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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) – January 12, 2024
THE BANK OF NEW YORK MELLON CORPORATION
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Delaware | 001-35651 | 13-2614959 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
240 Greenwich Street
New York, New York 10286
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code – (212) 495-1784
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value | BK | New York Stock Exchange |
| | |
6.244% Fixed-to-Floating Rate Normal Preferred Capital Securities of Mellon Capital IV | BK/P | New York Stock Exchange |
(fully and unconditionally guaranteed by The Bank of New York Mellon Corporation) | | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 under the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On January 12, 2024, The Bank of New York Mellon Corporation (“BNY Mellon”) released information on its financial results for the fourth quarter ended December 31, 2023. Copies of the Earnings Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
ITEM 7.01. REGULATION FD DISCLOSURE.
On January 12, 2024, BNY Mellon will hold a conference call and webcast to discuss its financial results for the fourth quarter ended December 31, 2023 and outlook. A copy of the Financial Highlights presentation for the conference call and webcast is attached hereto as Exhibit 99.3.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS.
| | | | | | | | |
Exhibit | | |
Number | | Description |
| | |
99.1 | | | |
| | The quotation in Exhibit 99.1 (the “Excluded Section”) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. The information included in Exhibit 99.1, other than in the Excluded Section, shall be deemed “filed” for purposes of the Exchange Act. |
| | |
99.2 | | | |
| | The information included in Exhibit 99.2 shall be deemed “filed” for purposes of the Exchange Act. |
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99.3 | | | |
| | The information included in Exhibit 99.3 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. |
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104 | | | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| The Bank of New York Mellon Corporation (Registrant)
|
Date: January 12, 2024 | By: | /s/ Jean Weng | |
| Name: Title: | Jean Weng Secretary | |
BNY Mellon Reports Fourth Quarter 2023
Earnings Per Common Share of $0.33, or $1.28 as Adjusted (a)
Full-Year 2023 Earnings Per Common Share of $4.00, or $5.05 as Adjusted (a)
NEW YORK, January 12, 2024 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today has reported financial results for the fourth quarter 2023.
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CEO COMMENTARY |
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| The fourth quarter marked the close to a year in which we clarified our strategic priorities and laid a foundation for a multi-year transformation. In 2023 we started to show early evidence that we can deliver stronger financial performance. We exceeded the financial outlook that we communicated at the beginning of last year and today we are announcing further improved financial targets for each of our business segments and the firm overall in the medium-term. |
Our 2023 financial results also once again highlight BNY Mellon’s characteristic resilience and our ability to perform in challenging operating environments. Against a complex backdrop of macro-economic uncertainty, evolving monetary policies and geopolitical tensions, our earnings per share for the full-year 2023 increased year-over-year by 38% on a reported basis and by 10% on an adjusted basis. Pre-tax margin and ROTCE improved on the back of significant operating leverage generation, and we further strengthened our regulatory capital and liquidity ratios, all while returning $3.9 billion of capital, or 123% of earnings, |
to common shareholders in 2023. We are entering 2024, the year of our 240th anniversary, on a strong footing and with great momentum. Our priorities are clear, and we are moving with speed to be more for our clients, run our company better, and power our culture in 2024 and beyond. | |
– Robin Vince, President and Chief Executive Officer |
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KEY FINANCIAL INFORMATION |
| | | |
| | | |
(in millions, except per share amounts and unless otherwise noted) | | 4Q23 vs. |
4Q23 | 3Q23 | 4Q22 |
Selected income statement data: | | | |
| | | |
Total fee revenue | $ | 3,214 | | (1) | % | — | % |
Investment and other revenue | (4) | | N/M | N/M |
Net interest revenue | 1,101 | | 8 | | 4 | |
Total revenue | 4,311 | | (1) | | 10 | |
Provision for credit losses | 84 | | N/M | N/M |
Noninterest expense | 3,868 | | 25 | | 20 | |
Net income applicable to common shareholders | 256 | | (73) | % | (50) | % |
Diluted EPS | $ | 0.33 | | (73) | % | (47) | % |
| | | |
Selected metrics: | | | |
| | | |
AUC/A (in trillions) | $ | 47.8 | | 5 | % | 8 | % |
AUM (in trillions) | $ | 2.0 | | 8 | % | 8 | % |
| | | |
Financial ratios: | 4Q23 | 3Q23 | 4Q22 |
| | | |
Pre-tax operating margin | 8 | % | 29 | % | 17 | % |
ROE | 2.8 | % | 10.5 | % | 5.7 | % |
ROTCE (a) | 5.6 | % | 20.5 | % | 11.5 | % |
| | | |
Capital ratios: | | | |
| | | |
Tier 1 leverage ratio | 6.0 | % | 6.1 | % | 5.8 | % |
CET1 ratio | 11.6 | % | 11.4 | % | 11.2 | % |
Results
•Total revenue of $4.3 billion, increased 10%; or
2% excluding notable items (a)
•Noninterest expense of $3.9 billion, increased 20%; or 4% excluding notable items (a)
•Diluted EPS of $0.33, decreased 47%; or
2% excluding notable items (a)
4Q23 Notable items
•Results include $752 million of noninterest expense related to the FDIC special assessment, severance and litigation reserves and a $150 million reduction in investment and other revenue primarily related to a fair value adjustment of a contingent consideration receivable related to a prior year divestiture
Profitability
•Pre-tax operating margin of 8%; or 28% excluding notable items (a)
•ROTCE of 5.6% (a); or 20.9% excluding notable items (a)
Balance sheet
•Average deposits of $273 billion, decreased 4% year-over-year and increased 4% sequentially
•Tier 1 leverage ratio of 6.0%, increased 25 bps year-over-year and decreased 8 bps sequentially
Capital distribution
•Returned $778 million of capital to common shareholders
•$328 million of dividends
•$450 million of share repurchases
•Total payout ratio of 123% for full-year 2023
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$0.33 EPS | $1.28 (a) Adj. EPS | | 8% Pre-tax margin | 28% (a) Adj. Pre-tax margin | | 2.8% ROE | 20.9% (a) Adj. ROTCE |
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(a) For information on the Non-GAAP measures, see “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11. |
|
Note: Above comparisons are 4Q23 vs. 4Q22, unless otherwise noted. |
Investor Relations: Marius Merz (212) 298-1480 | Media Relations: Garrett Marquis (949) 683-1503 |
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BNY Mellon 4Q23 Financial Results |
CONSOLIDATED FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | |
(in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | | | | 4Q23 vs. |
4Q23 | 3Q23 | 4Q22 | 3Q23 | 4Q22 |
Fee revenue | $ | 3,214 | | $ | 3,245 | | $ | 3,222 | | (1) | % | — | % |
Investment and other revenue | (4) | | 113 | | (360) | | N/M | N/M |
Total fee and other revenue | 3,210 | | 3,358 | | 2,862 | | (4) | | 12 | |
Net interest revenue | 1,101 | | 1,016 | | 1,056 | | 8 | | 4 | |
Total revenue | 4,311 | | 4,374 | | 3,918 | | (1) | | 10 | |
Provision for credit losses | 84 | | 3 | | 20 | | N/M | N/M |
Noninterest expense | 3,868 | | 3,089 | | 3,213 | | 25 | | 20 | |
Income before taxes | 359 | | 1,282 | | 685 | | (72) | | (48) | |
Provision for income taxes | 59 | | 241 | | 142 | | (76) | | (58) | |
Net income | $ | 300 | | $ | 1,041 | | $ | 543 | | (71) | % | (45) | % |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 256 | | $ | 956 | | $ | 509 | | (73) | % | (50) | % |
Operating leverage (a) | | | | (2,666) | bps | (1,036) | bps |
Diluted earnings per common share | $ | 0.33 | | $ | 1.22 | | $ | 0.62 | | (73) | % | (47) | % |
Average common shares and equivalents outstanding - diluted (in thousands) | 772,102 | | 781,781 | | 815,846 | | | |
Pre-tax operating margin | 8 | % | 29 | % | 17 | % | | |
| | | | | |
Metrics: | | | | | |
Average loans | $ | 65,677 | | $ | 63,962 | | $ | 67,364 | | 3 | % | (3) | % |
Average deposits | 273,075 | | 262,108 | | 283,737 | | 4 | | (4) | |
AUC/A at period end (in trillions) (current period is preliminary) | 47.8 | | 45.7 | | 44.3 | | 5 | | 8 | |
AUM (in trillions) (current period is preliminary) | 1.97 | | 1.82 | | 1.84 | | 8 | | 8 | |
Non-GAAP measures, excluding notable items: (b) | | | | | |
Adjusted total revenue | $ | 4,461 | | $ | 4,372 | | $ | 4,378 | | 2 | % | 2 | % |
Adjusted noninterest expense | $ | 3,116 | | $ | 3,043 | | $ | 3,000 | | 2 | % | 4 | % |
Adjusted operating leverage (a) | | | | (36) | bps | (197) | bps |
Adjusted diluted earnings per common share | $ | 1.28 | | $ | 1.27 | | $ | 1.30 | | 1 | % | (2 | %) |
Adjusted pre-tax operating margin | 28 | % | 30 | % | 31 | % | | |
(a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
(b) See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for additional information. bps – basis points.
KEY DRIVERS (comparisons are 4Q23 vs. 4Q22, unless otherwise noted)
•Total revenue increased 10%, primarily reflecting:
•Fee revenue was flat, primarily reflecting lower foreign exchange volatility and volumes and the mix of AUM flows, partially offset by higher market values and the favorable impact of a weaker U.S. dollar.
•Investment and other revenue increased primarily reflecting the 4Q22 net loss from repositioning the securities portfolio, partially offset by the 4Q23 reduction in the fair value of a contingent consideration receivable related to a prior year divestiture.
•Net interest revenue increased 4%, primarily reflecting higher interest rates, partially offset by changes in balance sheet size and mix.
•Provision for credit losses was $84 million, primarily driven by reserve increases related to commercial real estate exposure.
•Noninterest expense increased 20%, primarily related to the FDIC special assessment. Excluding notable items (a), noninterest expense increased 4% primarily reflecting higher investments and the unfavorable impact of a weaker U.S. dollar, as well as inflation, partially offset by efficiency savings.
•Effective tax rate of 16.4%.
Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•AUC/A increased 8%, primarily reflecting higher market values.
•AUM increased 8%, primarily reflecting higher market values and the favorable impact of a weaker U.S. dollar, partially offset by cumulative net outflows.
Capital and liquidity
•$328 million of dividends to common shareholders (b); $450 million of common share repurchases.
•Return on common equity (“ROE”) – 2.8%; Adjusted ROE – 10.9% (a).
•Return on tangible common equity (“ROTCE”) – 5.6% (a); Adjusted ROTCE – 20.9% (a).
•Common Equity Tier 1 (“CET1”) ratio – 11.6%.
•Tier 1 leverage ratio – 6.0%.
•Average liquidity coverage ratio (“LCR”) – 117%; Average net stable funding ratio (“NSFR”) – 135%.
•Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
(a) See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for additional information. (b) Including dividend-equivalents on share-based awards.
Note: Throughout this document, sequential growth rates are unannualized.
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BNY Mellon 4Q23 Financial Results |
FULL-YEAR CONSOLIDATED FINANCIAL HIGHLIGHTS
| | | | | | | | | | | |
(in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | | | 2023 vs. |
2023 | 2022 | 2022 |
Fee revenue | $ | 12,872 | | $ | 12,955 | | (1) | % |
Investment and other revenue | 285 | | (82) | | N/M |
Total fee and other revenue | 13,157 | | 12,873 | | 2 | |
Net interest revenue | 4,345 | | 3,504 | | 24 | |
Total revenue | 17,502 | | 16,377 | | 7 | |
Provision for credit losses | 119 | | 39 | | N/M |
Noninterest expense | 13,168 | | 13,010 | | 1 | |
Income before taxes | 4,215 | | 3,328 | | 27 | |
Provision for income taxes | 830 | | 768 | | 8 | |
Net income | $ | 3,385 | | $ | 2,560 | | 32 | % |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 3,148 | | $ | 2,362 | | 33 | % |
Operating leverage (a) | | | 566 | bps |
Diluted earnings per common share | $ | 4.00 | | $ | 2.90 | | 38 | % |
Average common shares and equivalents outstanding - diluted (in thousands) | 787,798 | | 814,795 | | |
Pre-tax operating margin | 24 | % | 20 | % | |
Non-GAAP measures, excluding notable items: (b) | | | |
Adjusted total revenue | $ | 17,652 | | $ | 16,888 | | 5 | % |
Adjusted noninterest expense | $ | 12,302 | | $ | 11,981 | | 3 | % |
Adjusted operating leverage (a) | | | 184 | bps |
Adjusted diluted earnings per common share | $ | 5.05 | | $ | 4.59 | | 10 | % |
Adjusted pre-tax operating margin | 30 | % | 29 | % | |
(a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
(b) See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11. bps – basis points.
KEY DRIVERS (comparisons are 2023 vs. 2022, unless otherwise noted)
•Total revenue increased 7%, primarily reflecting:
•Fee revenue decreased 1%, primarily reflecting lower foreign exchange volatility, the mix of AUM flows and the impact of a prior year divestiture, partially offset by the abatement of money market fee waivers, net new business and the 1Q22 accelerated amortization of deferred costs for depositary receipts services related to Russia.
•Investment and other revenue increased primarily reflecting the 4Q22 net loss from repositioning the securities portfolio, partially offset by the 4Q23 reduction in the fair value of a contingent consideration receivable related to a prior year divestiture.
•Net interest revenue increased 24%, primarily reflecting higher interest rates, partially offset by changes in balance sheet size and mix.
•Provision for credit losses was $119 million, primarily driven by reserve increases related to commercial real estate exposure and changes in the macroeconomic forecast.
•Noninterest expense increased 1%, primarily reflecting the 4Q23 FDIC special assessment, higher investments and revenue-related expenses, as well as inflation, partially offset by the impacts of the 3Q22 goodwill impairment in the Investment Management reporting unit, efficiency savings and a prior year divestiture. Excluding notable items, noninterest expense increased 3% (a).
•Effective tax rate of 19.7%.
Capital and liquidity
•Returned $3.9 billion to common shareholders, including dividends of $1.3 billion (including dividend equivalents on share-based awards) and $2.6 billion of share repurchases.
•ROE – 8.8%; Adjusted ROE – 11.1% (a).
•ROTCE – 17.1% (a); Adjusted ROTCE – 21.6% (a).
(a) See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for additional information.
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BNY Mellon 4Q23 Financial Results |
SECURITIES SERVICES BUSINESS SEGMENT HIGHLIGHTS
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(dollars in millions, unless otherwise noted; not meaningful - N/M) | | | | | | | 4Q23 vs. |
4Q23 | | 3Q23 | | 4Q22 | | 3Q23 | 4Q22 |
Investment services fees: | | | | | | | | |
Asset Servicing | $ | 975 | | | $ | 984 | | | $ | 971 | | | (1) | % | — | % |
Issuer Services | 285 | | | 281 | | | 271 | | | 1 | | 5 | |
Total investment services fees | 1,260 | | | 1,265 | | | 1,242 | | | — | | 1 | |
Foreign exchange revenue | 118 | | | 107 | | | 149 | | | 10 | | (21) | |
Other fees (a) | 54 | | | 52 | | | 55 | | | 4 | | (2) | |
Total fee revenue | 1,432 | | | 1,424 | | | 1,446 | | | 1 | | (1) | |
Investment and other revenue | 112 | | | 65 | | | 70 | | | N/M | N/M |
Total fee and other revenue | 1,544 | | | 1,489 | | | 1,516 | | | 4 | | 2 | |
Net interest revenue | 635 | | | 600 | | | 656 | | | 6 | | (3) | |
Total revenue | 2,179 | | | 2,089 | | | 2,172 | | | 4 | | — | |
Provision for credit losses | 64 | | | 19 | | | 11 | | | N/M | N/M |
Noninterest expense | 1,653 | | | 1,585 | | | 1,576 | | | 4 | | 5 | |
Income before taxes | $ | 462 | | | $ | 485 | | | $ | 585 | | | (5) | % | (21) | % |
| | | | | | | | |
Total revenue by line of business: | | | | | | | | |
Asset Servicing | $ | 1,675 | | | $ | 1,593 | | | $ | 1,681 | | | 5 | % | — | % |
Issuer Services | 504 | | | 496 | | | 491 | | | 2 | | 3 | |
Total revenue by line of business | $ | 2,179 | | | $ | 2,089 | | | $ | 2,172 | | | 4 | % | — | % |
| | | | | | | | |
Pre-tax operating margin | 21 | % | | 23 | % | | 27 | % | | | |
| | | | | | | | |
Securities lending revenue (b) | $ | 48 | | | $ | 46 | | | $ | 50 | | | 4 | % | (4) | % |
| | | | | | | | |
Metrics: | | | | | | | | |
Average loans | $ | 11,366 | | | $ | 11,236 | | | $ | 11,850 | | | 1 | % | (4) | % |
Average deposits | $ | 171,086 | | | $ | 162,509 | | | $ | 176,541 | | | 5 | % | (3) | % |
| | | | | | | | |
AUC/A at period end (in trillions) (current period is preliminary) (c) | $ | 34.2 | | | $ | 32.3 | | | $ | 31.4 | | | 6 | % | 9 | % |
Market value of securities on loan at period end (in billions) (d) | $ | 450 | | | $ | 406 | | | $ | 449 | | | 11 | % | — | % |
(a) Other fees primarily include financing-related fees.
(b) Included in investment services fees reported in the Asset Servicing line of business.
(c) Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of 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, 2023 and $1.5 trillion at Sept. 30, 2023 and Dec. 31, 2022.
(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 $63 billion at Dec. 31, 2023, $63 billion at Sept. 30, 2023 and $68 billion at Dec. 31, 2022.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Asset Servicing – Year-over-year was flat, primarily reflecting lower foreign exchange revenue and net interest revenue, partially offset by a strategic equity investment gain and higher market values. The sequential increase primarily reflects improved strategic equity investment results and higher net interest revenue.
•Issuer Services – The year-over-year increase primarily reflects net new business and higher client activity. The sequential increase primarily reflects higher net interest revenue.
•Noninterest expense increased year-over-year, primarily reflecting higher investments and higher revenue-related expenses, as well as inflation, partially offset by efficiency savings.
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BNY Mellon 4Q23 Financial Results |
MARKET AND WEALTH SERVICES BUSINESS SEGMENT HIGHLIGHTS
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(dollars in millions, unless otherwise noted; not meaningful - N/M) | | | | 4Q23 vs. |
4Q23 | 3Q23 | 4Q22 | 3Q23 | 4Q22 |
Investment services fees: | | | | | |
Pershing | $ | 506 | | $ | 506 | | $ | 502 | | — | % | 1 | % |
Treasury Services | 179 | | 172 | | 170 | | 4 | | 5 | |
Clearance and Collateral Management | 288 | | 277 | | 249 | | 4 | | 16 | |
Total investment services fees | 973 | | 955 | | 921 | | 2 | | 6 | |
Foreign exchange revenue | 21 | | 21 | | 20 | | — | | 5 | |
Other fees (a) | 52 | | 51 | | 47 | | 2 | | 11 | |
Total fee revenue | 1,046 | | 1,027 | | 988 | | 2 | | 6 | |
Investment and other revenue | 16 | | 16 | | 15 | | N/M | N/M |
Total fee and other revenue | 1,062 | | 1,043 | | 1,003 | | 2 | | 6 | |
Net interest revenue | 437 | | 402 | | 396 | | 9 | | 10 | |
Total revenue | 1,499 | | 1,445 | | 1,399 | | 4 | | 7 | |
Provision for credit losses | 28 | | 6 | | 6 | | N/M | N/M |
Noninterest expense | 839 | | 808 | | 785 | | 4 | | 7 | |
Income before taxes | $ | 632 | | $ | 631 | | $ | 608 | | — | % | 4 | % |
| | | | | |
Total revenue by line of business: | | | | | |
Pershing | $ | 711 | | $ | 699 | | $ | 673 | | 2 | % | 6 | % |
Treasury Services | 408 | | 389 | | 382 | | 5 | | 7 | |
Clearance and Collateral Management | 380 | | 357 | | 344 | | 6 | | 10 | |
Total revenue by line of business | $ | 1,499 | | $ | 1,445 | | $ | 1,399 | | 4 | % | 7 | % |
| | | | | |
Pre-tax operating margin | 42 | % | 44 | % | 43 | % | | |
| | | | | |
Metrics: | | | | | |
Average loans | $ | 39,200 | | $ | 37,496 | | $ | 39,843 | | 5 | % | (2) | % |
Average deposits | $ | 87,695 | | $ | 84,000 | | $ | 86,083 | | 4 | % | 2 | % |
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AUC/A at period end (in trillions) (current period is preliminary) (b) | $ | 13.3 | | $ | 13.1 | | $ | 12.7 | | 2 | % | 5 | % |
(a) Other fees primarily include financing-related fees.
