Jan 18, 2022
NEW YORK, Jan. 18, 2022 /PRNewswire/ --
Revenue up 4% (a) | EPS up 28% (a) | ROE 9% ROTCE 17% (c) | CET1 11.1% Tier 1 leverage 5.5% |
(a) | Excluding notable items revenue up 3% and EPS up 8%. See note (c). |
The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE: BK) today reported:
4Q21 vs. | |||||
4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 | |
Net income applicable to common shareholders (in millions) | $ 822 | $ 881 | $ 702 | (7) % | 17% |
Diluted earnings per common share (b) | $ 1.01 | $ 1.04 | $ 0.79 | (3) % | 28% |
(b) | Includes impact of notable items of $(0.04) per share in 4Q21, $(0.05) per share in 3Q21 and $(0.18) per share in 4Q20. See note (c). |
Fourth Quarter Results | CEO Commentary | ||
Total revenue of $4.0 billion, increased 4%; or 3% • Fee revenue increased 4%; or 8% excluding money market • Net interest revenue decreased slightly
Provision for credit losses was a benefit of $17 million
Total noninterest expense of $3.0 billion, increased 1%; or 6% excluding notable items (c)
AUC/A of $46.7 trillion, increased 14% AUM of $2.4 trillion, increased 10%
Securities Services • Total revenue increased 5% • Income before taxes increased 63%; or 24% excluding • Pre-tax operating margin of 19%
Market and Wealth Services • Total revenue increased 1% • Income before taxes increased 4% • Pre-tax operating margin of 43%
Investment and Wealth Management • Total revenue increased 3% • Income before taxes decreased 11% • Pre-tax operating margin of 27%; adjusted pre-tax | "2021 was in many regards a remarkable year for BNY
Mr. Gibbons added, "Full-year EPS of $4.14 was up 8% year-
"The pace of innovation across the firm, including in areas |
Media Relations: Garrett Marquis (949) 683-1503 | Investor Relations: Marius Merz (212) 298-1480 |
(c) For information on these Non-GAAP measures, see "Explanation of GAAP and Non-GAAP financial measures" on page 12. | |
Note: Above comparisons are 4Q21 vs. 4Q20, unless otherwise noted. |
CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||
(in millions, except per share amounts and unless otherwise noted; not | 4Q21 vs. | ||||
meaningful - N/M) | 4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 |
Fee revenue | $ 3,231 | $ 3,265 | $ 3,114 | (1)% | 4% |
Investment and other revenue | 107 | 129 | 49 | N/M | N/M |
Total fee and other revenue | 3,338 | 3,394 | 3,163 | (2) | 6 |
Net interest revenue | 677 | 641 | 680 | 6 | — |
Total revenue | 4,015 | 4,035 | 3,843 | — | 4 |
Provision for credit losses | (17) | (45) | 15 | N/M | N/M |
Noninterest expense | 2,967 | 2,918 | 2,925 | 2 | 1 |
Income before income taxes | 1,065 | 1,162 | 903 | (8) | 18 |
Provision for income taxes | 196 | 219 | 148 | (11) | 32 |
Net income | $ 869 | $ 943 | $ 755 | (8)% | 15% |
Net income applicable to common shareholders of The Bank of New York | $ 822 | $ 881 | $ 702 | (7)% | 17% |
Operating leverage (a) | (217) bps | 304 bps | |||
Diluted earnings per common share | $ 1.01 | $ 1.04 | $ 0.79 | (3)% | 28% |
Average common shares and equivalents outstanding - diluted (in thousands) | 817,345 | 849,028 | 891,846 | ||
Pre-tax operating margin | 27% | 29% | 24% |
(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 4Q21 vs. 4Q20, unless otherwise stated)
Assets under custody and/or administration ("AUC/A") and Assets under management ("AUM")
Capital and liquidity
(a) See "Explanation of GAAP and Non-GAAP financial measures" on page 12 for additional information. |
FULL-YEAR CONSOLIDATED FINANCIAL HIGHLIGHTS | |||
(in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | 2021 vs. | ||
2021 | 2020 | 2020 | |
Fee revenue | $ 12,977 | $ 12,515 | 4% |
Investment and other revenue | 336 | 316 | N/M |
