |
2,603 |
— |
(2) |
||||||||||||
Income: |
|||||||||||||||||||
Income before income taxes |
1,165 |
1,091 |
871 |
1,109 |
1,165 |
7 |
% |
— |
% | ||||||||||
Provision for income taxes |
290 |
283 |
175 |
282 |
276 |
||||||||||||||
Net income |
$ |
875 |
$ |
808 |
$ |
696 |
$ |
827 |
$ |
889 |
|||||||||
Net (income) loss attributable to noncontrolling interests (a) |
(2) |
9 |
(3) |
6 |
(36) |
||||||||||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation |
873 |
817 |
693 |
833 |
853 |
||||||||||||||
Preferred stock dividends |
(48) |
(13) |
(56) |
(13) |
(23) |
||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation |
$ |
825 |
$ |
804 |
$ |
637 |
$ |
820 |
$ |
830 |
|||||||||
Operating leverage (b) |
157 |
bps |
109 |
bps | |||||||||||||||
Operating leverage – Non-GAAP (b) |
98 |
bps |
(12) |
bps | |||||||||||||||
Key Metrics: |
|||||||||||||||||||
Pre-tax operating margin (c) |
31 |
% |
29 |
% |
23 |
% |
29 |
% |
30 |
% |
|||||||||
Pre-tax operating margin – Non-GAAP (c) |
33 |
% |
31 |
% |
30 |
% |
31 |
% |
33 |
% |
|||||||||
Return on common equity (annualized) (c) |
9.3 |
% |
9.2 |
% |
7.1 |
% |
9.1 |
% |
9.4 |
% |
|||||||||
Return on common equity (annualized) – Non-GAAP (c) |
9.7 |
% |
9.7 |
% |
8.9 |
% |
9.7 |
% |
10.3 |
% |
|||||||||
Return on tangible common equity (annualized) – Non-GAAP (d) |
20.4 |
% |
20.6 |
% |
16.2 |
% |
20.8 |
% |
21.5 |
% |
|||||||||
Adjusted return on tangible common equity (annualized) – Non-GAAP (c)(d) |
20.5 |
% |
20.8 |
% |
19.0 |
% |
21.0 |
% |
22.5 |
% |
|||||||||
Fee revenue as a percentage of total revenue |
79 |
% |
80 |
% |
79 |
% |
81 |
% |
79 |
% |
|||||||||
Percentage of non-U.S. total revenue |
34 |
% |
33 |
% |
34 |
% |
37 |
% |
36 |
% |
|||||||||
Average common shares and equivalents outstanding: |
|||||||||||||||||||
Basic |
1,072,583 |
1,079,641 |
1,088,880 |
1,098,003 |
1,113,790 |
||||||||||||||
Diluted |
1,078,271 |
1,085,284 |
1,096,385 |
1,105,645 |
1,122,135 |
||||||||||||||
Period end: |
|||||||||||||||||||
Full-time employees |
52,200 |
52,100 |
51,200 |
51,300 |
50,700 |
||||||||||||||
Book value per common share – GAAP (d) |
$ |
33.72 |
$ |
33.34 |
$ |
32.69 |
$ |
32.59 |
$ |
32.28 |
|||||||||
Tangible book value per common share – Non-GAAP (d) |
$ |
16.25 |
$ |
15.87 |
$ |
15.27 |
$ |
15.16 |
$ |
14.86 |
|||||||||
Cash dividends per common share |
$ |
0.17 |
$ |
0.17 |
$ |
0.17 |
$ |
0.17 |
$ |
0.17 |
|||||||||
Common dividend payout ratio |
23 |
% |
23 |
% |
30 |
% |
23 |
% |
23 |
% |
|||||||||
Closing stock price per common share |
$ |
38.85 |
$ |
36.83 |
$ |
41.22 |
$ |
39.15 |
$ |
41.97 |
|||||||||
Market capitalization |
$ |
41,479 |
$ |
39,669 |
$ |
44,738 |
$ |
42,789 |
$ |
46,441 |
|||||||||
Common shares outstanding |
1,067,674 |
1,077,083 |
1,085,343 |
1,092,953 |
1,106,518 |
(a) Primarily attributable to noncontrolling interests related to consolidated investment management funds.
(b) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. See "Supplemental information – Explanation of GAAP and Non-GAAP financial measures" beginning on page 24 for the components of this measure.
(c) Non-GAAP information for all periods presented excludes the net income (loss) attributable to noncontrolling interests related to consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for 4Q15 also excludes the impairment charge related to a court decision regarding Sentinel. See "Supplemental information – Explanation of GAAP and Non-GAAP financial measures" beginning on page 24 for the reconciliation of Non-GAAP measures.
(d) Tangible book value per common share - Non-GAAP and tangible common equity exclude goodwill and intangible assets, net of deferred tax liabilities. See "Supplemental information – Explanation of GAAP and Non-GAAP financial measures" beginning on page 24 for the reconciliation of Non-GAAP measures.
bps – basis points.
CONSOLIDATED BUSINESS METRICS
Consolidated business metrics |
2Q16 vs. | |||||||||||||||||||
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | ||||||||||||||
Changes in AUM (in billions): (a) |
||||||||||||||||||||
Beginning balance of AUM |
$ |
1,639 |
$ |
1,625 |
$ |
1,625 |
$ |
1,700 |
$ |
1,717 |
||||||||||
Net inflows (outflows): |
||||||||||||||||||||
Long-term: |
||||||||||||||||||||
Equity |
(2) |
(3) |
(9) |
(4) |
(13) |
|||||||||||||||
Fixed income |
(2) |
— |
1 |
(3) |
(2) |
|||||||||||||||
Liability-driven investments (b) |
15 |
14 |
11 |
11 |
5 |
|||||||||||||||
Alternative investments |
1 |
1 |
2 |
1 |
3 |
|||||||||||||||
Total long-term active inflows (outflows) |
12 |
12 |
5 |
5 |
(7) |
|||||||||||||||
Index |
(17) |
(11) |
(16) |
(10) |
(9) |
|||||||||||||||
Total long-term (outflows) inflows |
(5) |
1 |
(11) |
(5) |
(16) |
|||||||||||||||
Short term: |
||||||||||||||||||||
Cash |
4 |
(9) |
2 |
(10) |
(11) |
|||||||||||||||
Total net (outflows) |
(1) |
(8) |
(9) |
(15) |
(27) |
|||||||||||||||
Net market impact/other |
71 |
41 |
24 |
(35) |
(29) |
|||||||||||||||
Net currency impact |
(47) |
(19) |
(15) |
(25) |
39 |
|||||||||||||||
Acquisition |
2 |
— |
— |
— |
— |
|||||||||||||||
Ending balance of AUM |
$ |
1,664 |
(c) |
$ |
1,639 |
$ |
1,625 |
$ |
1,625 |
$ |
1,700 |
2 |
% |
(2) |
% | |||||
AUM at period end, by product type: (a) |
||||||||||||||||||||
Equity |
14 |
% |
14 |
% |
14 |
% |
14 |
% |
15 |
% |
||||||||||
Fixed income |
13 |
13 |
13 |
13 |
13 |
|||||||||||||||
Index |
18 |
19 |
20 |
20 |
21 |
|||||||||||||||
Liability-driven investments (b) |
34 |
33 |
32 |
32 |
30 |
|||||||||||||||
Alternative investments |
4 |
4 |
4 |
4 |
4 |
|||||||||||||||
Cash |
17 |
17 |
17 |
17 |
17 |
|||||||||||||||
Total AUM |
100 |
% |
(c) |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
|||||||||
Investment Management: |
||||||||||||||||||||
Average loans (in millions) |
$ |
14,795 |
$ |
14,275 |
$ |
13,447 |
$ |
12,779 |
$ |
12,298 |
4 |
% |
20 |
% | ||||||
Average deposits (in millions) |
$ |
15,518 |
$ |
15,971 |
$ |
15,497 |
$ |
15,282 |
$ |
14,638 |
(3) |
% |
6 |
% | ||||||
Investment Services: |
||||||||||||||||||||
Average loans (in millions) |
$ |
43,786 |
$ |
45,004 |
$ |
45,844 |
$ |
46,222 |
$ |
45,822 |
(3) |
% |
(4) |
% | ||||||
Average deposits (in millions) |
$ |
221,998 |
$ |
215,707 |
$ |
229,241 |
$ |
232,250 |
$ |
238,404 |
3 |
% |
(7) |
% | ||||||
AUC/A at period end (in trillions) (d) |
$ |
29.5 |
(c) |
$ |
29.1 |
$ |
28.9 |
$ |
28.5 |
$ |
28.6 |
1 |
% |
3 |
% | |||||
Market value of securities on loan at period end (in billions) (e) |
$ |
278 |
$ |
300 |
$ |
277 |
$ |
288 |
$ |
283 |
(7) |
% |
(2) |
% | ||||||
Asset servicing: |
||||||||||||||||||||
Estimated new business wins (AUC/A) (in billions) |
$ |
167 |
(c) |
$ |
40 |
$ |
49 |
$ |
84 |
$ |
933 |
|||||||||
Depositary Receipts: |
||||||||||||||||||||
Number of sponsored programs |
1,112 |
1,131 |
1,145 |
1,176 |
1,206 |
(2) |
% |
(8) |
% | |||||||||||
Clearing services: |
||||||||||||||||||||
Average active clearing accounts (U.S. platform) (in thousands) |
5,946 |
5,947 |
5,959 |
6,107 |
6,046 |
— |
% |
(2) |
% | |||||||||||
Average long-term mutual fund assets (U.S. platform) (in millions) |
$ |
431,150 |
$ |
415,025 |
$ |
437,260 |
$ |
447,287 |
$ |
466,195 |
4 |
% |
(8) |
% | ||||||
Average investor margin loans (U.S. platform) (in millions) |
$ |
10,633 |
$ |
11,063 |
$ |
11,575 |
$ |
11,806 |
$ |
11,890 |
(4) |
% |
(11) |
% | ||||||
Broker-Dealer: |
||||||||||||||||||||
Average tri-party repo balances (in billions) |
$ |
2,108 |
$ |
2,104 |
$ |
2,153 |
$ |
2,142 |
$ |
2,174 |
— |
% |
(3) |
% |
(a) Excludes securities lending cash management assets and assets managed in the Investment Services business.
(b) Includes currency overlay assets under management.
(c) Preliminary.
(d) Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.1 trillion at June 30, 2016 and March 31, 2016, $1.0 trillion at Dec. 31, 2015 and Sept. 30, 2015 and $1.1 trillion at June 30, 2015.
(e) Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $56 billion at June 30, 2016 and March 31, 2016, $55 billion at Dec. 31, 2015, $61 billion at Sept. 30, 2015 and $68 billion at June 30, 2015.
The following table presents key market metrics at period end and on an average basis.