(b) Consists of AUC/A from the Clearance and Collateral Management and Pershing lines of business.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Pershing – The year-over-year increase primarily reflects higher net interest revenue, higher market values and higher client activity, partially offset by lost business. The sequential increase primarily reflects higher net interest revenue.
•Treasury Services – The year-over-year and sequential increases primarily reflect higher net interest revenue.
•Clearance and Collateral Management – The year-over-year increase primarily reflects higher clearance volumes and collateral management balances. The sequential increase primarily reflects higher net interest revenue, higher clearance volumes and collateral management balances.
•Noninterest expense increased year-over-year, primarily reflecting higher investments and inflation, partially offset by efficiency savings.
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BNY Mellon 4Q23 Financial Results |
INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
(dollars in millions, unless otherwise noted; not meaningful - N/M) | | | | | | | 4Q23 vs. | |
4Q23 | | 3Q23 | | 4Q22 | | 3Q23 | | 4Q22 | |
Investment management fees | $ | 723 | | | $ | 746 | | | $ | 754 | | | (3) | % | | (4) | % | |
Performance fees | 19 | | | 30 | | | 26 | | | N/M | | N/M | |
Investment management and performance fees | 742 | | | 776 | | | 780 | | | (4) | | | (5) | | |
Distribution and servicing fees | 66 | | | 62 | | | 54 | | | 6 | | | 22 | | |
Other fees (a) | (55) | | | (50) | | | (58) | | | N/M | | N/M | |
Total fee revenue | 753 | | | 788 | | | 776 | | | (4) | | | (3) | | |
Investment and other revenue (b) | (121) | | | 1 | | | (3) | | | N/M | | N/M | |
Total fee and other revenue (b) | 632 | | | 789 | | | 773 | | | (20) | | | (18) | | |
Net interest revenue | 44 | | | 38 | | | 52 | | | 16 | | | (15) | | |
Total revenue | 676 | | | 827 | | | 825 | | | (18) | | | (18) | | |
Provision for credit losses | (2) | | | (9) | | | 1 | | | N/M | | N/M | |
Noninterest expense | 683 | | | 672 | | | 699 | | | 2 | | | (2) | | |
(Loss) income before taxes (c) | $ | (5) | | | $ | 164 | | | $ | 125 | | | (103) | % | | (104) | % | |
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Total revenue by line of business: | | | | | | | | | | |
Investment Management | $ | 408 | | | $ | 557 | | | $ | 550 | | | (27) | % | | (26) | % | |
Wealth Management | 268 | | | 270 | | | 275 | | | (1) | | | (3) | | |
Total revenue by line of business | $ | 676 | | | $ | 827 | | | $ | 825 | | | (18) | % | | (18) | % | |
| | | | | | | | | | |
Pre-tax operating margin | (1) | % | | 20 | % | | 15 | % | | | | | |
Adjusted pre-tax operating margin – Non-GAAP (d) | (1) | % | (e) | 22 | % | | 17 | % | | | | | |
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Metrics: | | | | | | | | | | |
Average loans | $ | 13,405 | | | $ | 13,519 | | | $ | 14,404 | | | (1) | % | | (7) | % | |
Average deposits | $ | 12,039 | | | $ | 13,578 | | | $ | 16,416 | | | (11) | % | | (27) | % | |
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AUM (in billions) (current period is preliminary) (f) | $ | 1,974 | | | $ | 1,821 | | | $ | 1,836 | | | 8 | % | | 8 | % | |
Wealth Management client assets (in billions) (current period is preliminary) (g) | $ | 312 | | | $ | 292 | | | $ | 269 | | | 7 | % | | 16 | % | |
(a) Other fees primarily include investment services fees.
(b) Investment and other revenue and total fee and other revenue are net of income (loss) attributable to noncontrolling interests related to consolidated investment management funds.
(c) Excluding notable items, income before taxes decreased 11% (Non-GAAP) compared with 3Q23 and increased 1% (Non-GAAP) compared with 4Q22. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for information on these Non-GAAP measures. (d) Net of distribution and servicing expense. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for information on this Non-GAAP measure. (e) Excluding notable items and net of distribution and servicing expense, the adjusted pre-tax operating margin was 21% (Non-GAAP) for 4Q23. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for information on this Non-GAAP measure. (f) Excludes assets managed outside of the Investment and Wealth Management business segment.
(g) Includes AUM and AUC/A in the Wealth Management line of business.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Investment Management – The year-over-year decrease primarily reflects the 4Q23 reduction in the fair value of a contingent consideration receivable and the impact of the prior year divestiture, as well as the mix of AUM flows, partially offset by higher market values, seed capital gains and the favorable impact of a weaker U.S. dollar. The sequential decrease primarily reflects the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture and the timing of performance fees, partially offset by seed capital gains.
•Wealth Management – The year-over-year decrease primarily reflects changes in product mix, partially offset by higher market values.
•Noninterest expense decreased year-over-year, primarily reflecting efficiency savings and the impact of a prior year divestiture, partially offset by higher investments and the unfavorable impact of a weaker U.S. dollar, as well as inflation.
| | |
BNY Mellon 4Q23 Financial Results |
OTHER SEGMENT
The Other segment primarily includes the leasing portfolio, corporate treasury activities, including our securities portfolio, derivatives and other trading activity, renewable energy and other corporate investments, certain business exits and other corporate revenue and expense items.
| | | | | | | | | | | |
| | | |
(in millions) | 4Q23 | 3Q23 | 4Q22 |
Fee revenue | $ | (17) | | $ | 6 | | $ | 12 | |
Investment and other revenue | (9) | | 28 | | (442) | |
Total fee and other revenue | (26) | | 34 | | (430) | |
Net interest (expense) | (15) | | (24) | | (48) | |
Total revenue | (41) | | 10 | | (478) | |
Provision for credit losses | (6) | | (13) | | 2 | |
Noninterest expense | 693 | | 24 | | 153 | |
(Loss) before taxes | $ | (728) | | $ | (1) | | $ | (633) | |
KEY DRIVERS
•Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense. Total revenue increased year-over-year primarily reflecting the net loss from repositioning the securities portfolio recorded in 4Q22. Total revenue decreased sequentially primarily reflecting net securities losses in 4Q23 and debt extinguishment gains in 3Q23.
•Noninterest expense increased year-over-year primarily driven by the FDIC special assessment. The sequential increase in noninterest expense primarily reflects the FDIC special assessment, higher severance expense and litigation reserves.
| | |
BNY Mellon 4Q23 Financial Results |
NOTABLE ITEMS BY BUSINESS SEGMENT
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Notable items by business segment (a) | 4Q23 | | | | 4Q22 |
(in millions) | Securities Services | Market and Wealth Services | Investment and Wealth Management | Other | Total | | | | | | | | Securities Services | Market and Wealth Services | Investment and Wealth Management | Other | Total |
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Fee and other revenue | $ | (6) | | $ | — | | $ | (144) | | $ | — | | $ | (150) | | | | | | | | | $ | — | | $ | — | | $ | (11) | | $ | (449) | | $ | (460) | |
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Noninterest expense | 29 | | 29 | | 12 | | 682 | | 752 | | | | | | | | | 28 | | 41 | | 14 | | 130 | | 213 | |
(Loss) before taxes | $ | (35) | | $ | (29) | | $ | (156) | | $ | (682) | | $ | (902) | | | | | | | | | $ | (28) | | $ | (41) | | $ | (25) | | $ | (579) | | $ | (673) | |
(a) See pages 12 and 13 for details of notable items and line items impacted.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Notable items by business segment (a) | | | 3Q23 | | |
(in millions) | | | | | | | Securities Services | Market and Wealth Services | Investment and Wealth Management | Other | Total | | | | | | |
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Fee and other revenue | | | | | | | $ | 2 | | $ | — | | $ | — | | $ | — | | $ | 2 | | | | | | | |
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Noninterest expense | | | | | | | 22 | | 5 | | 5 | | 14 | | 46 | | | | | | | |
(Loss) before taxes | | | | | | | $ | (20) | | $ | (5) | | $ | (5) | | $ | (14) | | $ | (44) | | | | | | | |
(a) See pages 12 and 13 for details of notable items and line items impacted.
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Notable items by business segment (a) | 2023 | | 2022 |
(in millions) | Securities Services | Market and Wealth Services | Investment and Wealth Management | Other | Total | | Securities Services | Market and Wealth Services | Investment and Wealth Management | Other | Total |
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Fee and other revenue | $ | (6) | | $ | — | | $ | (144) | | $ | — | | $ | (150) | | | $ | (45) | | $ | — | | $ | (17) | | $ | (449) | | $ | (511) | |
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Noninterest expense | 61 | | 39 | | 20 | | 746 | | 866 | | | 141 | | 49 | | 692 | | 147 | | 1,029 | |
(Loss) before taxes | $ | (67) | | $ | (39) | | $ | (164) | | $ | (746) | | $ | (1,016) | | | $ | (186) | | $ | (49) | | $ | (709) | | $ | (596) | | $ | (1,540) | |
(a) See pages 12 and 13 for details of notable items and line items impacted.
| | |
BNY Mellon 4Q23 Financial Results |
CAPITAL AND LIQUIDITY
| | | | | | | | | | | | | | | |
Capital and liquidity ratios | | Dec. 31, 2023 | Sept. 30, 2023 | Dec. 31, 2022 | |
Consolidated regulatory capital ratios: (a) | | | | | |
CET1 ratio | | 11.6 | % | 11.4 | % | 11.2 | % | |
Tier 1 capital ratio | | 14.3 | | 14.4 | | 14.1 | | |
Total capital ratio | | 15.0 | | 15.2 | | 14.9 | | |
Tier 1 leverage ratio (a) | | 6.0 | | 6.1 | | 5.8 | | |
Supplementary leverage ratio (a) | | 7.4 | | 7.2 | | 6.8 | | |
BNY Mellon shareholders’ equity to total assets ratio | | 10.0 | % | 10.1 | % | 10.0 | % | |
BNY Mellon common shareholders’ equity to total assets ratio | | 8.9 | % | 8.9 | % | 8.8 | % | |
| | | | | |
Average LCR (a) | | 117 | % | 121 | % | 118 | % | |
Average NSFR (a) | | 135 | % | 136 | % | N/A | (b) |
| | | | | |
Book value per common share | | $ | 48.24 | | $ | 46.98 | | $ | 44.40 | | |
Tangible book value per common share – Non-GAAP (c) | | $ | 25.52 | | $ | 24.66 | | $ | 23.11 | | |
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| | | | | |
Common shares outstanding (in thousands) | | 759,344 | | 769,073 | | 808,445 | | |
(a) Regulatory capital and liquidity ratios for Dec. 31, 2023 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 the periods presented, was the Advanced Approaches.
(b) The reporting requirement for the average NSFR became effective in 2Q23.
(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” beginning on page 11 for information on this Non-GAAP measure.
•CET1 capital totaled $18.7 billion at Dec. 31, 2023, and increased compared with Sept. 30, 2023, primarily reflecting a net increase in accumulated other comprehensive income and capital generated through earnings, partially offset by capital deployed through common stock repurchases and dividends. Tier 1 capital totaled $23.1 billion at Dec. 31, 2023, and decreased slightly compared with Sept. 30, 2023, reflecting the redemption of preferred stock. The Tier 1 leverage ratio decreased compared with Sept. 30, 2023, primarily reflecting higher average assets.
NET INTEREST REVENUE
| | | | | | | | | | | | | | | | | |
Net interest revenue | | | | 4Q23 vs. |
(dollars in millions; not meaningful - N/M) | 4Q23 | 3Q23 | 4Q22 | 3Q23 | 4Q22 |
Net interest revenue | $ | 1,101 | | $ | 1,016 | | $ | 1,056 | | 8% | 4% |
Add: Tax equivalent adjustment | 1 | | — | | 2 | | N/M | N/M |
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a) | $ | 1,102 | | $ | 1,016 | | $ | 1,058 | | 8% | 4% |
| | | | | |
Net interest margin | 1.26 | % | 1.18 | % | 1.19 | % | 8 | bps | 7 | bps |
Net interest margin (FTE) – Non-GAAP (a) | 1.26 | % | 1.18 | % | 1.19 | % | 8 | bps | 7 | 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” beginning on page 11 for information on this Non-GAAP measure. bps – basis points.
•Net interest revenue increased year-over-year primarily reflecting higher interest rates, partially offset by changes in balance sheet size and mix.
•The sequential increase in net interest revenue primarily reflects the higher balance sheet size and mix.
| | |
BNY Mellon 4Q23 Financial Results |
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement
| | | | | | | | | | | | | | | | | | | | |
(in millions) | Quarter ended | | Year ended |
Dec. 31, 2023 | Sept. 30, 2023 | Dec. 31, 2022 | | Dec. 31, 2023 | Dec. 31, 2022 |
|
Fee and other revenue | | | | | | |
Investment services fees | $ | 2,242 | | $ | 2,230 | | $ | 2,173 | | | $ | 8,843 | | $ | 8,529 | |
Investment management and performance fees | 743 | | 777 | | 783 | | | 3,058 | | 3,299 | |
Foreign exchange revenue | 143 | | 154 | | 190 | | | 631 | | 822 | |
Financing-related fees | 45 | | 45 | | 43 | | | 192 | | 175 | |
Distribution and servicing fees | 41 | | 39 | | 33 | | | 148 | | 130 | |
Total fee revenue | 3,214 | | 3,245 | | 3,222 | | | 12,872 | | 12,955 | |
Investment and other revenue | (4) | | 113 | | (360) | | | 285 | | (82) | |
Total fee and other revenue | 3,210 | | 3,358 | | 2,862 | | | 13,157 | | 12,873 | |
Net interest revenue | | | | | | |
Interest revenue | 5,963 | | 5,519 | | 3,197 | | | 20,648 | | 7,118 | |
Interest expense | 4,862 | | 4,503 | | 2,141 | | | 16,303 | | 3,614 | |
Net interest revenue | 1,101 | | 1,016 | | 1,056 | | | 4,345 | | 3,504 | |
Total revenue | 4,311 | | 4,374 | | 3,918 | | | 17,502 | | 16,377 | |
Provision for credit losses | 84 | | 3 | | 20 | | | 119 | | 39 | |
Noninterest expense | | | | | | |
Staff | 1,831 | | 1,755 | | 1,802 | | | 7,095 | | 6,800 | |
Software and equipment | 486 | | 452 | | 432 | | | 1,817 | | 1,657 | |
Professional, legal and other purchased services | 406 | | 368 | | 415 | | | 1,527 | | 1,527 | |
Net occupancy | 162 | | 140 | | 143 | | | 542 | | 514 | |
Sub-custodian and clearing | 117 | | 121 | | 112 | | | 475 | | 485 | |
Distribution and servicing | 88 | | 87 | | 86 | | | 353 | | 343 | |
Business development | 61 | | 36 | | 45 | | | 183 | | 152 | |
Bank assessment charges | 543 | | 37 | | 19 | | | 661 | | 126 | |
Goodwill impairment | — | | — | | — | | | — | | 680 | |
Amortization of intangible assets | 14 | | 15 | | 16 | | | 57 | | 67 | |
Other | 160 | | 78 | | 143 | | | 458 | | 659 | |
Total noninterest expense | 3,868 | | 3,089 | | 3,213 | | | 13,168 | | 13,010 | |
Income | | | | | | |
Income before taxes | 359 | | 1,282 | | 685 | | | 4,215 | | 3,328 | |
Provision for income taxes | 59 | | 241 | | 142 | | | 830 | | 768 | |
Net income | 300 | | 1,041 | | 543 | | | 3,385 | | 2,560 | |
Net (income) loss attributable to noncontrolling interests related to consolidated investment management funds | 2 | | (3) | | — | | | (2) | | 13 | |
Net income applicable to shareholders of The Bank of New York Mellon Corporation | 302 | | 1,038 | | 543 | | | 3,383 | | 2,573 | |
Preferred stock dividends | (46) | | (82) | | (34) | | | (235) | | (211) | |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 256 | | $ | 956 | | $ | 509 | | | $ | 3,148 | | $ | 2,362 | |
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Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation | Quarter ended | | Year ended |
Dec. 31, 2023 | Sept. 30, 2023 | Dec. 31, 2022 | | Dec. 31, 2023 | Dec. 31, 2022 |
(in dollars) |
Basic | $ | 0.33 | | $ | 1.23 | | $ | 0.63 | | | $ | 4.01 | | $ | 2.91 | |
Diluted | $ | 0.33 | | $ | 1.22 | | $ | 0.62 | | | $ | 4.00 | | $ | 2.90 | |
| | |
BNY Mellon 4Q23 Financial Results |
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 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.
See “Explanation of GAAP and Non-GAAP Financial Measures” in the Financial Supplement available at www.bnymellon.com for additional reconciliations of Non-GAAP measures.
BNY Mellon has also included revenue measures excluding notable items, including a net loss from repositioning the securities portfolio, the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture, disposal gains and losses and the revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipts services. Expense measures, excluding notable items, including goodwill impairment, FDIC special assessment, severance expense and litigation reserves, are also presented. Litigation reserves represent accruals for loss contingencies that are both probable and reasonably estimable, but exclude standard business-related legal fees. Net income applicable to common shareholders of The Bank of New York Mellon Corporation, diluted earnings per share, operating leverage, return on common equity, return on tangible common equity and pre-tax operating margin, excluding the notable items mentioned above, are also provided. These measures are provided to permit investors to view the financial measures on a basis consistent with how management views the businesses.
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BNY Mellon 4Q23 Financial Results |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Non-GAAP measures, excluding notable items | | | | | | | 4Q23 vs. |
(dollars in millions) | 4Q23 | | 3Q23 | | 4Q22 | | 3Q23 | 4Q22 |
| | | | | | | | |
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Total revenue – GAAP | $ | 4,311 | | | $ | 4,374 | | | $ | 3,918 | | | (1) | % | 10 | % |
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | (144) | | | — | | | — | | | | |
Disposal gain (loss) (a) | (6) | | | 2 | | | (11) | | | | |
Net loss from repositioning the securities portfolio (a) | — | | | — | | | (449) | | | | |
Adjusted total revenue – Non-GAAP | $ | 4,461 | | | $ | 4,372 | | | $ | 4,378 | | | 2 | % | 2 | % |
| | | | | | | | |
Noninterest expense – GAAP | $ | 3,868 | | | $ | 3,089 | | | $ | 3,213 | | | 25 | % | 20 | % |
Less: Severance (b) | 200 | | | 41 | | | 184 | | | | |
Litigation reserves (b) | 47 | | | 5 | | | 29 | | | | |
FDIC special assessment (b) | 505 | | | — | | | — | | | | |
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Adjusted noninterest expense – Non-GAAP | $ | 3,116 | | | $ | 3,043 | | | $ | 3,000 | | | 2 | % | 4 | % |
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Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 256 | | | $ | 956 | | | $ | 509 | | | (73) | % | (50) | % |
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | (144) | | | — | | | — | | | | |
Disposal gain (loss) (a) | (5) | | | — | | | (41) | | | | |
Net loss from repositioning the securities portfolio (a) | — | | | — | | | (342) | | | | |
Severance (b) | (153) | | | (32) | | | (141) | | | | |
Litigation reserves (b) | (47) | | | (4) | | | (24) | | | | |
FDIC special assessment (b) | (385) | | | — | | | — | | | | |
| | | | | | | | |
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP | $ | 990 | | | $ | 992 | | | $ | 1,057 | | | — | % | (6) | % |
| | | | | | | | |
Diluted earnings per common share | $ | 0.33 | | | $ | 1.22 | | | $ | 0.62 | | | (73) | % | (47) | % |
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | (0.19) | | | — | | | — | | | | |
Disposal gain (loss) (a) | (0.01) | | | — | | | (0.05) | | | | |
Net loss from repositioning the securities portfolio (a) | — | | | — | | | (0.42) | | | | |
Severance (b) | (0.20) | | | (0.04) | | | (0.17) | | | | |
Litigation reserves (b) | (0.06) | | | (0.01) | | | (0.03) | | | | |
FDIC special assessment (b) | (0.50) | | | — | | | — | | | | |
Total diluted earnings per common share impact of notable items | (0.95) | | (c) | (0.05) | | | (0.67) | | | | |
Adjusted diluted earnings per common share – Non-GAAP | $ | 1.28 | | | $ | 1.27 | | | $ | 1.30 | | (c) | 1 | % | (2) | % |
Operating leverage – GAAP (d) | | | | | | | (2,666) | bps | (1,036) | bps |
Adjusted operating leverage – Non-GAAP (d) | | | | | | | (36) | bps | (197) | bps |
(a) Reflected in Investment and other revenue.
(b) Severance is reflected in Staff expense, Litigation reserves in Other expense, and FDIC special assessment in Bank assessment charges, respectively.
(c) Does not foot due to rounding.