Total fee and other revenue | 13,313 | 12,831 | 4 |
Net interest revenue | 2,618 | 2,977 | (12) |
Total revenue | 15,931 | 15,808 | 1 |
Provision for credit losses | (231) | 336 | N/M |
Noninterest expense | 11,514 | 11,004 | 5 |
Income before income taxes | 4,648 | 4,468 | 4 |
Provision for income taxes | 877 | 842 | 4 |
Net income | $ 3,771 | $ 3,626 | 4% |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ 3,552 | $ 3,423 | 4% |
Operating leverage (a) | (386)bps | ||
Diluted earnings per common share | $ 4.14 | $ 3.83 | 8% |
Average common shares and equivalents outstanding - diluted (in thousands) | 856,359 | 892,514 | |
Pre-tax operating margin | 29% | 28% |
(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 2021 vs. 2020, unless otherwise stated)
Capital and liquidity
(a) See "Explanation of GAAP and Non-GAAP financial measures" on page 12 for additional information. |
SECURITIES SERVICES BUSINESS SEGMENT HIGHLIGHTS | |||||
(dollars in millions, unless otherwise noted; not meaningful - N/M) | 4Q21 vs. | ||||
4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 | |
Investment services fees: | |||||
Asset Servicing | $ 984 | $ 979 | $ 896 | 1% | 10% |
Issuer Services | 253 | 281 | 260 | (10) | (3) |
Total investment services fees | 1,237 | 1,260 | 1,156 | (2) | 7 |
Foreign exchange revenue | 148 | 125 | 139 | 18 | 6 |
Other fees (a) | 28 | 30 | 39 | (7) | (28) |
Total fee revenue | 1,413 | 1,415 | 1,334 | — | 6 |
Investment and other revenue | 53 | 73 | 30 | N/M | N/M |
Total fee and other revenue | 1,466 | 1,488 | 1,364 | (1) | 7 |
Net interest revenue | 367 | 349 | 378 | 5 | (3) |
Total revenue | 1,833 | 1,837 | 1,742 | — | 5 |
Provision for credit losses | (7) | (19) | 23 | N/M | N/M |
Noninterest expense | 1,490 | 1,543 | 1,504 | (3) | (1) |
Income before taxes | $ 350 | $ 313 | $ 215 | 12% | 63% |
Total revenue by line of business: | |||||
Asset Servicing | $ 1,456 | $ 1,437 | $ 1,357 | 1% | 7% |
Issuer Services | 377 | 400 | 385 | (6) | (2) |
Total revenue by line of business | $ 1,833 | $ 1,837 | $ 1,742 | —% | 5% |
Pre-tax operating margin | 19% | 17% | 12% | ||
Securities lending revenue (b) | $ 45 | $ 45 | $ 36 | —% | 25% |
Metrics: | |||||
Average loans | $ 9,764 | $ 8,389 | $ 8,498 | 16% | 15% |
Average deposits | $ 200,272 | $ 198,680 | $ 188,151 | 1% | 6% |
AUC/A at period end (in trillions) (current period is preliminary) (c) | $ 34.6 | $ 33.8 | $ 30.6 | 2% | 13% |
Market value of securities on loan at period end (in billions) (d) | $ 447 | $ 443 | $ 435 | 1% | 3% |
(a) | Other fees primarily include financing-related fees. |
(b) | Included in investment services fees in the Asset Servicing business. |
(c) | Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Issuer Services business. Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.7 trillion at Dec. 31, 2021 and Sept. 30, 2021 and $1.5 trillion at Dec. 31, 2020. |
(d) | Represents the total amount of securities on loan in our agency securities lending program. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $71 billion at Dec. 31, 2021 and $68 billion at Sept. 30, 2021 and Dec. 31, 2020. |
KEY DRIVERS
(a) | Notable items in 4Q21, 3Q21 and 4Q20 include litigation reserves and severance expense. See "Explanation of GAAP and Non-GAAP financial measures" on page 12 for additional information. |
MARKET AND WEALTH SERVICES BUSINESS SEGMENT HIGHLIGHTS | |||||
(dollars in millions, unless otherwise noted; not meaningful - N/M) | 4Q21 vs. | ||||
4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 | |
Investment services fees: | |||||
Pershing | $ 412 | $ 427 | $ 422 | (4)% | (2)% |
Treasury Services | 170 | 168 | 163 | 1 | 4 |
Clearance and Collateral Management | 236 | 228 | 220 | 4 | 7 |