Key market metrics |
2Q16 vs. | ||||||||||||||||||
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | |||||||||||||
S&P 500 Index (a) |
2099 |
2060 |
2044 |
1920 |
2063 |
2 |
% |
2 |
% | ||||||||||
S&P 500 Index – daily average |
2075 |
1951 |
2052 |
2027 |
2102 |
6 |
(1) |
||||||||||||
FTSE 100 Index (a) |
6504 |
6175 |
6242 |
6062 |
6521 |
5 |
— |
||||||||||||
FTSE 100 Index – daily average |
6204 |
5988 |
6271 |
6399 |
6920 |
4 |
(10) |
||||||||||||
MSCI World Index (a) |
1653 |
1648 |
1663 |
1582 |
1736 |
— |
(5) |
||||||||||||
MSCI World Index – daily average |
1656 |
1568 |
1677 |
1691 |
1780 |
6 |
(7) |
||||||||||||
Barclays Capital Global Aggregate BondSM Index (a)(b) |
382 |
368 |
342 |
346 |
342 |
4 |
12 |
||||||||||||
NYSE and NASDAQ share volume (in billions) |
203 |
218 |
198 |
206 |
185 |
(7) |
10 |
||||||||||||
JPMorgan G7 Volatility Index – daily average (c) |
11.12 |
10.60 |
9.49 |
9.93 |
10.06 |
5 |
11 |
||||||||||||
Average Fed Funds effective rate |
0.37 |
% |
0.36 |
% |
0.16 |
% |
0.13 |
% |
0.13 |
% |
1 |
bps |
24 |
bps | |||||
Foreign exchange rates vs. U.S. dollar: |
|||||||||||||||||||
British pound (a) |
$ |
1.34 |
$ |
1.44 |
$ |
1.48 |
$ |
1.52 |
$ |
1.57 |
(7) |
% |
(15) |
% | |||||
British pound - average rate |
1.43 |
1.43 |
1.52 |
1.55 |
1.53 |
— |
(7) |
||||||||||||
Euro (a) |
1.11 |
1.14 |
1.09 |
1.12 |
1.11 |
(3) |
— |
||||||||||||
Euro - average rate |
1.13 |
1.10 |
1.10 |
1.11 |
1.11 |
3 |
2 |
||||||||||||
(a) Period end.
(b) Unhedged in U.S. dollar terms.
(c) The JPMorgan G7 Volatility Index is based on the implied volatility in 3-month currency options.
bps – basis points.
FEE AND OTHER REVENUE
Fee and other revenue |
2Q16 vs. | ||||||||||||||||||
(dollars in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | ||||||||||||
Investment services fees: |
|||||||||||||||||||
Asset servicing (a) |
$ |
1,069 |
$ |
1,040 |
$ |
1,032 |
$ |
1,057 |
$ |
1,060 |
3 |
% |
1 |
% | |||||
Clearing services |
350 |
350 |
339 |
345 |
347 |
— |
1 |
||||||||||||
Issuer services |
234 |
244 |
199 |
313 |
234 |
(4) |
— |
||||||||||||
Treasury services |
139 |
131 |
137 |
137 |
144 |
6 |
(3) |
||||||||||||
Total investment services fees |
1,792 |
1,765 |
1,707 |
1,852 |
1,785 |
2 |
— |
||||||||||||
Investment management and performance fees |
830 |
812 |
864 |
829 |
878 |
2 |
(5) |
||||||||||||
Foreign exchange and other trading revenue |
182 |
175 |
173 |
179 |
187 |
4 |
(3) |
||||||||||||
Financing-related fees |
57 |
54 |
51 |
71 |
58 |
6 |
(2) |
||||||||||||
Distribution and servicing |
43 |
39 |
41 |
41 |
39 |
10 |
10 |
||||||||||||
Investment and other income |
74 |
105 |
93 |
59 |
104 |
(30) |
(29) |
||||||||||||
Total fee revenue |
2,978 |
2,950 |
2,929 |
3,031 |
3,051 |
1 |
(2) |
||||||||||||
Net securities gains |
21 |
20 |
21 |
22 |
16 |
N/M |
N/M | ||||||||||||
Total fee and other revenue |
$ |
2,999 |
$ |
2,970 |
$ |
2,950 |
$ |
3,053 |
$ |
3,067 |
1 |
% |
(2) |
% |
(a) Asset servicing fees include securities lending revenue of $52 million in 2Q16, $50 million in 1Q16, $46 million in 4Q15, $38 million in 3Q15 and $49 million in 2Q15.
N/M – Not meaningful.
KEY POINTS
Foreign exchange and other trading revenue |
||||||||||||||||
(in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | |||||||||||
Foreign exchange |
$ |
166 |
$ |
171 |
$ |
165 |
$ |
180 |
$ |
181 |
||||||
Other trading revenue (loss) |
16 |
4 |
8 |
(1) |
6 |
|||||||||||
Total foreign exchange and other trading revenue |
$ |
182 |
$ |
175 |
$ |
173 |
$ |
179 |
$ |
187 |
Foreign exchange and other trading revenue totaled $182 million in 2Q16 compared with $187 million in 2Q15 and $175 million in 1Q16. In 2Q16, foreign exchange revenue totaled $166 million, a decrease of 8% year-over-year and 3% sequentially. The year-over-year decrease primarily reflects lower volumes, partially offset by the positive net impact of foreign currency hedging activities. The sequential decrease primarily reflects the continued trend of clients migrating to lower margin products.
Other trading revenue was $16 million in 2Q16, compared with $6 million in 2Q15 and $4 million in 1Q16. The year-over-year increase primarily reflects higher fixed income trading. Year-over-year, losses on hedging activities in the Investment Management businesses were offset by the positive impact of interest rate hedging. The sequential increase primarily reflects hedging activities in the Investment Management businesses.
Investment and other income |
||||||||||||||||
(in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | |||||||||||
Corporate/bank-owned life insurance |
$ |
31 |
$ |
31 |
$ |
43 |
$ |
32 |
$ |
31 |
||||||
Expense reimbursements from joint venture |
17 |
17 |
16 |
16 |
17 |
|||||||||||
Seed capital gains (a) |
11 |
11 |
10 |
7 |
2 |
|||||||||||
Asset-related gains (losses) |
1 |
— |
5 |
(9) |
1 |
|||||||||||
Lease-related gains (losses) |
— |
44 |
(8) |
— |
54 |
|||||||||||
Private equity gains |
— |
2 |
— |
1 |
3 |
|||||||||||
Equity investment (losses) |
(4) |
(3) |
(2) |
(6) |
(7) |
|||||||||||
Other income |
18 |
3 |
29 |
18 |
3 |
|||||||||||
Total investment and other income |
$ |
74 |
$ |
105 |
$ |
93 |
$ |
59 |
$ |
104 |
(a) Excludes the gain (loss) on seed capital investments in consolidated investment management funds which are reflected in operations of consolidated investment management funds, net of noncontrolling interests. The gain (loss) on seed capital investments in consolidated investment management funds was $6 million in 2Q16, $1 million in 1Q16, $11 million in 4Q15, $(17) million in 3Q15 and $3 million in 2Q15.
Investment and other income was $74 million in 2Q16 compared with $104 million in 2Q15 and $105 million in 1Q16. Both decreases primarily reflect lower lease-related gains, partially offset by foreign currency remeasurement gains.
NET INTEREST REVENUE
Net interest revenue |
2Q16 vs. | ||||||||||||||||||
(dollars in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | ||||||||||||
Net interest revenue (non-FTE) |
$ |
767 |
$ |
766 |
$ |
760 |
$ |
759 |
$ |
779 |
— |
% |
(2) |
% | |||||
Net interest revenue (FTE) |
780 |
780 |
774 |
773 |
794 |
— |
(2) |
||||||||||||
Net interest margin (FTE) |
0.98 |
% |
1.01 |
% |
0.99 |
% |
0.98 |
% |
1.00 |
% |
(3) |
bps |
(2) |
bps | |||||
Selected average balances: |
|||||||||||||||||||
Cash/interbank investments |
$ |
137,995 |
$ |
127,624 |
$ |
128,328 |
$ |
130,090 |
$ |
125,626 |
8 |
% |
10 |
% | |||||
Trading account securities |
2,152 |
3,320 |
2,786 |
2,737 |
3,253 |
(35) |
(34) |
||||||||||||
Securities |
118,002 |
118,538 |
119,532 |
121,188 |
128,641 |
— |
(8) |
||||||||||||
Loans |
60,284 |
61,196 |
61,964 |
61,657 |
61,076 |
(1) |
(1) |
||||||||||||
Interest-earning assets |
318,433 |
310,678 |
312,610 |
315,672 |
318,596 |
2 |
— |
||||||||||||
Interest-bearing deposits |
165,122 |
162,017 |
160,334 |
169,753 |
170,716 |
2 |
(3) |
||||||||||||
Noninterest-bearing deposits |
84,033 |
82,944 |
85,878 |
85,046 |
84,890 |
1 |
(1) |
||||||||||||
Selected average yields/rates: |
|||||||||||||||||||
Cash/interbank investments |
0.44 |
% |
0.43 |
% |
0.32 |
% |
0.32 |
% |
0.34 |
% |
|||||||||
Trading account securities |
2.45 |
2.16 |
2.79 |
2.74 |
2.63 |
||||||||||||||
Securities |
1.56 |
1.61 |
1.62 |
1.60 |
1.57 |
||||||||||||||
Loans |
1.85 |
1.76 |
1.54 |
1.56 |
1.51 |
||||||||||||||
Interest-earning assets |
1.14 |
1.16 |
1.08 |
1.08 |
1.08 |
||||||||||||||
Interest-bearing deposits |
0.03 |
0.04 |
0.01 |
0.02 |
0.02 |
||||||||||||||
Average cash/interbank investments as a percentage of |
43 |
% |
41 |
% |
41 |
% |
41 |
% |
39 |
% |
|||||||||
Average noninterest-bearing deposits as a percentage of |
26 |
% |
27 |
% |
27 |
% |
27 |
% |
27 |
% |
FTE – fully taxable equivalent.
bps – basis points.
KEY POINTS
NONINTEREST EXPENSE
Noninterest expense |
2Q16 vs. | ||||||||||||||||||
(dollars in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | ||||||||||||
Staff |
$ |
1,412 |
$ |
1,459 |
$ |
1,481 |
$ |
1,437 |
$ |
1,434 |
(3) |
% |
(2) |
% | |||||
Professional, legal and other purchased services |
290 |
278 |
328 |
301 |
299 |
4 |
(3) |
||||||||||||
Software and equipment |
223 |
219 |
225 |
226 |
228 |
2 |
(2) |
||||||||||||
Net occupancy |
152 |
142 |
148 |
152 |
149 |
7 |
2 |
||||||||||||
Distribution and servicing |
102 |
100 |
92 |
95 |
96 |
2 |
6 |
||||||||||||
Sub-custodian |
70 |
59 |
60 |
65 |
75 |
19 |
(7) |
||||||||||||
Business development |
65 |
57 |
75 |
59 |
72 |
14 |
(10) |
||||||||||||
Other |
240 |
241 |
201 |
268 |
250 |
— |
(4) |
||||||||||||
Amortization of intangible assets |
59 |
57 |
64 |
66 |
65 |
4 |
(9) |
||||||||||||
M&I, litigation and restructuring charges |
7 |
17 |
18 |
11 |
59 |
N/M |
N/M |
||||||||||||
Total noninterest expense – GAAP |
$ |
2,620 |
$ |
2,629 |
$ |
2,692 |
$ |
2,680 |
$ |
2,727 |
— |
% |
(4) |
% | |||||
Total staff expense as a percentage of total revenue |
37 |
% |
39 |
% |
40 |
% |
38 |
% |
37 |
% |
|||||||||
Memo: |
|||||||||||||||||||
Total noninterest expense excluding amortization of |
$ |
2,554 |
$ |
2,555 |
$ |
2,610 |
$ |
2,603 |
$ |
2,603 |
— |
% |
(2) |
% |
N/M – Not meaningful.