(d) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps - basis points.
| | |
BNY Mellon 4Q23 Financial Results |
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Reconciliation of Non-GAAP measures, excluding notable items | | | | | 2023 vs. |
(dollars in millions) | 2023 | | 2022 | | 2022 |
Total revenue – GAAP | $ | 17,502 | | | $ | 16,377 | | | 7 | % |
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | (144) | | | — | | | |
Disposal (loss) gain (a) | (6) | | | 26 | | | |
Revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipts services (b) | — | | | (88) | | | |
Net loss from repositioning the securities portfolio (a) | — | | | (449) | | | |
Adjusted total revenue – Non-GAAP | $ | 17,652 | | | $ | 16,888 | | | 5 | % |
| | | | | |
Total noninterest expense – GAAP | $ | 13,168 | | | $ | 13,010 | | | 1 | % |
Less: Severance (c) | 267 | | | 215 | | | |
Litigation reserves (c) | 94 | | | 134 | | | |
FDIC special assessment (c) | 505 | | | — | | | |
Goodwill impairment | — | | | 680 | | | |
Adjusted total noninterest expense – Non-GAAP | $ | 12,302 | | | $ | 11,981 | | | 3 | % |
| | | | | |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 3,148 | | | $ | 2,362 | | | 33 | % |
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | (144) | | | — | | | |
Disposal (loss) gain (a) | (5) | | | (12) | | | |
Revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipts services (b) | — | | | (67) | | | |
Net loss from repositioning the securities portfolio (a) | — | | | (343) | | | |
Severance (c) | (205) | | | (166) | | | |
Litigation reserves (c) | (91) | | | (125) | | | |
FDIC special assessment (c) | (385) | | | — | | | |
Goodwill impairment | — | | | (665) | | | |
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Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP | $ | 3,978 | | | $ | 3,740 | | | 6 | % |
| | | | | |
Diluted earnings per share – GAAP | $ | 4.00 | | | $ | 2.90 | | | 38 | % |
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a) | (0.18) | | | — | | | |
Disposal (loss) gain (a) | (0.01) | | | (0.01) | | | |
Revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipts services (b) | — | | | (0.08) | | | |
Net loss from repositioning the securities portfolio (a) | — | | | (0.42) | | | |
Severance (c) | (0.26) | | | (0.20) | | | |
Litigation reserves (c) | (0.12) | | | (0.15) | | | |
FDIC special assessment (c) | (0.49) | | | — | | | |
Goodwill impairment | — | | | (0.82) | | | |
Total diluted earnings per common share impact of notable items | $ | (1.05) | | (d) | $ | (1.69) | | (d) | |
Adjusted diluted earnings per common share – Non-GAAP | $ | 5.05 | | | $ | 4.59 | | | 10 | % |
Operating leverage – GAAP (e) | | | | | 566 | bps |
Adjusted operating leverage – Non-GAAP (e) | | | | | 184 | bps |
(a) Reflected in Investment and other revenue.
(b) Primarily reflected in Investment services fees.
(c) Severance is reflected in Staff expense, Litigation reserves in Other expense, and FDIC special assessment in Bank assessment charges, respectively.
(d) Does not foot due to rounding.
(e) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps – basis points
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BNY Mellon 4Q23 Financial Results |
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Return on common equity and return on tangible common equity reconciliation | | | | | | |
(dollars in millions) | 4Q23 | 3Q23 | 4Q22 | | 2023 | 2022 |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 256 | | $ | 956 | | $ | 509 | | | $ | 3,148 | | $ | 2,362 | |
Add: Amortization of intangible assets | 14 | | 15 | | 16 | | | 57 | | 67 | |
Less: Tax impact of amortization of intangible assets | 4 | | 3 | | 4 | | | 14 | | 16 | |
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | $ | 266 | | $ | 968 | | $ | 521 | | | $ | 3,191 | | $ | 2,413 | |
Impact of notable items (a) | (734) | | (36) | | (548) | | | (830) | | (1,378) | |
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets and notable items – Non-GAAP | $ | 1,000 | | $ | 1,004 | | $ | 1,069 | | | $ | 4,021 | | $ | 3,791 | |
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Average common shareholders’ equity | $ | 36,158 | | $ | 35,983 | | $ | 35,259 | | | $ | 35,880 | | $ | 36,175 | |
Less: Average goodwill | 16,199 | | 16,237 | | 16,229 | | | 16,204 | | 17,060 | |
Average intangible assets | 2,858 | | 2,875 | | 2,905 | | | 2,880 | | 2,939 | |
Add: Deferred tax liability – tax deductible goodwill | 1,205 | | 1,197 | | 1,181 | | | 1,205 | | 1,181 | |
Deferred tax liability – intangible assets | 657 | | 657 | | 660 | | | 657 | | 660 | |
Average tangible common shareholders’ equity – Non-GAAP | $ | 18,963 | | $ | 18,725 | | $ | 17,966 | | | $ | 18,658 | | $ | 18,017 | |
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Return on common equity – GAAP (b) | 2.8 | % | 10.5 | % | 5.7 | % | | 8.8 | % | 6.5 | % |
Adjusted return on common equity – Non-GAAP (b) | 10.9 | % | 10.9 | % | 11.9 | % | | 11.1 | % | 10.3 | % |
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Return on tangible common equity – Non-GAAP (b) | 5.6 | % | 20.5 | % | 11.5 | % | | 17.1 | % | 13.4 | % |
Adjusted return on tangible common equity – Non-GAAP (b) | 20.9 | % | 21.2 | % | 23.6 | % | | 21.6 | % | 21.0 | % |
(a) See pages 12 and 13 for details of notable items and line items impacted.
(b) Quarterly returns are annualized.
| | | | | | | | | | | | | | | | | | | | |
Pre-tax operating margin reconciliation | | | | | | |
(dollars in millions) | 4Q23 | 3Q23 | 4Q22 | | 2023 | 2022 |
Income before taxes – GAAP | $ | 359 | | $ | 1,282 | | $ | 685 | | | $ | 4,215 | | $ | 3,328 | |
Impact of notable items (a) | (902) | | (44) | | (673) | | | (1,016) | | (1,540) | |
Adjusted income before taxes, excluding notable items – Non-GAAP | $ | 1,261 | | $ | 1,326 | | $ | 1,358 | | | $ | 5,231 | | $ | 4,868 | |
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Total revenue – GAAP | $ | 4,311 | | $ | 4,374 | | $ | 3,918 | | | $ | 17,502 | | $ | 16,377 | |
Impact of notable items (a) | (150) | | 2 | | (460) | | | (150) | | (511) | |
Adjusted total revenue, excluding notable items – Non-GAAP | $ | 4,461 | | $ | 4,372 | | $ | 4,378 | | | $ | 17,652 | | $ | 16,888 | |
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Pre-tax operating margin – GAAP (b) | 8 | % | 29 | % | 17 | % | | 24 | % | 20 | % |
Adjusted pre-tax operating margin – Non-GAAP (b) | 28 | % | 30 | % | 31 | % | | 30 | % | 29 | % |
(a) See pages 12 and 13 for details of notable items and line items impacted.
(b) Income before taxes divided by total revenue.
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BNY Mellon 4Q23 Financial Results |
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Reconciliation of Non-GAAP measures, excluding notable items - Investment and Wealth Management | | | | 4Q23 vs. |
(dollars in millions) | 4Q23 | 3Q23 | 4Q22 | 3Q23 | 4Q22 |
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(Loss) income before taxes – GAAP | $ | (5) | | $ | 164 | | $ | 125 | | (103) | % | (104) | % |
Impact of notable items (a) | (156) | | (5) | | (25) | | | |
Adjusted income before taxes – Non-GAAP | $ | 151 | | $ | 169 | | $ | 150 | | (11) | % | 1 | % |
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Total revenue – GAAP | $ | 676 | | $ | 827 | | $ | 825 | | (18) | % | (18) | % |
Less: Distribution and servicing expense | 89 | | 87 | | 87 | | | |
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | $ | 587 | | $ | 740 | | $ | 738 | | (21) | % | (20 | %) |
Impact of notable items (a) | (144) | | | | | |
Adjusted total revenue, excluding notable items and net of distribution and servicing expense – Non-GAAP | $ | 731 | | | | | |
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Pre-tax operating margin – GAAP (b) | (1) | % | | | | |
Adjusted pre-tax operating margin, net of distribution and servicing expense (b) | (1) | % | | | | |
Adjusted pre-tax operating margin, net of distribution and servicing expense and excluding notable items – Non-GAAP (b) | 21 | % | | | | |
(a) Notable items in 4Q23 include the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (reflected in investment and other revenue) and severance expense. Notable items in 3Q23 include severance expense. Notable items in 4Q22 include severance expense and a disposal loss (reflected in investment and other revenue).
(b) Income before taxes divided by total revenue.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
A number of statements in this Earnings Release and in our Financial Supplement may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our strategic priorities, financial performance and financial targets. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as we complete our Annual Report on Form 10-K for the year ended Dec. 31, 2023. Forward-looking statements are not guarantees of future results or occurrences, are inherently uncertain and are based upon current beliefs and expectations of future events, many of which are, by their nature, difficult to predict, outside of our control and subject to change.
By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results may differ, possibly materially, from the anticipated results expressed or implied in these forward-looking statements as a result of a number of important factors, including the risk factors and other uncertainties set forth in our Annual Report on Form 10-K for the year ended Dec. 31, 2022 and our other filings with the Securities and Exchange Commission.
You should not place undue reliance on any forward-looking statement. All forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.
ABOUT BNY MELLON
Established in 1784, BNY Mellon is America’s oldest bank and the first company listed on the New York Stock Exchange (NYSE: BK). Today, BNY Mellon powers capital markets around the world through comprehensive solutions that help clients manage and service their financial assets throughout the investment life cycle. BNY Mellon had $47.8 trillion in assets under custody and/or administration and $2.0 trillion in assets under management as of Dec. 31, 2023. BNY Mellon has been named among Fortune’s World’s Most Admired Companies and Fast Company’s Best Workplaces for Innovators. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Additional information is available on www.bnymellon.com. Follow us on LinkedIn or visit our Newsroom for the latest company news.
CONFERENCE CALL INFORMATION
Robin Vince, President and Chief Executive Officer, and Dermot McDonogh, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 1:00 p.m. ET on Jan. 12, 2024. 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: 200200, 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. 12, 2024. An archived version of the fourth quarter conference call and audio webcast will be available beginning on Jan. 12, 2024 at approximately 5:00 p.m. ET through Feb. 12, 2024 at www.bnymellon.com/investorrelations.
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The Bank of New York Mellon Corporation |
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Financial Supplement |
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Fourth Quarter 2023 |
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Table of Contents | |
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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 | | |
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Business Segment Results | | |
Securities Services Business Segment | | |
Market and Wealth Services Business Segment | | |
Investment and Wealth Management Business Segment | | |
AUM by Product Type, Changes in AUM and Wealth Management Client Assets | | |
Other Segment | | |
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Other | | |
Securities Portfolio | | |
Allowance for Credit Losses and Nonperforming Assets | | |
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Supplemental Information | | |
Explanation of GAAP and Non-GAAP Financial Measures | | |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | |
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CONSOLIDATED FINANCIAL HIGHLIGHTS | | | | | | | | | |
(dollars in millions, except per common share amounts, or unless otherwise noted) | | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
| 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Selected income statement data | | | | | | | | | | | | | | | | | | | | |
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Fee and other revenue | | $ | 3,210 | | | $ | 3,358 | | | $ | 3,354 | | | $ | 3,235 | | | $ | 2,862 | | | (4) | % | | 12 | % | | $ | 13,157 | | | $ | 12,873 | | | 2 | % |
Net interest revenue | | 1,101 | | | 1,016 | | | 1,100 | | | 1,128 | | | 1,056 | | | 8 | | | 4 | | | 4,345 | | | 3,504 | | | 24 | |
Total revenue | | 4,311 | | | 4,374 | | | 4,454 | | | 4,363 | | | 3,918 | | | (1) | | | 10 | | | 17,502 | | | 16,377 | | | 7 | |
Provision for credit losses | | 84 | | | 3 | | | 5 | | | 27 | | | 20 | | | N/M | | N/M | | 119 | | | 39 | | | N/M |
Noninterest expense | | 3,868 | | | 3,089 | | | 3,111 | | | 3,100 | | | 3,213 | | | 25 | | | 20 | | | 13,168 | | | 13,010 | | | 1 | |
Income before income taxes | | 359 | | | 1,282 | | | 1,338 | | | 1,236 | | | 685 | | | (72) | | | (48) | | | 4,215 | | | 3,328 | | | 27 | |
Provision for income taxes | | 59 | | | 241 | | | 270 | | | 260 | | | 142 | | | (76) | | | (58) | | | 830 | | | 768 | | | 8 | |
Net income | | $ | 300 | | | $ | 1,041 | | | $ | 1,068 | | | $ | 976 | | | $ | 543 | | | (71) | % | | (45) | % | | $ | 3,385 | | | $ | 2,560 | | | 32 | % |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | | $ | 256 | | | $ | 956 | | | $ | 1,031 | | | $ | 905 | | | $ | 509 | | | (73) | % | | (50) | % | | $ | 3,148 | | | $ | 2,362 | | | 33 | % |
Diluted earnings per common share | | $ | 0.33 | | | $ | 1.22 | | | $ | 1.30 | | | $ | 1.12 | | | $ | 0.62 | | | (73) | % | | (47) | % | | $ | 4.00 | | | $ | 2.90 | | | 38 | % |
Average common shares and equivalents outstanding – diluted (in thousands) | | 772,102 | | | 781,781 | | | 790,725 | | | 807,718 | | | 815,846 | | | (1) | % | | (5) | % | | 787,798 | | | 814,795 | | | (3) | % |
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Financial ratios (Returns are annualized) | | | | | | | | | | | | | | | | | | | | |
Pre-tax operating margin | | 8 | % | | 29 | % | | 30 | % | | 28 | % | | 17 | % | | | | | | 24 | % | | 20 | % | | |
Return on common equity | | 2.8 | % | | 10.5 | % | | 11.6 | % | | 10.3 | % | | 5.7 | % | | | | | | 8.8 | % | | 6.5 | % | | |
Return on tangible common equity – Non-GAAP (a) | | 5.6 | % | | 20.5 | % | | 22.6 | % | | 20.2 | % | | 11.5 | % | | | | | | 17.1 | % | | 13.4 | % | | |
Non-U.S. revenue as a percentage of total revenue | | 36 | % | | 36 | % | | 37 | % | | 35 | % | | 39 | % | | | | | | 36 | % | | 36 | % | | |
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Period end | | | | | | | | | | | | | | | | | | | | |
Assets under custody and/or administration (“AUC/A”) (in trillions) (b) | | $ | 47.8 | | | $ | 45.7 | | | $ | 46.9 | | | $ | 46.6 | | | $ | 44.3 | | | 5 | % | | 8 | % | | | | | | |
Assets under management (“AUM”) (in trillions) | | $ | 1.97 | | | $ | 1.82 | | | $ | 1.91 | | | $ | 1.91 | | | $ | 1.84 | | | 8 | % | | 8 | % | | | | | | |
Full-time employees | | 53,400 | | | 53,600 | | | 53,200 | | | 51,600 | | | 51,700 | | | — | % | | 3 | % | | | | | | |
Book value per common share | | $ | 48.24 | | | $ | 46.98 | | | $ | 46.35 | | | $ | 45.36 | | | $ | 44.40 | | | | | | | | | | | |
Tangible book value per common share – Non-GAAP (a) | | $ | 25.52 | | | $ | 24.66 | | | $ | 24.17 | | | $ | 23.52 | | | $ | 23.11 | | | | | | | | | | | |
Cash dividends per common share | | $ | 0.42 | | | $ | 0.42 | | | $ | 0.37 | | | $ | 0.37 | | | $ | 0.37 | | | | | | | | | | | |
Common dividend payout ratio | | 128 | % | | 35 | % | | 29 | % | | 34 | % | | 60 | % | | | | | | | | | | |
Closing stock price per common share | | $ | 52.05 | | | $ | 42.65 | | | $ | 44.52 | | | $ | 45.44 | | | $ | 45.52 | | | | | | | | | | | |
Market capitalization | | $ | 39,524 | | | $ | 32,801 | | | $ | 34,671 | | | $ | 35,858 | | | $ | 36,800 | | | | | | | | | | | |
Common shares outstanding (in thousands) | | 759,344 | | | 769,073 | | | 778,782 | | | 789,134 | | | 808,445 | | | | | | | | | | | |
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Capital ratios at period end (c) | | | | | | | | | | | | | | | | | | | | |
Common Equity Tier 1 ("CET1") ratio | | 11.6 | % | | 11.4 | % | | 11.1 | % | | 11.0 | % | | 11.2 | % | | | | | | | | | | |
Tier 1 capital ratio | | 14.3 | % | | 14.4 | % | | 14.0 | % | | 13.9 | % | | 14.1 | % | | | | | | | | | | |
Total capital ratio | | 15.0 | % | | 15.2 | % | | 14.8 | % | | 14.7 | % | | 14.9 | % | | | | | | | | | | |
Tier 1 leverage ratio | | 6.0 | % | | 6.1 | % | | 5.7 | % | | 5.8 | % | | 5.8 | % | | | | | | | | | | |
Supplementary leverage ratio ("SLR") | | 7.4 | % | | 7.2 | % | | 7.0 | % | | 6.9 | % | | 6.8 | % | | | | | | | | | | |
(a) Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of Non-GAAP measures. |
(b) Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.7 trillion at Dec. 31, 2023, $1.5 trillion at Sept. 30, 2023, $1.6 trillion at June 30, 2023 and $1.5 trillion at March 31, 2023 and Dec. 31, 2022. |
(c) Regulatory capital ratios for Dec. 31, 2023 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 the periods presented, was the Advanced Approaches. |
N/M – Not meaningful. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | | | |
CONDENSED CONSOLIDATED INCOME STATEMENT | | | | | | | | | |
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(dollars in millions, except per share amounts; common shares in thousands) | | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
| 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Revenue | | | | | | | | | | | | | | | | | | | | |
Investment services fees | | $ | 2,242 | | | $ | 2,230 | | | $ | 2,252 | | | $ | 2,119 | | | $ | 2,173 | | | 1 | % | | 3 | % | | $ | 8,843 | | | $ | 8,529 | | | 4 | % |