Total investment services fees | 818 | 823 | 805 | (1) | 2 |
Foreign exchange revenue | 21 | 23 | 24 | (9) | (13) |
Other fees (a) | 31 | 31 | 33 | — | (6) |
Total fee revenue | 870 | 877 | 862 | (1) | 1 |
Investment and other revenue | 6 | 13 | 9 | N/M | N/M |
Total fee and other revenue | 876 | 890 | 871 | (2) | 1 |
Net interest revenue | 297 | 283 | 292 | 5 | 2 |
Total revenue | 1,173 | 1,173 | 1,163 | — | 1 |
Provision for credit losses | (3) | (16) | 8 | N/M | N/M |
Noninterest expense | 674 | 668 | 670 | 1 | 1 |
Income before taxes | $ 502 | $ 521 | $ 485 | (4)% | 4% |
Total revenue by line of business: | |||||
Pershing | $ 553 | $ 566 | $ 563 | (2)% | (2) % |
Treasury Services | 331 | 326 | 325 | 2 | 2 |
Clearance and Collateral Management | 289 | 281 | 275 | 3 | 5 |
Total revenue by line of business | $ 1,173 | $ 1,173 | $ 1,163 | —% | 1% |
Pre-tax operating margin | 43% | 44% | 42% | ||
Metrics: | |||||
Average loans | $ 40,812 | $ 39,041 | $ 32,939 | 5% | 24% |
Average deposits | $ 100,653 | $ 101,253 | $ 98,670 | (1)% | 2% |
AUC/A at period end (in trillions) (current period is preliminary) (b) | $ 11.8 | $ 11.2 | $ 10.2 | 5% | 16% |
(a) | Other fees primarily include financing-related fees. |
(b) | Consists of AUC/A primarily from the Clearance and Collateral Management and Pershing businesses. |
KEY DRIVERS
INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT HIGHLIGHTS | |||||
(dollars in millions, unless otherwise noted; not meaningful - N/M) | 4Q21 vs. | ||||
4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 | |
Investment management fees | $ 864 | $ 893 | $ 839 | (3)% | 3% |
Performance fees | 32 | 21 | 45 | N/M | (29) |
Investment management and performance fees | 896 | 914 | 884 | (2) | 1 |
Distribution and servicing fees | 28 | 28 | 29 | — | (3) |
Other fees (a) | 22 | 20 | (6) | N/M | N/M |
Total fee revenue | 946 | 962 | 907 | (2) | 4 |
Investment and other revenue (b) | 23 | 23 | 33 | N/M | N/M |
Total fee and other revenue (b) | 969 | 985 | 940 | (2) | 3 |
Net interest revenue | 51 | 47 | 50 | 9 | 2 |
Total revenue | 1,020 | 1,032 | 990 | (1) | 3 |
Provision for credit losses | (6) | (7) | (8) | N/M | N/M |
Noninterest expense | 748 | 691 | 687 | 8 | 9 |
Income before taxes | $ 278 | $ 348 | $ 311 | (20)% | (11)% |
Total revenue by line of business: | |||||
Investment Management | $ 709 | $ 727 | $ 714 | (2)% | (1)% |
Wealth Management | 311 | 305 | 276 | 2 | 13 |
Total revenue by line of business | $ 1,020 | $ 1,032 | $ 990 | (1)% | 3% |
Pre-tax operating margin | 27% | 34% | 32% | ||
Adjusted pre-tax operating margin – Non-GAAP (c) | 29% | 36% | 34% | ||
Metrics: | |||||
Average loans | $ 12,737 | $ 12,248 | $ 11,497 | 4% | 11% |
Average deposits | $ 18,374 | $ 17,270 | $ 18,144 | 6% | 1% |
AUM (in billions) (current period is preliminary) (d) | $ 2,434 | $ 2,310 | $ 2,211 | 5% | 10% |
Wealth Management client assets (in billions) (current period is preliminary) (e) | $ 321 | $ 307 | $ 286 | 5% | 12% |
(a) | Other fees primarily include investment services fees. |
(b) | Investment and other revenue and total fee and other revenue are net of income attributable to noncontrolling interests related to consolidated investment management funds. |
(c) | Net of distribution and servicing expense. See "Explanation of GAAP and Non-GAAP financial measures" on page 12 for information on this Non-GAAP measure. |
(d) | Excludes assets managed outside of the Investment and Wealth Management business segment. |
(e) | Includes AUM and AUC/A in the Wealth Management business. |
KEY DRIVERS
OTHER SEGMENT primarily includes leasing operations, certain corporate treasury activities, derivatives, business exits and other corporate revenue and expense items.