KEY POINTS
INVESTMENT SECURITIES PORTFOLIO
At June 30, 2016, the fair value of our investment securities portfolio totaled $117.3 billion. The net unrealized pre-tax gain on our total securities portfolio was $1.6 billion at June 30, 2016 compared with $1.2 billion at March 31, 2016. The increase in the net unrealized pre-tax gain was primarily driven by a decline in market interest rates. At June 30, 2016, the fair value of the held-to-maturity securities totaled $41.8 billion and represented 36% of the fair value of the total investment securities portfolio.
The following table shows the distribution of our investment securities portfolio.
Investment securities
(dollars in millions) |
March 31, 2016 |
2Q16 change in unrealized gain (loss) |
June 30, 2016 |
Fair value as a % of amortized cost (a) |
Unrealized gain (loss) |
Ratings | ||||||||||||||||||||||||
BB+ and lower |
||||||||||||||||||||||||||||||
Fair value |
Amortized cost |
Fair value |
AAA/ AA- |
A+/ A- |
BBB+/ BBB- |
Not rated | ||||||||||||||||||||||||
Agency RMBS |
$ |
49,870 |
$ |
157 |
$ |
48,947 |
$ |
49,506 |
101 |
% |
$ |
559 |
100 |
% |
— |
% |
— |
% |
— |
% |
— |
% | ||||||||
U.S. Treasury |
23,870 |
110 |
23,716 |
23,893 |
101 |
177 |
100 |
— |
— |
— |
— |
|||||||||||||||||||
Sovereign debt/sovereign guaranteed |
15,866 |
56 |
15,309 |
15,605 |
102 |
296 |
73 |
5 |
22 |
— |
— |
|||||||||||||||||||
Non-agency RMBS (b) |
1,685 |
(19) |
1,237 |
1,529 |
80 |
292 |
— |
1 |
1 |
90 |
8 |
|||||||||||||||||||
Non-agency RMBS |
862 |
4 |
789 |
797 |
93 |
8 |
8 |
3 |
17 |
71 |
1 |
|||||||||||||||||||
European floating rate notes |
1,244 |
(2) |
1,137 |
1,104 |
97 |
(33) |
65 |
30 |
5 |
— |
— |
|||||||||||||||||||
Commercial MBS |
6,003 |
46 |
6,250 |
6,316 |
101 |
66 |
98 |
2 |
— |
— |
— |
|||||||||||||||||||
State and political subdivisions |
3,740 |
19 |
3,657 |
3,765 |
103 |
108 |
80 |
17 |
— |
— |
3 |
|||||||||||||||||||
Foreign covered bonds |
2,279 |
7 |
2,334 |
2,376 |
102 |
42 |
100 |
— |
— |
— |
— |
|||||||||||||||||||
Corporate bonds |
1,737 |
9 |
1,554 |
1,610 |
104 |
56 |
15 |
69 |
16 |
— |
— |
|||||||||||||||||||
CLO |
2,424 |
5 |
2,494 |
2,482 |
100 |
(12) |
100 |
— |
— |
— |
— |
|||||||||||||||||||
U.S. Government agencies |
1,881 |
(6) |
1,904 |
1,889 |
99 |
(15) |
100 |
— |
— |
— |
— |
|||||||||||||||||||
Consumer ABS |
2,408 |
6 |
2,460 |
2,454 |
100 |
(6) |
100 |
— |
— |
— |
— |
|||||||||||||||||||
Other (c) |
3,893 |
— |
3,949 |
4,002 |
101 |
53 |
54 |
— |
43 |
— |
3 |
|||||||||||||||||||
Total investment securities |
$ |
117,762 |
(d) |
$ |
392 |
$ |
115,737 |
$ |
117,328 |
(d) |
101 |
% |
$ |
1,591 |
(d)(e) |
91 |
% |
2 |
% |
5 |
% |
2 |
% |
— |
% |
(a) Amortized cost before impairments.
(b) These RMBS were included in the former Grantor Trust and were marked-to-market in 2009. We believe these RMBS would receive higher credit ratings if these ratings incorporated, as additional credit enhancements, the difference between the written-down amortized cost and the current face amount of each of these securities.
(c) Includes commercial paper with a fair value of $1.7 billion and $1.7 billion and money market funds with a fair value of $862 million and $865 million at March 31, 2016 and June 30, 2016, respectively.
(d) Includes net unrealized losses on derivatives hedging securities available-for-sale of $763 million at March 31, 2016 and $1,023 million at June 30, 2016.
(e) Unrealized gains of $840 million at June 30, 2016 related to available-for-sale securities.
NONPERFORMING ASSETS
Nonperforming assets (dollars in millions) |
June 30, |
March 31, |
June 30, | ||||||
Loans: |
|||||||||
Financial institutions |
$ |
171 |
$ |
171 |
$ |
— |
|||
Other residential mortgages |
97 |
99 |
110 |
||||||
Wealth management loans and mortgages |
10 |
11 |
11 |
||||||
Lease financing |
4 |
5 |
— |
||||||
Commercial real estate |
2 |
2 |
1 |
||||||
Total nonperforming loans |
284 |
288 |
122 |
||||||
Other assets owned |
5 |
4 |
5 |
||||||
Total nonperforming assets |
$ |
289 |
$ |
292 |
$ |
127 |
|||
Nonperforming assets ratio |
0.45 |
% |
0.48 |
% |
0.20 |
% | |||
Allowance for loan losses/nonperforming loans |
55.6 |
56.3 |
150.0 |
||||||
Total allowance for credit losses/nonperforming loans |
98.6 |
99.7 |
227.9 |
Nonperforming assets were $289 million at June 30, 2016, a decrease of $3 million compared with March 31, 2016. Nonperforming loans include our claim in the bankruptcy proceedings of Sentinel. On July 13, 2016, a settlement agreement between BNY Mellon and Sentinel's Liquidation Trustee was accepted by the bankruptcy court. This is expected to become effective in 3Q16 and result in release of trust assets to BNY Mellon in an amount that should exceed BNY Mellon's carrying value of $171 million.
ALLOWANCE FOR CREDIT LOSSES, PROVISION AND NET CHARGE-OFFS
Allowance for credit losses, provision and net charge-offs (in millions) |
June 30, |
March 31, |
June 30, | ||||||
Allowance for credit losses - beginning of period |
$ |
287 |
$ |
275 |
$ |
283 |
|||
Provision for credit losses |
(9) |
10 |
(6) |
||||||
Net recoveries: |
|||||||||
Other residential mortgages |
1 |
2 |
— |
||||||
Foreign |
1 |
— |
— |
||||||
Financial institutions |
— |
— |
1 |
||||||
Net recoveries |
2 |
2 |
1 |
||||||
Allowance for credit losses - end of period |
$ |
280 |
$ |
287 |
$ |
278 |
|||
Allowance for loan losses |
$ |
158 |
$ |
162 |
$ |
183 |
|||
Allowance for lending-related commitments |
122 |
125 |
95 |
The allowance for credit losses was $280 million at June 30, 2016, a decrease of $7 million compared with $287 million at March 31, 2016. Net recoveries were $2 million in 2Q16 reflected in the other residential mortgage and foreign portfolios.
CAPITAL AND LIQUIDITY
Capital ratios |
June 30, |
March 31, 2016 |
December 31, 2015 | |||
Consolidated regulatory capital ratios: (a) |
||||||
Standardized: |
||||||
CET1 ratio |
11.8 |
% |
11.8 |
% |
11.5 |
% |
Tier 1 capital ratio |
13.3 |
13.5 |
13.1 |
|||
Total (Tier 1 plus Tier 2) capital ratio |
13.7 |
13.9 |
13.5 |
|||
Advanced: |
||||||
CET1 ratio |
10.2 |
10.6 |
10.8 |
|||
Tier 1 capital ratio |
11.5 |
12.0 |
12.3 |
|||
Total (Tier 1 plus Tier 2) capital ratio |
11.7 |
12.3 |
12.5 |
|||
Leverage capital ratio (b) |
5.8 |
5.9 |
6.0 |
|||
Supplementary leverage ratio ("SLR") |
5.3 |
5.4 |
5.4 |
|||
BNY Mellon shareholders' equity to total assets ratio – GAAP (c) |
10.4 |
10.3 |
9.7 |
|||
BNY Mellon common shareholders' equity to total assets ratio – GAAP (c) |
9.7 |
9.6 |
9.0 |
|||
BNY Mellon tangible common shareholders' equity to tangible assets of operations ratio – Non-GAAP (c) |
6.6 |
6.7 |
6.5 |
|||
Selected regulatory capital ratios – fully phased-in – Non-GAAP: (a)(d) |
||||||
CET1 ratio: |
||||||
Standardized Approach |
10.9 |
11.0 |
10.2 |
|||
Advanced Approach |
9.5 |
9.8 |
9.5 |
|||
SLR |
5.0 |
5.1 |
4.9 |
(a) Regulatory capital ratios for June 30, 2016 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under application capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches.
(b) The leverage capital ratios are based on Tier 1 capital, as phased-in and quarterly average total assets.
(c) See "Supplemental information – Explanation of GAAP and Non-GAAP financial measures" beginning on page 24 for a reconciliation of these ratios.
(d) Estimated.
CET1 generation in 2Q16 – preliminary |
Transitional basis (b) |
Fully phased-in - Non-GAAP (c) | ||||
(in millions) | ||||||
CET1 – Beginning of period |
$ |
18,069 |
$ |
16,607 |
||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP |
825 |
825 |
||||
Goodwill and intangible assets, net of related deferred tax liabilities |
146 |
159 |
||||
Gross CET1 generated |
971 |
984 |
||||
Capital deployed: |
||||||
Dividends |
(185) |
(185) |
||||
Common stock repurchased |
(509) |
(509) |
||||
Total capital deployed |
(694) |
(694) |
||||
Other comprehensive income |
(209) |
(162) |
||||
Additional paid-in capital (a) |
131 |
131 |
||||
Other |
10 |
12 |
||||
Total other deductions |
(68) |
(19) |
||||
Net CET1 generated |
209 |
271 |
||||
CET1 – End of period |
$ |
18,278 |
$ |
16,878 |
(a) Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.
(b) Reflects transitional adjustments to CET1 required under U.S. capital rules.
(c) Estimated.
The table presented below compares the fully phased-in Basel III capital components and ratios to those capital components and ratios determined on a transitional basis.