Investment management and performance fees | | 743 | | | 777 | | | 762 | | | 776 | | | 783 | | | (4) | | | (5) | | | 3,058 | | | 3,299 | | | (7) | |
Foreign exchange revenue | | 143 | | | 154 | | | 158 | | | 176 | | | 190 | | | (7) | | | (25) | | | 631 | | | 822 | | | (23) | |
Financing-related fees | | 45 | | | 45 | | | 50 | | | 52 | | | 43 | | | — | | | 5 | | | 192 | | | 175 | | | 10 | |
Distribution and servicing fees | | 41 | | | 39 | | | 35 | | | 33 | | | 33 | | | 5 | | | 24 | | | 148 | | | 130 | | | 14 | |
Total fee revenue | | 3,214 | | | 3,245 | | | 3,257 | | | 3,156 | | | 3,222 | | | (1) | | | — | | | 12,872 | | | 12,955 | | | (1) | |
Investment and other revenue | | (4) | | | 113 | | | 97 | | | 79 | | | (360) | | | N/M | | N/M | | 285 | | | (82) | | | N/M |
Total fee and other revenue | | 3,210 | | | 3,358 | | | 3,354 | | | 3,235 | | | 2,862 | | | (4) | | | 12 | | | 13,157 | | | 12,873 | | | 2 | |
Net interest revenue | | 1,101 | | | 1,016 | | | 1,100 | | | 1,128 | | | 1,056 | | | 8 | | | 4 | | | 4,345 | | | 3,504 | | | 24 | |
Total revenue | | 4,311 | | | 4,374 | | | 4,454 | | | 4,363 | | | 3,918 | | | (1) | | | 10 | | | 17,502 | | | 16,377 | | | 7 | |
Provision for credit losses | | 84 | | | 3 | | | 5 | | | 27 | | | 20 | | | N/M | | N/M | | 119 | | | 39 | | | N/M |
Noninterest expense | | | | | | | | | | | | | | | | | | | | |
Staff | | 1,831 | | | 1,755 | | | 1,718 | | | 1,791 | | | 1,802 | | | 4 | | | 2 | | | 7,095 | | | 6,800 | | | 4 | |
Software and equipment | | 486 | | | 452 | | | 450 | | | 429 | | | 432 | | | 8 | | | 13 | | | 1,817 | | | 1,657 | | | 10 | |
Professional, legal and other purchased services | | 406 | | | 368 | | | 378 | | | 375 | | | 415 | | | 10 | | | (2) | | | 1,527 | | | 1,527 | | | — | |
Net occupancy | | 162 | | | 140 | | | 121 | | | 119 | | | 143 | | | 16 | | | 13 | | | 542 | | | 514 | | | 5 | |
Sub-custodian and clearing | | 117 | | | 121 | | | 119 | | | 118 | | | 112 | | | (3) | | | 4 | | | 475 | | | 485 | | | (2) | |
Distribution and servicing | | 88 | | | 87 | | | 93 | | | 85 | | | 86 | | | 1 | | | 2 | | | 353 | | | 343 | | | 3 | |
Business development | | 61 | | | 36 | | | 47 | | | 39 | | | 45 | | | 69 | | | 36 | | | 183 | | | 152 | | | 20 | |
Bank assessment charges | | 543 | | | 37 | | | 41 | | | 40 | | | 19 | | | N/M | | N/M | | 661 | | | 126 | | | N/M |
Goodwill impairment | | — | | | — | | | — | | | — | | | — | | | N/M | | N/M | | — | | | 680 | | | N/M |
Amortization of intangible assets | | 14 | | | 15 | | | 14 | | | 14 | | | 16 | | | (7) | | | (13) | | | 57 | | | 67 | | | (15) | |
Other | | 160 | | | 78 | | | 130 | | | 90 | | | 143 | | | 105 | | | 12 | | | 458 | | | 659 | | | (31) | |
Total noninterest expense | | 3,868 | | | 3,089 | | | 3,111 | | | 3,100 | | | 3,213 | | | 25 | | | 20 | | | 13,168 | | | 13,010 | | | 1 | |
Income before income taxes | | 359 | | | 1,282 | | | 1,338 | | | 1,236 | | | 685 | | | (72) | | | (48) | | | 4,215 | | | 3,328 | | | 27 | |
Provision for income taxes | | 59 | | | 241 | | | 270 | | | 260 | | | 142 | | | (76) | | | (58) | | | 830 | | | 768 | | | 8 | |
Net income | | 300 | | | 1,041 | | | 1,068 | | | 976 | | | 543 | | | (71) | | | (45) | | | 3,385 | | | 2,560 | | | 32 | |
Net (income) loss attributable to noncontrolling interests | | 2 | | | (3) | | | (1) | | | — | | | — | | | N/M | | N/M | | (2) | | | 13 | | | N/M |
Preferred stock dividends | | (46) | | | (82) | | | (36) | | | (71) | | | (34) | | | N/M | | N/M | | (235) | | | (211) | | | N/M |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | | $ | 256 | | | $ | 956 | | | $ | 1,031 | | | $ | 905 | | | $ | 509 | | | (73) | % | | (50) | % | | $ | 3,148 | | | $ | 2,362 | | | 33 | % |
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Average common shares and equivalents outstanding: Basic | | 767,146 | | | 777,813 | | | 787,718 | | | 803,340 | | | 811,669 | | | (1) | % | | (5) | % | | 784,069 | | | 811,068 | | | (3) | % |
Diluted | | 772,102 | | | 781,781 | | | 790,725 | | | 807,718 | | | 815,846 | | | (1) | % | | (5) | % | | 787,798 | | | 814,795 | | | (3) | % |
| | | | | | | | | | | | | | | | | | | | |
Earnings per common share: Basic | | $ | 0.33 | | | $ | 1.23 | | | $ | 1.31 | | | $ | 1.13 | | | $ | 0.63 | | | (73) | % | | (48) | % | | $ | 4.01 | | | $ | 2.91 | | | 38 | % |
Diluted | | $ | 0.33 | | | $ | 1.22 | | | $ | 1.30 | | | $ | 1.12 | | | $ | 0.62 | | | (73) | % | | (47) | % | | $ | 4.00 | | | $ | 2.90 | | | 38 | % |
N/M – Not meaningful. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
THE BANK OF NEW YORK MELLON CORPORATION | | | | | | |
CONDENSED CONSOLIDATED BALANCE SHEET | | | | | |
| | | | | | | | |
| | 2023 | | 2022 |
(in millions) | | Dec. 31 | | Sept. 30 | | June 30 | | March 31 | | Dec. 31 |
Assets | | | | | | | | | | |
Cash and due from banks | | $ | 4,922 | | | $ | 4,904 | | | $ | 5,720 | | | $ | 5,564 | | | $ | 5,030 | |
Interest-bearing deposits with the Federal Reserve and other central banks | | 111,550 | | | 107,419 | | | 118,908 | | | 117,042 | | | 91,655 | |
Interest-bearing deposits with banks | | 12,139 | | | 12,999 | | | 12,316 | | | 15,114 | | | 17,169 | |
Federal funds sold and securities purchased under resale agreements | | 28,900 | | | 26,299 | | | 35,378 | | | 26,894 | | | 24,298 | |
Securities | | 126,395 | | | 128,225 | | | 134,233 | | | 138,678 | | | 142,816 | |
Trading assets | | 10,058 | | | 10,699 | | | 10,562 | | | 9,024 | | | 9,908 | |
Loans | | 66,879 | | | 66,290 | | | 64,469 | | | 62,323 | | | 66,063 | |
Allowance for loan losses | | (303) | | | (211) | | | (191) | | | (170) | | | (176) | |
Net loans | | 66,576 | | | 66,079 | | | 64,278 | | | 62,153 | | | 65,887 | |
Premises and equipment | | 3,163 | | | 3,234 | | | 3,241 | | | 3,248 | | | 3,256 | |
Accrued interest receivable | | 1,150 | | | 1,141 | | | 963 | | | 978 | | | 858 | |
Goodwill | | 16,261 | | | 16,159 | | | 16,246 | | | 16,192 | | | 16,150 | |
Intangible assets | | 2,854 | | | 2,859 | | | 2,881 | | | 2,890 | | | 2,901 | |
Other assets | | 25,985 | | | 25,231 | | | 25,656 | | | 27,335 | | | 25,855 | |
Total assets | | $ | 409,953 | | | $ | 405,248 | | | $ | 430,382 | | | $ | 425,112 | | | $ | 405,783 | |
Liabilities | | | | | | | | | | |
Deposits | | $ | 283,669 | | | $ | 277,467 | | | $ | 292,045 | | | $ | 281,294 | | | $ | 278,970 | |
Federal funds purchased and securities sold under repurchase agreements | | 14,507 | | | 14,771 | | | 21,285 | | | 26,540 | | | 12,335 | |
Trading liabilities | | 6,226 | | | 7,358 | | | 6,319 | | | 5,705 | | | 5,385 | |
Payables to customers and broker-dealers | | 18,395 | | | 17,441 | | | 21,084 | | | 22,598 | | | 23,435 | |
| | | | | | | | | | |
Other borrowed funds | | 479 | | | 728 | | | 1,371 | | | 2,538 | | | 397 | |
Accrued taxes and other expenses | | 5,470 | | | 5,389 | | | 5,160 | | | 4,732 | | | 5,410 | |
Other liabilities | | 8,844 | | | 11,758 | | | 9,553 | | | 10,414 | | | 8,543 | |
Long-term debt | | 31,257 | | | 29,205 | | | 32,463 | | | 30,489 | | | 30,458 | |
Total liabilities | | 368,847 | | | 364,117 | | | 389,280 | | | 384,310 | | | 364,933 | |
Temporary equity | | | | | | | | | | |
Redeemable noncontrolling interests | | 85 | | | 109 | | | 104 | | | 96 | | | 109 | |
Permanent equity | | | | | | | | | | |
Preferred stock | | 4,343 | | | 4,838 | | | 4,838 | | | 4,838 | | | 4,838 | |
Common stock | | 14 | | | 14 | | | 14 | | | 14 | | | 14 | |
Additional paid-in capital | | 28,908 | | | 28,793 | | | 28,726 | | | 28,650 | | | 28,508 | |
Retained earnings | | 39,750 | | | 39,822 | | | 39,199 | | | 38,465 | | | 37,864 | |
Accumulated other comprehensive loss, net of tax | | (4,893) | | | (5,805) | | | (5,602) | | | (5,543) | | | (5,966) | |
Less: Treasury stock, at cost | | (27,151) | | | (26,696) | | | (26,242) | | | (25,790) | | | (24,524) | |
Total The Bank of New York Mellon Corporation shareholders’ equity | | 40,971 | | | 40,966 | | | 40,933 | | | 40,634 | | | 40,734 | |
Nonredeemable noncontrolling interests of consolidated investment management funds | | 50 | | | 56 | | | 65 | | | 72 | | | 7 | |
Total permanent equity | | 41,021 | | | 41,022 | | | 40,998 | | | 40,706 | | | 40,741 | |
Total liabilities, temporary equity and permanent equity | | $ | 409,953 | | | $ | 405,248 | | | $ | 430,382 | | | $ | 425,112 | | | $ | 405,783 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | | | |
FEE AND OTHER REVENUE | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
(dollars in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Investment services fees | | $ | 2,242 | | | $ | 2,230 | | | $ | 2,252 | | | $ | 2,119 | | | $ | 2,173 | | | 1 | % | | 3 | % | | $ | 8,843 | | | $ | 8,529 | | | 4 | % |
Investment management and performance fees: | | | | | | | | | | | | | | | | | | | | |
Investment management fees (a) | | 724 | | | 747 | | | 752 | | | 754 | | | 757 | | | (3) | | | (4) | | | 2,977 | | | 3,224 | | | (8) | |
Performance fees | | 19 | | | 30 | | | 10 | | | 22 | | | 26 | | | N/M | | N/M | | 81 | | | 75 | | | 8 | |
Total investment management and performance fees (b) | | 743 | | | 777 | | | 762 | | | 776 | | | 783 | | | (4) | | | (5) | | | 3,058 | | | 3,299 | | | (7) | |
Foreign exchange revenue | | 143 | | | 154 | | | 158 | | | 176 | | | 190 | | | (7) | | | (25) | | | 631 | | | 822 | | | (23) | |
Financing-related fees | | 45 | | | 45 | | | 50 | | | 52 | | | 43 | | | — | | | 5 | | | 192 | | | 175 | | | 10 | |
Distribution and servicing fees | | 41 | | | 39 | | | 35 | | | 33 | | | 33 | | | 5 | | | 24 | | | 148 | | | 130 | | | 14 | |
Total fee revenue | | 3,214 | | | 3,245 | | | 3,257 | | | 3,156 | | | 3,222 | | | (1) | | | — | | | 12,872 | | | 12,955 | | | (1) | |
Investment and other revenue: | | | | | | | | | | | | | | | | | | | | |
Income (loss) from consolidated investment management funds | | 26 | | | (11) | | | 10 | | | 5 | | | 9 | | | N/M | | N/M | | 30 | | | (42) | | | N/M |
Seed capital gains (losses) (c) | | 18 | | | (4) | | | 7 | | | 8 | | | 6 | | | N/M | | N/M | | 29 | | | (37) | | | N/M |
Other trading revenue | | 47 | | | 86 | | | 53 | | | 45 | | | 34 | | | N/M | | N/M | | 231 | | | 149 | | | N/M |
Renewable energy investment (losses) | | (45) | | | (45) | | | (45) | | | (32) | | | (32) | | | N/M | | N/M | | (167) | | | (164) | | | N/M |
Corporate/bank-owned life insurance | | 39 | | | 29 | | | 23 | | | 27 | | | 35 | | | N/M | | N/M | | 118 | | | 128 | | | N/M |
Other investments gains (losses) (d) | | 55 | | | (9) | | | 10 | | | (9) | | | 7 | | | N/M | | N/M | | 47 | | | 159 | | | N/M |
Disposal (losses) gains | | (6) | | | 2 | | | (1) | | | (1) | | | (11) | | | N/M | | N/M | | (6) | | | 26 | | | N/M |
Expense reimbursements from joint venture | | 28 | | | 29 | | | 31 | | | 29 | | | 28 | | | N/M | | N/M | | 117 | | | 108 | | | N/M |
Other (loss) income | | (118) | | | 55 | | | 9 | | | 8 | | | 12 | | | N/M | | N/M | | (46) | | | 34 | | | N/M |
Net securities (losses) gains | | (48) | | | (19) | | | — | | | (1) | | | (448) | | | N/M | | N/M | | (68) | | | (443) | | | N/M |
Total investment and other revenue | | (4) | | | 113 | | | 97 | | | 79 | | | (360) | | | N/M | | N/M | | 285 | | | (82) | | | N/M |
Total fee and other revenue | | $ | 3,210 | | | $ | 3,358 | | | $ | 3,354 | | | $ | 3,235 | | | $ | 2,862 | | | (4) | % | | 12 | % | | $ | 13,157 | | | $ | 12,873 | | | 2 | % |
(a) Excludes seed capital gains (losses) related to consolidated investment management funds. |
(b) On a constant currency basis (Non-GAAP), investment management and performance fees decreased 6% compared with 4Q22. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. |
(c) Includes gains (losses) on investments in BNY Mellon funds which hedge deferred incentive awards. |
(d) Includes strategic equity, private equity and other investments. |
N/M – Not meaningful. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | | | | | | | |
AVERAGE BALANCES AND INTEREST RATES | | | | | | | | | | | | | |
| | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 |
| | 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 | | $ | 107,291 | | 4.72 | % | | | $ | 98,767 | | 4.57 | % | | | $ | 114,578 | | 4.29 | % | | | $ | 94,899 | | 3.59 | % | | | $ | 94,868 | | 2.60 | % | |
Interest-bearing deposits with banks | | 12,110 | | 4.26 | | | | 12,287 | | 4.04 | | | | 13,919 | | 3.68 | | | | 16,225 | | 3.51 | | | | 15,750 | | 2.70 | | |
Federal funds sold and securities purchased under resale agreements | | 25,753 | | 35.55 | | (a) | | 26,915 | | 30.47 | | (a) | | 26,989 | | 26.38 | | (a) | | 24,631 | | 16.32 | | (a) | | 25,657 | | 11.22 | | (a) |
Loans | | 65,677 | | 6.43 | | | | 63,962 | | 6.39 | | | | 63,459 | | 6.05 | | | | 63,261 | | 5.54 | | | | 67,364 | | 4.65 | | |
Securities: | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations | | 28,641 | | 3.40 | | | | 32,224 | | 3.08 | | | | 34,147 | | 2.90 | | | | 38,852 | | 2.89 | | | | 39,382 | | 2.46 | | |
U.S. government agency obligations | | 59,067 | | 2.95 | | | | 59,481 | | 2.87 | | | | 61,565 | | 2.78 | | | | 62,280 | | 2.60 | | | | 61,426 | | 2.30 | | |
State and political subdivisions (b) | | 12 | | 4.40 | | | | 13 | | 4.42 | | | | 13 | | 4.45 | | | | 23 | | 7.07 | | | | 1,178 | | 2.77 | | |
Other securities (b) | | 39,403 | | 4.03 | | | | 39,861 | | 3.93 | | | | 40,976 | | 3.59 | | | | 42,429 | | 3.21 | | | | 41,732 | | 2.66 | | |
Total investment securities (b) | | 127,123 | | 3.39 | | | | 131,579 | | 3.24 | | | | 136,701 | | 3.05 | | | | 143,584 | | 2.86 | | | | 143,718 | | 2.45 | | |
Trading securities (b) | | 6,220 | | 5.59 | | | | 5,534 | | 5.49 | | | | 6,403 | | 5.02 | | | | 5,778 | | 4.97 | | | | 5,630 | | 4.51 | | |
Total securities (b) | | 133,343 | | 3.49 | | | | 137,113 | | 3.33 | | | | 143,104 | | 3.14 | | | | 149,362 | | 2.94 | | | | 149,348 | | 2.53 | | |
Total interest-earning assets (b) | | $ | 344,174 | | 6.86 | % | | | $ | 339,044 | | 6.45 | % | | | $ | 362,049 | | 5.77 | % | | | $ | 348,378 | | 4.56 | % | | | $ | 352,987 | | 3.59 | % | |
Noninterest-earning assets | | 57,626 | | | | | 58,448 | | | | | 59,125 | | | | | 59,123 | | | | | 61,532 | | | |
Total assets | | $ | 401,800 | | | | | $ | 397,492 | | | | | $ | 421,174 | | | | | $ | 407,501 | | | | | $ | 414,519 | | | |
| | | | | | | | | | | | | | | | | | | | |
Liabilities and equity | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits | | $ | 220,408 | | 3.79 | % | | | $ | 209,641 | | 3.62 | % | | | $ | 215,057 | | 3.24 | % | | | $ | 204,114 | | 2.71 | % | | | $ | 207,875 | | 2.00 | % | |
Federal funds purchased and securities sold under repurchase agreements | | 16,065 | | 52.41 | | (a) | | 21,512 | | 36.07 | | (a) | | 26,282 | | 26.39 | | (a) | | 18,316 | | 19.75 | | (a) | | 13,985 | | 16.88 | | (a) |
Trading liabilities | | 2,857 | | 4.83 | | | | 3,959 | | 4.80 | | | | 3,893 | | 4.46 | | | | 3,025 | | 4.05 | | | | 3,572 | | 3.45 | | |
Other borrowed funds | | 465 | | 5.56 | | | | 540 | | 4.47 | | | | 2,702 | | 4.60 | | | | 711 | | 1.75 | | | | 619 | | 1.69 | | |
Commercial paper | | 5 | | 5.40 | | | | 7 | | 4.13 | | | | 5 | | 5.11 | | | | — | | — | | | | 6 | | 3.87 | | |
Payables to customers and broker-dealers | | 12,586 | | 4.67 | | | | 13,515 | | 4.30 | | | | 14,801 | | 3.85 | | | | 16,954 | | 3.08 | | | | 17,147 | | 2.27 | | |
Long-term debt | | 30,702 | | 5.70 | | | | 31,161 | | 5.52 | | | | 31,970 | | 5.45 | | | | 30,246 | | 5.22 | | | | 29,508 | | 4.90 | | |
Total interest-bearing liabilities | | $ | 283,088 | | 6.81 | % | | | $ | 280,335 | | 6.37 | % | | | $ | 294,710 | | 5.61 | % | | | $ | 273,366 | | 4.17 | % | | | $ | 272,712 | | 3.11 | % | |
Total noninterest-bearing deposits | | 52,667 | | | | | 52,467 | | | | | 62,152 | | | | | 69,886 | | | | | 75,862 | | | |
Other noninterest-bearing liabilities | | 25,049 | | | | | 23,790 | | | | | 23,625 | | | | | 23,789 | | | | | 25,810 | | | |
Total The Bank of New York Mellon Corporation shareholders’ equity | | 40,931 | | | | | 40,821 | | | | | 40,607 | | | | | 40,442 | | | | | 40,097 | | | |
Noncontrolling interests | | 65 | | | | | 79 | | | | | 80 | | | | | 18 | | | | | 38 | | | |
Total liabilities and equity | | $ | 401,800 | | | | | $ | 397,492 | | | | | $ | 421,174 | | | | | $ | 407,501 | | | | | $ | 414,519 | | | |
Net interest margin | | | 1.26 | % | | | | 1.18 | % | | | | 1.20 | % | | | | 1.29 | % | | | | 1.19 | % | |
Net interest margin (FTE) – Non-GAAP (c) | | | 1.26 | % | | | | 1.18 | % | | | | 1.20 | % | | | | 1.29 | % | | | | 1.19 | % | |
(a) Includes the average impact of offsetting under enforceable netting agreements of approximately $141 billion for 4Q23, $126 billion for 3Q23, $113 billion for 2Q23, $62 billion for 1Q23 and $51 billion for 4Q22. 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 5.48% for 4Q23, 5.36% for 3Q23, 5.10% for 2Q23, 4.62% for 1Q23 and 3.76% for 4Q22. 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 5.35% for 4Q23, 5.26% for 3Q23, 4.99% for 2Q23, 4.49% for 1Q23 and 3.63% for 4Q22. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid. |
(b) Average rates were calculated on an FTE basis, at tax rates of approximately 21%. |
(c) See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | |
CAPITAL AND LIQUIDITY | | | | | |
| | | | | | | | | | | | | |
| | 2023 | | | 2022 | |
(dollars in millions) | | Dec. 31 | | Sept. 30 | | June 30 | | | March 31 | | | Dec. 31 | |
Consolidated regulatory capital ratios (a) | | | | | | | | | | | | | |
Standardized Approach: | | | | | | | | | | | | | |
CET1 capital | | $ | 18,735 | | | $ | 18,264 | | | $ | 18,127 | | | | $ | 17,876 | | | | $ | 18,032 | | |
Tier 1 capital | | 23,064 | | | 23,093 | | | 22,957 | | | | 22,710 | | | | 22,856 | | |
Total capital | | 24,614 | | | 24,660 | | | 24,522 | | | | 24,276 | | | | 24,384 | | |
Risk-weighted assets | | 156,393 | | | 153,363 | | | 153,359 | | | | 157,399 | | | | 159,096 | | |
| | | | | | | | | | | | | |
CET1 ratio | | 12.0 | % | | 11.9 | % | | 11.8 | % | | | 11.4 | % | | | 11.3 | % | |
Tier 1 capital ratio | | 14.7 | | | 15.1 | | | 15.0 | | | | 14.4 | | | | 14.4 | | |
Total capital ratio | | 15.7 | | | 16.1 | | | 16.0 | | | | 15.4 | | | | 15.3 | | |
| | | | | | | | | | | | | |
Advanced Approaches: | | | | | | | | | | | | | |
