Attached files
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8-K - FORM 8-K - Bank of New York Mellon Corp | bk-20201016.htm |
EX-99.3 - EXHIBIT 99.3 - Bank of New York Mellon Corp | ex993_financialhighlight.htm |
EX-99.1 - EXHIBIT 99.1 - Bank of New York Mellon Corp | ex991earningsrelease3q.htm |
The Bank of New York Mellon Corporation | ||
Financial Supplement | ||
Third Quarter 2020 | ||
Table of Contents | ||||||||
Consolidated Results | Page | |||||||
Consolidated Financial Highlights | ||||||||
Condensed Consolidated Income Statement | ||||||||
Condensed Consolidated Balance Sheet | ||||||||
Fee and Other Revenue | ||||||||
Average Balances and Interest Rates | ||||||||
Capital and Liquidity | ||||||||
Business Segment Results | ||||||||
Investment Services Business | ||||||||
Investment and Wealth Management Business | ||||||||
AUM by Product, AUM Flows and Wealth Management Client Assets | ||||||||
Other Segment | ||||||||
Other | ||||||||
Securities Portfolio | ||||||||
Allowance for Credit Losses and Nonperforming Assets | ||||||||
Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures | ||||||||
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||||||||||||||
(dollars in millions, except per common share amounts, or unless otherwise noted) | 3Q20 vs. | YTD20 vs. | |||||||||||||||||||||||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q20 | 3Q19 | YTD20 | YTD19 | YTD19 | ||||||||||||||||||||||||||||||||
Selected income statement data | |||||||||||||||||||||||||||||||||||||||||
Fee revenue | $ | 3,108 | $ | 3,167 | $ | 3,323 | $ | 3,971 | $ | 3,129 | (2) | % | (1) | % | $ | 9,598 | $ | 9,265 | 4 | % | |||||||||||||||||||||
Net securities gains (losses) | 9 | 9 | 9 | (25) | (1) | N/M | N/M | 27 | 7 | N/M | |||||||||||||||||||||||||||||||
Total fee and other revenue | 3,117 | 3,176 | 3,332 | 3,946 | 3,128 | (2) | — | 9,625 | 9,272 | 4 | |||||||||||||||||||||||||||||||
Income (loss) from consolidated investment management funds | 27 | 54 | (38) | 17 | 3 | N/M | N/M | 43 | 39 | N/M | |||||||||||||||||||||||||||||||
Net interest revenue | 703 | 780 | 814 | 815 | 730 | (10) | (4) | 2,297 | 2,373 | (3) | |||||||||||||||||||||||||||||||
Total revenue | 3,847 | 4,010 | 4,108 | 4,778 | 3,861 | (4) | — | 11,965 | 11,684 | 2 | |||||||||||||||||||||||||||||||
Provision for credit losses | 9 | 143 | 169 | (8) | (16) | N/M | N/M | 321 | (17) | N/M | |||||||||||||||||||||||||||||||
Noninterest expense | 2,681 | 2,686 | 2,712 | 2,964 | 2,590 | — | 4 | 8,079 | 7,936 | 2 | |||||||||||||||||||||||||||||||
Income before income taxes | 1,157 | 1,181 | 1,227 | 1,822 | 1,287 | (2) | (10) | 3,565 | 3,765 | (5) | |||||||||||||||||||||||||||||||
Provision for income taxes | 213 | 216 | 265 | 373 | 246 | (1) | (13) | 694 | 747 | (7) | |||||||||||||||||||||||||||||||
Net income | $ | 944 | $ | 965 | $ | 962 | $ | 1,449 | $ | 1,041 | (2) | % | (9) | % | $ | 2,871 | $ | 3,018 | (5) | % | |||||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 876 | $ | 901 | $ | 944 | $ | 1,391 | $ | 1,002 | (3) | % | (13) | % | $ | 2,721 | $ | 2,881 | (6) | % | |||||||||||||||||||||
Diluted earnings per common share | $ | 0.98 | $ | 1.01 | $ | 1.05 | $ | 1.52 | $ | 1.07 | (3) | % | (8) | % | $ | 3.04 | $ | 3.01 | 1 | % | |||||||||||||||||||||
Average common shares and equivalents outstanding - diluted (in thousands) | 891,069 | 890,561 | 896,689 | 914,739 | 935,677 | — | % | (5) | % | 892,793 | 951,876 | (6) | % | ||||||||||||||||||||||||||||
Financial ratios (Returns are annualized) | |||||||||||||||||||||||||||||||||||||||||
Pre-tax operating margin | 30 | % | 29 | % | 30 | % | 38 | % | 33 | % | 30 | % | 32 | % | |||||||||||||||||||||||||||
Return on common equity | 8.7 | % | 9.4 | % | 10.1 | % | 14.6 | % | 10.6 | % | 9.4 | % | 10.3 | % | |||||||||||||||||||||||||||
Return on tangible common equity – Non-GAAP (a) | 16.7 | % | 18.5 | % | 20.4 | % | 29.3 | % | 21.4 | % | 18.5 | % | 21.1 | % | |||||||||||||||||||||||||||
Non-U.S. revenue as a percentage of total revenue | 37 | % | 36 | % | 36 | % | 31 | % | 37 | % | 37 | % | 36 | % | |||||||||||||||||||||||||||
Period end | |||||||||||||||||||||||||||||||||||||||||
Assets under custody and/or administration (“AUC/A”) (in trillions) (b) | $ | 38.6 | $ | 37.3 | $ | 35.2 | $ | 37.1 | $ | 35.8 | 3 | % | 8 | % | |||||||||||||||||||||||||||
Assets under management (“AUM”) (in trillions) | $ | 2.04 | $ | 1.96 | $ | 1.80 | $ | 1.91 | $ | 1.88 | 4 | % | 9 | % | |||||||||||||||||||||||||||
Full-time employees | 48,600 | 48,300 | 47,900 | 48,400 | 48,700 | 1 | % | — | % | ||||||||||||||||||||||||||||||||
Book value per common share | $ | 45.58 | $ | 44.21 | $ | 42.47 | $ | 42.12 | $ | 40.75 | |||||||||||||||||||||||||||||||
Tangible book value per common share – Non-GAAP (a) | $ | 24.60 | $ | 23.31 | $ | 21.53 | $ | 21.33 | $ | 20.59 | |||||||||||||||||||||||||||||||
Cash dividends per common share | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | |||||||||||||||||||||||||||||||
Common dividend payout ratio | 32 | % | 31 | % | 30 | % | 20 | % | 29 | % | |||||||||||||||||||||||||||||||
Closing stock price per common share | $ | 34.34 | $ | 38.65 | $ | 33.68 | $ | 50.33 | $ | 45.21 | |||||||||||||||||||||||||||||||
Market capitalization | $ | 30,430 | $ | 34,239 | $ | 29,822 | $ | 45,331 | $ | 41,693 | |||||||||||||||||||||||||||||||
Common shares outstanding (in thousands) | 886,136 | 885,862 | 885,443 | 900,683 | 922,199 | ||||||||||||||||||||||||||||||||||||
Capital ratios at period end (c) | |||||||||||||||||||||||||||||||||||||||||
Common Equity Tier 1 ("CET1") ratio | 13.0 | % | 12.6 | % | 11.3 | % | 11.5 | % | 11.1 | % | |||||||||||||||||||||||||||||||
Tier 1 capital ratio | 15.7 | % | 15.4 | % | 13.5 | % | 13.7 | % | 13.2 | % | |||||||||||||||||||||||||||||||
Total capital ratio | 16.6 | % | 16.3 | % | 14.3 | % | 14.4 | % | 14.0 | % | |||||||||||||||||||||||||||||||
Tier 1 leverage ratio | 6.5 | % | 6.2 | % | 6.0 | % | 6.6 | % | 6.5 | % | |||||||||||||||||||||||||||||||
Supplementary leverage ratio ("SLR") | 8.5 | % | 8.2 | % | 5.6 | % | 6.1 | % | 6.0 | % | |||||||||||||||||||||||||||||||
(a) Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of Non-GAAP measures. | |||||||||||||||||||||||||||||||||||||||||
(b) Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.4 trillion at Sept. 30, 2020, $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.4 trillion at Sept. 30, 2019. | |||||||||||||||||||||||||||||||||||||||||
(c) Regulatory capital ratios for Sept. 30, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for Sept. 30,2020, June 30, 2020, Dec. 31, 2019 and Sept. 30, 2019, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio. | |||||||||||||||||||||||||||||||||||||||||
N/M - Not meaningful. |
3
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED INCOME STATEMENT | |||||||||||||||||||||||||||||||||||||||||
(dollars in millions, except per share amounts; common shares in thousands) | 3Q20 vs. | YTD20 vs. | |||||||||||||||||||||||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q20 | 3Q19 | YTD20 | YTD19 | YTD19 | ||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||||||||
Investment services fees: | |||||||||||||||||||||||||||||||||||||||||
Asset servicing fees | $ | 1,168 | $ | 1,173 | $ | 1,159 | $ | 1,148 | $ | 1,152 | — | % | 1 | % | $ | 3,500 | $ | 3,415 | 2 | % | |||||||||||||||||||||