(in millions) | 4Q21 | 3Q21 | 4Q20 |
Fee revenue | $ 2 | $ 12 | $ 11 |
Investment and other revenue | 19 | 23 | (28) |
Total fee and other revenue | 21 | 35 | (17) |
Net interest (expense) | (38) | (38) | (40) |
Total revenue | (17) | (3) | (57) |
Provision for credit losses | (1) | (3) | (8) |
Noninterest expense | 55 | 16 | 64 |
(Loss) before taxes | $ (71) | $ (16) | $ (113) |
KEY DRIVERS
NOTABLE ITEMS BY BUSINESS SEGMENT | |||||||||||
Notable items by business | 4Q21 | 4Q20 | |||||||||
(in millions) | Securities Services | Market and | Investment | Other | Total | Securities Services | Market and | Investment | Other | Total | |
Fee and other revenue | $ — | $ — | $ — | $ — | $ — | $ — | $ — | $ (5) | $ (56) | $ (61) | |
Net interest revenue | — | — | — | — | — | — | — | — | — | — | |
Total revenue | — | — | — | — | — | — | — | (5) | (56) | (61) | |
Total noninterest expense | 21 | 6 | 1 | 9 | 37 | 84 | 15 | 9 | 57 | 165 | |
(Loss) income before | $ (21) | $ (6) | $ (1) | $ (9) | $ (37) | $ (84) | $ (15) | $ (14) | $ (113) | $ (226) |
(a) | Notable items in 4Q21 include severance expense and litigation reserves. Notable items in 4Q20 include litigation reserves, severance expense, losses on business sales (reflected in investment and other revenue) and real estate charges. |
Notable items by business segment (a) | 3Q21 | ||||
(in millions) | Securities Services | Market and | Investment | Other | Total |
Fee and other revenue | $ — | $ — | $ — | $ 9 | $ 9 |
Net interest revenue | — | — | — | — | — |
Total revenue | — | — | — | 9 | 9 |
Total noninterest expense | 70 | 1 | 1 | 1 | 73 |
(Loss) income before income taxes | $ (70) | $ (1) | $ (1) | $ 8 | $ (64) |
(a) | Notable items in 3Q21 include litigation reserves, gains on disposals (reflected in investment and other revenue) and severance expense. |
Notable items by business segment (a) | 2021 | 2020 | |||||||||
(in millions) | Securities Services | Market and | Investment | Other | Total | Securities Services | Market and | Investment | Other | Total | |
Fee and other revenue | $ — | $ — | $ (1) | $ 14 | $ 13 | $ — | $ — | $ (5) | $ (56) | $ (61) | |
Net interest revenue | — | — | — | — | — | — | — | — | — | — | |
Total revenue | — | — | (1) | 14 | 13 | — | — | (5) | (56) | (61) | |
Total noninterest expense | 84 | 23 | 4 | 18 | 129 | 84 | 15 | 9 | 57 | 165 | |
(Loss) income before income taxes | $ (84) | $ (23) | $ (5) | $ (4) | $ (116) | $ (84) | $ (15) | $ (14) | $ (113) | $ (226) |
(a) | Notable items in 2021 include litigation reserves, severance expense and gains on disposals (reflected in investment and other revenue). Notable items in 2020 include litigation reserves, severance expense, losses on business sales (reflected in investment and other revenue) and real estate charges recorded in 4Q20. |
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 4Q21, the net impact of money market fee waivers was $243 million, up from $233 million in 3Q21, driven by higher money market balances.