CET1 capital | | $ | 18,735 | | | $ | 18,264 | | | $ | 18,127 | | | | $ | 17,876 | | | | $ | 18,032 | | |
Tier 1 capital | | 23,064 | | | 23,093 | | | 22,957 | | | | 22,710 | | | | 22,856 | | |
Total capital | | 24,286 | | | 24,413 | | | 24,260 | | | | 24,005 | | | | 24,143 | | |
Risk-weighted assets | | 161,736 | | | 160,458 | | | 163,536 | | | | 162,905 | | | | 161,672 | | |
| | | | | | | | | | | | | |
CET1 ratio | | 11.6 | % | | 11.4 | % | | 11.1 | % | | | 11.0 | % | | | 11.2 | % | |
Tier 1 capital ratio | | 14.3 | | | 14.4 | | | 14.0 | | | | 13.9 | | | | 14.1 | | |
Total capital ratio | | 15.0 | | | 15.2 | | | 14.8 | | | | 14.7 | | | | 14.9 | | |
| | | | | | | | | | | | | |
Tier 1 leverage ratio (a): | | | | | | | | | | | | | |
Average assets for Tier 1 leverage ratio | | $ | 383,899 | | | $ | 379,630 | | | $ | 403,206 | | | | $ | 389,581 | | | | $ | 396,643 | | |
Tier 1 leverage ratio | | 6.0 | % | | 6.1 | % | | 5.7 | % | | | 5.8 | % | | | 5.8 | % | |
| | | | | | | | | | | | | |
SLR (a): | | | | | | | | | | | | | |
Leverage exposure | | $ | 312,872 | | | $ | 318,865 | | | $ | 326,215 | | | | $ | 330,501 | | | | $ | 336,049 | | |
SLR | | 7.4 | % | | 7.2 | % | | 7.0 | % | | | 6.9 | % | | | 6.8 | % | |
| | | | | | | | | | | | | |
Average liquidity coverage ratio (a) | | 117 | % | | 121 | % | | 120 | % | | | 118 | % | | | 118 | % | |
Average net stable funding ratio (a) | | 135 | % | | 136 | % | | 136 | % | | | 132 | % | | | N/A | (b) |
(a) Regulatory capital and liquidity ratios for Dec. 31, 2023 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 the periods presented, was the Advanced Approaches. |
(b) The reporting requirement for the average net stable funding ratio became effective in 2Q23, inclusive of reporting the average 1Q23 ratio. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | | | |
SECURITIES SERVICES BUSINESS SEGMENT | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
(dollars in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Revenue: | | | | | | | | | | | | | | | | | | | | |
Investment services fees: | | | | | | | | | | | | | | | | | | | | |
Asset Servicing | | $ | 975 | | | $ | 984 | | | $ | 991 | | | $ | 948 | | | $ | 971 | | | (1) | % | | — | % | | $ | 3,898 | | | $ | 3,918 | | | (1) | % |
Issuer Services | | 285 | | | 281 | | | 319 | | | 236 | | | 271 | | | 1 | | | 5 | | | 1,121 | | | 1,009 | | | 11 | |
Total investment services fees | | 1,260 | | | 1,265 | | | 1,310 | | | 1,184 | | | 1,242 | | | — | | | 1 | | | 5,019 | | | 4,927 | | | 2 | |
Foreign exchange revenue | | 118 | | | 107 | | | 124 | | | 139 | | | 149 | | | 10 | | | (21) | | | 488 | | | 584 | | | (16) | |
Other fees (a) | | 54 | | | 52 | | | 54 | | | 55 | | | 55 | | | 4 | | | (2) | | | 215 | | | 202 | | | 6 | |
Total fee revenue | | 1,432 | | | 1,424 | | | 1,488 | | | 1,378 | | | 1,446 | | | 1 | | | (1) | | | 5,722 | | | 5,713 | | | — | |
Investment and other revenue | | 112 | | | 65 | | | 84 | | | 72 | | | 70 | | | N/M | | N/M | | 333 | | | 291 | | | N/M |
Total fee and other revenue | | 1,544 | | | 1,489 | | | 1,572 | | | 1,450 | | | 1,516 | | | 4 | | | 2 | | | 6,055 | | | 6,004 | | | 1 | |
Net interest revenue | | 635 | | | 600 | | | 668 | | | 666 | | | 656 | | | 6 | | | (3) | | | 2,569 | | | 2,028 | | | 27 | |
Total revenue | | 2,179 | | | 2,089 | | | 2,240 | | | 2,116 | | | 2,172 | | | 4 | | | — | | | 8,624 | | | 8,032 | | | 7 | |
Provision for credit losses | | 64 | | | 19 | | | 16 | | | — | | | 11 | | | N/M | | N/M | | 99 | | | 8 | | | N/M |
Noninterest expense (ex. amortization of intangible assets) | | 1,645 | | | 1,577 | | | 1,575 | | | 1,548 | | | 1,568 | | | 4 | | | 5 | | | 6,345 | | | 6,266 | | | 1 | |
Amortization of intangible assets | | 8 | | | 8 | | | 7 | | | 8 | | | 8 | | | — | | | — | | | 31 | | | 33 | | | (6) | |
Total noninterest expense | | 1,653 | | | 1,585 | | | 1,582 | | | 1,556 | | | 1,576 | | | 4 | | | 5 | | | 6,376 | | | 6,299 | | | 1 | |
Income before income taxes | | $ | 462 | | | $ | 485 | | | $ | 642 | | | $ | 560 | | | $ | 585 | | | (5) | % | | (21) | % | | $ | 2,149 | | | $ | 1,725 | | | 25 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue by line of business: | | | | | | | | | | | | | | | | | | | | |
Asset Servicing | | $ | 1,675 | | | $ | 1,593 | | | $ | 1,706 | | | $ | 1,664 | | | $ | 1,681 | | | 5 | % | | — | % | | $ | 6,638 | | | $ | 6,323 | | | 5 | % |
Issuer Services | | 504 | | | 496 | | | 534 | | | 452 | | | 491 | | | 2 | | | 3 | | | 1,986 | | | 1,709 | | | 16 | |
Total revenue by line of business | | $ | 2,179 | | | $ | 2,089 | | | $ | 2,240 | | | $ | 2,116 | | | $ | 2,172 | | | 4 | % | | — | % | | $ | 8,624 | | | $ | 8,032 | | | 7 | % |
| | | | | | | | | | | | | | | | | | | | |
Financial ratios: | | | | | | | | | | | | | | | | | | | | |
Pre-tax operating margin | | 21 | % | | 23 | % | | 29 | % | | 26 | % | | 27 | % | | | | | | 25 | % | | 21 | % | | |
| | | | | | | | | | | | | | | | | | | | |
Memo: Securities lending revenue (b) | | $ | 48 | | | $ | 46 | | | $ | 47 | | | $ | 48 | | | $ | 50 | | | 4 | % | | (4) | % | | $ | 189 | | | $ | 182 | | | 4 | % |
(a) Other fees primarily include financing-related fees. |
(b) Included in investment services fees reported in the Asset Servicing line of business. |
N/M – Not meaningful. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | | | |
SECURITIES SERVICES BUSINESS SEGMENT | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
(dollars in millions, unless otherwise noted) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Selected balance sheet data: | | | | | | | | | | | | | | | | | | | | |
Average loans | | $ | 11,366 | | | $ | 11,236 | | | $ | 11,283 | | | $ | 10,939 | | | $ | 11,850 | | | 1 | % | | (4) | % | | $ | 11,207 | | | $ | 11,245 | | | — | % |
Average assets (a) | | $ | 200,040 | | | $ | 190,964 | | | $ | 202,207 | | | $ | 196,560 | | | $ | 206,810 | | | 5 | % | | (3) | % | | $ | 197,434 | | | $ | 212,575 | | | (7) | % |
Average deposits | | $ | 171,086 | | | $ | 162,509 | | | $ | 172,863 | | | $ | 167,209 | | | $ | 176,541 | | | 5 | % | | (3) | % | | $ | 168,411 | | | $ | 183,990 | | | (8) | % |
| | | | | | | | | | | | | | | | | | | | |
Selected metrics: | | | | | | | | | | | | | | | | | | | | |
AUC/A at period end (in trillions) (b)(c) | | $ | 34.2 | | | $ | 32.3 | | | $ | 33.2 | | | $ | 32.6 | | | $ | 31.4 | | | 6 | % | | 9 | % | | $ | 34.2 | | | $ | 31.4 | | | 9 | % |
Market value of securities on loan at period end (in billions) (d) | | $ | 450 | | | $ | 406 | | | $ | 415 | | | $ | 441 | | | $ | 449 | | | 11 | % | | — | % | | $ | 450 | | | $ | 449 | | | — | % |
| | | | | | | | | | | | | | | | | | | | |
Issuer Services | | | | | | | | | | | | | | | | | | | | |
Total debt serviced at period end (in trillions) | | $ | 13.3 | | | $ | 13.1 | | | $ | 13.1 | | | $ | 12.9 | | | $ | 12.6 | | | 2 | % | | 6 | % | | $ | 13.3 | | | $ | 12.6 | | | 6 | % |
Number of sponsored Depositary Receipts programs at period end | | 543 | | | 559 | | | 564 | | | 577 | | | 589 | | | (3) | % | | (8) | % | | 543 | | | 589 | | | (8) | % |
(a) In business segments where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference. |
(b) Dec. 31, 2023 information is preliminary. |
(c) Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of business. Includes the AUC/A of CIBC Mellon of $1.7 trillion at Dec. 31, 2023, $1.5 trillion at Sept. 30, 2023, $1.6 trillion at June 30, 2023 and $1.5 trillion at March 31, 2023 and Dec. 31, 2022. |
(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 $63 billion at Dec. 31, 2023 and Sept. 30, 2023, $66 billion at June 30, 2023, $69 billion at March 31, 2023 and $68 billion at Dec. 31, 2022. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | | | |
MARKET AND WEALTH SERVICES BUSINESS SEGMENT | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
(dollars in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Revenue: | | | | | | | | | | | | | | | | | | | | |
Investment services fees: | | | | | | | | | | | | | | | | | | | | |
Pershing | | $ | 506 | | | $ | 506 | | | $ | 496 | | | $ | 499 | | | $ | 502 | | | — | % | | 1 | % | | $ | 2,007 | | | $ | 1,908 | | | 5 | % |
Treasury Services | | 179 | | | 172 | | | 172 | | | 168 | | | 170 | | | 4 | | | 5 | | | 691 | | | 689 | | | — | |
Clearance and Collateral Management | | 288 | | | 277 | | | 265 | | | 260 | | | 249 | | | 4 | | | 16 | | | 1,090 | | | 971 | | | 12 | |
Total investment services fees | | 973 | | | 955 | | | 933 | | | 927 | | | 921 | | | 2 | | | 6 | | | 3,788 | | | 3,568 | | | 6 | |
Foreign exchange revenue | | 21 | | | 21 | | | 21 | | | 18 | | | 20 | | | — | | | 5 | | | 81 | | | 88 | | | (8) | |
Other fees (a) | | 52 | | | 51 | | | 55 | | | 54 | | | 47 | | | 2 | | | 11 | | | 212 | | | 176 | | | 20 | |
Total fee revenue | | 1,046 | | | 1,027 | | | 1,009 | | | 999 | | | 988 | | | 2 | | | 6 | | | 4,081 | | | 3,832 | | | 6 | |
Investment and other revenue | | 16 | | | 16 | | | 16 | | | 15 | | | 15 | | | N/M | | N/M | | 63 | | | 40 | | | N/M |
Total fee and other revenue | | 1,062 | | | 1,043 | | | 1,025 | | | 1,014 | | | 1,003 | | | 2 | | | 6 | | | 4,144 | | | 3,872 | | | 7 | |
Net interest revenue | | 437 | | | 402 | | | 420 | | | 453 | | | 396 | | | 9 | | | 10 | | | 1,712 | | | 1,410 | | | 21 | |
Total revenue | | 1,499 | | | 1,445 | | | 1,445 | | | 1,467 | | | 1,399 | | | 4 | | | 7 | | | 5,856 | | | 5,282 | | | 11 | |
Provision for credit losses | | 28 | | | 6 | | | 7 | | | — | | | 6 | | | N/M | | N/M | | 41 | | | 7 | | | N/M |
Noninterest expense (ex. amortization of intangible assets) | | 838 | | | 806 | | | 779 | | | 768 | | | 783 | | | 4 | | | 7 | | | 3,191 | | | 2,924 | | | 9 | |
Amortization of intangible assets | | 1 | | | 2 | | | 2 | | | 1 | | | 2 | | | (50) | | | (50) | | | 6 | | | 8 | | | (25) | |
Total noninterest expense | | 839 | | | 808 | | | 781 | | | 769 | | | 785 | | | 4 | | | 7 | | | 3,197 | | | 2,932 | | | 9 | |
Income before income taxes | | $ | 632 | | | $ | 631 | | | $ | 657 | | | $ | 698 | | | $ | 608 | | | — | % | | 4 | % | | $ | 2,618 | | | $ | 2,343 | | | 12 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue by line of business: | | | | | | | | | | | | | | | | | | | | |
Pershing | | $ | 711 | | | $ | 699 | | | $ | 686 | | | $ | 693 | | | $ | 673 | | | 2 | % | | 6 | % | | $ | 2,789 | | | $ | 2,537 | | | 10 | % |
Treasury Services | | 408 | | | 389 | | | 402 | | | 412 | | | 382 | | | 5 | | | 7 | | | 1,611 | | | 1,483 | | | 9 | |
Clearance and Collateral Management | | 380 | | | 357 | | | 357 | | | 362 | | | 344 | | | 6 | | | 10 | | | 1,456 | | | 1,262 | | | 15 | |
Total revenue by line of business | | $ | 1,499 | | | $ | 1,445 | | | $ | 1,445 | | | $ | 1,467 | | | $ | 1,399 | | | 4 | % | | 7 | % | | $ | 5,856 | | | $ | 5,282 | | | 11 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Financial ratios: | | | | | | | | | | | | | | | | | | | | |
Pre-tax operating margin | | 42 | % | | 44 | % | | 46 | % | | 48 | % | | 43 | % | | | | | | 45 | % | | 44 | % | | |
(a) Other fees primarily include financing-related fees. |
N/M – Not meaningful. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | |
MARKET AND WEALTH SERVICES BUSINESS SEGMENT | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
(dollars in millions, unless otherwise noted) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Selected balance sheet data: | | | | | | | | | | | | | | | | | | | | |
Average loans | | $ | 39,200 | | | $ | 37,496 | | | $ | 36,432 | | | $ | 36,854 | | | $ | 39,843 | | | 5 | % | | (2) | % | | $ | 37,502 | | | $ | 41,300 | | | (9) | % |
Average assets (a) | | $ | 132,483 | | | $ | 129,804 | | | $ | 131,657 | | | $ | 132,143 | | | $ | 132,306 | | | 2 | % | | — | % | | $ | 131,518 | | | $ | 138,386 | | | (5) | % |
Average deposits | | $ | 87,695 | | | $ | 84,000 | | | $ | 85,407 | | | $ | 86,040 | | | $ | 86,083 | | | 4 | % | | 2 | % | | $ | 85,785 | | | $ | 91,749 | | | (7) | % |
| | | | | | | | | | | | | | | | | | | | |
Selected metrics: | | | | | | | | | | | | | | | | | | | | |
AUC/A at period end (in trillions) (b)(c) | | $ | 13.3 | | | $ | 13.1 | | | $ | 13.4 | | | $ | 13.7 | | | $ | 12.7 | | | 2 | % | | 5 | % | | $ | 13.3 | | | $ | 12.7 | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | |
Pershing | | | | | | | | | | | | | | | | | | | | |
AUC/A at period end (in trillions) (b) | | $ | 2.5 | | | $ | 2.4 | | | $ | 2.4 | | | $ | 2.4 | | | $ | 2.3 | | | 4 | % | | 9 | % | | $ | 2.5 | | | $ | 2.3 | | | 9 | % |
Net new assets (U.S. platform) (in billions) (d) | | $ | (4) | | | $ | 23 | | | $ | (34) | | | $ | 37 | | | $ | 42 | | | N/M | | N/M | | $ | 22 | | | $ | 121 | | | (82) | % |
Average active clearing accounts (in thousands) | | 8,012 | | | 7,979 | | | 7,946 | | | 7,849 | | | 7,603 | | | — | % | | 5 | % | | 7,946 | | | 7,483 | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | |
Treasury Services | | | | | | | | | | | | | | | | | | | | |
Average daily U.S. dollar payment volumes | | 243,005 | | | 233,620 | | | 233,931 | | | 236,322 | | | 246,189 | | | 4 | % | | (1) | % | | 236,696 | | | 239,630 | | | (1) | % |
| | | | | | | | | | | | | | | | | | | | |
Clearance and Collateral Management | | | | | | | | | | | | | | | | | | | | |
Average tri-party collateral management balances (in billions) | | $ | 5,248 | | | $ | 5,706 | | | $ | 6,044 | | | $ | 5,626 | | | $ | 5,451 | | | (8) | % | | (4) | % | | $ | 5,658 | | | $ | 5,285 | | | 7 | % |
(a) In business segments where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference. |
(b) Dec. 31, 2023 information is preliminary. |
(c) Consists of AUC/A from the Clearance and Collateral Management and Pershing lines of business. |
(d) Net new assets represent net flows of assets (e.g., net cash deposits and net securities transfers, including dividends and interest) in customer accounts in Pershing LLC, a U.S. broker-dealer. |
N/M – Not meaningful. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | |
INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
(dollars in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
Revenue: | | | | | | | | | | | | | | | | | | | | |
Investment management fees | | $ | 723 | | | $ | 746 | | | $ | 750 | | | $ | 752 | | | $ | 754 | | | (3) | % | | (4) | % | | $ | 2,971 | | | $ | 3,215 | | | (8) | % |
Performance fees | | 19 | | | 30 | | | 10 | | | 22 | | | 26 | | | N/M | | N/M | | 81 | | | 75 | | | 8 | |
Investment management and performance fees (a) | | 742 | | | 776 | | | 760 | | | 774 | | | 780 | | | (4) | | | (5) | | | 3,052 | | | 3,290 | | | (7) | |
Distribution and servicing fees | | 66 | | | 62 | | | 58 | | | 55 | | | 54 | | | 6 | | | 22 | | | 241 | | | 192 | | | 26 | |
Other fees (b) | | (55) | | | (50) | | | (56) | | | (53) | | | (58) | | | N/M | | N/M | | (214) | | | (133) | | | N/M |
Total fee revenue | | 753 | | | 788 | | | 762 | | | 776 | | | 776 | | | (4) | | | (3) | | | 3,079 | | | 3,349 | | | (8) | |
Investment and other revenue (c) | | (121) | | | 1 | | | 12 | | | 6 | | | (3) | | | N/M | | N/M | | (102) | | | (27) | | | N/M |
Total fee and other revenue (c) | | 632 | | | 789 | | | 774 | | | 782 | | | 773 | | | (20) | | | (18) | | | 2,977 | | | 3,322 | | | (10) | |
Net interest revenue | | 44 | | | 38 | | | 39 | | | 45 | | | 52 | | | 16 | | | (15) | | | 166 | | | 228 | | | (27) | |
Total revenue | | 676 | | | 827 | | | 813 | | | 827 | | | 825 | | | (18) | | | (18) | | | 3,143 | | | 3,550 | | | (11) | |
Provision for credit losses | | (2) | | | (9) | | | 7 | | | — | | | 1 | | | N/M | | N/M | | (4) | | | 1 | | | N/M |
Noninterest expense (ex. goodwill impairment and amortization of intangible assets) | | 678 | | | 667 | | | 672 | | | 729 | | | 693 | | | 2 | | | (2) | | | 2,746 | | | 2,795 | | | (2) | |
Goodwill impairment | | — | | | — | | | — | | | — | | | — | | | N/M | | N/M | | — | | | 680 | | | N/M |
Amortization of intangible assets | | 5 | | | 5 | | | 5 | | | 5 | | | 6 | | | — | | (17) | | 20 | | | 26 | | | (23) |
Total noninterest expense | | 683 | | | 672 | | | 677 | | | 734 | | | 699 | | | 2 | | | (2) | | | 2,766 | | | 3,501 | | | (21) | |
(Loss) income before income taxes | | $ | (5) | | | $ | 164 | | | $ | 129 | | | $ | 93 | | | $ | 125 | | | (103) | % | | (104) | % | | $ | 381 | | | $ | 48 | | | 694 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue by line of business: | | | | | | | | | | | | | | | | | | | | |
Investment Management | | $ | 408 | | | $ | 557 | | | $ | 546 | | | $ | 557 | | | $ | 550 | | | (27) | % | | (26) | % | | $ | 2,068 | | | $ | 2,390 | | | (13) | % |
Wealth Management | | 268 | | | 270 | | | 267 | | | 270 | | | 275 | | | (1) | | | (3) | | | 1,075 | | | 1,160 | | | (7) | |
Total revenue by line of business | | $ | 676 | | | $ | 827 | | | $ | 813 | | | $ | 827 | | | $ | 825 | | | (18) | % | | (18) | % | | $ | 3,143 | | | $ | 3,550 | | | (11) | % |
| | | | | | | | | | | | | | | | | | | | |
Financial ratios: | | | | | | | | | | | | | | | | | | | | |
Pre-tax operating margin | | (1) | % | | 20 | % | | 16 | % | | 11 | % | | 15 | % | | | | | | 12 | % | | 1 | % | | |
Adjusted pre-tax operating margin – Non-GAAP (d) | | (1) | % | | 22 | % | | 18 | % | | 13 | % | | 17 | % | | | | | | 14 | % | | 2 | % | | |
| | | | | | | | | | | | | | | | | | | | |
Selected balance sheet data: | | | | | | | | | | | | | | | | | | | | |
Average loans | | $ | 13,405 | | | $ | 13,519 | | | $ | 13,995 | | | $ | 13,960 | | | $ | 14,404 | | | (1) | % | | (7) | % | | $ | 13,718 | | | $ | 14,055 | | | (2) | % |
Average assets (e) | | $ | 26,228 | | | $ | 26,531 | | | $ | 27,260 | | | $ | 28,232 | | | $ | 28,488 | | | (1) | % | | (8) | % | | $ | 26,594 | | | $ | 31,920 | | | (17) | % |
Average deposits | | $ | 12,039 | | | $ | 13,578 | | | $ | 15,410 | | | $ | 16,144 | | | $ | 16,416 | | | (11) | % | | (27) | % | | $ | 14,280 | | | $ | 19,214 | | | (26) | % |
(a) On a constant currency basis, investment management and performance fees decreased 6% (Non-GAAP) compared with 4Q22. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. |
(b) Other fees primarily include investment services fees. |
(c) Investment and other revenue and total fee and other revenue are net of income (loss) attributable to noncontrolling interests related to consolidated investment management funds. |