Basel III capital components and ratios |
June 30, 2016 (a) |
March 31, 2016 |
Dec. 31, 2015 | |||||||||||||||||
(dollars in millions) |
Transitional |
Fully |
Transitional basis (b) |
Fully phased-in - Non-GAAP (c) |
Transitional basis (b) |
Fully phased-in - Non-GAAP (c) | ||||||||||||||
CET1: |
||||||||||||||||||||
Common shareholders' equity |
$ |
36,282 |
$ |
36,007 |
$ |
36,229 |
$ |
35,907 |
$ |
36,067 |
$ |
35,485 |
||||||||
Goodwill and intangible assets |
(17,614) |
(18,658) |
(17,760) |
(18,817) |
(17,295) |
(18,911) |
||||||||||||||
Net pension fund assets |
(53) |
(88) |
(54) |
(89) |
(46) |
(116) |
||||||||||||||
Equity method investments |
(322) |
(356) |
(324) |
(359) |
(296) |
(347) |
||||||||||||||
Deferred tax assets |
(14) |
(23) |
(14) |
(23) |
(8) |
(20) |
||||||||||||||
Other |
(1) |
(4) |
(8) |
(12) |
(5) |
(9) |
||||||||||||||
Total CET1 |
18,278 |
16,878 |
18,069 |
16,607 |
18,417 |
16,082 |
||||||||||||||
Other Tier 1 capital: |
||||||||||||||||||||
Preferred stock |
2,552 |
2,552 |
2,552 |
2,552 |
2,552 |
2,552 |
||||||||||||||
Trust preferred securities |
— |
— |
— |
— |
74 |
— |
||||||||||||||
Deferred tax assets |
(9) |
— |
(9) |
— |
(12) |
— |
||||||||||||||
Net pension fund assets |
(35) |
— |
(36) |
— |
(70) |
— |
||||||||||||||
Other |
(113) |
(109) |
(11) |
(8) |
(25) |
(22) |
||||||||||||||
Total Tier 1 capital |
20,673 |
19,321 |
20,565 |
19,151 |
20,936 |
18,612 |
||||||||||||||
Tier 2 capital: |
||||||||||||||||||||
Trust preferred securities |
161 |
— |
173 |
— |
222 |
— |
||||||||||||||
Subordinated debt |
149 |
149 |
149 |
149 |
149 |
149 |
||||||||||||||
Allowance for credit losses |
280 |
280 |
287 |
287 |
275 |
275 |
||||||||||||||
Other |
(6) |
(7) |
(2) |
(1) |
(12) |
(12) |
||||||||||||||
Total Tier 2 capital - Standardized Approach |
584 |
422 |
607 |
435 |
634 |
412 |
||||||||||||||
Excess of expected credit losses |
53 |
53 |
46 |
46 |
37 |
37 |
||||||||||||||
Less: Allowance for credit losses |
280 |
280 |
287 |
287 |
275 |
275 |
||||||||||||||
Total Tier 2 capital - Advanced Approach |
$ |
357 |
$ |
195 |
$ |
366 |
$ |
194 |
$ |
396 |
$ |
174 |
||||||||
Total capital: |
||||||||||||||||||||
Standardized Approach |
$ |
21,257 |
$ |
19,743 |
$ |
21,172 |
$ |
19,586 |
$ |
21,570 |
$ |
19,024 |
||||||||
Advanced Approach |
$ |
21,030 |
$ |
19,516 |
$ |
20,931 |
$ |
19,345 |
$ |
21,332 |
$ |
18,786 |
||||||||
Risk-weighted assets: |
||||||||||||||||||||
Standardized Approach |
$ |
155,448 |
$ |
154,182 |
$ |
152,673 |
$ |
151,388 |
$ |
159,893 |
$ |
158,015 |
||||||||
Advanced Approach |
$ |
179,457 |
$ |
178,114 |
$ |
170,709 |
$ |
169,347 |
$ |
170,384 |
$ |
168,509 |
||||||||
Standardized Approach: |
||||||||||||||||||||
CET1 ratio |
11.8 |
% |
10.9 |
% |
11.8 |
% |
11.0 |
% |
11.5 |
% |
10.2 |
% | ||||||||
Tier 1 capital ratio |
13.3 |
12.5 |
13.5 |
12.7 |
13.1 |
11.8 |
||||||||||||||
Total (Tier 1 plus Tier 2) capital ratio |
13.7 |
12.8 |
13.9 |
12.9 |
13.5 |
12.0 |
||||||||||||||
Advanced Approach: |
||||||||||||||||||||
CET1 ratio |
10.2 |
% |
9.5 |
% |
10.6 |
% |
9.8 |
% |
10.8 |
% |
9.5 |
% | ||||||||
Tier 1 capital ratio |
11.5 |
10.8 |
12.0 |
11.3 |
12.3 |
11.0 |
||||||||||||||
Total (Tier 1 plus Tier 2) capital ratio |
11.7 |
11.0 |
12.3 |
11.4 |
12.5 |
11.1 |
(a) Preliminary.
(b) Reflects transitional adjustments to CET1, Tier 1 capital and Tier 2 capital required under the U.S. capital rules.
(c) Estimated.
BNY Mellon has presented its estimated fully phased-in CET1 and other risk-based capital ratios and the fully phased-in SLR based on its interpretation of the U.S. capital rules, which are being gradually phased-in over a multi-year period, and on the application of such rules to BNY Mellon's businesses as currently conducted. Management views the estimated fully phased-in CET1 and other risk-based capital ratios and fully phased-in SLR as key measures in monitoring BNY Mellon's capital position and progress against future regulatory capital standards. Additionally, the presentation of the estimated fully phased-in CET1 and other risk-based capital ratios and fully phased-in SLR are intended to allow investors to compare these ratios with estimates presented by other companies.
Our capital and liquidity ratios are necessarily subject to, among other things, BNY Mellon's further review of applicable rules, anticipated compliance with all necessary enhancements to model calibration, approval by regulators of certain models used as part of RWA calculations, other refinements, further implementation guidance from regulators, market practices and standards and any changes BNY Mellon may make to its businesses. Consequently, our capital and liquidity ratios remain subject to ongoing review and revision and may change based on these factors.
Supplementary Leverage Ratio ("SLR")
The following table presents the SLR on both the transitional and fully phased-in Basel III basis for BNY Mellon and our largest bank subsidiary, The Bank of New York Mellon.
SLR |
June 30, 2016 (a) |
March 31, 2016 |
Dec. 31, 2015 | |||||||||||||||||
(dollars in millions) |
Transitional |
Fully |
Transitional basis |
Fully |
Transitional basis |
Fully phased-in - Non-GAAP (b) | ||||||||||||||
Consolidated: |
||||||||||||||||||||
Tier 1 capital |
$ |
20,673 |
$ |
19,321 |
$ |
20,565 |
$ |
19,151 |
$ |
20,936 |
$ |
18,612 |
||||||||
Total leverage exposure: |
||||||||||||||||||||
Quarterly average total assets |
$ |
374,220 |
$ |
374,220 |
$ |
364,554 |
$ |
364,554 |
$ |
368,590 |
$ |
368,590 |
||||||||
Less: Amounts deducted from Tier 1 capital |
18,156 |
19,233 |
18,160 |
19,300 |
17,650 |
19,403 |
||||||||||||||
Total on-balance sheet assets |
356,064 |
354,987 |
346,394 |
345,254 |
350,940 |
349,187 |
||||||||||||||
Off-balance sheet exposures: |
||||||||||||||||||||
Potential future exposure for derivatives |
6,125 |
6,125 |
5,838 |
5,838 |
7,158 |
7,158 |
||||||||||||||
Repo-style transaction exposures |
402 |
402 |
403 |
403 |
440 |
440 |
||||||||||||||
Credit-equivalent amount of other off- |
24,122 |
24,122 |
24,950 |
24,950 |
26,025 |
26,025 |
||||||||||||||
Total off-balance sheet exposures |
30,649 |
30,649 |
31,191 |
31,191 |
33,623 |
33,623 |
||||||||||||||
Total leverage exposure |
$ |
386,713 |
$ |
385,636 |
$ |
377,585 |
$ |
376,445 |
$ |
384,563 |
$ |
382,810 |
||||||||
SLR - Consolidated (c) |
5.3 |
% |
5.0 |
% |
5.4 |
% |
5.1 |
% |
5.4 |
% |
4.9 |
% | ||||||||
The Bank of New York Mellon, our largest |
||||||||||||||||||||
Tier 1 capital |
$ |
18,042 |
$ |
16,942 |
$ |
17,322 |
$ |
16,167 |
$ |
16,814 |
$ |
15,142 |
||||||||
Total leverage exposure |
$ |
322,879 |
$ |
322,559 |
$ |
313,331 |
$ |
312,988 |
$ |
316,812 |
$ |
316,270 |
||||||||
SLR - The Bank of New York Mellon (c) |
5.6 |
% |
5.3 |
% |
5.5 |
% |
5.2 |
% |
5.3 |
% |
4.8 |
% |
(a) June 30, 2016 information is preliminary.
(b) Estimated.
(c) The estimated fully phased-in SLR (Non-GAAP) is based on our interpretation of the U.S. capital rules. When the SLR is fully phased-in in 2018 as a required minimum ratio, we expect to maintain an SLR of over 5%. The minimum required SLR is 3% and there is a 2% buffer, in addition to the minimum, that is applicable to U.S. G-SIBs. The insured depository institution subsidiaries of the U.S. G-SIBs, including those of BNY Mellon, must maintain a 6% SLR to be considered "well capitalized."
Liquidity Coverage Ratio ("LCR")
The U.S. LCR rules became effective Jan. 1, 2015 and currently require BNY Mellon to meet an LCR of 90%, increasing to 100% when fully phased-in on Jan. 1, 2017. Our estimated LCR on a consolidated basis is compliant with the fully phased-in requirements of the U.S. LCR as of June 30, 2016 based on our understanding of the U.S. LCR rules. Our consolidated HQLA before haircuts, totaled $191 billion at June 30, 2016, compared with $202 billion at March 31, 2016 and $218 billion at Dec. 31, 2015.
INVESTMENT MANAGEMENT provides investment management services to institutional and retail investors, as well as investment management, wealth and estate planning and private banking solutions to high net worth individuals and families, and foundations and endowments.