Clearing services fees | 397 | 431 | 470 | 421 | 419 | (8) | (5) | 1,298 | 1,227 | 6 | |||||||||||||||||||||||||||||||
Issuer services fees | 295 | 277 | 263 | 264 | 324 | 6 | (9) | 835 | 866 | (4) | |||||||||||||||||||||||||||||||
Treasury services fees | 152 | 144 | 149 | 147 | 140 | 6 | 9 | 445 | 412 | 8 | |||||||||||||||||||||||||||||||
Total investment services fees | 2,012 | 2,025 | 2,041 | 1,980 | 2,035 | (1) | (1) | 6,078 | 5,920 | 3 | |||||||||||||||||||||||||||||||
Investment management and performance fees | 835 | 786 | 862 | 883 | 832 | 6 | — | 2,483 | 2,506 | (1) | |||||||||||||||||||||||||||||||
Foreign exchange and other trading revenue | 137 | 166 | 319 | 168 | 150 | (17) | (9) | 622 | 486 | 28 | |||||||||||||||||||||||||||||||
Financing-related fees | 49 | 58 | 59 | 46 | 49 | (16) | — | 166 | 150 | 11 | |||||||||||||||||||||||||||||||
Distribution and servicing | 29 | 27 | 31 | 34 | 33 | 7 | (12) | 87 | 95 | (8) | |||||||||||||||||||||||||||||||
Investment and other income | 46 | 105 | 11 | 860 | 30 | N/M | N/M | 162 | 108 | N/M | |||||||||||||||||||||||||||||||
Total fee revenue | 3,108 | 3,167 | 3,323 | 3,971 | 3,129 | (2) | (1) | 9,598 | 9,265 | 4 | |||||||||||||||||||||||||||||||
Net securities gains (losses) | 9 | 9 | 9 | (25) | (1) | N/M | N/M | 27 | 7 | N/M | |||||||||||||||||||||||||||||||
Total fee and other revenue | 3,117 | 3,176 | 3,332 | 3,946 | 3,128 | (2) | — | 9,625 | 9,272 | 4 | |||||||||||||||||||||||||||||||
Income (loss) from consolidated investment management funds | 27 | 54 | (38) | 17 | 3 | N/M | N/M | 43 | 39 | N/M | |||||||||||||||||||||||||||||||
Net interest revenue | 703 | 780 | 814 | 815 | 730 | (10) | (4) | 2,297 | 2,373 | (3) | |||||||||||||||||||||||||||||||
Total revenue | 3,847 | 4,010 | 4,108 | 4,778 | 3,861 | (4) | — | 11,965 | 11,684 | 2 | |||||||||||||||||||||||||||||||
Provision for credit losses | 9 | 143 | 169 | (8) | (16) | N/M | N/M | 321 | (17) | N/M | |||||||||||||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||||||||||||||||||||
Staff | 1,466 | 1,464 | 1,482 | 1,639 | 1,479 | — | (1) | 4,412 | 4,424 | — | |||||||||||||||||||||||||||||||
Professional, legal and other purchased services | 355 | 337 | 330 | 367 | 316 | 5 | 12 | 1,022 | 978 | 4 | |||||||||||||||||||||||||||||||
Software and equipment | 340 | 345 | 326 | 326 | 309 | (1) | 10 | 1,011 | 896 | 13 | |||||||||||||||||||||||||||||||
Net occupancy | 136 | 137 | 135 | 151 | 138 | (1) | (1) | 408 | 413 | (1) | |||||||||||||||||||||||||||||||
Sub-custodian and clearing | 119 | 120 | 105 | 119 | 111 | (1) | 7 | 344 | 331 | 4 | |||||||||||||||||||||||||||||||
Distribution and servicing | 85 | 85 | 91 | 92 | 97 | — | (12) | 261 | 282 | (7) | |||||||||||||||||||||||||||||||
Bank assessment charges | 30 | 35 | 35 | 32 | 31 | (14) | (3) | 100 | 93 | 8 | |||||||||||||||||||||||||||||||
Business development | 17 | 20 | 42 | 65 | 47 | (15) | (64) | 79 | 148 | (47) | |||||||||||||||||||||||||||||||
Amortization of intangible assets | 26 | 26 | 26 | 28 | 30 | — | (13) | 78 | 89 | (12) | |||||||||||||||||||||||||||||||
Other | 107 | 117 | 140 | 145 | 32 | (9) | 234 | 364 | 282 | 29 | |||||||||||||||||||||||||||||||
Total noninterest expense | 2,681 | 2,686 | 2,712 | 2,964 | 2,590 | — | 4 | 8,079 | 7,936 | 2 | |||||||||||||||||||||||||||||||
Income before income taxes | 1,157 | 1,181 | 1,227 | 1,822 | 1,287 | (2) | (10) | 3,565 | 3,765 | (5) | |||||||||||||||||||||||||||||||
Provision for income taxes | 213 | 216 | 265 | 373 | 246 | (1) | (13) | 694 | 747 | (7) | |||||||||||||||||||||||||||||||
Net income | 944 | 965 | 962 | 1,449 | 1,041 | (2) | (9) | 2,871 | 3,018 | (5) | |||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | (7) | (15) | 18 | (9) | (3) | N/M | N/M | (4) | (17) | N/M | |||||||||||||||||||||||||||||||
Preferred stock dividends | (61) | (49) | (36) | (49) | (36) | N/M | N/M | (146) | (120) | N/M | |||||||||||||||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 876 | $ | 901 | $ | 944 | $ | 1,391 | $ | 1,002 | (3) | % | (13) | % | $ | 2,721 | $ | 2,881 | (6) | % | |||||||||||||||||||||
Average common shares and equivalents outstanding: Basic | 889,499 | 889,020 | 894,122 | 911,324 | 933,264 | — | % | (5) | % | 891,050 | 949,035 | (6) | % | ||||||||||||||||||||||||||||
Diluted | 891,069 | 890,561 | 896,689 | 914,739 | 935,677 | — | % | (5) | % | 892,793 | 951,876 | (6) | % | ||||||||||||||||||||||||||||
Earnings per common share: Basic | $ | 0.98 | $ | 1.01 | $ | 1.05 | $ | 1.52 | $ | 1.07 | (3) | % | (8) | % | $ | 3.05 | $ | 3.02 | 1 | % | |||||||||||||||||||||
Diluted | $ | 0.98 | $ | 1.01 | $ | 1.05 | $ | 1.52 | $ | 1.07 | (3) | % | (8) | % | $ | 3.04 | $ | 3.01 | 1 | % | |||||||||||||||||||||
N/M - Not meaningful. |
4
THE BANK OF NEW YORK MELLON CORPORATION | ||||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||
(in millions) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 4,104 | $ | 4,776 | $ | 5,091 | $ | 4,830 | $ | 6,718 | ||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | 106,185 | 112,728 | 146,535 | 95,042 | 73,811 | |||||||||||||||
Interest-bearing deposits with banks | 19,027 | 18,045 | 22,672 | 14,811 | 15,417 | |||||||||||||||
Federal funds sold and securities purchased under resale agreements | 29,647 | 36,638 | 27,363 | 30,182 | 43,723 | |||||||||||||||
Securities | 155,339 | 154,682 | 139,273 | 123,033 | 122,340 | |||||||||||||||
Trading assets | 13,074 | 14,150 | 12,918 | 13,571 | 10,180 | |||||||||||||||
Loans | 55,491 | 55,397 | 62,368 | 54,953 | 54,881 | |||||||||||||||
Allowance for loan losses | (325) | (302) | (140) | (122) | (127) | |||||||||||||||
Net loans | 55,166 | 55,095 | 62,228 | 54,831 | 54,754 | |||||||||||||||
Premises and equipment | 3,617 | 3,598 | 3,514 | 3,625 | 3,149 | |||||||||||||||
Accrued interest receivable | 489 | 540 | 576 | 624 | 596 | |||||||||||||||
Goodwill | 17,357 | 17,253 | 17,240 | 17,386 | 17,248 | |||||||||||||||
Intangible assets | 3,026 | 3,045 | 3,070 | 3,107 | 3,124 | |||||||||||||||
Other assets | 20,779 | 21,306 | 27,446 | 20,221 | 21,727 | |||||||||||||||
Subtotal assets of operations | 427,810 | 441,856 | 467,926 | 381,263 | 372,787 | |||||||||||||||
Assets of consolidated investment management funds, at fair value | 588 | 460 | 229 | 245 | 381 | |||||||||||||||
Total assets | $ | 428,398 | $ | 442,316 | $ | 468,155 | $ | 381,508 | $ | 373,168 | ||||||||||
Liabilities | ||||||||||||||||||||
Deposits | $ | 296,312 | $ | 305,470 | $ | 336,717 | $ | 259,466 | $ | 249,660 | ||||||||||
Federal funds purchased and securities sold under repurchase agreements | 15,907 | 14,512 | 13,128 | 11,401 | 11,796 | |||||||||||||||
Trading liabilities | 6,084 | 5,595 | 6,625 | 4,841 | 4,756 | |||||||||||||||
Payables to customers and broker-dealers | 23,514 | 25,012 | 24,016 | 18,758 | 18,364 | |||||||||||||||
Commercial paper | 671 | 665 | 1,121 | 3,959 | 3,538 | |||||||||||||||
Other borrowed funds | 420 | 1,628 | 1,544 | 599 | 820 | |||||||||||||||
Accrued taxes and other expenses | 5,347 | 5,029 | 4,705 | 5,642 | 5,081 | |||||||||||||||
Other liabilities | 8,671 | 12,869 | 11,425 | 7,612 | 9,796 | |||||||||||||||
Long-term debt | 26,121 | 27,566 | 27,494 | 27,501 | 27,872 | |||||||||||||||