(d) Net of distribution and servicing expense. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. |
(e) In business segments where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference. |
N/M – Not meaningful. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | | |
AUM BY PRODUCT TYPE, CHANGES IN AUM AND WEALTH MANAGEMENT CLIENT ASSETS | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 4Q23 vs. | | | | | | FY23 vs. |
(dollars in billions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | 3Q23 | | 4Q22 | | FY23 | | FY22 | | FY22 |
AUM by product type (a)(b): | | | | | | | | | | | | | | | | | | | | |
Equity | | $ | 145 | | | $ | 133 | | | $ | 145 | | | $ | 142 | | | $ | 135 | | | 9 | % | | 7 | % | | | | | | |
Fixed income | | 205 | | | 190 | | | 203 | | | 207 | | | 198 | | | 8 | | | 4 | | | | | | | |
Index | | 459 | | | 425 | | | 440 | | | 408 | | | 395 | | | 8 | | | 16 | | | | | | | |
Liability-driven investments | | 605 | | | 534 | | | 579 | | | 604 | | | 570 | | | 13 | | | 6 | | | | | | | |
Multi-asset and alternative investments | | 170 | | | 156 | | | 162 | | | 161 | | | 153 | | | 9 | | | 11 | | | | | | | |
Cash | | 390 | | | 383 | | | 377 | | | 386 | | | 385 | | | 2 | | | 1 | | | | | | | |
Total AUM | | $ | 1,974 | | | $ | 1,821 | | | $ | 1,906 | | | $ | 1,908 | | | $ | 1,836 | | | 8 | % | | 8 | % | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Changes in AUM (a)(b): | | | | | | | | | | | | | | | | | | | | |
Beginning balance of AUM | | $ | 1,821 | | | $ | 1,906 | | | $ | 1,908 | | | $ | 1,836 | | | $ | 1,776 | | | | | | | $ | 1,836 | | | $ | 2,434 | | | |
Net inflows (outflows): | | | | | | | | | | | | | | | | | | | | |
Long-term strategies: | | | | | | | | | | | | | | | | | | | | |
Equity | | (2) | | | (3) | | | (3) | | | (4) | | | (5) | | | | | | | (12) | | | (18) | | | |
Fixed income | | 3 | | | (7) | | | (4) | | | 4 | | | (12) | | | | | | | (4) | | | (21) | | | |
Liability-driven investments | | 4 | | | 1 | | | (3) | | | 10 | | | 19 | | | | | | | 12 | | | 78 | | | |
Multi-asset and alternative investments | | (1) | | | (4) | | | (1) | | | (3) | | | (4) | | | | | | | (9) | | | (11) | | | |
Total long-term active strategies inflows (outflows) | | 4 | | | (13) | | | (11) | | | 7 | | | (2) | | | | | | | (13) | | | 28 | | | |
Index | | (10) | | | (2) | | | 2 | | | (2) | | | (4) | | | | | | | (12) | | | 2 | | | |
Total long-term strategies (outflows) inflows | | (6) | | | (15) | | | (9) | | | 5 | | | (6) | | | | | | | (25) | | | 30 | | | |
Short-term strategies: | | | | | | | | | | | | | | | | | | | | |
Cash | | 7 | | | 7 | | | (9) | | | — | | | 27 | | | | | | | 5 | | | (12) | | | |
Total net inflows (outflows) | | 1 | | | (8) | | | (18) | | | 5 | | | 21 | | | | | | | (20) | | | 18 | | | |
Net market impact | | 122 | | | (50) | | | (3) | | | 52 | | | 18 | | | | | | | 121 | | | (471) | | | |
Net currency impact | | 30 | | | (27) | | | 19 | | | 15 | | | 53 | | | | | | | 37 | | | (113) | | | |
Divestiture | | — | | | — | | | — | | | — | | | (32) | | | | | | | — | | | (32) | | | |
Ending balance of AUM | | $ | 1,974 | | | $ | 1,821 | | | $ | 1,906 | | | $ | 1,908 | | | $ | 1,836 | | | 8 | % | | 8 | % | | $ | 1,974 | | | $ | 1,836 | | | 8 | % |
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Wealth Management client assets (a)(c) | | $ | 312 | | | $ | 292 | | | $ | 286 | | | $ | 279 | | | $ | 269 | | | 7 | % | | 16 | % | | | | | | |
(a) Dec. 31, 2023 information is preliminary. |
(b) Excludes assets managed outside of the Investment and Wealth Management business segment. |
(c) Includes AUM and AUC/A in the Wealth Management line of business. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | |
OTHER SEGMENT | | | | | |
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(in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | FY23 | | FY22 |
Revenue: | | | | | | | | | | | | | | |
Fee revenue | | $ | (17) | | | $ | 6 | | | $ | (2) | | | $ | 3 | | | $ | 12 | | | $ | (10) | | | $ | 61 | |
Investment and other revenue | | (9) | | | 28 | | | (16) | | | (14) | | | (442) | | | (11) | | | (373) | |
Total fee and other revenue | | (26) | | | 34 | | | (18) | | | (11) | | | (430) | | | (21) | | | (312) | |
Net interest (expense) | | (15) | | | (24) | | | (27) | | | (36) | | | (48) | | | (102) | | | (162) | |
Total revenue | | (41) | | | 10 | | | (45) | | | (47) | | | (478) | | | (123) | | | (474) | |
Provision for credit losses | | (6) | | | (13) | | | (25) | | | 27 | | | 2 | | | (17) | | | 23 | |
Noninterest expense | | 693 | | | 24 | | | 71 | | | 41 | | | 153 | | | 829 | | | 278 | |
(Loss) before income taxes | | $ | (728) | | | $ | (1) | | | $ | (91) | | | $ | (115) | | | $ | (633) | | | $ | (935) | | | $ | (775) | |
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Selected balance sheet data: | | | | | | | | | | | | | | |
Average loans and leases | | $ | 1,706 | | | $ | 1,711 | | | $ | 1,749 | | | $ | 1,508 | | | $ | 1,267 | | | $ | 1,669 | | | $ | 1,225 | |
Average assets | | $ | 43,049 | | | $ | 50,193 | | | $ | 60,050 | | | $ | 50,566 | | | $ | 46,915 | | | $ | 51,404 | | | $ | 44,020 | |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | | |
SECURITIES PORTFOLIO | | | | | | | | | | |
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(dollars in millions) | Sept. 30, 2023 | | 4Q23 change in unrealized gain (loss) | Dec. 31, 2023 | | Fair value as a % of amortized cost (a) | Unrealized gain (loss) | | % Floating rate (b) | | Ratings (c) |
Amortized cost (a) | Fair value | | | | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | | Not rated |
Fair value | | | |
Agency RMBS | $ | 35,850 | | | $ | 1,627 | | $ | 43,197 | | $ | 39,333 | | | 91 | % | $ | (3,864) | | | 21 | % | | 100 | % | — | % | — | % | — | % | | — | % |
U.S. Treasury | 31,439 | | | 410 | | 27,316 | | 26,476 | | | 97 | | (840) | | | 62 | | | 100 | | — | | — | | — | | | — | |
Non-U.S. government (d) | 20,650 | | | 238 | | 21,135 | | 20,543 | | | 97 | | (592) | | | 42 | | | 94 | | 3 | | 2 | | 1 | | | — | |
Agency commercial MBS | 10,927 | | | 220 | | 11,602 | | 11,010 | | | 95 | | (592) | | | 45 | | | 100 | | — | | — | | — | | | — | |
CLOs | 6,908 | | | 34 | | 7,125 | | 7,119 | | | 100 | | (6) | | | 100 | | | 100 | | — | | — | | — | | | — | |
U.S. government agencies | 6,630 | | | 164 | | 7,199 | | 6,780 | | | 94 | | (419) | | | 42 | | | 100 | | — | | — | | — | | | — | |
Foreign covered bonds | 6,137 | | | 55 | | 6,489 | | 6,317 | | | 97 | | (172) | | | 57 | | | 100 | | — | | — | | — | | | — | |
Non-agency commercial MBS | 3,012 | | | 55 | | 3,245 | | 2,997 | | | 92 | | (248) | | | 53 | | | 100 | | — | | — | | — | | | — | |
Non-agency RMBS | 1,763 | | | 47 | | 1,909 | | 1,766 | | | 92 | | (143) | | | 46 | | | 85 | | 3 | | — | | 6 | | | 6 | |
Other asset-backed securities | 922 | | | 21 | | 1,026 | | 943 | | | 92 | | (83) | | | 18 | | | 100 | | — | | — | | — | | | — | |
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Other debt securities | 11 | | | — | | 13 | | 11 | | | 88 | | (2) | | | — | | | — | | — | | — | | — | | | 100 | |
Total securities | $ | 124,249 | | (e) | $ | 2,871 | | $ | 130,256 | | $ | 123,295 | | (e)(f) | 95 | % | $ | (6,961) | | (e)(g) | 44 | % | | 99 | % | 1 | % | — | % | — | % | | — | % |
(a) Amortized cost reflects historical impairments, and is net of allowance for credit losses. |
(b) Includes the impact of hedges. |
(c) Represents ratings by S&P, or the equivalent. |
(d) Includes supranational securities. |
(e) Includes net unrealized gains on derivatives hedging securities available-for-sale (including terminated hedges) of $2,820 million at Sept. 30, 2023 and $1,767 million at Dec. 31, 2023. |
(f) The fair value of available-for-sale securities totaled $78,584 million at Dec. 31, 2023, net of hedges, or 64% of the fair value of the securities portfolio, net of hedges. The fair value of the held-to-maturity securities totaled $44,711 million at Dec. 31, 2023, or 36% of the fair value of the securities portfolio, net of hedges. |
(g) At Dec. 31, 2023, includes pre-tax net unrealized losses of $2,094 million related to available-for-sale securities, net of hedges, and $4,867 million related to held-to-maturity securities. The after-tax unrealized losses, net of hedges, related to available-for-sale securities was $1,580 million and the after-tax equivalent related to held-to-maturity securities was $3,711 million. |
Note: The amortizable purchase premium (net of discount) relating to securities was $821 million at Dec. 31, 2023 and the amortization of that net purchase premium was $38 million in 4Q23. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | |
ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS | | | | | |
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| | 2023 | | 2022 |
(dollars in millions) | | Dec. 31 | | Sept. 30 | | June 30 | | March 31 | | Dec. 31 |
Allowance for credit losses – beginning of period: | | | | | | | | | | |
Allowance for loan losses | | $ | 211 | | | $ | 191 | | | $ | 170 | | | $ | 176 | | | $ | 164 | |
Allowance for lending-related commitments | | 85 | | | 91 | | | 83 | | | 78 | | | 72 | |
Allowance for other financial instruments (a) | | 29 | | | 41 | | | 67 | | | 38 | | | 44 | |
Allowance for credit losses – beginning of period | | $ | 325 | | | $ | 323 | | | $ | 320 | | | $ | 292 | | | $ | 280 | |
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Net (charge-offs) recoveries: | | | | | | | | | | |
Charge-offs | | — | | | (1) | | | (4) | | | — | | | (9) | |
Recoveries | | 5 | | | — | | | 2 | | | 1 | | | 1 | |
Total net recoveries (charge-offs) | | 5 | | | (1) | | | (2) | | | 1 | | | (8) | |
Provision for credit losses (b) | | 84 | | | 3 | | | 5 | | | 27 | | | 20 | |
Allowance for credit losses – end of period | | $ | 414 | | | $ | 325 | | | $ | 323 | | | $ | 320 | | | $ | 292 | |
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Allowance for credit losses – end of period: | | | | | | | | | | |
Allowance for loan losses | | $ | 303 | | | $ | 211 | | | $ | 191 | | | $ | 170 | | | $ | 176 | |
Allowance for lending-related commitments | | 87 | | | 85 | | | 91 | | | 83 | | | 78 | |
Allowance for other financial instruments (a) | | 24 | | | 29 | | | 41 | | | 67 | | | 38 | |
Allowance for credit losses – end of period | | $ | 414 | | | $ | 325 | | | $ | 323 | | | $ | 320 | | | $ | 292 | |
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Allowance for loan losses as a percentage of total loans | | 0.45 | % | | 0.32 | % | | 0.30 | % | | 0.27 | % | | 0.27 | % |
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Nonperforming assets | | $ | 237 | | | $ | 48 | | | $ | 88 | | | $ | 105 | | | $ | 109 | |
(a) Includes allowance for credit losses on federal funds sold and securities purchased under resale agreements, available-for-sale securities, held-to-maturity securities, accounts receivable, cash and due from banks and interest-bearing deposits with banks. |
(b) Includes all other instruments within the scope of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | |
EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | |
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BNY Mellon has included in this Financial Supplement certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity – Non-GAAP is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share – Non-GAAP is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding. |
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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. |
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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. |
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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. |
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Notes: | | | | | | | | |
|
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Return on common and tangible common equity ratios are annualized. |
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Return on common equity and tangible common equity reconciliation | | | | | | | | | | | | | | |
(dollars in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | FY23 | | FY22 |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | | $ | 256 | | | $ | 956 | | | $ | 1,031 | | | $ | 905 | | | $ | 509 | | | $ | 3,148 | | | $ | 2,362 | |
Add: Amortization of intangible assets | | 14 | | | 15 | | | 14 | | | 14 | | | 16 | | | 57 | | | 67 | |
Less: Tax impact of amortization of intangible assets | | 4 | | | 3 | | | 4 | | | 3 | | | 4 | | | 14 | | | 16 | |
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | | $ | 266 | | | $ | 968 | | | $ | 1,041 | | | $ | 916 | | | $ | 521 | | | $ | 3,191 | | | $ | 2,413 | |
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Average common shareholders’ equity | | $ | 36,158 | | | $ | 35,983 | | | $ | 35,769 | | | $ | 35,604 | | | $ | 35,259 | | | $ | 35,880 | | | $ | 36,175 | |
Less: Average goodwill | | 16,199 | | | 16,237 | | | 16,219 | | | 16,160 | | | 16,229 | | | 16,204 | | | 17,060 | |
Average intangible assets | | 2,858 | | | 2,875 | | | 2,888 | | | 2,899 | | | 2,905 | | | 2,880 | | | 2,939 | |
Add: Deferred tax liability – tax deductible goodwill | | 1,205 | | | 1,197 | | | 1,193 | | | 1,187 | | | 1,181 | | | 1,205 | | | 1,181 | |
Deferred tax liability – intangible assets | | 657 | | | 657 | | | 660 | | | 660 | | | 660 | | | 657 | | | 660 | |
Average tangible common shareholders’ equity – Non-GAAP | | $ | 18,963 | | | $ | 18,725 | | | $ | 18,515 | | | $ | 18,392 | | | $ | 17,966 | | | $ | 18,658 | | | $ | 18,017 | |
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Return on common equity – GAAP | | 2.8 | % | | 10.5 | % | | 11.6 | % | | 10.3 | % | | 5.7 | % | | 8.8 | % | | 6.5 | % |
Return on tangible common equity – Non-GAAP | | 5.6 | % | | 20.5 | % | | 22.6 | % | | 20.2 | % | | 11.5 | % | | 17.1 | % | | 13.4 | % |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | |
EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
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Book value and tangible book value per common share reconciliation | | 2023 | | 2022 |
(dollars in millions, except common shares and unless otherwise noted) | | Dec. 31 | | Sept. 30 | | June 30 | | March 31 | | Dec. 31 |
BNY Mellon shareholders’ equity at period end – GAAP | | $ | 40,971 | | | $ | 40,966 | | | $ | 40,933 | | | $ | 40,634 | | | $ | 40,734 | |
Less: Preferred stock | | 4,343 | | | 4,838 | | | 4,838 | | | 4,838 | | | 4,838 | |
BNY Mellon common shareholders’ equity at period end – GAAP | | 36,628 | | | 36,128 | | | 36,095 | | | 35,796 | | | 35,896 | |
Less: Goodwill | | 16,261 | | | 16,159 | | | 16,246 | | | 16,192 | | | 16,150 | |
Intangible assets | | 2,854 | | | 2,859 | | | 2,881 | | | 2,890 | | | 2,901 | |
Add: Deferred tax liability – tax deductible goodwill | | 1,205 | | | 1,197 | | | 1,193 | | | 1,187 | | | 1,181 | |
Deferred tax liability – intangible assets | | 657 | | | 657 | | | 660 | | | 660 | | | 660 | |
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP | | $ | 19,375 | | | $ | 18,964 | | | $ | 18,821 | | | $ | 18,561 | | | $ | 18,686 | |
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Period-end common shares outstanding (in thousands) | | 759,344 | | | 769,073 | | | 778,782 | | | 789,134 | | | 808,445 | |
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Book value per common share – GAAP | | $ | 48.24 | | | $ | 46.98 | | | $ | 46.35 | | | $ | 45.36 | | | $ | 44.40 | |
Tangible book value per common share – Non-GAAP | | $ | 25.52 | | | $ | 24.66 | | | $ | 24.17 | | | $ | 23.52 | | | $ | 23.11 | |
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Net interest margin reconciliation | | | | | | | | | | |
(dollars in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 |
Net interest revenue – GAAP | | $ | 1,101 | | | $ | 1,016 | | | $ | 1,100 | | | $ | 1,128 | | | $ | 1,056 | |
Add: Tax equivalent adjustment | | 1 | | | — | | | 1 | | | — | | | 2 | |
Net interest revenue (FTE) – Non-GAAP | | $ | 1,102 | | | $ | 1,016 | | | $ | 1,101 | | | $ | 1,128 | | | $ | 1,058 | |
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Average interest-earning assets | | $ | 344,174 | | | $ | 339,044 | | | $ | 362,049 | | | $ | 348,378 | | | $ | 352,987 | |
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Net interest margin – GAAP (a) | | 1.26 | % | | 1.18 | % | | 1.20 | % | | 1.29 | % | | 1.19 | % |
Net interest margin (FTE) – Non-GAAP (a) | | 1.26 | % | | 1.18 | % | | 1.20 | % | | 1.29 | % | | 1.19 | % |
(a) Net interest margin is annualized. |
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THE BANK OF NEW YORK MELLON CORPORATION | | | | | | |
EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | |
Pre-tax operating margin reconciliation - Investment and Wealth Management business segment | | | | | | | | | | | | |
(dollars in millions) | | 4Q23 | | 3Q23 | | 2Q23 | | 1Q23 | | 4Q22 | | FY23 | | FY22 |
(Loss) income before income taxes – GAAP | | $ | (5) | | | $ | 164 | | | $ | 129 | | | $ | 93 | | | $ | 125 | | | $ | 381 | | | $ | 48 | |
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Total revenue – GAAP | | $ | 676 | | | $ | 827 | | | $ | 813 | | | $ | 827 | | | $ | 825 | | | $ | 3,143 | | | $ | 3,550 | |
Less: Distribution and servicing expense | | 89 | | | 87 | | | 93 | | | 86 | | | 87 | | | 355 | | | 345 | |
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | | $ | 587 | | | $ | 740 | | | $ | 720 | | | $ | 741 | | | $ | 738 | | | $ | 2,788 | | | $ | 3,205 | |
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Pre-tax operating margin – GAAP (a) | | (1) | % | | 20 | % | | 16 | % | | 11 | % | | 15 | % | | 12 | % | | 1 | % |
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a) | | (1) | % | | 22 | % | | 18 | % | | 13 | % | | 17 | % | | 14 | % | | 2 | % |
(a) Income before income taxes divided by total revenue. |
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Constant currency reconciliations | | | | | | 4Q23 vs. | | | | | | | | |
(dollars in millions) | | 4Q23 | | 4Q22 | | 4Q22 | | | | | | | | |