(dollars in millions, unless otherwise noted) |
2Q16 vs. | |||||||||||||||||||
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | ||||||||||||||
Revenue: |
||||||||||||||||||||
Investment management fees: |
||||||||||||||||||||
Mutual funds |
$ |
304 |
$ |
300 |
$ |
294 |
$ |
301 |
$ |
312 |
1 |
% |
(3) |
% | ||||||
Institutional clients |
344 |
334 |
350 |
347 |
363 |
3 |
(5) |
|||||||||||||
Wealth management |
160 |
152 |
155 |
156 |
160 |
5 |
— |
|||||||||||||
Investment management fees (a) |
808 |
786 |
799 |
804 |
835 |
3 |
(3) |
|||||||||||||
Performance fees |
9 |
11 |
55 |
7 |
20 |
N/M |
(55) |
|||||||||||||
Investment management and performance fees |
817 |
797 |
854 |
811 |
855 |
3 |
(4) |
|||||||||||||
Distribution and servicing |
49 |
46 |
39 |
37 |
38 |
7 |
29 |
|||||||||||||
Other (a) |
(10) |
(31) |
22 |
(5) |
17 |
N/M |
N/M | |||||||||||||
Total fee and other revenue (a) |
856 |
812 |
915 |
843 |
910 |
5 |
(6) |
|||||||||||||
Net interest revenue |
82 |
83 |
84 |
83 |
77 |
(1) |
6 |
|||||||||||||
Total revenue |
938 |
895 |
999 |
926 |
987 |
5 |
(5) |
|||||||||||||
Provision for credit losses |
1 |
(1) |
(4) |
1 |
3 |
N/M |
N/M | |||||||||||||
Noninterest expense (ex. amortization of intangible assets) |
684 |
660 |
689 |
665 |
700 |
4 |
(2) |
|||||||||||||
Income before taxes (ex. amortization of intangible assets) |
253 |
236 |
314 |
260 |
284 |
7 |
(11) |
|||||||||||||
Amortization of intangible assets |
19 |
19 |
24 |
24 |
25 |
— |
(24) |
|||||||||||||
Income before taxes |
$ |
234 |
$ |
217 |
$ |
290 |
$ |
236 |
$ |
259 |
8 |
% |
(10) |
% | ||||||
Pre-tax operating margin |
25 |
% |
24 |
% |
29 |
% |
25 |
% |
26 |
% |
||||||||||
Adjusted pre-tax operating margin - Non-GAAP (b) |
31 |
% |
30 |
% |
36 |
% |
34 |
% |
34 |
% |
||||||||||
Changes in AUM (in billions): (c) |
||||||||||||||||||||
Beginning balance of AUM |
$ |
1,639 |
$ |
1,625 |
$ |
1,625 |
$ |
1,700 |
$ |
1,717 |
||||||||||
Net inflows (outflows): |
||||||||||||||||||||
Long-term: |
||||||||||||||||||||
Equity |
(2) |
(3) |
(9) |
(4) |
(13) |
|||||||||||||||
Fixed income |
(2) |
— |
1 |
(3) |
(2) |
|||||||||||||||
Liability-driven investments (d) |
15 |
14 |
11 |
11 |
5 |
|||||||||||||||
Alternative investments |
1 |
1 |
2 |
1 |
3 |
|||||||||||||||
Total long-term active inflows (outflows) |
12 |
12 |
5 |
5 |
(7) |
|||||||||||||||
Index |
(17) |
(11) |
(16) |
(10) |
(9) |
|||||||||||||||
Total long-term (outflows) inflows |
(5) |
1 |
(11) |
(5) |
(16) |
|||||||||||||||
Short term: |
||||||||||||||||||||
Cash |
4 |
(9) |
2 |
(10) |
(11) |
|||||||||||||||
Total net (outflows) |
(1) |
(8) |
(9) |
(15) |
(27) |
|||||||||||||||
Net market impact/other |
71 |
41 |
24 |
(35) |
(29) |
|||||||||||||||
Net currency impact |
(47) |
(19) |
(15) |
(25) |
39 |
|||||||||||||||
Acquisition |
2 |
— |
— |
— |
— |
|||||||||||||||
Ending balance of AUM |
$ |
1,664 |
(e) |
$ |
1,639 |
$ |
1,625 |
$ |
1,625 |
$ |
1,700 |
2 |
% |
(2) |
% | |||||
AUM at period end, by product type: (c) |
||||||||||||||||||||
Equity |
14 |
% |
14 |
% |
14 |
% |
14 |
% |
15 |
% |
||||||||||
Fixed income |
13 |
13 |
13 |
13 |
13 |
|||||||||||||||
Index |
18 |
19 |
20 |
20 |
21 |
|||||||||||||||
Liability-driven investments (d) |
34 |
33 |
32 |
32 |
30 |
|||||||||||||||
Alternative investments |
4 |
4 |
4 |
4 |
4 |
|||||||||||||||
Cash |
17 |
17 |
17 |
17 |
17 |
|||||||||||||||
Total AUM |
100 |
% (e) |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
||||||||||
Average balances: |
||||||||||||||||||||
Average loans |
$ |
14,795 |
$ |
14,275 |
$ |
13,447 |
$ |
12,779 |
$ |
12,298 |
4 |
% |
20 |
% | ||||||
Average deposits |
$ |
15,518 |
$ |
15,971 |
$ |
15,497 |
$ |
15,282 |
$ |
14,638 |
(3) |
% |
6 |
% |
(a) Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. See page 28 for a breakdown of the revenue line items in the Investment Management business impacted by the consolidated investment management funds. Additionally, other revenue includes asset servicing, treasury services, foreign exchange and other trading revenue and investment and other income.
(b) Excludes the net negative impact of money market fee waivers, amortization of intangible assets and provision for credit losses and is net of distribution and servicing expense. See "Supplemental information – Explanation of GAAP and Non-GAAP financial measures" beginning on page 24 for the reconciliation of this Non-GAAP measure.
(c) Excludes securities lending cash management assets and assets managed in the Investment Services business.
(d) Includes currency overlay assets under management.
(e) Preliminary.
N/M – Not meaningful.
INVESTMENT MANAGEMENT KEY POINTS
INVESTMENT SERVICES provides global custody and related services, broker-dealer services, global collateral services, corporate trust, depositary receipt and clearing services as well as global payment/working capital solutions to global financial institutions and credit-related activities.
(dollars in millions, unless otherwise noted) |
2Q16 vs. | |||||||||||||||||||
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 |
1Q16 |
2Q15 | ||||||||||||||
Revenue: |
||||||||||||||||||||
Investment services fees: |
||||||||||||||||||||
Asset servicing |
$ |
1,043 |
$ |
1,016 |
$ |
1,009 |
$ |
1,034 |
$ |
1,038 |
3 |
% |
— |
% | ||||||
Clearing services |
350 |
348 |
337 |
345 |
346 |
1 |
1 |
|||||||||||||
Issuer services |
233 |
244 |
199 |
312 |
234 |
(5) |
— |
|||||||||||||
Treasury services |
137 |
129 |
135 |
135 |
141 |
6 |
(3) |
|||||||||||||
Total investment services fees |
1,763 |
1,737 |
1,680 |
1,826 |
1,759 |
1 |
— |
|||||||||||||
Foreign exchange and other trading revenue |
161 |
168 |
150 |
179 |
181 |
(4) |
(11) |
|||||||||||||
Other (a) |
130 |
125 |
127 |
129 |
117 |
4 |
11 |
|||||||||||||
Total fee and other revenue |
2,054 |
2,030 |
1,957 |
2,134 |
2,057 |
1 |
— |
|||||||||||||
Net interest revenue |
690 |
679 |
664 |
662 |
667 |
2 |
3 |
|||||||||||||
Total revenue |
2,744 |
2,709 |
2,621 |
2,796 |
2,724 |
1 |
1 |
|||||||||||||
Provision for credit losses |
(7) |
14 |
8 |
7 |
6 |
N/M |
N/M | |||||||||||||
Noninterest expense (ex. amortization of intangible assets) |
1,819 |
1,770 |
1,791 |
1,853 |
1,874 |
3 |
(3) |
|||||||||||||
Income before taxes (ex. amortization of intangible assets) |
932 |
925 |
822 |
936 |
844 |
1 |
10 | |||||||||||||
Amortization of intangible assets |
40 |
38 |
40 |
41 |
40 |
5 |
— |
|||||||||||||
Income before taxes |
$ |
892 |
$ |
887 |
$ |
782 |
$ |
895 |
$ |
804 |
1 |
% |
11 |
% | ||||||
Pre-tax operating margin |
33 |
% |
33 |
% |
30 |
% |
32 |
% |
30 |
% |
||||||||||
Pre-tax operating margin (ex. provision for credit losses and amortization of intangible assets) |
34 |
% |
35 |
% |
32 |
% |
34 |
% |
31 |
% |
||||||||||
Investment services fees as a percentage of noninterest expense (ex. amortization of intangible assets) (b) |
97 |
% |
98 |
% |
94 |
% |
99 |
% |
94 |
% |
||||||||||
Securities lending revenue |
$ |
42 |
$ |
42 |
$ |
39 |
$ |
33 |
$ |
43 |
— |
% |
(2) |
% | ||||||
Metrics: |
||||||||||||||||||||
Average loans |
$ |
43,786 |
$ |
45,004 |
$ |
45,844 |
$ |
46,222 |
$ |
45,822 |
(3) |
% |
(4) |
% | ||||||
Average deposits |
$ |
221,998 |
$ |
215,707 |
$ |
229,241 |
$ |
232,250 |
$ |
238,404 |
3 |
% |
(7) |
% | ||||||
AUC/A at period end (in trillions) (c) |
$ |
29.5 |
(d) |
$ |
29.1 |
$ |
28.9 |
$ |
28.5 |
$ |
28.6 |
1 |
% |
3 |
% | |||||
Market value of securities on loan at period end (in billions) (e) |
$ |
278 |
$ |
300 |
$ |
277 |
$ |
288 |
$ |
283 |
(7) |
% |
(2) |
% | ||||||
Asset servicing: |
||||||||||||||||||||
Estimated new business wins (AUC/A) (in billions) |
$ |
167 |
(d) |
$ |
40 |
$ |
49 |
$ |
84 |
$ |
933 |
|||||||||
Depositary Receipts: |
||||||||||||||||||||
Number of sponsored programs |
1,112 |
1,131 |
1,145 |
1,176 |
1,206 |
(2) |
% |
(8) |
% | |||||||||||
Clearing services: |
||||||||||||||||||||
Average active clearing accounts (U.S. platform) (in thousands) |
5,946 |
5,947 |
5,959 |
6,107 |
6,046 |
— |
% |
(2) |
% | |||||||||||
Average long-term mutual fund assets (U.S. platform) |
$ |
431,150 |
$ |
415,025 |
$ |
437,260 |
$ |
447,287 |
$ |
466,195 |
4 |
% |
(8) |
% | ||||||
Average investor margin loans (U.S. platform) |
$ |
10,633 |
$ |
11,063 |
$ |
11,575 |
$ |
11,806 |
$ |
11,890 |
(4) |
% |
(11) |
% | ||||||
Broker-Dealer: |
||||||||||||||||||||
Average tri-party repo balances (in billions) |
$ |
2,108 |
$ |
2,104 |
$ |
2,153 |
$ |
2,142 |
$ |
2,174 |
— |
% |
(3) |
% |
(a) Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue and investment and other income.
(b) Investment services fees as a percentage of noninterest expense (ex. amortization of intangible assets) was lower in 2Q15 primarily reflecting litigation expense.
(c) Includes the AUC/A of CIBC Mellon of $1.1 trillion at June 30, 2016 and March 31, 2016, $1.0 trillion at Dec. 31, 2015 and Sept. 30, 2015 and $1.1 trillion at June 30, 2015.
(d) Preliminary.
(e) Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $56 billion at June 30, 2016 and March 31, 2016, $55 billion at Dec. 31, 2015, $61 billion at Sept. 30, 2015 and $68 billion at June 30, 2015.
N/M - Not meaningful.
INVESTMENT SERVICES KEY POINTS
OTHER SEGMENT primarily includes leasing operations, corporate treasury activities, derivatives, global markets, business exits and other corporate revenue and expense items.