Subtotal liabilities of operations | 383,047 | 398,346 | 426,775 | 339,779 | 331,683 | |||||||||||||||
Liabilities of consolidated investment management funds, at fair value | 4 | 4 | 1 | 1 | 15 | |||||||||||||||
Total liabilities | 383,051 | 398,350 | 426,776 | 339,780 | 331,698 | |||||||||||||||
Temporary equity | ||||||||||||||||||||
Redeemable noncontrolling interests | 179 | 157 | 140 | 143 | 147 | |||||||||||||||
Permanent equity | ||||||||||||||||||||
Preferred stock | 4,532 | 4,532 | 3,542 | 3,542 | 3,542 | |||||||||||||||
Common stock | 14 | 14 | 14 | 14 | 14 | |||||||||||||||
Additional paid-in capital | 27,741 | 27,702 | 27,644 | 27,515 | 27,471 | |||||||||||||||
Retained earnings | 33,821 | 33,224 | 32,601 | 31,894 | 30,789 | |||||||||||||||
Accumulated other comprehensive loss, net of tax | (1,359) | (1,943) | (2,827) | (2,638) | (2,893) | |||||||||||||||
Less: Treasury stock, at cost | (19,832) | (19,832) | (19,829) | (18,844) | (17,803) | |||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity | 44,917 | 43,697 | 41,145 | 41,483 | 41,120 | |||||||||||||||
Nonredeemable noncontrolling interests of consolidated investment management funds | 251 | 112 | 94 | 102 | 203 | |||||||||||||||
Total permanent equity | 45,168 | 43,809 | 41,239 | 41,585 | 41,323 | |||||||||||||||
Total liabilities, temporary equity and permanent equity | $ | 428,398 | $ | 442,316 | $ | 468,155 | $ | 381,508 | $ | 373,168 |
5
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||
FEE AND OTHER REVENUE | |||||||||||||||||||||||||||||||||||||||||
3Q20 vs. | YTD20 vs. | ||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q20 | 3Q19 | YTD20 | YTD19 | YTD19 | |||||||||||||||||||||||||||||||
Investment services fees: | |||||||||||||||||||||||||||||||||||||||||
Asset servicing fees (a) | $ | 1,128 | $ | 1,117 | $ | 1,108 | $ | 1,104 | $ | 1,109 | 1 | % | 2 | % | $ | 3,353 | $ | 3,280 | 2 | % | |||||||||||||||||||||
Securities lending revenue | 40 | 56 | 51 | 44 | 43 | (29) | (7) | 147 | 135 | 9 | |||||||||||||||||||||||||||||||
Clearing services fees (b) | 397 | 431 | 470 | 421 | 419 | (8) | (5) | 1,298 | 1,227 | 6 | |||||||||||||||||||||||||||||||
Issuer services fees | 295 | 277 | 263 | 264 | 324 | 6 | (9) | 835 | 866 | (4) | |||||||||||||||||||||||||||||||
Treasury services fees | 152 | 144 | 149 | 147 | 140 | 6 | 9 | 445 | 412 | 8 | |||||||||||||||||||||||||||||||
Total investment services fees | 2,012 | 2,025 | 2,041 | 1,980 | 2,035 | (1) | (1) | 6,078 | 5,920 | 3 | |||||||||||||||||||||||||||||||
Investment management and performance fees (c): | |||||||||||||||||||||||||||||||||||||||||
Investment management fees | 828 | 781 | 812 | 835 | 830 | 6 | — | 2,421 | 2,471 | (2) | |||||||||||||||||||||||||||||||
Performance fees | 7 | 5 | 50 | 48 | 2 | N/M | N/M | 62 | 35 | 77 | |||||||||||||||||||||||||||||||
Total investment management and performance fees (d) | 835 | 786 | 862 | 883 | 832 | 6 | — | 2,483 | 2,506 | (1) | |||||||||||||||||||||||||||||||
Foreign exchange and other trading revenue: | |||||||||||||||||||||||||||||||||||||||||
Foreign exchange | 151 | 174 | 253 | 138 | 129 | (13) | 17 | 578 | 439 | 32 | |||||||||||||||||||||||||||||||
Other trading (loss) revenue | (14) | (8) | 66 | 30 | 21 | N/M | N/M | 44 | 47 | N/M | |||||||||||||||||||||||||||||||
Total foreign exchange and other trading revenue | 137 | 166 | 319 | 168 | 150 | (17) | (9) | 622 | 486 | 28 | |||||||||||||||||||||||||||||||
Financing-related fees | 49 | 58 | 59 | 46 | 49 | (16) | — | 166 | 150 | 11 | |||||||||||||||||||||||||||||||
Distribution and servicing | 29 | 27 | 31 | 34 | 33 | 7 | (12) | 87 | 95 | (8) | |||||||||||||||||||||||||||||||
Investment and other income: | |||||||||||||||||||||||||||||||||||||||||
Corporate/bank-owned life insurance | 33 | 36 | 36 | 43 | 33 | N/M | N/M | 105 | 95 | N/M | |||||||||||||||||||||||||||||||
Expense reimbursements from joint venture | 23 | 19 | 21 | 20 | 21 | N/M | N/M | 63 | 59 | N/M | |||||||||||||||||||||||||||||||
Asset-related gains | 4 | 3 | 4 | 815 | 2 | N/M | N/M | 11 | 4 | N/M | |||||||||||||||||||||||||||||||
Seed capital gains (losses) (c) | 9 | 23 | (31) | 4 | — | N/M | N/M | 1 | 10 | N/M | |||||||||||||||||||||||||||||||
Other (loss) income | (23) | 24 | (19) | (22) | (26) | N/M | N/M | (18) | (60) | N/M | |||||||||||||||||||||||||||||||
Total investment and other income (c) | 46 | 105 | 11 | 860 | 30 | N/M | N/M | 162 | 108 | N/M | |||||||||||||||||||||||||||||||
Total fee revenue | 3,108 | 3,167 | 3,323 | 3,971 | 3,129 | (2) | (1) | 9,598 | 9,265 | 4 | |||||||||||||||||||||||||||||||
Net securities gains (losses) | 9 | 9 | 9 | (25) | (1) | N/M | N/M | 27 | 7 | N/M | |||||||||||||||||||||||||||||||
Total fee and other revenue | $ | 3,117 | $ | 3,176 | $ | 3,332 | $ | 3,946 | $ | 3,128 | (2) | % | — | % | $ | 9,625 | $ | 9,272 | 4 | % | |||||||||||||||||||||
(a) Asset servicing fees include the fees from the Clearance and Collateral Management business. | |||||||||||||||||||||||||||||||||||||||||
(b) Clearing services fees are almost entirely earned by our Pershing business. | |||||||||||||||||||||||||||||||||||||||||
(c) Excludes seed capital gains (losses) related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds. | |||||||||||||||||||||||||||||||||||||||||
(d) On a constant currency basis (Non-GAAP), investment management and performance fees decreased 1% compared with 3Q19. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure. | |||||||||||||||||||||||||||||||||||||||||
N/M - Not meaningful. |
6
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||
AVERAGE BALANCES AND INTEREST RATES | |||||||||||||||||||||||||||||||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||||||||||||||||||||||||||||||
Average balance | Average rate | Average balance | Average rate | Average balance | Average rate | Average balance | Average rate | Average balance | Average rate | ||||||||||||||||||||||||||||||||||||||
(dollars in millions; average rates are annualized) | |||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | 90,670 | (0.04) | % | $ | 94,229 | (0.03) | % | $ | 80,403 | 0.39 | % | $ | 61,627 | 0.60 | % | $ | 60,030 | 0.67 | % | |||||||||||||||||||||||||||
Interest-bearing deposits with banks (primarily foreign banks) | 19,202 | 0.42 | 21,093 | 0.76 | 17,081 | 1.37 | 15,788 | 1.63 | 15,324 | 1.89 | |||||||||||||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements (a) | 30,342 | 0.63 | 30,265 | 0.82 | 34,109 | 4.67 | 38,846 | 4.62 | 40,816 | 6.42 | |||||||||||||||||||||||||||||||||||||
Margin loans | 12,870 | 1.24 | 12,791 | 1.28 | 12,984 | 2.69 | 11,609 | 3.25 | 10,303 | 4.02 | |||||||||||||||||||||||||||||||||||||
Non-margin loans: | |||||||||||||||||||||||||||||||||||||||||||||||
Domestic offices | 30,053 | 2.12 | 31,185 | 2.21 | 31,720 | 3.02 | 29,690 | 3.36 | 29,285 | 2.75 | (b) | ||||||||||||||||||||||||||||||||||||
Foreign offices | 10,693 | 1.45 | 12,743 | 1.84 | 11,170 | 2.55 | 11,418 | 2.70 | 11,247 | 2.97 | |||||||||||||||||||||||||||||||||||||
Total non-margin loans | 40,746 | 1.94 | 43,928 | 2.10 | 42,890 | 2.89 | 41,108 | 3.18 | 40,532 | 2.81 | (b) | ||||||||||||||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. government obligations | 30,073 | 1.36 | 27,901 | 1.52 | 23,175 | 1.87 | 18,444 | 2.08 | 19,315 | 2.11 | |||||||||||||||||||||||||||||||||||||