Money market fee waivers | |||||||
(in millions) | 4Q21 | 3Q21 | 2Q21 | 1Q21 | 4Q20 | FY21 | FY20 |
Investment services fees (see table below) | $ (148) | $ (142) | $ (148) | $ (109) | $ (85) | $ (547) | $ (209) |
Investment management and performance fees | (116) | (109) | (115) | (89) | (56) | (429) | (142) |
Distribution and servicing fees | (14) | (11) | (13) | (13) | (8) | (51) | (17) |
Total fee revenue | (278) | (262) | (276) | (211) | (149) | (1,027) | (368) |
Less: Distribution and servicing expense | 35 | 29 | 24 | 23 | 15 | 111 | 31 |
Net impact of money market fee waivers | $ (243) | $ (233) | $ (252) | $ (188) | $ (134) | $ (916) | $ (337) |
Impact to investment services fees by line of | |||||||
Asset Servicing | $ (31) | $ (29) | $ (30) | $ (15) | $ (9) | $ (105) | $ (10) |
Issuer Services | (18) | (17) | (16) | (11) | (7) | (62) | (9) |
Pershing | (89) | (86) | (91) | (77) | (65) | (343) | (186) |
Treasury Services | (10) | (10) | (11) | (6) | (4) | (37) | (4) |
Total impact to investment services fees by | $ (148) | $ (142) | $ (148) | $ (109) | $ (85) | $ (547) | $ (209) |
Impact to fee revenue by line of business (a): | |||||||
Asset Servicing | $ (50) | $ (47) | $ (50) | $ (29) | $ (13) | $ (176) | $ (18) |
Issuer Services | (24) | (22) | (22) | (15) | (10) | (83) | (13) |
Pershing | (106) | (102) | (99) | (94) | (85) | (401) | (227) |
Treasury Services | (14) | (13) | (16) | (9) | (5) | (52) | (6) |
Investment Management | (81) | (76) | (85) | (61) | (34) | (303) | (100) |
Wealth Management | (3) | (2) | (4) | (3) | (2) | (12) | (4) |
Total impact to fee revenue by line of business | $ (278) | $ (262) | $ (276) | $ (211) | $ (149) | $ (1,027) | $ (368) |
(a) | The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses. |
CAPITAL AND LIQUIDITY | ||||
Capital and liquidity ratios | Dec. 31, | Sept. 30, | Dec. 31, | |
Consolidated regulatory capital ratios: (a) | ||||
CET1 ratio | 11.1% | 11.7% | 13.1% | |
Tier 1 capital ratio | 13.9 | 14.4 | 15.8 | |
Total capital ratio | 14.8 | 15.2 | 16.7 | |
Tier 1 leverage ratio | 5.5 | 5.7 | 6.3 | |
SLR | 6.6 | 7.0 | 8.6 | (b) |
BNY Mellon shareholders' equity to total assets ratio | 9.7% | 9.3% | 9.8% | |
BNY Mellon common shareholders' equity to total assets ratio | 8.6% | 8.3% | 8.8% | |
Average LCR | 109% | 111% | 110% | |
Book value per common share | $ 47.50 | $ 47.30 | $ 46.53 | |
Tangible book value per common share – Non-GAAP (c) | $ 24.31 | $ 24.88 | $ 25.44 | |
Common shares outstanding (in thousands) | 804,145 | 825,821 | 886,764 |
(a) | Regulatory capital ratios for Dec. 31, 2021 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for Dec. 31, 2021 was the Standardized Approach, for Sept. 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 "Explanation of GAAP and Non-GAAP financial measures" on page 12 for information on this Non-GAAP measure. |
NET INTEREST REVENUE | ||||||
Net interest revenue | 4Q21 vs. | |||||
(dollars in millions; not meaningful - N/M) | 4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 | |
Net interest revenue | $ 677 | $ 641 | $ 680 | 6% | —% | |
Add: Tax equivalent adjustment | 4 | 3 | 3 | N/M | N/M | |
Net interest revenue, on a fully taxable equivalent ("FTE") basis – Non-GAAP (a) | $ 681 | $ 644 | $ 683 | 6% | —% | |