(dollars in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | ||||||||||
Revenue: |
|||||||||||||||
Fee and other revenue |
$ |
95 |
$ |
129 |
$ |
89 |
$ |
59 |
$ |
103 |
|||||
Net interest (expense) revenue |
(5) |
4 |
12 |
14 |
35 |
||||||||||
Total revenue |
90 |
133 |
101 |
73 |
138 |
||||||||||
Provision for credit losses |
(3) |
(3) |
159 |
(7) |
(15) |
||||||||||
Noninterest expense (ex. amortization of intangible assets and restructuring charges (recoveries)) |
53 |
141 |
150 |
97 |
79 |
||||||||||
Income (loss) before taxes (ex. amortization of intangible assets and restructuring charges (recoveries)) |
40 |
(5) |
(208) |
(17) |
74 |
||||||||||
Amortization of intangible assets |
— |
— |
— |
1 |
— |
||||||||||
M&I and restructuring charges (recoveries) |
3 |
(1) |
(4) |
(2) |
8 |
||||||||||
Income (loss) before taxes |
$ |
37 |
$ |
(4) |
$ |
(204) |
$ |
(16) |
$ |
66 |
|||||
Average loans and leases |
$ |
1,703 |
$ |
1,917 |
$ |
2,673 |
$ |
2,656 |
$ |
2,956 |
KEY POINTS
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement
(in millions) |
Quarter ended |
Year-to-date |
|||||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|||||||||||||
Fee and other revenue |
|||||||||||||||||
Investment services fees: |
|||||||||||||||||
Asset servicing |
$ |
1,069 |
$ |
1,040 |
$ |
1,060 |
$ |
2,109 |
$ |
2,098 |
|||||||
Clearing services |
350 |
350 |
347 |
700 |
691 |
||||||||||||
Issuer services |
234 |
244 |
234 |
478 |
466 |
||||||||||||
Treasury services |
139 |
131 |
144 |
270 |
281 |
||||||||||||
Total investment services fees |
1,792 |
1,765 |
1,785 |
3,557 |
3,536 |
||||||||||||
Investment management and performance fees |
830 |
812 |
878 |
1,642 |
1,745 |
||||||||||||
Foreign exchange and other trading revenue |
182 |
175 |
187 |
357 |
416 |
||||||||||||
Financing-related fees |
57 |
54 |
58 |
111 |
98 |
||||||||||||
Distribution and servicing |
43 |
39 |
39 |
82 |
80 |
||||||||||||
Investment and other income |
74 |
105 |
104 |
179 |
164 |
||||||||||||
Total fee revenue |
2,978 |
2,950 |
3,051 |
5,928 |
6,039 |
||||||||||||
Net securities gains |
21 |
20 |
16 |
41 |
40 |
||||||||||||
Total fee and other revenue |
2,999 |
2,970 |
3,067 |
5,969 |
6,079 |
||||||||||||
Operations of consolidated investment management funds |
|||||||||||||||||
Investment income (loss) |
10 |
(3) |
46 |
7 |
102 |
||||||||||||
Interest of investment management fund note holders |
— |
3 |
6 |
3 |
10 |
||||||||||||
Income (loss) from consolidated investment management funds |
10 |
(6) |
40 |
4 |
92 |
||||||||||||
Net interest revenue |
|||||||||||||||||
Interest revenue |
890 |
883 |
847 |
1,773 |
1,654 |
||||||||||||
Interest expense |
123 |
117 |
68 |
240 |
147 |
||||||||||||
Net interest revenue |
767 |
766 |
779 |
1,533 |
1,507 |
||||||||||||
Provision for credit losses |
(9) |
10 |
(6) |
1 |
(4) |
||||||||||||
Net interest revenue after provision for credit losses |
776 |
756 |
785 |
1,532 |
1,511 |
||||||||||||
Noninterest expense |
|||||||||||||||||
Staff |
1,412 |
1,459 |
1,434 |
2,871 |
2,919 |
||||||||||||
Professional, legal and other purchased services |
290 |
278 |
299 |
568 |
601 |
||||||||||||
Software and equipment |
223 |
219 |
228 |
442 |
456 |
||||||||||||
Net occupancy |
152 |
142 |
149 |
294 |
300 |
||||||||||||
Distribution and servicing |
102 |
100 |
96 |
202 |
194 |
||||||||||||
Sub-custodian |
70 |
59 |
75 |
129 |
145 |
||||||||||||
Business development |
65 |
57 |
72 |
122 |
133 |
||||||||||||
Other |
240 |
241 |
250 |
481 |
492 |
||||||||||||
Amortization of intangible assets |
59 |
57 |
65 |
116 |
131 |
||||||||||||
M&I, litigation and restructuring charges |
7 |
17 |
59 |
24 |
56 |
||||||||||||
Total noninterest expense |
2,620 |
2,629 |
2,727 |
5,249 |
5,427 |
||||||||||||
Income |
|||||||||||||||||
Income before income taxes |
1,165 |
1,091 |
1,165 |
2,256 |
2,255 |
||||||||||||
Provision for income taxes |
290 |
283 |
276 |
573 |
556 |
||||||||||||
Net income |
875 |
808 |
889 |
1,683 |
1,699 |
||||||||||||
Net (income) loss attributable to noncontrolling interests (includes $(4), $7, $(37), $3 and $(68) related to consolidated investment management funds, respectively) |
(2) |
9 |
(36) |
7 |
(67) |
||||||||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation |
873 |
817 |
853 |
1,690 |
1,632 |
||||||||||||
Preferred stock dividends |
(48) |
(13) |
(23) |
(61) |
(36) |
||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation |
$ |
825 |
$ |
804 |
$ |
830 |
$ |
1,629 |
$ |
1,596 |
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement - continued
Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation |
Quarter ended |
Year-to-date |
|||||||||||||||
June 30, 2016 |
March 31, 2016 |
June 30, 2015 |
June 30, 2016 |
June 30, 2015 |
|||||||||||||
(in millions) |
|||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation |
$ |
825 |
$ |
804 |
$ |
830 |
$ |
1,629 |
$ |
1,596 |
|||||||
Less: Earnings allocated to participating securities |
13 |
11 |
9 |
24 |
24 |
||||||||||||
Net income applicable to the common shareholders of The Bank of New York Mellon Corporation after required adjustments for the calculation of basic and diluted earnings per common share |
$ |
812 |
$ |
793 |
$ |
821 |
$ |
1,605 |
$ |
1,572 |
Average common shares and equivalents outstanding of The Bank of |
Quarter ended |
Year-to-date |
||||||||||
June 30, 2016 |
March 31, 2016 |
June 30, 2015 |
June 30, 2016 |
June 30, 2015 |
||||||||
(in thousands) |
||||||||||||
Basic |
1,072,583 |
1,079,641 |
1,113,790 |
1,076,112 |
1,116,183 |
|||||||
Diluted |
1,078,271 |
1,085,284 |
1,122,135 |
1,081,847 |
1,124,154 |
Earnings per share applicable to the common shareholders of The Bank |
Quarter ended |
Year-to-date |
|||||||||||||||
June 30, 2016 |
March 31, 2016 |
June 30, 2015 |
June 30, 2016 |
June 30, 2015 |
|||||||||||||
(in dollars) |
|||||||||||||||||
Basic |
$ |
0.76 |
$ |
0.73 |
$ |
0.74 |
$ |
1.49 |
$ |
1.41 |
|||||||
Diluted |
$ |
0.75 |
$ |
0.73 |
$ |
0.73 |
$ |
1.48 |
$ |
1.40 |
THE BANK OF NEW YORK MELLON CORPORATION
Consolidated Balance Sheet
(dollars in millions, except per share amounts) |
June 30, |
March 31, |
December 31, |
|||||||
Assets |
||||||||||
Cash and due from: |
||||||||||
Banks |
$ |
5,809 |
$ |
3,928 |
$ |
6,537 |
||||
Interest-bearing deposits with the Federal Reserve and other central banks |
88,080 |
96,426 |
113,203 |
|||||||
Interest-bearing deposits with banks |
13,303 |
14,662 |
15,146 |
|||||||
Federal funds sold and securities purchased under resale agreements |
28,060 |
26,904 |
24,373 |
|||||||
Securities: |
||||||||||
Held-to-maturity (fair value of $41,804, $42,231 and $43,204) |
41,053 |
41,717 |
43,312 |
|||||||
Available-for-sale |
76,547 |
76,294 |
75,867 |
|||||||
Total securities |
117,600 |
118,011 |
119,179 |
|||||||
Trading assets |
7,148 |
6,526 |
7,368 |
|||||||
Loans |
64,513 |
61,661 |
63,703 |
|||||||
Allowance for loan losses |
(158) |
(162) |
(157) |
|||||||
Net loans |
64,355 |
61,499 |
63,546 |
|||||||
Premises and equipment |
1,399 |
1,377 |
1,379 |
|||||||
Accrued interest receivable |
540 |
545 |
562 |
|||||||
Goodwill |
17,501 |
17,604 |
17,618 |
|||||||
Intangible assets |
3,738 |
3,781 |
3,842 |
|||||||
Other assets |
23,735 |
20,307 |
19,626 |
|||||||
Subtotal assets of operations |
371,268 |
371,570 |
392,379 |
|||||||
Assets of consolidated investment management funds, at fair value: |
||||||||||
Trading assets |
959 |
1,186 |
1,228 |
|||||||
Other assets |
124 |
114 |
173 |
|||||||
Subtotal assets of consolidated investment management funds, at fair value |
1,083 |
1,300 |
1,401 |
|||||||
Total assets |
$ |
372,351 |
$ |
372,870 |
$ |
393,780 |
||||
Liabilities |
||||||||||
Deposits: |
||||||||||
Noninterest-bearing (principally U.S. offices) |
$ |
99,035 |
$ |
93,005 |
$ |
96,277 |
||||
Interest-bearing deposits in U.S. offices |
58,519 |
52,124 |
51,704 |
|||||||
Interest-bearing deposits in Non-U.S. offices |
102,124 |
112,213 |
131,629 |
|||||||
Total deposits |
259,678 |
257,342 |
279,610 |
|||||||
Federal funds purchased and securities sold under repurchase agreements |
7,611 |
14,803 |
15,002 |
|||||||
Trading liabilities |
6,195 |
5,247 |
4,501 |
|||||||
Payables to customers and broker-dealers |
21,172 |
22,008 |
21,900 |
|||||||
Other borrowed funds |
1,098 |
828 |
523 |
|||||||
Accrued taxes and other expenses |
5,385 |
5,288 |
5,986 |
|||||||
Other liabilities (includes allowance for lending-related commitments of $122, $125 and $118) |
8,105 |
6,129 |
5,490 |
|||||||
Long-term debt |
23,573 |
21,686 |
21,547 |
|||||||
Subtotal liabilities of operations |
332,817 |
333,331 |
354,559 |
|||||||
Liabilities of consolidated investment management funds, at fair value: |
||||||||||
Trading liabilities |
214 |
245 |
229 |
|||||||
Other liabilities |
23 |
9 |
17 |
|||||||
Subtotal liabilities of consolidated investment management funds, at fair value |
237 |
254 |
246 |
|||||||
Total liabilities |
333,054 |
333,585 |
354,805 |
|||||||
Temporary equity |
||||||||||
Redeemable noncontrolling interests |
172 |
169 |
200 |
|||||||
Permanent equity |
||||||||||
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 25,826, 25,826 and 25,826 shares |
2,552 |
2,552 |
2,552 |
|||||||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,323,941,399, 1,320,883,792 and 1,312,941,113 shares |
13 |
13 |
13 |
|||||||
Additional paid-in capital |
25,563 |
25,432 |
25,262 |
|||||||
Retained earnings |
21,233 |
20,593 |
19,974 |
|||||||
Accumulated other comprehensive loss, net of tax |
(2,552) |
(2,390) |
(2,600) |
|||||||
Less: Treasury stock of 256,266,980, 243,801,160 and 227,598,128 common shares, at cost |
(8,250) |
(7,741) |
(7,164) |
|||||||
Total The Bank of New York Mellon Corporation shareholders' equity |
38,559 |
38,459 |
38,037 |
|||||||
Nonredeemable noncontrolling interests of consolidated investment management funds |
566 |
657 |
738 |
|||||||
Total permanent equity |
39,125 |
39,116 |
38,775 |
|||||||
Total liabilities, temporary equity and permanent equity |
$ |
372,351 |
$ |
372,870 |
$ |
393,780 |
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
BNY Mellon has included in this Earnings Release certain Non-GAAP financial measures based on fully phased-in CET1 and other risk-based capital ratios, the fully phased-in SLR and tangible common shareholders' equity. BNY Mellon believes that the Basel III CET1 and other risk-based capital ratios on a fully phased-in basis, the SLR on a fully phased-in basis and the ratio of tangible common shareholders' equity to tangible assets of operations are measures of capital strength that provide additional useful information to investors, supplementing the capital ratios which are, or were, required by regulatory authorities. The tangible common shareholders' equity ratio, which excludes goodwill and intangible assets net of deferred tax liabilities, includes changes in investment securities valuations which are reflected in total shareholders' equity. In addition, this ratio is expressed as a percentage of the actual book value of assets, as opposed to a percentage of a risk-based reduced value established in accordance with regulatory requirements, although BNY Mellon in its reconciliation has excluded certain assets which are given a zero percent risk-weighting for regulatory purposes and the assets of consolidated investment management funds to which BNY Mellon has limited economic exposure. Further, BNY Mellon believes that the return on tangible common equity measure, which excludes goodwill and intangible assets net of deferred tax liabilities, is a useful additional measure for investors because it presents a measure of those assets that can generate income. BNY Mellon has provided a measure of tangible book value per common share, which it believes provides additional useful information as to the level of tangible assets in relation to shares of common stock outstanding.