Consolidated: | | | | | | | | | | | | | | |
Investment management and performance fees – GAAP | | $ | 743 | | | $ | 783 | | | (5) | % | | | | | | | | |
Impact of changes in foreign currency exchange rates | | — | | | 11 | | | | | | | | | | | |
Adjusted investment management and performance fees – Non-GAAP | | $ | 743 | | | $ | 794 | | | (6) | % | | | | | | | | |
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Investment and Wealth Management business segment: | | | | | | | | | | | | | | |
Investment management and performance fees – GAAP | | $ | 742 | | | $ | 780 | | | (5) | % | | | | | | | | |
Impact of changes in foreign currency exchange rates | | — | | | 11 | | | | | | | | | | | |
Adjusted investment management and performance fees – Non-GAAP | | $ | 742 | | | $ | 791 | | | (6) | % | | | | | | | | |
January 12, 2024 4Q FINANCIAL 23 HIGHLIGHTS
1 AGENDA PAGE 1 4Q and FY 2023 Financial Results 1 2 Financial Outlook • 2024 Outlook • Medium-term Targets 13 3 Appendix 21
(a) Note: See page 22 in the Appendix for corresponding footnotes. (b) Represents a non-GAAP measure. See page 24 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE. (c) Each of the below line items represents a non-GAAP measure. See pages 24 and 25 in the Appendix for the corresponding reconciliations of these non-GAAP measures excluding notable items. N/M – not meaningful. 2023 vs. $mm, except per share data or unless otherwise noted 2023 2022 2022 Income Statement Investment services fees $8,843 $8,529 4% Investment management and performance fees 3,058 3,299 (7) Foreign exchange revenue 631 822 (23) Other fee revenue 340 305 11 Total fee revenue $12,872 $12,955 (1)% Investment and other revenue 285 (82) N/M Net interest revenue 4,345 3,504 24 Total revenue $17,502 $16,377 7% Provision for credit losses 119 39 N/M Noninterest expense 13,168 13,010 1 Income before income taxes $4,215 $3,328 27% Net income applicable to common shareholders $3,148 $2,362 33% Avg. common shares and equivalents outstanding (mm) - diluted 788 815 (3)% EPS $4.00 $2.90 38% Key Performance Indicators Operating leverage(a) 566 bps Pre-tax margin 24% 20% ROE 8.8% 6.5% ROTCE(b) 17.1% 13.4% Non-GAAP measures, excluding notable items(c) Adjusted total revenue $17,652 $16,888 5% Adjusted noninterest expense 12,302 11,981 3 Adjusted EPS 5.05 4.59 10 Adjusted operating leverage 184 bps Adjusted pre-tax margin 29.6% 28.8% Adjusted ROTCE 21.6% 21.0% 2023 Financial Results 2
6.0% Generated Solid Financial Results in 2023... Adj. Revenue Growth(a): Adj. Pre-tax Margin(a): Tier 1 Leverage: Adj. ROTCE(b): Adj. EPS Growth(a): ...And Delivered on 2023 Commitments: Net Interest Revenue Growth: Adj. Expense Growth(a): Total Payout Ratio: Adj. Operating Leverage(a): • Revenue Growth: Revenue of $17.5 billion up 7% YoY; up 5%(a) excluding notable items – Net interest revenue up 24% YoY – Investment services fees up 4% YoY – Investment management and performance fees down 7% YoY – Foreign exchange revenue down 23% YoY • Expense Discipline: Expense of $13.2 billion up 1% YoY; up 3%(a) excluding notable items – Generated ~$600mm of efficiency savings, compared with ~$300mm in 2022 • Strengthened Capital: – Tier 1 leverage ratio of 6.0%, up 25 bps YoY – CET1 ratio 11.6%, up 43 bps YoY • Improved Profitability: – ROE of 9% and ROTCE(c) of 17%, up 2.2%-pts and 3.7%-pts YoY, respectively > Excluding notable items, ROTCE of 22%(b), up 0.5%-pts YoY • Attractive Capital Returns: Returned $3.9 billion to common shareholders, including $1.3 billion dividends and $2.6 billion of share repurchases – Increased quarterly dividend by 14% in 3Q23 – 123% total payout ratio +5% 30% 22% +10% +24% +3% 123% +184bps (a) Represents a non-GAAP measure. See page 25 in the Appendix for the corresponding reconciliation of the non-GAAP measures excluding notable items. (b) Represents a non-GAAP measure. See page 24 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE excluding notable items. (c) Represents a non-GAAP measure. See page 24 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE. 3
[DRAFT – 1/11/2024 10:47 PM] 4 STRATEGIC PILLARS POWER OUR CULTURE Be a Top Talent Destination Invest in Our People Elevate Experiences & Sense of Belonging RUN OUR COMPANY BETTER Simplify Processes & Embrace Platforms Embrace New Technologies Prioritize Resilience BE MORE FOR OUR CLIENTS Deliver More to Existing Clients Develop New & Connect Adjacent Products Win Market Share
5 2023 Delivery Against Our Strategic Pillars POWER OUR CULTURE RUN OUR COMPANY BETTER BE MORE FOR OUR CLIENTS Executing on our commitments and seeding for the future — Wove Wealth advisory platform, Buyside Trading Solutions, Bankify, FedNow, intra- day repo settlement, BondWise and more • Re-imagined Commercial Model — Enhanced Client Coverage organization — Coverage Practice to drive consistency of delivery, tools and support — Integrated Solutions to assemble scalable multi-line of business solutions • Self-funded Investments — ~$600mm efficiency savings in 2023 vs. ~$300mm in 2022 — ~$500mm incremental investments in 2023 — ~$3.8bn total Tech spend in 2023 • Embraced Platforms Operating Model — Designed enhanced operating model and developed implementation approach — Successfully delivered two pilots • Upgraded Talent — Strengthened Executive Committee — Empowered next level of senior leaders — Largest campus recruiting class on record • Invested in our Culture — Drove higher employee engagement — Launched BK shares — Enhanced learning, development and feedback — Improved employee benefits • Delivered Innovative New Products & Solutions
4Q23 vs. $mm, except per share data or unless otherwise noted 4Q23 3Q23 4Q22 3Q23 4Q22 Income Statement Investment services fees $2,242 $2,230 $2,173 1% 3% Investment management and performance fees 743 777 783 (4) (5) Foreign exchange revenue 143 154 190 (7) (25) Other fee revenue 86 84 76 2 13 Total fee revenue $3,214 $3,245 $3,222 (1)% —% Investment and other revenue (4) 113 (360) N/M N/M Net interest revenue 1,101 1,016 1,056 8 4 Total revenue $4,311 $4,374 $3,918 (1)% 10% Provision for credit losses 84 3 20 N/M N/M Noninterest expense 3,868 3,089 3,213 25 20 Income before income taxes $359 $1,282 $685 (72)% (48)% Net income applicable to common shareholders $256 $956 $509 (73)% (50)% Avg. common shares and equivalents outstanding (mm) - diluted 772 782 816 (1)% (5)% EPS $0.33 $1.22 $0.62 (73)% (47)% Key Performance Indicators Operating leverage(a) (2,666) bps (1,036) bps Pre-tax margin 8% 29% 17% ROE 2.8% 10.5% 5.7% ROTCE(b) 5.6% 20.5% 11.5% Non-GAAP measures, excluding notable items(c) Adjusted total revenue $4,461 $4,372 $4,378 2% 2% Adjusted noninterest expense 3,116 3,043 3,000 2 4 Adjusted EPS 1.28 1.27 1.30 1 (2) Adjusted operating leverage (36) bps (197) bps Adjusted pre-tax margin 28.3% 30.3% 31.0% Adjusted ROTCE 20.9% 21.2% 23.6% 4Q23 Financial Results (a) Note: See page 22 in the Appendix for corresponding footnotes. (b) Represents a non-GAAP measure. See page 24 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE. (c) Each of the below line items represents a non-GAAP measure. See pages 24 and 25 in the Appendix for the corresponding reconciliations of these non-GAAP measures excluding notable items. N/M – not meaningful. 6
Note: See page 22 in the Appendix for corresponding footnotes. N/M – not meaningful. 4Q23 3Q23 4Q22 Consolidated regulatory capital ratios:(a) Tier 1 capital ($mm) $23,064 $23,093 $22,856 Average assets for Tier 1 leverage ratio ($mm) 383,899 379,630 396,643 Tier 1 leverage ratio 6.0% 6.1% 5.8% Common Equity Tier 1 ("CET1") capital ($mm) $18,735 $18,264 $18,032 Risk-weighted assets - Advanced Approaches ($mm) 161,736 160,458 161,672 CET1 ratio – Advanced Approaches 11.6% 11.4% 11.2% Supplementary leverage ratio ("SLR") 7.4% 7.2% 6.8% Consolidated regulatory liquidity ratios:(a) Liquidity coverage ratio ("LCR") 117% 121% 118% Net stable funding ratio ("NSFR") 135% 136% N/A(b) Capital returns: Cash dividends per common share $0.42 $0.42 $0.37 Common stock dividends ($mm) $328 $333 $305 Common stock repurchases ($mm) 450 450 2 Total capital return ($mm) $778 $783 $307 Total payout ratio 304% 82% 60% Profitability ROE 2.8% 10.5% 5.7% ROTCE(c) 5.6% 20.5% 11.5% Adjusted ROTCE(d) 20.9% 21.2% 23.6% Capital and Liquidity Capital • Tier 1 leverage ratio of 6.0%, down 8 bps QoQ – Tier 1 capital of $23.1bn decreased $29mm QoQ, reflecting capital distributions to common shareholders and redemption of $500mm perpetual preferred stock, largely offset by a net increase in accumulated other comprehensive income and capital generated through earnings – Average assets for Tier 1 leverage ratio of $384bn increased $4.3bn QoQ • CET1 ratio of 11.6%, up 20 bps QoQ – CET1 capital of $18.7bn increased $0.5bn QoQ, reflecting a net increase in accumulated other comprehensive income and capital generated through earnings, partially offset by capital distributions to common shareholders – RWA of $162bn increased by $1.3bn QoQ Liquidity • LCR of 117%, down 4%-pts QoQ • NSFR of 135%, down 1%-pt QoQ 7
1,056 1,128 1,100 1,016 1,101 4Q22 1Q23 2Q23 3Q23 4Q23 4Q23 vs. 4Q23 3Q23 4Q22 Total assets $402 1% (3)% Total interest-earning assets $344 2% (2)% Cash and reverse repo 145 5 7 Loans 66 3 (3) Investment securities 127 (3) (12) Noninterest-bearing $53 —% (31)% Interest-bearing 220 5 6 Total deposits $273 4% (4)% Net Interest Revenue and Balance Sheet Trends Net Interest Revenue ($mm) 1.19% 1.29% 1.20% 1.18% 1.26% 4Q22 1Q23 2Q23 3Q23 4Q23 Net Interest Margin Balance Sheet Trends ($bn, average) • Net interest revenue of $1,101mm up 4% YoY and up 8% QoQ – QoQ increase primarily driven by higher balance sheet size and mix • Net interest margin of 1.26% up 7 bps YoY and up 8 bps QoQ – QoQ increase primarily driven by changes in balance sheet mix • Avg. total deposits of $273bn down 4% YoY and up 4% QoQ 8
4Q23 vs. $mm, unless otherwise noted 4Q23 3Q23 4Q22 Asset Servicing $975 (1)% —% Issuer Services 285 1 5 Total investment services fees $1,260 —% 1% Foreign exchange revenue 118 10 (21) Other fees 54 4 (2) Investment and other revenue 112 N/M N/M Net interest revenue 635 6 (3) Total revenue $2,179 4% —% Provision for credit losses 64 N/M N/M Noninterest expense 1,653 4 5 Income before income taxes $462 (5)% (21)% $bn, unless otherwise noted 4Q23 3Q23 4Q22 Pre-tax margin 21% 23% 27% AUC/A (trn)(a)(b) $34.2 $32.3 $31.4 Deposits (average) $171 $163 $177 Issuer Services Total debt serviced (trn) $13.3 $13.1 $12.6 Number of sponsored Depositary Receipts programs 543 559 589 Securities Services Select Income Statement Data • Total revenue of $2,179mm flat YoY – Investment services fees up 1% YoY > Asset Servicing flat YoY > Issuer Services up 5% YoY, primarily driven by net new business and higher client activity – Foreign exchange revenue down 21% YoY – Net interest revenue down 3% YoY • Noninterest expense of $1,653mm up 5% YoY, primarily reflecting higher investments and higher revenue-related expenses, as well as inflation, partially offset by efficiency savings • Income before income taxes of $462mm down 21% YoY Key Performance Indicators Select Income Statement Data Note: See page 22 in the Appendix for corresponding footnotes. N/M – not meaningful. 9
Note: See page 22 in the Appendix for corresponding footnotes. N/M – not meaningful. 4Q23 vs. $mm, unless otherwise noted 4Q23 3Q23 4Q22 Pershing $506 —% 1% Treasury Services 179 4 5 Clearance and Collateral Management 288 4 16 Total investment services fees $973 2% 6% Foreign exchange revenue 21 — 5 Other fees 52 2 11 Investment and other revenue 16 N/M N/M Net interest revenue 437 9 10 Total revenue $1,499 4% 7% Provision for credit losses 28 N/M N/M Noninterest expense 839 4 7 Income before income taxes $632 —% 4% $bn, unless otherwise noted 4Q23 3Q23 4Q22 Pre-tax margin 42% 44% 43% AUC/A (trn)(a)(b) $13.3 $13.1 $12.7 Deposits (average) $88 $84 $86 Pershing AUC/A (trn)(a) $2.5 $2.4 $2.3 Net new assets (U.S. platform)(c) (4) 23 42 Average active clearing accounts ('000) 8,012 7,979 7,603 Treasury Services U.S. dollar payment volumes (daily average) 243,005 233,620 246,189 Clearance and Collateral Management Tri-party collateral management balances (average) $5,248 $5,706 $5,451 Market and Wealth Services Select Income Statement Data Key Performance Indicators Select Income Statement Data • Total revenue of $1,499mm up 7% YoY – Investment services fees up 6% YoY > Pershing up 1% YoY, primarily reflecting higher market values and higher client activity, partially offset by lost business > Treasury Services up 5% YoY, primarily reflecting organic growth, partially offset by higher ECRs > Clearance and Collateral Management up 16% YoY, primarily reflecting higher clearance volumes and collateral management balances – Foreign exchange revenue up 5% YoY – Net interest revenue up 10% YoY • Noninterest expense of $839mm up 7% YoY, primarily reflecting higher investments and inflation, partially offset by efficiency savings • Income before income taxes of $632mm up 4% YoY 10
4Q23 vs. $mm, unless otherwise noted 4Q23 3Q23 4Q22 Investment management fees $723 (3)% (4)% Performance fees 19 N/M N/M Distribution and servicing fees 66 6 22 Other fees (55) N/M N/M Investment and other revenue (121) N/M N/M Net interest revenue 44 16 (15) Total revenue $676 (18)% (18)% Provision for credit losses (2) N/M N/M Noninterest expense 683 2 (2) Income (loss) before income taxes $(5) (103)% (104)% Total revenue by line of business: Investment Management $408 (27)% (26)% Wealth Management 268 (1) (3) Total revenue $676 (18)% (18)% $bn, unless otherwise noted 4Q23 3Q23 4Q22 Pre-tax margin (1)% 20% 15% Adjusted pre-tax operating margin — Non-GAAP(a) (1)% 22% 17% Deposits $12 $14 $16 Assets under management ("AUM")(b) $1,974 $1,821 $1,836 Long-term strategies net flows $(6) $(15) $(6) Short-term strategies net flows 7 7 27 Total net flows $1 (8) 21 Wealth Management Client assets(c) $312 $292 $269 Investment and Wealth Management Select Income Statement Data Key Performance Indicators Select Income Statement Data (a) Adjusted pre-tax operating margin – non-GAAP is net of distribution and servicing expense. See page 26 in the Appendix for the corresponding reconciliation of this non-GAAP measure. Note: See page 22 in the Appendix for the corresponding footnotes (b), (c) and (d) N/M – not meaningful. • Total revenue of $676mm down 18% YoY – Investment Management down 26% YoY, primarily reflecting the 4Q23 reduction in the fair value of a contingent consideration receivable and the impact of the prior year divestiture, as well as the mix of AUM flows, partially offset by higher market values, seed capital gains and the favorable impact of a weaker U.S. dollar – Wealth Management down 3% YoY, primarily reflecting changes in product mix, partially offset by higher market values • Noninterest expense of $683mm down 2% YoY, primarily reflecting efficiency savings and the impact of a prior year divestiture, partially offset by higher investments and the unfavorable impact of a weaker U.S. dollar, as well as inflation • Income before income taxes of $(5)mm; $151mm excluding notable items(d), up 1% year-over year – Excluding the impact of notable items, pre-tax margin of 18%(d) • AUM of $2.0trn up 8% YoY, primarily reflecting higher market values and the favorable impact of a weaker U.S. dollar, partially offset by cumulative net outflows • Wealth Management client assets of $312bn up 16% YoY, primarily reflecting higher market values and cumulative net inflows 11
$mm, unless otherwise noted 4Q23 3Q23 4Q22 Fee revenue $(17) $6 $12 Investment and other revenue (9) 28 (442) Net interest (expense) (15) (24) (48) Total revenue $(41) $10 $(478) Provision for credit losses (6) (13) 2 Noninterest expense 693 24 153 Income (loss) before income taxes $(728) $(1) $(633) Other Segment Select Income Statement Data Select Income Statement Data • Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense – YoY improvement primarily reflects the net loss from repositioning the securities portfolio recorded in 4Q22 • Noninterest expense increased YoY, primarily reflecting the FDIC special assessment 12
13 AGENDA PAGE 1 4Q23 and FY 2023 Financial Results 1 2 Financial Outlook • 2024 Outlook • Medium-term Targets 13 3 Appendix 21
14 2024 Financial Outlook 2023 Net Interest Revenue Total Payout Ratio Expenses (excluding notable items) $4.3bn Down ~10% YoY 2024 Key Assumptions 123% $12.3bn ~ Flat YoY ≥100% Higher re-investment yields Deposit margin compression Modest deposit run-off amid continued QT Continued investments Efficiency savings Higher revenue-related expenses AOCI pull-to-par Smaller balance sheet size Higher earnings (a) Note: 2024 financial outlook based on market-implied forward interest rates as of year-end 2023. (b) Represents a non-GAAP measure. See page 25 in the Appendix for the corresponding reconciliation of non-GAAP measures excluding notable items. (c) Represents a forward-looking non-GAAP financial measure. See "Cautionary Statement" on page 27 for information regarding forward-looking non-GAAP financial measures. (d) Operating leverage is the rate of increase (decrease) in total revenue growth less the rate of increase (decrease) in total noninterest expense growth. (a) (b) (c) Operating Leverage ≥0 bps (d) Fee Revenue $12.9bn Up YoY Higher organic growth Modest normalization in FX revenue Mid-single digit equity market appreciation
15 Continued Delivery Against Strategic Pillars Drives Improved Financial Results in 2024 and Beyond BE MORE FOR OUR CLIENTS RUN OUR COMPANY BETTER POWER OUR CULTURE MEDIUM-TERM FINANCIAL TARGETS ≥33% Pre-tax Margin ≥23% ROTCE 5.5 - 6% Tier 1 Leverage Ratio ~11% CET1 Ratio • Deliver Enhanced Commercial Model • Scale Growth Investments • Continuous Product Innovation • Platforms Operating Model Transition • Continued Digitization of Workflows • Leveraging New Technologies • Continue Attracting Top Talent • Further Enhance Learning & Development • Elevate Experiences & Sense of Belonging Note: Medium-term refers to a 3-5 year time horizon.