U.S. government agency obligations | 78,300 | 1.68 | 74,583 | 1.92 | 69,046 | 2.32 | 67,494 | 2.36 | 67,235 | 2.49 | |||||||||||||||||||||||||||||||||||||
State and political subdivisions (c) | 1,500 | 2.51 | 1,025 | 2.98 | 1,033 | 3.06 | 1,134 | 3.03 | 1,217 | 3.05 | |||||||||||||||||||||||||||||||||||||
Other securities (c) | 46,719 | 0.59 | 45,511 | 0.82 | 36,375 | 0.95 | 35,242 | 1.64 | 33,729 | 1.75 | |||||||||||||||||||||||||||||||||||||
Trading securities (c) | 7,212 | 0.91 | 6,236 | 1.13 | 6,840 | 2.36 | 6,695 | 2.41 | 5,653 | 2.80 | |||||||||||||||||||||||||||||||||||||
Total securities (c) | 163,804 | 1.28 | 155,256 | 1.50 | 136,469 | 1.88 | 129,009 | 2.13 | 127,149 | 2.25 | |||||||||||||||||||||||||||||||||||||
Total interest-earning assets (c) | $ | 357,634 | 0.92 | % | $ | 357,562 | 1.06 | % | $ | 323,936 | 1.95 | % | $ | 297,987 | 2.30 | % | $ | 294,154 | 2.63 | % | (b) | ||||||||||||||||||||||||||
Noninterest-earning assets | 57,231 | 57,797 | 61,342 | 56,354 | 56,525 | ||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 414,865 | $ | 415,359 | $ | 385,278 | $ | 354,341 | $ | 350,679 | |||||||||||||||||||||||||||||||||||||
Liabilities and equity | |||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||||||||||||||
Domestic offices | $ | 102,767 | (0.01) | % | $ | 102,135 | 0.06 | % | $ | 99,915 | 0.69 | % | $ | 87,162 | 0.98 | % | $ | 82,663 | 1.28 | % | |||||||||||||||||||||||||||
Foreign offices | 108,733 | (0.09) | 108,508 | (0.12) | 97,717 | 0.29 | 95,262 | 0.49 | 94,738 | 0.71 | |||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 211,500 | (0.05) | 210,643 | (0.03) | 197,632 | 0.49 | 182,424 | 0.73 | 177,401 | 0.98 | |||||||||||||||||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements (a) | 16,850 | 0.13 | 14,209 | 0.03 | 13,919 | 7.96 | 12,668 | 9.11 | 13,432 | 13.08 | |||||||||||||||||||||||||||||||||||||
Trading liabilities | 2,692 | 0.30 | 1,974 | 0.39 | 1,626 | 1.61 | 1,504 | 2.25 | 1,371 | 2.33 | |||||||||||||||||||||||||||||||||||||
Other borrowed funds | 873 | 1.40 | 2,272 | 1.30 | 719 | 2.27 | 709 | 2.83 | 1,148 | 3.24 | |||||||||||||||||||||||||||||||||||||
Commercial paper | 2,274 | 0.09 | 191 | 1.02 | 1,581 | 1.56 | 1,792 | 1.66 | 3,796 | 2.26 | |||||||||||||||||||||||||||||||||||||
Payables to customers and broker-dealers | 18,501 | (0.01) | 18,742 | (0.01) | 16,386 | 0.73 | 15,178 | 1.07 | 15,440 | 1.52 | |||||||||||||||||||||||||||||||||||||
Long-term debt | 26,511 | 2.01 | 28,122 | 2.42 | 27,231 | 2.83 | 28,117 | 3.09 | 28,386 | 3.24 | |||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 279,201 | 0.16 | % | $ | 276,153 | 0.24 | % | $ | 259,094 | 1.17 | % | $ | 242,392 | 1.48 | % | $ | 240,974 | 1.99 | % | |||||||||||||||||||||||||||
Total noninterest-bearing deposits | 67,610 | 72,411 | 60,577 | 49,632 | 49,027 | ||||||||||||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 23,393 | 24,121 | 24,229 | 20,681 | 19,280 | ||||||||||||||||||||||||||||||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity | 44,456 | 42,486 | 41,206 | 41,384 | 41,139 | ||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | 205 | 188 | 172 | 252 | 259 | ||||||||||||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 414,865 | $ | 415,359 | $ | 385,278 | $ | 354,341 | $ | 350,679 | |||||||||||||||||||||||||||||||||||||
Net interest margin | 0.79 | % | 0.88 | % | 1.01 | % | 1.09 | % | 0.99 | % | (b) | ||||||||||||||||||||||||||||||||||||
Net interest margin (FTE) – Non-GAAP (d) | 0.79 | % | 0.88 | % | 1.01 | % | 1.09 | % | 1.00 | % | (b) | ||||||||||||||||||||||||||||||||||||
(a) Includes the average impact of offsetting under enforceable netting agreements of approximately $43 billion for 3Q20, $67 billion for 2Q20, $80 billion for 1Q20, $60 billion for 4Q19 and $68 billion for 3Q19. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 0.26% for 3Q20 and 2Q20, 1.39% for 1Q20, 1.82% for 4Q19 and 2.42% for 3Q19. On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under repurchase agreements would have been 0.04% for 3Q20, 0.00% for 2Q20, 1.18% for 1Q20, 1.59% for 4Q19 and 2.17% for 3Q19. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid. | |||||||||||||||||||||||||||||||||||||||||||||||
(b) Includes the impact of the lease-related impairment of $70 million in 3Q19. On a Non-GAAP basis, excluding the lease-related impairment, the yield on non-margin loans in domestic offices would have been 3.70%, the yield on total non-margin loans would have been 3.50%, the yield on total interest-earning assets would have been 2.72% and the net interest margin and the net interest margin (FTE) – Non-GAAP would have been 1.09% in 3Q19. | |||||||||||||||||||||||||||||||||||||||||||||||
(c) Average rates were calculated on an FTE basis, at tax rates of approximately 21%. | |||||||||||||||||||||||||||||||||||||||||||||||
(d) See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure. |
7
THE BANK OF NEW YORK MELLON CORPORATION | ||||||||||||||||||||||||||
CAPITAL AND LIQUIDITY | ||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||
(dollars in millions) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | |||||||||||||||||||||
Consolidated regulatory capital ratios (a) | ||||||||||||||||||||||||||
Standardized Approach: | ||||||||||||||||||||||||||
CET1 capital | $ | 21,171 | $ | 20,035 | $ | 18,465 | $ | 18,540 | $ | 18,196 | ||||||||||||||||
Tier 1 capital | 25,614 | 24,478 | 21,933 | 21,996 | 21,677 | |||||||||||||||||||||
Total capital | 27,331 | 26,183 | 23,494 | 23,449 | 23,145 | |||||||||||||||||||||
Risk-weighted assets | 156,741 | 157,290 | 163,006 | 148,695 | 148,399 | |||||||||||||||||||||
CET1 ratio | 13.5 | % | 12.7 | % | 11.3 | % | 12.5 | % | 12.3 | % | ||||||||||||||||
Tier 1 capital ratio | 16.3 | 15.6 | 13.5 | 14.8 | 14.6 | |||||||||||||||||||||
Total capital ratio | 17.4 | 16.6 | 14.4 | 15.8 | 15.6 | |||||||||||||||||||||
Advanced Approaches: | ||||||||||||||||||||||||||
CET1 capital | $ | 21,171 | $ | 20,035 | $ | 18,465 | $ | 18,540 | $ | 18,196 | ||||||||||||||||
Tier 1 capital | 25,614 | 24,478 | 21,933 | 21,996 | 21,677 | |||||||||||||||||||||
Total capital | 27,095 | 25,937 | 23,281 | 23,233 | 22,921 | |||||||||||||||||||||
Risk-weighted assets | 163,136 | 159,340 | 162,561 | 160,898 | 164,172 | |||||||||||||||||||||
CET1 ratio | 13.0 | % | 12.6 | % | 11.4 | % | 11.5 | % | 11.1 | % | ||||||||||||||||
Tier 1 capital ratio | 15.7 | 15.4 | 13.5 | 13.7 | 13.2 | |||||||||||||||||||||
Total capital ratio | 16.6 | 16.3 | 14.3 | 14.4 | 14.0 | |||||||||||||||||||||
Tier 1 leverage ratio | 6.5 | % | 6.2 | % | 6.0 | % | 6.6 | % | 6.5 | % | ||||||||||||||||
SLR: | ||||||||||||||||||||||||||
Leverage exposure | $ | 300,105 | (b) | $ | 297,300 | (b) | $ | 392,807 | $ | 362,452 | $ | 359,023 | ||||||||||||||
SLR | 8.5 | % | (b) | 8.2 | % | (b) | 5.6 | % | 6.1 | % | 6.0 | % | ||||||||||||||
Average liquidity coverage ratio | 111 | % | 112 | % | 115 | % | 120 | % | 117 | % | ||||||||||||||||
(a) Regulatory capital ratios for Sept. 30, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for Sept. 30, 2020, June 30, 2020, Dec. 31, 2019 and Sept. 30, 2019, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio. | ||||||||||||||||||||||||||