Net interest margin | 0.71% | 0.67% | 0.72% | 4 bps | (1) bps | |
Net interest margin (FTE) – Non-GAAP (a) | 0.71% | 0.68% | 0.72% | 3 bps | (1) 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 "Explanation of GAAP and Non-GAAP financial measures" on page 12 for information on this Non-GAAP measure. |
bps – basis points. |
THE BANK OF NEW YORK MELLON CORPORATION | |||||||
Condensed Consolidated Income Statement | |||||||
(in millions) | Quarter ended | Year ended | |||||
Dec. 31, | Sept. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||
Fee and other revenue | |||||||
Investment services fees | $ 2,061 | $ 2,091 | $ 1,969 | $ 8,284 | $ 8,047 | ||
Investment management and performance fees | 896 | 913 | 884 | 3,588 | 3,367 | ||
Foreign exchange revenue | 199 | 185 | 187 | 799 | 774 | ||
Financing-related fees | 47 | 48 | 46 | 194 | 212 | ||
Distribution and servicing | 28 | 28 | 28 | 112 | 115 | ||
Total fee revenue | 3,231 | 3,265 | 3,114 | 12,977 | 12,515 | ||
Investment and other revenue | 107 | 129 | 49 | 336 | 316 | ||
Total fee and other revenue | 3,338 | 3,394 | 3,163 | 13,313 | 12,831 | ||
Net interest revenue | |||||||
Interest revenue | 729 | 693 | 776 | 2,845 | 4,109 | ||
Interest expense | 52 | 52 | 96 | 227 | 1,132 | ||
Net interest revenue | 677 | 641 | 680 | 2,618 | 2,977 | ||
Total revenue | 4,015 | 4,035 | 3,843 | 15,931 | 15,808 | ||
Provision for credit losses | (17) | (45) | 15 | (231) | 336 | ||
Noninterest expense | |||||||
Staff | 1,633 | 1,584 | 1,554 | 6,337 | 5,966 | ||
Software and equipment | 379 | 372 | 359 | 1,478 | 1,370 | ||
Professional, legal and other purchased services | 390 | 363 | 381 | 1,459 | 1,403 | ||
Sub-custodian and clearing | 120 | 129 | 116 | 505 | 460 | ||
Net occupancy | 133 | 120 | 173 | 498 | 581 | ||
Distribution and servicing | 75 | 76 | 75 | 298 | 336 | ||
Bank assessment charges | 30 | 34 | 24 | 133 | 124 | ||
Business development | 44 | 22 | 26 | 107 | 105 | ||
Amortization of intangible assets | 19 | 19 | 26 | 82 | 104 | ||
Other | 144 | 199 | 191 | 617 | 555 | ||
Total noninterest expense | 2,967 | 2,918 | 2,925 | 11,514 | 11,004 | ||
Income | |||||||
Income before income taxes | 1,065 | 1,162 | 903 | 4,648 | 4,468 | ||
Provision for income taxes | 196 | 219 | 148 | 877 | 842 | ||
Net income | 869 | 943 | 755 | 3,771 | 3,626 | ||
Net (income) loss attributable to noncontrolling interests related to consolidated | (6) | 4 | (5) | (12) | (9) | ||
Net income applicable to shareholders of The Bank of New York Mellon | 863 | 947 | 750 | 3,759 | 3,617 | ||
Preferred stock dividends | (41) | (66) | (48) | (207) | (194) | ||
Net income applicable to common shareholders of The Bank of New York | $ 822 | $ 881 | $ 702 | $ 3,552 | $ 3,423 |
Earnings per share applicable to the common shareholders of The Bank of | Quarter ended | Year ended | |||||
Dec. 31, | Sept. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||
(in dollars) | |||||||
Basic | $ 1.01 | $ 1.04 | $ 0.79 | $ 4.17 | $ 3.84 | ||
Diluted | $ 1.01 | $ 1.04 | $ 0.79 | $ 4.14 | $ 3.83 |
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 segment, net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. We believe that this measure is useful when evaluating the performance of the Investment and Wealth Management business segment relative to industry competitors.