BNY Mellon has presented revenue measures which exclude the effect of noncontrolling interests related to consolidated investment management funds, and expense measures which exclude M&I, litigation and restructuring charges and amortization of intangible assets. Earnings per share, return on equity, operating leverage and operating margin measures, which exclude some or all of these items, as well as the impairment charge related to a court decision regarding Sentinel, are also presented. Operating margin measures may also exclude the provision for credit losses and the net negative impact of money market fee waivers, net of distribution and servicing expense. BNY Mellon believes that these measures are useful to investors because they permit a focus on period-to-period comparisons, which relate to the ability of BNY Mellon to enhance revenues and limit expenses in circumstances where such matters are within BNY Mellon's control. M&I expenses primarily relate to acquisitions and generally continue for approximately three years after the transaction. Litigation charges represent accruals for loss contingencies that are both probable and reasonably estimable, but exclude standard business-related legal fees. Restructuring charges relate to our streamlining actions, Operational Excellence Initiatives and migrating positions to Global Delivery Centers. Excluding these charges mentioned above permits investors to view expenses on a basis consistent with how management views the business.
The presentation of revenue growth on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. BNY Mellon believes that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates.
The presentation of income (loss) from consolidated investment management funds, net of net income (loss) attributable to noncontrolling interests related to the consolidation of certain investment management funds permits investors to view revenue on a basis consistent with how management views the business. BNY Mellon believes that these presentations, as a supplement to GAAP information, give investors a clearer picture of the results of its primary businesses.
In this Earnings Release, net interest revenue and the net interest margin are presented on an FTE basis. We believe that this presentation provides comparability 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. Each of these measures as described above is used by management to monitor financial performance, both on a company-wide and on a business-level basis.
The following table presents the reconciliation of diluted earnings per share and the net income applicable to common shareholders of The Bank of New York Mellon Corporation.
Reconciliation of net income and diluted EPS – GAAP to Non-GAAP |
2Q16 |
2Q15 |
||||||||||||
(in millions, except per share amounts) |
Net income |
Diluted EPS |
Net income |
Diluted EPS |
||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP |
$ |
825 |
$ |
0.75 |
$ |
830 |
$ |
0.73 |
||||||
Add: M&I, litigation and restructuring charges |
7 |
59 |
||||||||||||
Less: Tax impact of M&I, litigation and restructuring charges |
2 |
21 |
||||||||||||
M&I, litigation and restructuring charges after-tax |
5 |
— |
38 |
0.03 |
||||||||||
Non-GAAP results |
$ |
830 |
$ |
0.76 |
(a) |
$ |
868 |
$ |
0.77 |
(a) |
(a) Does not foot due to rounding.
The following table presents the reconciliation of the pre-tax operating margin ratio.
Reconciliation of income before income taxes – pre-tax operating margin |
|||||||||||||||
(dollars in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | ||||||||||
Income before income taxes – GAAP |
$ |
1,165 |
$ |
1,091 |
$ |
871 |
$ |
1,109 |
$ |
1,165 |
|||||
Less: Net income (loss) attributable to noncontrolling interests of consolidated investment management funds |
4 |
(7) |
5 |
(5) |
37 |
||||||||||
Add: Amortization of intangible assets |
59 |
57 |
64 |
66 |
65 |
||||||||||
M&I, litigation and restructuring charges |
7 |
17 |
18 |
11 |
59 |
||||||||||
Impairment charge related to a court decision regarding Sentinel |
— |
— |
170 |
— |
— |
||||||||||
Income before income taxes, as adjusted – Non-GAAP (a) |
$ |
1,227 |
$ |
1,172 |
$ |
1,118 |
$ |
1,191 |
$ |
1,252 |
|||||
Fee and other revenue – GAAP |
$ |
2,999 |
$ |
2,970 |
$ |
2,950 |
$ |
3,053 |
$ |
3,067 |
|||||
Income (loss) from consolidated investment management funds – GAAP |
10 |
(6) |
16 |
(22) |
40 |
||||||||||
Net interest revenue – GAAP |
767 |
766 |
760 |
759 |
779 |
||||||||||
Total revenue – GAAP |
3,776 |
3,730 |
3,726 |
3,790 |
3,886 |
||||||||||
Less: Net income (loss) attributable to noncontrolling interests of consolidated investment management funds |
4 |
(7) |
5 |
(5) |
37 |
||||||||||
Total revenue, as adjusted – Non-GAAP (a) |
$ |
3,772 |
$ |
3,737 |
$ |
3,721 |
$ |
3,795 |
$ |
3,849 |
|||||
Pre-tax operating margin (b)(c) |
31 |
% |
29 |
% |
23 |
% |
29 |
% |
30 |
% | |||||
Pre-tax operating margin – Non-GAAP (a)(b)(c) |
33 |
% |
31 |
% |
30 |
% |
31 |
% |
33 |
% |
(a) Non-GAAP information for all periods presented excludes net income (loss) attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges. Non-GAAP information for 4Q15 excludes the impairment charge related to a court decision regarding Sentinel.
(b) Income before taxes divided by total revenue.
(c) Our GAAP earnings include tax-advantaged investments such as low income housing, renewable energy, bank-owned life insurance and tax-exempt securities. The benefits of these investments are primarily reflected in tax expense. If reported on a tax-equivalent basis, these investments would increase revenue and income before taxes by $74 million for 2Q16, $77 million for 1Q16, $73 million for 4Q15, $53 million for 3Q15 and $52 million for 2Q15 and would increase our pre-tax operating margin by approximately 1.3% for 2Q16, 1.4% for 1Q16, 1.5% for 4Q15, 1.0% for 3Q15 and 0.9% for 2Q15.
The following table presents the reconciliation of the operating leverage.
Operating leverage |
2Q16 vs. | ||||||||||||
(dollars in millions) |
2Q16 |
1Q16 |
2Q15 |
1Q16 |
2Q15 | ||||||||
Total revenue – GAAP |
$ |
3,776 |
$ |
3,730 |
$ |
3,886 |
1.23 |
% |
(2.83) |
% | |||
Less: Net income (loss) attributable to noncontrolling interests of consolidated investment management funds |
4 |
(7) |
37 |
||||||||||
Total revenue, as adjusted – Non-GAAP |
$ |
3,772 |
$ |
3,737 |
$ |
3,849 |
0.94 |
% |
(2.00) |
% | |||
Total noninterest expense – GAAP |
$ |
2,620 |
$ |
2,629 |
$ |
2,727 |
(0.34) |
% |
(3.92) |
% | |||
Less: Amortization of intangible assets |
59 |
57 |
65 |
||||||||||
M&I, litigation and restructuring charges |
7 |
17 |
59 |
||||||||||
Total noninterest expense, as adjusted – Non-GAAP |
$ |
2,554 |
$ |
2,555 |
$ |
2,603 |
(0.04) |
% |
(1.88) |
% | |||
Operating leverage – GAAP (a) |
157 |
bps |
109 |
bps | |||||||||
Operating leverage, as adjusted – Non-GAAP (a)(b) |
98 |
bps |
(12) |
bps |
(a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
(b) Non-GAAP operating leverage for all periods presented excludes net income (loss) attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges.
bps - basis points.
The following table presents the reconciliation of the returns on common equity and tangible common equity.
Return on common equity and tangible common equity |
|||||||||||||||
(dollars in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | ||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP |
$ |
825 |
$ |
804 |
$ |
637 |
$ |
820 |
$ |
830 |
|||||
Add: Amortization of intangible assets |
59 |
57 |
64 |
66 |
65 |
||||||||||
Less: Tax impact of amortization of intangible assets |
21 |
20 |
22 |
23 |
21 |
||||||||||
Net income applicable to common shareholders of The Bank of New |
863 |
841 |
679 |
863 |
874 |
||||||||||
Add: M&I, litigation and restructuring charges |
7 |
17 |
18 |
11 |
59 |
||||||||||
Impairment charge related to a court decision regarding Sentinel |
— |
— |
170 |
— |
— |
||||||||||
Less: Tax impact of M&I, litigation and restructuring charges |
2 |
6 |
6 |
3 |
21 |
||||||||||
Tax impact of impairment charge related to a court decision regarding Sentinel |
— |
— |
64 |
— |
— |
||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation, as adjusted – Non-GAAP (a) |
$ |
868 |
$ |
852 |
$ |
797 |
$ |
871 |
$ |
912 |
|||||
Average common shareholders' equity |
$ |
35,826 |
$ |
35,252 |
$ |
35,664 |
$ |
35,588 |
$ |
35,516 |
|||||
Less: Average goodwill |
17,622 |
17,562 |
17,673 |
17,742 |
17,752 |
||||||||||
Average intangible assets |
3,789 |
3,812 |
3,887 |
3,962 |
4,031 |
||||||||||
Add: Deferred tax liability – tax deductible goodwill (b) |
1,452 |
1,428 |
1,401 |
1,379 |
1,351 |
||||||||||
Deferred tax liability – intangible assets (b) |
1,129 |
1,140 |
1,148 |
1,164 |
1,179 |
||||||||||
Average tangible common shareholders' equity – Non-GAAP |
$ |
16,996 |
$ |
16,446 |
$ |
16,653 |
$ |
16,427 |
$ |
16,263 |
|||||
Return on common equity – GAAP (c) |
9.3 |
% |
9.2 |
% |
7.1 |
% |
9.1 |
% |
9.4 |
% | |||||
Return on common equity – Non-GAAP (a)(c) |
9.7 |
% |
9.7 |
% |
8.9 |
% |
9.7 |
% |
10.3 |
% | |||||
Return on tangible common equity – Non-GAAP (c) |
20.4 |
% |
20.6 |
% |
16.2 |
% |
20.8 |
% |
21.5 |
% | |||||
Return on tangible common equity – Non-GAAP adjusted (a)(c) |
20.5 |
% |
20.8 |
% |
19.0 |
% |
21.0 |
% |
22.5 |
% |
(a) Non-GAAP information for all periods presented excludes amortization of intangible assets, net of tax, and M&I, litigation and restructuring charges. Non-GAAP information for 4Q15 also excludes the impairment charge related to a court decision regarding Sentinel.