(b) Reflects the application of a new rule effective April 1, 2020 to exclude certain central bank placements. Also effective on April 1, 2020 was the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation which increased our consolidated SLR by 78 basis points at Sept. 30, 2020 and 40 basis points at June 30, 2020. |
8
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||
INVESTMENT SERVICES BUSINESS | |||||||||||||||||||||||||||||||||||||||||
3Q20 vs. | YTD20 vs. | ||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q20 | 3Q19 | YTD20 | YTD19 | YTD19 | |||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||||||||
Investment services fees: | |||||||||||||||||||||||||||||||||||||||||
Asset servicing fees (ex. securities lending revenue) (a) | $ | 1,119 | $ | 1,113 | $ | 1,101 | $ | 1,098 | $ | 1,099 | 1 | % | 2 | % | $ | 3,333 | $ | 3,252 | 2 | % | |||||||||||||||||||||
Securities lending revenue | 37 | 51 | 46 | 40 | 39 | (27) | (5) | 134 | 123 | 9 | |||||||||||||||||||||||||||||||
Clearing services fees (b) | 397 | 431 | 470 | 421 | 419 | (8) | (5) | 1,298 | 1,228 | 6 | |||||||||||||||||||||||||||||||
Issuer services fees | 295 | 277 | 263 | 264 | 324 | 6 | (9) | 835 | 866 | (4) | |||||||||||||||||||||||||||||||
Treasury services fees | 152 | 144 | 149 | 147 | 139 | 6 | 9 | 445 | 411 | 8 | |||||||||||||||||||||||||||||||
Total investment services fees | 2,000 | 2,016 | 2,029 | 1,970 | 2,020 | (1) | (1) | 6,045 | 5,880 | 3 | |||||||||||||||||||||||||||||||
Foreign exchange and other trading revenue | 146 | 178 | 261 | 151 | 160 | (18) | (9) | 585 | 470 | 24 | |||||||||||||||||||||||||||||||
Other (c) | 100 | 145 | 146 | 115 | 116 | (31) | (14) | 391 | 340 | 15 | |||||||||||||||||||||||||||||||
Total fee and other revenue | 2,246 | 2,339 | 2,436 | 2,236 | 2,296 | (4) | (2) | 7,021 | 6,690 | 5 | |||||||||||||||||||||||||||||||
Net interest revenue | 681 | 768 | 806 | 778 | 761 | (11) | (11) | 2,255 | 2,348 | (4) | |||||||||||||||||||||||||||||||
Total revenue | 2,927 | 3,107 | 3,242 | 3,014 | 3,057 | (6) | (4) | 9,276 | 9,038 | 3 | |||||||||||||||||||||||||||||||
Provision for credit losses | (10) | 145 | 149 | (5) | (15) | N/M | N/M | 284 | (11) | N/M | |||||||||||||||||||||||||||||||
Noninterest expense (ex. amortization of intangible assets) | 2,002 | 1,971 | 1,969 | 2,160 | 1,952 | 2 | 3 | 5,942 | 5,856 | 1 | |||||||||||||||||||||||||||||||
Amortization of intangible assets | 18 | 18 | 18 | 19 | 21 | — | (14) | 54 | 61 | (11) | |||||||||||||||||||||||||||||||
Total noninterest expense | 2,020 | 1,989 | 1,987 | 2,179 | 1,973 | 2 | 2 | 5,996 | 5,917 | 1 | |||||||||||||||||||||||||||||||
Income before taxes | $ | 917 | $ | 973 | $ | 1,106 | $ | 840 | $ | 1,099 | (6) | % | (17) | % | $ | 2,996 | $ | 3,132 | (4) | % | |||||||||||||||||||||
Pre-tax operating margin | 31 | % | 31 | % | 34 | % | 28 | % | 36 | % | 32 | % | 35 | % | |||||||||||||||||||||||||||
Total revenue by line of business: | |||||||||||||||||||||||||||||||||||||||||
Asset Servicing | $ | 1,354 | $ | 1,463 | $ | 1,531 | $ | 1,411 | $ | 1,411 | (7) | % | (4) | % | $ | 4,348 | $ | 4,223 | 3 | % | |||||||||||||||||||||
Pershing | 538 | 578 | 653 | 579 | 575 | (7) | (6) | 1,769 | 1,708 | 4 | |||||||||||||||||||||||||||||||
Issuer Services | 435 | 431 | 419 | 415 | 466 | 1 | (7) | 1,285 | 1,308 | (2) | |||||||||||||||||||||||||||||||
Treasury Services | 323 | 340 | 339 | 329 | 312 | (5) | 4 | 1,002 | 946 | 6 | |||||||||||||||||||||||||||||||
Clearance and Collateral Management | 277 | 295 | 300 | 280 | 293 | (6) | (5) | 872 | 853 | 2 | |||||||||||||||||||||||||||||||
Total revenue by line of business | $ | 2,927 | $ | 3,107 | $ | 3,242 | $ | 3,014 | $ | 3,057 | (6) | % | (4) | % | $ | 9,276 | $ | 9,038 | 3 | % | |||||||||||||||||||||
(a) Asset servicing fees include the fees from the Clearance and Collateral Management business. | |||||||||||||||||||||||||||||||||||||||||
(b) Clearing services fees are almost entirely earned by our Pershing business. | |||||||||||||||||||||||||||||||||||||||||
(c) Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue, securities gains and losses and investment and other income. | |||||||||||||||||||||||||||||||||||||||||
N/M - Not meaningful. |
9
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||
INVESTMENT SERVICES BUSINESS | |||||||||||||||||||||||||||||||||||||||||
3Q20 vs. | YTD20 vs. | ||||||||||||||||||||||||||||||||||||||||
(dollars in millions, unless otherwise noted) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q20 | 3Q19 | YTD20 | YTD19 | YTD19 | |||||||||||||||||||||||||||||||
Average loans | $ | 40,308 | $ | 43,113 | $ | 41,789 | $ | 38,721 | $ | 37,005 | (7) | % | 9 | % | $ | 41,731 | $ | 36,881 | 13 | % | |||||||||||||||||||||
Average assets | $ | 329,324 | $ | 335,288 | $ | 304,089 | $ | 278,098 | $ | 269,926 | (2) | % | 22 | % | $ | 322,924 | $ | 263,631 | 22 | % | |||||||||||||||||||||
Average deposits | $ | 263,621 | $ | 268,467 | $ | 242,187 | $ | 215,388 | $ | 208,044 | (2) | % | 27 | % | $ | 258,112 | $ | 201,472 | 28 | % | |||||||||||||||||||||
AUC/A at period end (in trillions) (a)(b) | $ | 38.6 | $ | 37.3 | $ | 35.2 | $ | 37.1 | $ | 35.8 | 3 | % | 8 | % | |||||||||||||||||||||||||||
Market value of securities on loan at period end (in billions) (c) | $ | 378 | $ | 384 | $ | 389 | $ | 378 | $ | 362 | (2) | % | 4 | % | |||||||||||||||||||||||||||
Pershing | |||||||||||||||||||||||||||||||||||||||||
Net new assets (U.S. platform) (in billions) (d) | $ | 12 | $ | 11 | $ | 31 | $ | 33 | $ | 19 | N/M | N/M | |||||||||||||||||||||||||||||
Average active clearing accounts (U.S. platform) (in thousands) | 6,556 | 6,507 | 6,437 | 6,340 | 6,283 | 1 | % | 4 | % | ||||||||||||||||||||||||||||||||
Average long-term mutual fund assets (U.S. platform) | $ | 597,312 | $ | 547,579 | $ | 549,206 | $ | 573,475 | $ | 547,522 | 9 | % | 9 | % | |||||||||||||||||||||||||||
Average investor margin loans (U.S. platform) | $ | 9,350 | $ | 9,235 | $ | 9,419 | $ | 9,420 | $ | 9,222 | 1 | % | 1 | % | |||||||||||||||||||||||||||
Clearance and Collateral Management | |||||||||||||||||||||||||||||||||||||||||
Average tri-party collateral management balances (in billions) | $ | 3,417 | $ | 3,573 | $ | 3,724 | $ | 3,562 | $ | 3,550 | (4) | % | (4) | % | |||||||||||||||||||||||||||
(a) Sept. 30, 2020 information is preliminary. | |||||||||||||||||||||||||||||||||||||||||
(b) Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth Management businesses. Includes the AUC/A of CIBC Mellon of $1.4 trillion at Sept. 30, 2020, $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.4 trillion at Sept. 30, 2019. | |||||||||||||||||||||||||||||||||||||||||
(c) Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $62 billion at Sept. 30, 2020 and June 30, 2020, $59 billion at March 31, 2020, $60 billion at Dec. 31, 2019 and $66 billion at Sept. 30, 2019. | |||||||||||||||||||||||||||||||||||||||||
(d) Net new assets represents net flows of assets (e.g., net cash deposits and net securities transfers) in customer accounts in Pershing LLC, a U.S. broker-dealer. | |||||||||||||||||||||||||||||||||||||||||
N/M - Not meaningful. |
10
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||
INVESTMENT AND WEALTH MANAGEMENT BUSINESS | |||||||||||||||||||||||||||||||||||||||||
3Q20 vs. | YTD20 vs. | ||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q20 | 3Q19 | YTD20 | YTD19 | YTD19 | |||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||||||||