For the reconciliations of these Non-GAAP measures, see "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 for evaluating the impact of current interest rates and market conditions on fee revenue growth rates and the performance of our business.
Fee revenue reconciliation | 4Q21 vs. | 2021 vs. | |||||
(dollars in millions) | 4Q21 | 4Q20 | 4Q20 | 2021 | 2020 | 2020 | |
Fee revenue | $ 3,231 | $ 3,114 | 4% | $ 12,977 | $ 12,515 | 4% | |
Less: Money market fee waivers | (278) | (149) | (1,027) | (368) | |||
Fee revenue, excluding money market fee waivers – Non-GAAP | $ 3,509 | $ 3,263 | 8% | $ 14,004 | $ 12,883 | 9% |
BNY Mellon has presented revenue measures excluding notable items, including losses on business sales. Expense measures, excluding notable items, including litigation reserves, severance expense and real estate charges are also presented. Litigation reserves represents accruals for loss contingencies that are both probable and reasonably estimable, but exclude standard business-related legal fees. Income before tax measures, excluding the notable items mentioned above are provided. These measures are provided to permit investors to view the financial measures on a basis consistent with how management views the businesses.
Reconciliations of Non-GAAP measures, excluding notable items | 4Q21 vs. | ||||
(in millions, except per share amounts) | 4Q21 | 4Q20 | 4Q20 | ||
Total revenue – GAAP | $ 4,015 | $ 3,843 | 4% | ||
Impact of notable items (a) | — | (61) | |||
Total revenue – Non-GAAP | $ 4,015 | $ 3,904 | 3% | ||
Noninterest expense – GAAP | $ 2,967 | $ 2,925 | 1% | ||
Impact of notable items (a) | 37 | 165 | |||
Noninterest expense – Non-GAAP | $ 2,930 | $ 2,760 | 6% | ||
Diluted earnings per common share – GAAP | $ 1.01 | $ 0.79 | 28% | ||
Impact of notable items (a) | (0.04) | (0.18) | |||
Diluted earnings per common share – Non-GAAP | $ 1.04 | (b) | $ 0.96 | (b) | 8% |
(a) | Notable items in 4Q21 include severance expense and litigation reserves. Notable items in 4Q20 include litigation reserves, severance expense, losses on business sales (reflected in investment and other revenue) and real estate charges. |
(b) | Does not foot due to rounding. |
Reconciliations of Non-GAAP measures, excluding notable items - Securities | 4Q21 vs. | ||||
(in millions) | 4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 |
Noninterest expense – GAAP | $ 1,490 | $ 1,543 | $ 1,504 | (3)% | (1)% |
Impact of notable items (a) | 21 | 70 | 84 | ||
Noninterest expense – Non-GAAP | $ 1,469 | $ 1,473 | $ 1,420 | —% | 3% |
Income before taxes – GAAP | $ 350 | $ 313 | $ 215 | 12% | 63% |
Impact of notable items (a) | (21) | (70) | (84) | ||
Income before taxes – Non-GAAP | $ 371 | $ 383 | $ 299 | (3)% | 24% |
(a) | Notable items in 4Q21, 3Q21 and 4Q20 include litigation reserves and severance expense. |
Note: In 4Q21, we disaggregated our former Investment Services business segment into two new business segments, Securities Services and Market and Wealth Services. See the Current Report for Form 8-K dated Dec. 8, 2021 for additional information.
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, innovation in products and services, 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 Annual Report on Form 10-K for the year ended Dec. 31, 2021. All forward-looking statements in this Earnings Release speak only as of Jan. 18, 2022, 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 Dec. 31, 2021, BNY Mellon had $46.7 trillion in assets under custody and/or administration, and $2.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
CONFERENCE CALL INFORMATION
Todd Gibbons, Chief Executive Officer, and Emily Portney, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 8:00 a.m. ET on Jan. 18, 2022. 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 Jan. 18, 2022. Replays of the conference call and audio webcast will be available beginning Jan. 18, 2022 at approximately 2:00 p.m. ET through Feb. 18, 2022 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.
SOURCE BNY Mellon