16 Information Classification: HIGHLY CONFIDENTIAL 2023 Medium-term Target ≥30% 25% Segment Pre-tax Margin Market Positions Securities Services Focus on margin expansion through operational efficiency and profitable growth Strategic Priorities Drive Cost-to-Serve Down #1 Global Custodian #1 Global Provider of Issuer Services Securities Services Asset Servicing Issuer Services 2% Investment Services Fee Growth (’19-’23 CAGR) 2% 0% • Infrastructure: Accelerate optimization of platforms across several core services e.g., fund accounting, tax services, corporate actions processing, loan administration • Manual Processes: Continued focus on automation and digitization of core operating processes • Client Engagement: Enhance client solutions and deliver digitally-enabled client experiences Actions Deepen Client Relationships Accelerate Underlying Growth • Integrated Solutions: Expand key relationship and segment wallet share, and continue to drive end-to-end whole bank solutions • Client Intelligence: Deliver enhanced service quality, economics, and revenue opportunities through deeper understanding of client behavior • ETF Servicing: Continue strong momentum and innovation • Private Markets: Optimize and expand capability sets • Client Transformation: Leverage extensive data experience to solve clients’ challenges across the ecosystem • Expedite Onboarding: Accelerate pace of onboarding new business (c) Note: See page 22 for corresponding footnotes. (a) (b)
1 Information Classification: HIGHLY CONFIDENTIAL7 Market and Wealth Services Focus on accelerating growth on the back of self-funded investments 2023 Medium-term Target ~45%45% Segment Pre-tax Margin Market Positions #1 Clearing firm for broker-dealers and Top 3 RIA Custodian #1 Global Provider of Clearance & Collateral Management Market and Wealth Services Pershing Treasury Services Clearance and Collateral Management 5% Investment Services Fee Growth (’19-’23 CAGR) 4%5% Top 5 Global U.S. dollar payments clearer 5% Line of Business Key Growth Initiatives Pershing Treasury Services Clearance and Collateral Management • Scaling Wove advisor platform: Capture the growing momentum with existing clients and new opportunities to deliver platform, data and investment solutions – Expect $30 – 40mm in revenue in 2024 • Growing custody and clearing: Leverage the multi-year investments in core platforms and client experience to drive market share gains with growing ≥$1bn RIAs and hybrid broker-dealers • Growth Client Segments: Expand in historically underpenetrated higher growth segments (e.g., e-commerce, non-bank financial institutions) capitalizing on strong position with Financial Institutions • Geographic Expansion: Drive market share in select target markets by capitalizing on completion of the multi-year payments platform uplift. Goal to increase SWIFT market share by 3% by the end of 2024 • FX Payments: Enhanced capabilities in partnership with BNY Mellon Markets business • Product Innovation: Continuously launch new flexible collateral management solutions that position our clients to meet growing liquidity needs • Collateral Mobility and Optimization: Continue to increase collateral mobility and optimization across global client venues (d) (a) (b) (c) Note: See page 23 for corresponding footnotes.
18 Information Classification: HIGHLY CONFIDENTIAL Investment and Wealth Management Focus on margin expansion through growth and efficiency initiatives Segment Pre-tax Margin Market Positions Investment Mgmt. Fee Growth (’19-’23 CAGR) Top 15 Global Asset Manager Top 10 U.S. Private Bank Investment and Wealth Management (3)% 2023 Medium-term Target ≥25% 17% Strategic Priorities Actions Unlock Distribution Expand Products & Solutions Drive Efficiency & Scale • Global Distribution: Deliver a firmwide platform that combines in-house products with offerings from select 3rd party managers to provide best-in-class solutions • Retail: Accelerate growth in U.S. through model portfolio and alternatives offering, and in U.K. with retirement offering through new products and dedicated tools for advisors • Platform Share: Elevate visibility of Dreyfus Cash offerings across our open-architecture liquidity ecosystem • Wealth Management: Investing in attractive target markets • Integrated Solutions: Scaling investment capabilities across Investment and Wealth Management and Pershing to offer customized solutions to advisors and professional investors • Direct Indexing and Model Portfolios: Catalyzing growth through partnership with Wove • Private Banking: Further expand banking capabilities for (U)HNW and Family Office clients • Infrastructure Uplift: Completion of ongoing infrastructure uplift expected to allow retirement of legacy systems • Leveraging the Enterprise: Enhance fragmented and sub- scale support activities into scaled enterprise platforms 12% (c) Note: See page 23 in the Appendix for the corresponding footnotes. (d) (a) (b)
19 Information Classification: HIGHLY CONFIDENTIAL Common Equity Tier 1 Tier 1 leverage Capital Management Philosophy Track record of disciplined capital deployment and significant excess capital generation 2023 Medium-term Target 6.0% 5.5 - 6% 2023 Medium-term Target 11.6% ~11% Capital Deployment • Organic Growth: Focused on organic growth – Delivering 1 BNY Mellon experiences, new products and solutions, technology platforms • Bolt-on Acquisitions: Acquisitions must fill a gap and enhance our core strategy • Investments in organic growth and acquisitions must exceed financial hurdles Capital Distribution Dividend per Share Growth AFS Securities-related AOCI Forecast ($bn, post-tax)Total Payout Ratio 10-year CAGR 10-year average 11% 98% • Dividends: Resilient, consistently growing and competitive common stock dividend • Share repurchases: Supplement dividends with flexible common share repurchases 31% 67% Dividends Buybacks (1.6) 4Q23 4Q24(a) (a) Medium-term refers to a 3-5 year time horizon. (b) Assumes market-implied forward interest rates as of year-end 2023. (b) (a)
20 BNY Mellon Medium-term Targets BE MORE FOR OUR CLIENTS RUN OUR COMPANY BETTER POWER OUR CULTURE MEDIUM-TERM FINANCIAL TARGETS ≥33% Pre-tax Margin ≥23% ROTCE 5.5 - 6% Tier 1 Leverage Ratio ~11% CET1 Ratio Note: Medium-term refers to a 3-5 year time horizon.
21 AGENDA PAGE 1 4Q23 and FY 2023 Financial Results 1 2 Financial Outlook • 2024 Outlook • Medium-term Targets 13 3 Appendix 21
Footnotes Page 2 – 2023 Financial Results (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. Page 6 – 4Q23 Financial Results (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. Page 7 – Capital and Liquidity (a) Regulatory capital and liquidity ratios for December 31, 2023 are preliminary. For our CET1 ratio, 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 December 31, 2023, September 30, 2023 and December 31, 2022 was the Advanced Approaches. (b) The reporting requirement for the average NSFR became effective in 2Q23, inclusive of reporting the average 1Q23 ratio. (c) Represents a non-GAAP measure. See page 24 in the Appendix for the corresponding reconciliation of the non-GAAP measure of ROTCE. (d) Represents a non-GAAP measure. See page 24 in the Appendix for the corresponding reconciliation of the non-GAAP measure of Adjusted ROTCE. Page 9 – Securities Services (a) December 31, 2023 information is preliminary. (b) Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of 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 December 31, 2023, $1.5 trillion at September 30, 2023, and $1.5 trillion at December 31, 2022. Page 10 – Market and Wealth Services (a) December 31, 2023 information is preliminary. (b) Consists of AUC/A from the Clearance and Collateral Management and Pershing lines of business. (c) Net new assets represent net flows of assets (e.g., net cash deposits and net securities transfers, including dividends and interest) in customer accounts in Pershing LLC, a U.S. broker-dealer. Page 11 – Investment and Wealth Management (b) December 31, 2023 information is preliminary. Excludes assets managed outside of the Investment and Wealth Management business segment. (c) December 31, 2023 information is preliminary. Includes AUM and AUC/A in the Wealth Management line of business. (d) Represents a non-GAAP measure. See page 26 in the Appendix for the corresponding reconciliation of these non-GAAP measures excluding notable items. Page 16 – Securities Services Outlook (a) Ranking based on latest available peer group company filings. Peer group included in ranking analysis: State Street, JPMorgan Chase, Citigroup, BNP Paribas, HSBC, Northern Trust and RBC. (b) Full-year 2022 figures by deal volume and count referenced herein include long-term program and stand-alone bond issuance in markets where BNY Mellon actively participates and for which public trustee and/or paying agent data is available. Sources include: Refinitiv, Dealogic, Asset-Backed Alert and Concept ABS. Depositary Receipts ranked #1 based on market share sourced from BNY Mellon internal analysis. (c) Medium-term refers to a 3-5 year time horizon. 22
Footnotes Page 17 – Market and Wealth Services Outlook (a) LaRoche Research Partners, “US Broker Clearing Relationship Changes 2022,” based on number of broker-dealer clients. Registered Investment Advisor rankings sourced from “Cerulli Report, U.S. RIA Marketplace 2023,” Cerulli Associates. (b) Finadium market analysis as of June 2023. (c) The Clearing House. Based on CHIPS volumes for the year ended December 31, 2023. (d) Medium-term refers to a 3-5 year time horizon. Page 18 – Investment and Wealth Management Outlook (a) Pensions & Investments, October 23, 2023. Ranked by total worldwide assets under management as of December 31, 2022. (b) Based on company filings and The Cerulli Report, 2022. Ranked by Wealth Management assets under management as of December 31, 2022. (c) Adjusted pre-tax operating margin – non-GAAP is excluding notable items. See page 26 in the Appendix for the corresponding reconciliation of this non-GAAP measure. (d) Medium-term refers to a 3-5 year time horizon. 23
$mm 4Q23 3Q23 4Q22 2023 2022 Net income applicable to common shareholders of The Bank of New York Mellon Corporation — GAAP $ 256 $ 956 $ 509 $ 3,148 $ 2,362 Add: Amortization of intangible assets 14 15 16 57 67 Less: Tax impact of amortization of intangible assets 4 3 4 14 16 Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets — Non-GAAP $ 266 $ 968 $ 521 $ 3,191 $ 2,413 Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (144) — — (144) — Disposal (loss) gain (5) — (41) (5) (12) Revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipt services — — — — (67) Net loss from repositioning the securities portfolio — — (342) — (343) Severance (153) (32) (141) (205) (166) Litigation reserves (47) (4) (24) (91) (125) FDIC special assessment (385) — — (385) — Goodwill impairment — — — — (665) Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets and notable items — Non-GAAP $ 1,000 $ 1,004 $ 1,069 $ 4,021 $ 3,791 Average common shareholders’ equity $ 36,158 $ 35,983 $ 35,259 $ 35,880 $ 36,175 Less: Average goodwill 16,199 16,237 16,229 16,204 17,060 Average intangible assets 2,858 2,875 2,905 2,880 2,939 Add: Deferred tax liability — tax deductible goodwill 1,205 1,197 1,181 1,205 1,181 Deferred tax liability — intangible assets 657 657 660 657 660 Average tangible common shareholders’ equity — Non-GAAP $ 18,963 $ 18,725 $ 17,966 $ 18,658 $ 18,017 Return on common equity(a) — GAAP 2.8% 10.5% 5.7% 8.8% 6.5% Adjusted return on common equity(a) — Non-GAAP 10.9% 10.9% 11.9% 11.1% 10.3% Return on tangible common equity(a) — Non-GAAP 5.6% 20.5% 11.5% 17.1% 13.4% Adjusted return on tangible common equity(a) — Non-GAAP 20.9% 21.2% 23.6% 21.6% 21.0% Return on Common Equity and Tangible Common Equity Reconciliation (a) Quarterly results are annualized. 24
Select Income Statement Data Reconciliation of Non-GAAP Measures – Impact of Notable Items 4Q23 vs. 2023 vs. $mm 4Q23 3Q23 4Q22 3Q23 4Q22 2023 2022 2022 Total revenue – GAAP $ 4,311 $ 4,374 $ 3,918 (1) % 10 % $ 17,502 $ 16,377 7 % Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (144) — — (144) — Disposal (loss) gain (6) 2 (11) (6) 26 Revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipt services — — — — (88) Net loss from repositioning the securities portfolio — — (449) — (449) Adjusted total revenue, ex-notables — Non-GAAP $ 4,461 $ 4,372 $ 4,378 2% 2% $ 17,652 $ 16,888 5% Noninterest expense — GAAP $ 3,868 $ 3,089 $ 3,213 25 % 20 % $ 13,168 $ 13,010 1 % Less: Severance 200 41 184 267 215 Litigation reserves 47 5 29 94 134 FDIC special assessment 505 — — 505 — Goodwill Impairment — — — — 680 Adjusted noninterest expense, ex-notables — Non-GAAP $ 3,116 $ 3,043 $ 3,000 2% 4% $ 12,302 $ 11,981 2.7% Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 256 $ 956 $ 509 (73)% (50)% $ 3,148 $ 2,362 33% Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (144) — — (144) — Disposal (loss) gain (5) — (41) (5) (12) Revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipt services — — — — (67) Net loss from repositioning the securities portfolio — — (342) — (343) Severance (153) (32) (141) (205) (166) Litigation reserves (47) (4) (24) (91) (125) FDIC special assessment (385) — — (385) — Goodwill impairment — — — — (665) Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation — Non-GAAP $ 990 $ 992 $ 1,057 —% (6)% $ 3,978 $ 3,740 6% Diluted earnings per share — GAAP $ 0.33 $ 1.22 $ 0.62 (73)% (47)% $ 4.00 $ 2.90 38% Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (0.19) — — (0.18) — Disposal (loss) gain (0.01) — (0.05) (0.01) (0.01) Revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipt services — — — — (0.08) Net loss from repositioning the securities portfolio — — (0.42) — (0.42) Severance (0.20) (0.04) (0.17) (0.26) (0.20) Litigation reserves (0.06) (0.01) (0.03) (0.12) (0.15) FDIC special assessment (0.50) — — (0.49) — Goodwill impairment — — — — (0.82) Adjusted diluted earnings per share — Non-GAAP $ 1.28 $ 1.27 $ 1.30 1% (2)% $ 5.05 $ 4.59 10% Operating leverage — GAAP(a) (2,666) bps (1,036) bps 566 bps Adjusted operating leverage — Non-GAAP(a) (36) bps (197) bps 184 bps Pre-tax operating margin — GAAP 8 % 29 % 17 % 24 % 20 % Adjusted pre-tax operating margin — Non-GAAP 28 % 30 % 31 % 30 % 29 % 25 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
4Q23 vs. $mm 4Q23 3Q23 4Q22 4Q22 2023 2022 Income before income taxes — GAAP $ (5) $ 164 $ 125 (104)% $ 381 $ 48 Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (144) — — (144) — Disposal (loss) gain — — (11) — (11) Revenue reduction related to Russia — — — — (6) Severance (12) (5) (14) (19) (12) Litigation reserves — — — (1) — Goodwill impairment — — — — (680) Adjusted income before taxes — Non-GAAP $ 151 $ 169 $ 150 1% $ 545 $ 757 Total revenue — GAAP $ 676 $ 827 $ 825 (18)% $ 3,143 $ 3,550 Less: Distribution and servicing expense 89 87 87 355 345 Adjusted total revenue, net of distribution and servicing expense — Non-GAAP $ 587 $ 740 $ 738 (20)% $ 2,788 $ 3,205 Pre-tax operating margin — GAAP(a) (1)% 20% 15 % 12 % 1 % Adjusted pre-tax operating margin, net of distribution and servicing expense — Non-GAAP(a) (1)% 22% 17 % 14 % 2 % Total revenue — GAAP $ 676 $ 827 $ 825 (18)% $ 3,143 $ 3,550 Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (144) — — (144) — Disposal (loss) gain — — (11) — (11) Revenue reduction related to Russia — — — — (6) Adjusted total revenue, excluding notable items — Non-GAAP $ 820 $ 827 $ 836 (2) % $ 3,287 $ 3,567 Adjusted pre-tax operating margin, excluding notable items — Non-GAAP(a) 18% 20 % 18 % 17 % 21 % Pre-tax Operating Margin Reconciliation – Investment and Wealth Management Segment (a) Income before income taxes divided by total revenue. 2023 2022 $mm, expect common shares and unless otherwise noted Dec. 31 Sept. 30 Dec. 31 BNY Mellon shareholders’ equity at period end — GAAP $ 40,971 $ 40,966 $ 40,734 Less: Preferred stock 4,343 4,838 4,838 BNY Mellon common shareholders’ equity at period end — GAAP 36,628 36,128 35,896 Less: Goodwill 16,261 16,159 16,150 Intangible assets 2,854 2,859 2,901 Add: Deferred tax liability — tax deductible goodwill 1,205 1,197 1,181 Deferred tax liability — intangible assets 657 657 660 BNY Mellon tangible common shareholders’ equity at period end — Non-GAAP $ 19,375 $ 18,964 $ 18,686 Period-end common shares outstanding (in thousands) 759,344 769,073 808,445 Book value per common share — GAAP $ 48.24 $ 46.98 $ 44.40 Tangible book value per common share — Non-GAAP 25.52 24.66 23.11 Book Value and Tangible Book Value Per Common Share Reconciliation 26
27 Cautionary Statement A number of statements in our presentations, the accompanying slides and the responses to questions on our conference call discussing our quarterly results may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our capital plans including dividends and repurchases, total payout ratio, financial performance, fee revenue, net interest revenue, expenses, cost discipline, efficiency savings, operating leverage, pre-tax margin, capital ratios, organic growth, currency fluctuations, deposits, interest rates and yield curves, securities portfolio, taxes, investments, including in technology and product development, innovation in products and services, client experience, strategic priorities and initiatives, capabilities, resiliency, risk profile, human capital management, recruitment programs and the effects of the current and near-term market and macroeconomic outlook on us, including on our business, operations, financial performance and prospects. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as we complete our Annual Report on Form 10-K for the year ended Dec. 31, 2023. Forward-looking 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,” “aspiration,” “objective,” “aim,” “future,” “potentially,” “outlook” and words of similar meaning may signify forward-looking statements. These statements are not guarantees of future results or occurrences, are inherently uncertain and are based upon current beliefs and expectations of future events, many of which are, by their nature, difficult to predict, outside of our control and subject to change. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results may differ, possibly materially, from the anticipated results expressed or implied in these forward-looking statements as a result of a number of important factors. These factors include: continued elevated levels of inflation and interest rates and the corresponding impacts on macroeconomic conditions, client behavior and our funding costs; liquidity and interest rate volatility; potential recessions or slowing of growth in the US, Europe and other regions; worsening hostilities in the Middle East; our ability to execute against our strategic initiatives; potential increased regulatory requirements and costs; and the risk factors and other uncertainties set forth in our Annual Report on Form 10-K for the year ended Dec. 31, 2022 (the “2022 Annual Report”) and our other filings with the Securities and Exchange Commission (the “SEC”). Forward-looking statements about the timing, profitability, benefits and other prospective aspects of business and expense initiatives, our financial outlook and our medium-term financial targets, and how they can be achieved, are based on our current expectations regarding our ability to execute against our strategic initiatives, as well as our balance sheet size and composition, and may change, possibly materially, from what is currently expected. Statements about our outlook on fee revenue are subject to various factors, including market levels, client activity, our ability to win and onboard new business, lost business, pricing pressure and our ability to launch new products to, and expand relationships with, existing clients. Statements about our outlook on net interest revenue are subject to various factors, including interest rates, continued quantitative tightening, re-investment yields and the size, mix and duration of our balance sheet size, including with respect to deposits, loan balances and the securities portfolio. Statements about our outlook on expenses are subject to various factors, including investments, revenue-related expenses, efficiency savings, merit increases, inflation and currency fluctuations. Statements about our target ROTCE are subject to various factors, including total revenue, expenses, tax rate, capital levels and capital requirements. Statements about our target Tier 1 leverage ratio and CET1 Ratio are subject to various factors, including capital requirements, interest rates, capital levels, risk-weighted assets and the size of our balance sheet, including deposit levels. Statements about our forecasts for accumulated other comprehensive income (AOCI) and capital accretion are subject to various factors, including interest rates and the size and duration of our securities portfolio. Statements about Pershing X’s projected revenue are subject to various factors, including pricing, pipeline, demand from existing clients, the number of services and apps purchased, investments and inflation. Statements about the timing, manner and amount of any future common stock dividends or repurchases, as well as our outlook on total payout ratio, are subject to various factors, including our capital position, capital deployment opportunities, prevailing market conditions, legal and regulatory considerations and our outlook for the economic environment. You should not place undue reliance on any forward-looking statement. All forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events. Non-GAAP Measures. In this presentation, the accompanying slides and our responses to questions, we discuss certain non-GAAP measures in detailing our performance, which exclude certain items or otherwise include components that differ from GAAP. We believe these measures are useful to the investment community in analyzing the financial results and trends of ongoing operations. We believe they facilitate comparisons with prior periods and reflect the principal basis on which our management monitors financial performance. Additional disclosures relating to non-GAAP measures are contained in our reports filed with the SEC, including the 2022 Annual Report, and the fourth quarter 2023 earnings release and the fourth quarter 2023 financial supplement, which are available at www.bnymellon.com/investorrelations. Forward-Looking Non-GAAP Financial Measures. From time to time we may discuss forward-looking non-GAAP financial measures, such as forward-looking estimates or targets for expenses excluding notable items and for return on tangible common equity. We are unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because we are unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant to future results.
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