Investment management fees (a) | $ | 828 | $ | 782 | $ | 812 | $ | 836 | $ | 830 | 6 | % | — | % | $ | 2,422 | $ | 2,471 | (2) | % | |||||||||||||||||||||
Performance fees | 7 | 5 | 50 | 48 | 2 | N/M | N/M | 62 | 35 | 77 | |||||||||||||||||||||||||||||||
Investment management and performance fees (b) | 835 | 787 | 862 | 884 | 832 | 6 | — | 2,484 | 2,506 | (1) | |||||||||||||||||||||||||||||||
Distribution and servicing | 31 | 34 | 43 | 44 | 45 | (9) | (31) | 108 | 134 | (19) | |||||||||||||||||||||||||||||||
Other (a) | 5 | 17 | (59) | (4) | (39) | N/M | N/M | (37) | (79) | N/M | |||||||||||||||||||||||||||||||
Total fee and other revenue (a) | 871 | 838 | 846 | 924 | 838 | 4 | 4 | 2,555 | 2,561 | — | |||||||||||||||||||||||||||||||
Net interest revenue | 47 | 48 | 52 | 47 | 49 | (2) | (4) | 147 | 175 | (16) | |||||||||||||||||||||||||||||||
Total revenue | 918 | 886 | 898 | 971 | 887 | 4 | 3 | 2,702 | 2,736 | (1) | |||||||||||||||||||||||||||||||
Provision for credit losses | 12 | 7 | 9 | — | — | N/M | N/M | 28 | (1) | N/M | |||||||||||||||||||||||||||||||
Noninterest expense (ex. amortization of intangible assets) | 653 | 650 | 687 | 722 | 582 | — | 12 | 1,990 | 1,888 | 5 | |||||||||||||||||||||||||||||||
Amortization of intangible assets | 8 | 8 | 8 | 9 | 10 | — | (20) | 24 | 28 | (14) | |||||||||||||||||||||||||||||||
Total noninterest expense | 661 | 658 | 695 | 731 | 592 | — | 12 | 2,014 | 1,916 | 5 | |||||||||||||||||||||||||||||||
Income before taxes | $ | 245 | $ | 221 | $ | 194 | $ | 240 | $ | 295 | 11 | % | (17) | % | $ | 660 | $ | 821 | (20) | % | |||||||||||||||||||||
Pre-tax operating margin | 27 | % | 25 | % | 22 | % | 25 | % | 33 | % | 24 | % | 30 | % | |||||||||||||||||||||||||||
Adjusted pre-tax operating margin – Non-GAAP (c) | 29 | % | 28 | % | 24 | % | 27 | % | 37 | % | 27 | % | 33 | % | |||||||||||||||||||||||||||
Total revenue by line of business: | |||||||||||||||||||||||||||||||||||||||||
Investment Management | $ | 641 | $ | 621 | $ | 620 | $ | 692 | $ | 608 | 3 | % | 5 | % | $ | 1,882 | $ | 1,870 | 1 | % | |||||||||||||||||||||
Wealth Management | 277 | 265 | 278 | 279 | 279 | 5 | (1) | 820 | 866 | (5) | |||||||||||||||||||||||||||||||
Total revenue by line of business | $ | 918 | $ | 886 | $ | 898 | $ | 971 | $ | 887 | 4 | % | 3 | % | $ | 2,702 | $ | 2,736 | (1) | % | |||||||||||||||||||||
Average loans | $ | 11,503 | $ | 11,791 | $ | 12,124 | $ | 12,022 | $ | 12,013 | (2) | % | (4) | % | $ | 11,805 | $ | 12,184 | (3) | % | |||||||||||||||||||||
Average assets | $ | 30,160 | $ | 30,327 | $ | 30,543 | $ | 28,481 | $ | 27,840 | (1) | % | 8 | % | $ | 30,343 | $ | 29,815 | 2 | % | |||||||||||||||||||||
Average deposits | $ | 17,570 | $ | 17,491 | $ | 16,144 | $ | 15,195 | $ | 14,083 | — | % | 25 | % | $ | 17,070 | $ | 14,831 | 15 | % | |||||||||||||||||||||
(a) Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. Additionally, other revenue includes asset servicing fees, treasury services fees, foreign exchange and other trading revenue and investment and other income. | |||||||||||||||||||||||||||||||||||||||||
(b) On a constant currency basis (Non-GAAP), investment management and performance fees decreased 1% compared with 3Q19. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure. | |||||||||||||||||||||||||||||||||||||||||
(c) Net of distribution and servicing expense. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure. | |||||||||||||||||||||||||||||||||||||||||
N/M - Not meaningful. |
11
THE BANK OF NEW YORK MELLON CORPORATION | ||||||||||||||||||||||||||
AUM BY PRODUCT, AUM FLOWS AND WEALTH MANAGEMENT CLIENT ASSETS | ||||||||||||||||||||||||||
3Q20 vs. | ||||||||||||||||||||||||||
(dollars in billions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q20 | 3Q19 | |||||||||||||||||||
AUM by product type (a)(b) | ||||||||||||||||||||||||||
Equity | $ | 149 | $ | 141 | $ | 120 | $ | 154 | $ | 147 | 6 | % | 1 | % | ||||||||||||
Fixed income | 241 | 224 | 211 | 224 | 211 | 8 | 14 | |||||||||||||||||||
Index | 350 | 333 | 274 | 339 | 321 | 5 | 9 | |||||||||||||||||||
Liability-driven investments | 788 | 752 | 705 | 728 | 742 | 5 | 6 | |||||||||||||||||||
Multi-asset and alternative investments | 193 | 185 | 171 | 192 | 182 | 4 | 6 | |||||||||||||||||||
Cash | 320 | 326 | 315 | 273 | 278 | (2) | 15 | |||||||||||||||||||
Total AUM by product type | $ | 2,041 | $ | 1,961 | $ | 1,796 | $ | 1,910 | $ | 1,881 | 4 | % | 9 | % | ||||||||||||
Changes in AUM (a)(b) | ||||||||||||||||||||||||||
Beginning balance of AUM | $ | 1,961 | $ | 1,796 | $ | 1,910 | $ | 1,881 | $ | 1,843 | ||||||||||||||||
Net inflows (outflows): | ||||||||||||||||||||||||||
Long-term strategies: | ||||||||||||||||||||||||||
Equity | (4) | (2) | (2) | (6) | (4) | |||||||||||||||||||||
Fixed income | 1 | 4 | — | 5 | 2 | |||||||||||||||||||||
Liability-driven investments | 14 | (2) | (5) | (3) | (4) | |||||||||||||||||||||
Multi-asset and alternative investments | (3) | — | (1) | 3 | (1) | |||||||||||||||||||||
Total long-term active strategies inflows (outflows) | 8 | — | (8) | (1) | (7) | |||||||||||||||||||||
Index | (3) | 9 | 3 | (5) | (3) | |||||||||||||||||||||
Total long-term strategies inflows (outflows) | 5 | 9 | (5) | (6) | (10) | |||||||||||||||||||||
Short-term strategies: | ||||||||||||||||||||||||||
Cash | (10) | 11 | 43 | (7) | 11 | |||||||||||||||||||||
Total net (outflows) inflows | (5) | 20 | 38 | (13) | 1 | |||||||||||||||||||||
Net market impact | 41 | 143 | (91) | (20) | 66 | |||||||||||||||||||||
Net currency impact | 44 | 2 | (61) | 62 | (29) | |||||||||||||||||||||
Ending balance of AUM | $ | 2,041 | $ | 1,961 | $ | 1,796 | $ | 1,910 | $ | 1,881 | 4 | % | 9 | % | ||||||||||||
Wealth Management client assets (a)(c) | $ | 265 | $ | 254 | $ | 236 | $ | 266 | $ | 259 | 4 | % | 2 | % | ||||||||||||
(a) Sept. 30, 2020 information is preliminary. | ||||||||||||||||||||||||||
(b) Excludes securities lending cash management assets and assets managed in the Investment Services business. | ||||||||||||||||||||||||||
(c) Includes AUM and AUC/A in the Wealth Management business. |
12
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||
OTHER SEGMENT | |||||||||||||||||||||||||||||
(in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | YTD20 | YTD19 | ||||||||||||||||||||||
Fee revenue (loss) | $ | 11 | $ | 29 | $ | 21 | $ | 817 | (a) | $ | (5) | $ | 61 | $ | 36 | ||||||||||||||
Net securities gains (losses) | 9 | 9 | 9 | (23) | (1) | 27 | 7 | ||||||||||||||||||||||
Total fee and other revenue (loss) | 20 | 38 | 30 | 794 | (6) | 88 | 43 | ||||||||||||||||||||||
Net interest (expense) | (25) | (36) | (44) | (10) | (80) | (105) | (150) | ||||||||||||||||||||||
Total (loss) revenue | (5) | 2 | (14) | 784 | (86) | (17) | (107) | ||||||||||||||||||||||
Provision for credit losses | 7 | (9) | 11 | (3) | (1) | 9 | (5) | ||||||||||||||||||||||
Noninterest expense | — | 39 | 30 | 54 | 25 | 69 | 103 | ||||||||||||||||||||||
(Loss) income before taxes | $ | (12) | $ | (28) | $ | (55) | $ | 733 | $ | (110) | $ | (95) | $ | (205) | |||||||||||||||
Average loans and leases | $ | 1,805 | $ | 1,815 | $ | 1,961 | $ | 1,974 | $ | 1,817 | $ | 1,861 | $ | 1,789 | |||||||||||||||