(b) Deferred tax liabilities are based on fully phased-in Basel III rules.
(c) Annualized.
The following table presents the reconciliation of the equity to assets ratio and book value per common share.
Equity to assets and book value per common share |
June 30, |
March 31, |
Dec. 31, |
Sept. 30, |
June 30, | ||||||||||
(dollars in millions, unless otherwise noted) | |||||||||||||||
BNY Mellon shareholders' equity at period end – GAAP |
$ |
38,559 |
$ |
38,459 |
$ |
38,037 |
$ |
38,170 |
$ |
38,270 |
|||||
Less: Preferred stock |
2,552 |
2,552 |
2,552 |
2,552 |
2,552 |
||||||||||
BNY Mellon common shareholders' equity at period end – GAAP |
36,007 |
35,907 |
35,485 |
35,618 |
35,718 |
||||||||||
Less: Goodwill |
17,501 |
17,604 |
17,618 |
17,679 |
17,807 |
||||||||||
Intangible assets |
3,738 |
3,781 |
3,842 |
3,914 |
4,000 |
||||||||||
Add: Deferred tax liability – tax deductible goodwill (a) |
1,452 |
1,428 |
1,401 |
1,379 |
1,351 |
||||||||||
Deferred tax liability – intangible assets (a) |
1,129 |
1,140 |
1,148 |
1,164 |
1,179 |
||||||||||
BNY Mellon tangible common shareholders' equity at period end – Non-GAAP |
$ |
17,349 |
$ |
17,090 |
$ |
16,574 |
$ |
16,568 |
$ |
16,441 |
|||||
Total assets at period end – GAAP |
$ |
372,351 |
$ |
372,870 |
$ |
393,780 |
$ |
377,371 |
$ |
395,254 |
|||||
Less: Assets of consolidated investment management funds |
1,083 |
1,300 |
1,401 |
2,297 |
2,231 |
||||||||||
Subtotal assets of operations – Non-GAAP |
371,268 |
371,570 |
392,379 |
375,074 |
393,023 |
||||||||||
Less: Goodwill |
17,501 |
17,604 |
17,618 |
17,679 |
17,807 |
||||||||||
Intangible assets |
3,738 |
3,781 |
3,842 |
3,914 |
4,000 |
||||||||||
Cash on deposit with the Federal Reserve and other central banks (b) |
88,080 |
96,421 |
116,211 |
86,426 |
106,628 |
||||||||||
Tangible total assets of operations at period end – Non-GAAP |
$ |
261,949 |
$ |
253,764 |
$ |
254,708 |
$ |
267,055 |
$ |
264,588 |
|||||
BNY Mellon shareholders' equity to total assets ratio – GAAP |
10.4 |
% |
10.3 |
% |
9.7 |
% |
10.1 |
% |
9.7 |
% | |||||
BNY Mellon common shareholders' equity to total assets ratio – GAAP |
9.7 |
% |
9.6 |
% |
9.0 |
% |
9.4 |
% |
9.0 |
% | |||||
BNY Mellon tangible common shareholders' equity to tangible assets of operations ratio – Non-GAAP |
6.6 |
% |
6.7 |
% |
6.5 |
% |
6.2 |
% |
6.2 |
% | |||||
Period-end common shares outstanding (in thousands) |
1,067,674 |
1,077,083 |
1,085,343 |
1,092,953 |
1,106,518 |
||||||||||
Book value per common share – GAAP |
$ |
33.72 |
$ |
33.34 |
$ |
32.69 |
$ |
32.59 |
$ |
32.28 |
|||||
Tangible book value per common share – Non-GAAP |
$ |
16.25 |
$ |
15.87 |
$ |
15.27 |
$ |
15.16 |
$ |
14.86 |
(a) Deferred tax liabilities are based on fully phased-in Basel III rules.
(b) Assigned a zero percent risk-weighting by the regulators.
The following table presents income from consolidated investment management funds, net of noncontrolling interests.
Income (loss) from consolidated investment management funds, net of noncontrolling interests | |||||||||||||||
(in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | ||||||||||
Income (loss) from consolidated investment management funds |
$ |
10 |
$ |
(6) |
$ |
16 |
$ |
(22) |
$ |
40 |
|||||
Less: Net income (loss) attributable to noncontrolling interests of consolidated investment management funds |
4 |
(7) |
5 |
(5) |
37 |
||||||||||
Income (loss) from consolidated investment management funds, net of noncontrolling interests |
$ |
6 |
$ |
1 |
$ |
11 |
$ |
(17) |
$ |
3 |
The following table presents the impact of changes in foreign currency exchange rates on our consolidated investment management and performance fees.
Investment management and performance fees – Consolidated |
2Q16 vs. | |||||||
(dollars in millions) |
2Q16 |
2Q15 |
2Q15 | |||||
Investment management and performance fees – GAAP |
$ |
830 |
$ |
878 |
(5) |
% | ||
Impact of changes in foreign currency exchange rates |
— |
(14) |
||||||
Investment management and performance fees, as adjusted – Non-GAAP |
$ |
830 |
$ |
864 |
(4) |
% |
The following table presents the revenue line items in the Investment Management business impacted by the consolidated investment management funds.
Income (loss) from consolidated investment management funds, net of noncontrolling interests - Investment Management business |
|||||||||||||||
(in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | ||||||||||
Investment management fees |
$ |
3 |
$ |
2 |
$ |
7 |
$ |
3 |
$ |
4 |
|||||
Other (Investment income (loss)) |
3 |
(1) |
4 |
(20) |
(1) |
||||||||||
Income (loss) from consolidated investment management funds, net of noncontrolling interests |
$ |
6 |
$ |
1 |
$ |
11 |
$ |
(17) |
$ |
3 |
The following table presents the impact of changes in foreign currency exchange rates on investment management fees reported in the Investment Management segment.
Investment management fees - Investment Management business |
2Q16 vs. | |||||||
(dollars in millions) |
2Q16 |
2Q15 |
2Q15 | |||||
Investment management fees – GAAP |
$ |
808 |
$ |
835 |
(3) |
% | ||
Impact of changes in foreign currency exchange rates |
— |
(14) |
||||||
Investment management fees, as adjusted – Non-GAAP |
$ |
808 |
$ |
821 |
(2) |
% |
The following table presents the reconciliation of the pre-tax operating margin for the Investment Management business.
Pre-tax operating margin - Investment Management business |
|||||||||||||||
(dollars in millions) |
2Q16 |
1Q16 |
4Q15 |
3Q15 |
2Q15 | ||||||||||
Income before income taxes – GAAP |
$ |
234 |
$ |
217 |
$ |
290 |
$ |
236 |
$ |
259 |
|||||
Add: Amortization of intangible assets |
19 |
19 |
24 |
24 |
25 |
||||||||||
Provision for credit losses |
1 |
(1) |
(4) |
1 |
3 |
||||||||||
Money market fee waivers |
11 |
9 |
23 |
28 |
29 |
||||||||||
Income before income taxes excluding amortization of intangible assets, provision for credit losses and money market fee waivers – Non-GAAP |
$ |
265 |
$ |
244 |
$ |
333 |
$ |
289 |
$ |
316 |
|||||
Total revenue – GAAP |
$ |
938 |
$ |
895 |
$ |
999 |
$ |
926 |
$ |
987 |
|||||
Less: Distribution and servicing expense |
102 |
100 |
92 |
94 |
95 |
||||||||||
Money market fee waivers benefiting distribution and servicing expense |
15 |
23 |
27 |
35 |
37 |
||||||||||
Add: Money market fee waivers impacting total revenue |
26 |
32 |
50 |
63 |
66 |
||||||||||
Total revenue net of distribution and servicing expense and excluding money market fee waivers – Non-GAAP |
$ |
847 |
$ |
804 |
$ |
930 |
$ |
860 |
$ |
921 |
|||||
Pre-tax operating margin (a) |
25 |
% |
24 |
% |
29 |
% |
25 |
% |
26 |
% | |||||
Pre-tax operating margin excluding amortization of intangible assets, provision for credit losses, money market fee waivers and net of distribution and servicing expense – Non-GAAP (a) |
31 |
% |
30 |
% |
36 |
% |
34 |
% |
34 |
% |
(a) Income before taxes divided by total revenue.
DIVIDENDS
Common – On July 21, 2016, The Bank of New York Mellon Corporation declared a quarterly common stock dividend of $0.19 per common share, an increase from the prior dividend amount of $0.17 per common share. This cash dividend is payable on Aug. 12, 2016 to shareholders of record as of the close of business on Aug. 2, 2016.
Preferred – On July 21, 2016, The Bank of New York Mellon Corporation declared the following dividends for the noncumulative perpetual preferred stock, liquidation preference $100,000 per share, for the dividend period ending in September 2016, in each case payable on Sept. 20, 2016 to holders of record as of the close of business on Sept. 5, 2016:
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 management and investment services in 35 countries and more than 100 markets. As of June 30, 2016, BNY Mellon had $29.5 trillion in assets under custody and/or administration, and $1.7 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.
CAUTIONARY STATEMENT
A number of statements (i) in this Earnings Release, (ii) in our presentations and (iii) 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 our estimated capital ratios and expectations relating to those ratios, preliminary business metrics and statements regarding driving revenue growth, our business model, technology, digital transformation, capital plans and the potential effects of adopting a single point of entry resolution strategy. 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," "target," "likely," "expect," "intend," "continue," "seek," "believe," "plan," "goal," "could," "should," "may," "will," "strategy," "opportunities," "trends" and words of similar meaning signify forward-looking statements. These statements and other forward-looking statements contained in other public disclosures of The Bank of New York Mellon Corporation 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 these risks and uncertainties, 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, 2015 and BNY Mellon's other filings with the Securities and Exchange Commission. All forward-looking statements in this Earnings Release speak only as of July 21, 2016, 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.
Contact:
MEDIA:
Kevin Heine
(212) 635-1590
kevin.heine@bnymellon.com
ANALYSTS:
Valerie Haertel
(212) 635-8529
valerie.haertel@bnymellon.com
SOURCE BNY Mellon