Average assets | $ | 55,381 | $ | 49,744 | $ | 50,646 | $ | 47,762 | $ | 52,913 | $ | 51,936 | $ | 49,683 | |||||||||||||||
(a) Includes a gain on sale of an equity investment. |
13
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SECURITIES PORTFOLIO | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | June 30, 2020 | 3Q20 change in unrealized gain (loss) | Sept. 30, 2020 | Fair value as a % of amortized cost (a) | Unrealized gain (loss) | % Floating rate | Ratings (c) | ||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost | Fair value | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | A1+/ A2 & SP-1+ | Not rated | ||||||||||||||||||||||||||||||||||||||||||||||
Fair value | (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency RMBS | $ | 60,401 | $ | 47 | $ | 61,348 | $ | 62,922 | 103 | % | $ | 1,574 | 16 | % | 100 | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||||||||||||||||
U.S. Treasury | 28,651 | 83 | 26,454 | 26,964 | 102 | 510 | 42 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 16,868 | 8 | 14,908 | 15,086 | 101 | 178 | 10 | 67 | 7 | 25 | 1 | — | — | ||||||||||||||||||||||||||||||||||||||||
Agency commercial MBS | 11,731 | 45 | 11,340 | 11,777 | 104 | 437 | 32 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Supranational | 5,484 | 5 | 7,121 | 7,176 | 101 | 55 | 46 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Foreign covered bonds | 5,598 | 14 | 5,777 | 5,841 | 101 | 64 | 35 | 99 | 1 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 5,056 | 8 | 5,566 | 5,646 | 101 | 80 | 21 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
CLOs | 4,432 | 44 | 4,707 | 4,657 | 99 | (50) | 100 | 99 | — | — | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||
Foreign government agencies | 3,575 | 4 | 3,924 | 3,967 | 101 | 43 | 29 | 94 | 6 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | 2,743 | 8 | 2,903 | 2,930 | 101 | 27 | 25 | 99 | — | — | 1 | — | — | ||||||||||||||||||||||||||||||||||||||||
Non-agency commercial MBS | 2,602 | 34 | 2,565 | 2,684 | 105 | 119 | 23 | 100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Non-agency RMBS (d) | 1,672 | 14 | 1,864 | 2,013 | 108 | 149 | 55 | 60 | 5 | 2 | 20 | — | 13 | ||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | 1,196 | (1) | 1,676 | 1,705 | 102 | 29 | 1 | 83 | 13 | 3 | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||
Corporate bonds | 831 | — | 988 | 1,030 | 104 | 42 | — | 19 | 64 | 17 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Commercial paper and certificates of deposits (e)(f) | 3,392 | (4) | 650 | 652 | 100 | 2 | 55 | — | — | — | — | 100 | — | ||||||||||||||||||||||||||||||||||||||||
Other | 1 | — | 1 | 1 | 100 | — | — | — | — | — | — | — | 100 | ||||||||||||||||||||||||||||||||||||||||
Total securities | $ | 154,233 | (g) | $ | 309 | $ | 151,792 | $ | 155,051 | (g)(h) | 102 | % | $ | 3,259 | (g)(i) | 27 | % | 95 | % | 2 | % | 3 | % | — | % | — | % | — | % | ||||||||||||||||||||||||
(a) Amortized cost reflects historical impairments. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) Includes the impact of hedges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) Represents ratings by S&P, or the equivalent. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) Includes RMBS that were included in the former Grantor Trust of $538 million at June 30, 2020 and $512 million at Sept. 30, 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) Includes amounts purchased from affiliated money market funds of $1,853 million at June 30, 2020 and $357 million at Sept. 30, 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(f) Includes amounts funded by borrowings from the Federal Reserve Bank under its Money Market Mutual Fund Liquidity Facility program of $1,539 million at June 30, 2020 and $295 million at Sept. 30, 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(g) Includes net unrealized losses on derivatives hedging securities available-for-sale (including terminated hedges) of $1,817 million at June 30, 2020 and $1,650 million at Sept. 30, 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(h) The fair value of available-for-sale securities totaled $107,593 million at Sept. 30, 2020, net of hedges, or 69% of the fair value of the securities portfolio, net of hedges. The fair value of the held-to-maturity securities totaled $47,458 million at Sept. 30, 2020, or 31% of the fair value of the securities portfolio, net of hedges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(i) Includes unrealized gains of $1,897 million at Sept. 30, 2020 related to available-for-sale securities, net of hedges, and $1,362 million related to held-to-maturity securities. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Note: The amortizable purchase premium (net of discount) relating to securities was $1,917 million at Sept. 30, 2020 and the 3Q20 amortization of that purchase premium was $152 million in 3Q20. |
14
THE BANK OF NEW YORK MELLON CORPORATION | |||||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS | |||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||
(dollars in millions) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | ||||||||||||||||||||||||
Allowance for credit losses - beginning of period: | |||||||||||||||||||||||||||||
Allowance for loan losses | $ | 302 | $ | 140 | $ | 122 | $ | 127 | $ | 146 | |||||||||||||||||||
Allowance for lending-related commitments | 152 | 148 | 94 | 97 | 95 | ||||||||||||||||||||||||
Allowance for other financial instruments | 21 | (a) | 41 | (a) | N/A | N/A | N/A | ||||||||||||||||||||||
Allowance for credit losses - beginning of period | $ | 475 | $ | 329 | $ | 216 | $ | 224 | $ | 241 | |||||||||||||||||||
Impact of adopting ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, effective Jan. 1, 2020 | N/A | N/A | (55) | (b) | N/A | N/A | |||||||||||||||||||||||
Net recoveries (charge-offs): | |||||||||||||||||||||||||||||
Charge-offs | — | — | (1) | (1) | (1) | ||||||||||||||||||||||||
Recoveries | 2 | 3 | — | 1 | — | ||||||||||||||||||||||||
Total net recoveries (charge-offs) | 2 | 3 | (1) | — | (1) | ||||||||||||||||||||||||
Provision for credit losses | 9 | (b) | 143 | (b) | 169 | (b) | (8) | (16) | |||||||||||||||||||||
Allowance for credit losses - end of period | $ | 486 | $ | 475 | $ | 329 | $ | 216 | $ | 224 | |||||||||||||||||||
Allowance for credit losses - end of period: | |||||||||||||||||||||||||||||
Allowance for loan losses | $ | 325 | $ | 302 | $ | 140 | $ | 122 | $ | 127 | |||||||||||||||||||
Allowance for lending-related commitments | 135 | 152 | 148 | 94 | 97 | ||||||||||||||||||||||||
Allowance for other financial instruments | 26 | (a) | 21 | (a) | 41 | (a) | N/A | N/A | |||||||||||||||||||||
Allowance for credit losses - end of period | $ | 486 | $ | 475 | $ | 329 | $ | 216 | $ | 224 | |||||||||||||||||||
Allowance for loan losses as a percentage of total loans | 0.59 | % | 0.55 | % | 0.22 | % | 0.22 | % | 0.23 | % | |||||||||||||||||||
Nonperforming assets | $ | 84 | $ | 88 | $ | 88 | $ | 89 | $ | 88 | |||||||||||||||||||
(a) Includes allowance for credit losses on federal funds sold and securities purchased under resale agreements, available-for-sale securities, accounts receivable, cash and due from banks and interest-bearing deposits with banks. | |||||||||||||||||||||||||||||
(b) Includes all instruments within the scope of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. | |||||||||||||||||||||||||||||
N/A - Not applicable. |
15
THE BANK OF NEW YORK MELLON CORPORATION | ||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||
BNY Mellon has included in this Financial Supplement certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding. | ||||||||||||||||||||||||||
Net interest revenue, on a fully taxable equivalent ("FTE") basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income. | ||||||||||||||||||||||||||
BNY Mellon has also included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. We believe that this measure is useful when evaluating the performance of the Investment and Wealth Management business relative to industry competitors. | ||||||||||||||||||||||||||
The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. We believe that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates. | ||||||||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||
Certain immaterial reclassifications/revisions have been made to prior periods to place them on a basis comparable with the current period's presentation. | ||||||||||||||||||||||||||
In businesses where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference. | ||||||||||||||||||||||||||
Return on common and tangible common equity ratios are annualized. | ||||||||||||||||||||||||||
Return on common equity and tangible common equity reconciliation | ||||||||||||||||||||||||||
(dollars in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | YTD20 | YTD19 | |||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 876 | $ | 901 | $ | 944 | $ | 1,391 | $ | 1,002 | $ | 2,721 | $ | 2,881 | ||||||||||||
Add: Amortization of intangible assets | 26 | 26 | 26 | 28 | 30 | 78 | 89 | |||||||||||||||||||
Less: Tax impact of amortization of intangible assets | 7 | 6 | 6 | 7 | 7 | 19 | 21 | |||||||||||||||||||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | $ | 895 | $ | 921 | $ | 964 | $ | 1,412 | $ | 1,025 | $ | 2,780 | $ | 2,949 | ||||||||||||
Average common shareholders’ equity | $ | 39,924 | $ | 38,476 | $ | 37,664 | $ | 37,842 | $ | 37,597 | $ | 38,693 | $ | 37,392 | ||||||||||||
Less: Average goodwill | 17,357 | 17,243 | 17,311 | 17,332 | 17,267 | 17,304 | 17,328 | |||||||||||||||||||
Average intangible assets | 3,039 | 3,058 | 3,089 | 3,119 | 3,141 | 3,062 | 3,176 | |||||||||||||||||||
Add: Deferred tax liability – tax deductible goodwill | 1,132 | 1,119 | 1,109 | 1,098 | 1,103 | 1,132 | 1,103 | |||||||||||||||||||
Deferred tax liability – intangible assets | 666 | 664 | 666 | 670 | 679 | 666 | 679 | |||||||||||||||||||
Average tangible common shareholders’ equity – Non-GAAP | $ | 21,326 | $ | 19,958 | $ | 19,039 | $ | 19,159 | $ | 18,971 | $ | 20,125 | $ | 18,670 | ||||||||||||
Return on common equity – GAAP | 8.7 | % | 9.4 | % | 10.1 | % | 14.6 | % | 10.6 | % | 9.4 | % | 10.3 | % | ||||||||||||
Return on tangible common equity – Non-GAAP | 16.7 | % | 18.5 | % | 20.4 | % | 29.3 | % | 21.4 | % | 18.5 | % | 21.1 | % |
16
THE BANK OF NEW YORK MELLON CORPORATION | ||||||||||||||||||||
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
Book value and tangible book value per common share reconciliation | 2020 | 2019 | ||||||||||||||||||
(dollars in millions, except common shares) | Sept. 30 | June 30 | March 31 | Dec. 31 | Sept. 30 | |||||||||||||||
BNY Mellon shareholders’ equity at period end – GAAP | $ | 44,917 | $ | 43,697 | $ | 41,145 | $ | 41,483 | $ | 41,120 | ||||||||||
Less: Preferred stock | 4,532 | 4,532 | 3,542 | 3,542 | 3,542 | |||||||||||||||
BNY Mellon common shareholders’ equity at period end – GAAP | 40,385 | 39,165 | 37,603 | 37,941 | 37,578 | |||||||||||||||
Less: Goodwill | 17,357 | 17,253 | 17,240 | 17,386 | 17,248 | |||||||||||||||
Intangible assets | 3,026 | 3,045 | 3,070 | 3,107 | 3,124 | |||||||||||||||
Add: Deferred tax liability – tax deductible goodwill | 1,132 | 1,119 | 1,109 | 1,098 | 1,103 | |||||||||||||||
Deferred tax liability – intangible assets | 666 | 664 | 666 | 670 | 679 | |||||||||||||||
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP | $ | 21,800 | $ | 20,650 | $ | 19,068 | $ | 19,216 | $ | 18,988 | ||||||||||
Period-end common shares outstanding (in thousands) | 886,136 | 885,862 | 885,443 | 900,683 | 922,199 | |||||||||||||||
Book value per common share – GAAP | $ | 45.58 | $ | 44.21 | $ | 42.47 | $ | 42.12 | $ | 40.75 | ||||||||||
Tangible book value per common share – Non-GAAP | $ | 24.60 | $ | 23.31 | $ | 21.53 | $ | 21.33 | $ | 20.59 | ||||||||||
Net interest margin reconciliation | ||||||||||||||||||||
(dollars in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
Net interest revenue – GAAP | $ | 703 | $ | 780 | $ | 814 | $ | 815 | $ | 730 | ||||||||||
Add: Tax equivalent adjustment | 2 | 2 | 2 | 2 | 3 | |||||||||||||||
Net interest revenue (FTE) – Non-GAAP | $ | 705 | $ | 782 | $ | 816 | $ | 817 | $ | 733 | ||||||||||
Average interest-earning assets | $ | 357,634 | $ | 357,562 | $ | 323,936 | $ | 297,987 | $ | 294,154 | ||||||||||
Net interest margin – GAAP (a) | 0.79 | % | 0.88 | % | 1.01 | % | 1.09 | % | 0.99 | % | ||||||||||
Net interest margin (FTE) – Non-GAAP (a) | 0.79 | % | 0.88 | % | 1.01 | % | 1.09 | % | 1.00 | % | ||||||||||
(a) Net interest margin is annualized. |
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THE BANK OF NEW YORK MELLON CORPORATION | ||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||
Pre-tax operating margin reconciliation - Investment and Wealth Management business | ||||||||||||||||||||||||||
(dollars in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | YTD20 | YTD19 | |||||||||||||||||||
Income before income taxes – GAAP | $ | 245 | $ | 221 | $ | 194 | $ | 240 | $ | 295 | $ | 660 | $ | 821 | ||||||||||||
Total revenue – GAAP | $ | 918 | $ | 886 | $ | 898 | $ | 971 | $ | 887 | $ | 2,702 | $ | 2,736 | ||||||||||||
Less: Distribution and servicing expense | 85 | 86 | 91 | 93 | 98 | 262 | 283 | |||||||||||||||||||
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | $ | 833 | $ | 800 | $ | 807 | $ | 878 | $ | 789 | $ | 2,440 | $ | 2,453 | ||||||||||||
Pre-tax operating margin – GAAP (a) | 27 | % | 25 | % | 22 | % | 25 | % | 33 | % | 24 | % | 30 | % | ||||||||||||
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a) | 29 | % | 28 | % | 24 | % | 27 | % | 37 | % | 27 | % | 33 | % | ||||||||||||
(a) Income before income taxes divided by total revenue. | ||||||||||||||||||||||||||
Constant currency reconciliations | 3Q20 vs. | |||||||||||||||||||||||||
(dollars in millions) | 3Q20 | 3Q19 | 3Q19 | |||||||||||||||||||||||
Consolidated: | ||||||||||||||||||||||||||
Investment management and performance fees – GAAP | $ | 835 | $ | 832 | — | % | ||||||||||||||||||||
Impact of changes in foreign currency exchange rates | — | 11 | ||||||||||||||||||||||||
Adjusted investment management and performance fees – Non-GAAP | $ | 835 | $ | 843 | (1) | % | ||||||||||||||||||||
Investment and Wealth Management business: | ||||||||||||||||||||||||||
Investment management and performance fees – GAAP | $ | 835 | $ | 832 | — | % | ||||||||||||||||||||
Impact of changes in foreign currency exchange rates | — | 11 | ||||||||||||||||||||||||
Adjusted investment management and performance fees – Non-GAAP | $ | 835 | $ | 843 | (1) | % |
18